samchain/econo-pairs-v1 huggingface dataset:
I shall keep my comments mainly therefore to what the new government should do, be it really a new government or just the old one in a new bottle, and I shall refer only to the present or historical developments only in so far as it is necessary to understand future recommendations. As this is an after lunch speech, I shall also keep it short and not try to be comprehensive, but only comment on things that interest me or I think might be useful to the audience. Let’s start with a simple concept, the Credit Bureau. One of the reasons the NPL could become so high, and banks with high NPLs could remain supported by the public, is because in the present law the concept is that financial transactions are secret and banks are secret places, looked after and owned and supervised by responsible people. It would be nice if it were true, but the banking industry is leveraged by a ratio of 12:1 and the temptation is rather great for the owner to take advantage of other people’s money, people who have no right to know what is going on with their money even once a year because they are not shareholders but just depositors. The temptation of the supervisors to evade their responsibilities by not taking the correct action is also great, as rich people are powerful, and bad political systems over a long time do not help to make you brave. This philosophy must be changed.

Again in the same vein, resources must be made available for farmers to better their production methods or change the nature of their farming so that costs can be reduced or farmers can change to more valuable products needing bigger investments or having larger gestation periods. No doubt in doing this, old debts, being quite considerable and pervasive, will also have to be looked at. In industry, the problems and the roles of the SMEs are obvious. There is no major industrial economy without SMEs. I would say that over half the SMEs are NPL. And a lot of the owners have abandoned their old companies because they don’t need historic records or quota, for instance. They could assume some other identity and live another life and become SMEs again in a not too difficult way, but it is a big burden on the banks. A lot of SMEs can’t do that because they need past performance records. Efforts to prod these SMEs into viability are obviously going to need some government assistance. The problem is too big for commercial banks to handle alone. 3  BIS Review 108/2000  The government has made some efforts in improving the technology, marketing and management of the SMEs. How well it has done this depends on who you ask and I am not really in the field of the SMEs well enough to know the generality of what most people are thinking.
François Villeroy de Galhau: Financial stability in the age of digital industry Introducing speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Paris Europlace International Financial Forum, New York City, 18 April 2016. *  *  *  Ladies and gentlemen, I would like to introduce this third round table by presenting the latest issue of the Banque de France Financial Stability Review entitled “Financial Stability in the Digital Era”. This new edition of the FSR addresses a very topical issue in the financial world, the impact of digitalisation and how to regulate such changes where necessary. I am keen to hear today’s exchange of views. In this FSR, we have gathered contributions from prominent academics, practitioners and policy-makers in order to shed light on the impact of innovation on financial stability. I would like to express my sincere thanks to all the contributors who have provided their views and analyses on such a technical and forward-looking topic. I cannot list all the contributors just now but I would like to give a special mention to Ms Karen Gifford who is with us today. The contributions presented in the FSR are very diverse in nature. The aim of the FSR is to help readers form an opinion; it is not designed to convey the explicit message of the Banque de France. The core aims of our Review are to exchange ideas, explore a given theme from various angles, and juxtapose different analyses and opinions.

The regulation of financial services created in the wake of the digital wave must be tailored to its specific risks. To this end, we must adhere to two principles of action. The first principle is an absolute guarantee of payment and transaction security. In the framework of its mandate to oversee the security of payment instruments, the Banque de France strives to promote innovative, effective and safe payment solutions. In this respect, it ensures that the emergence of new players and new solutions does not reduce security. Central banks are also trying to take a proactive approach towards the digital transition, to avoid being left behind by the highly technical nature of certain innovations. For instance, discussions are underway at the Banque de France over how to monitor the development of initiatives concerning blockchain technology, both in terms of the possibilities it offers and the issues it raises notably in terms of security. The second principle is a proportionate adaptation of regulations and supervision to address the development of fintechs. The regulation applied to these new players should avoid stifling innovations that may be beneficial to consumers and, more generally, to the economy and society; but at the same time it should also guarantee consumer protection and address issues of financial stability. Specific regulations, allowing for a gradual adjustment of regulatory intensity, might be better suited to preventing the risks generated by fintech firms.
Compared to ten years ago, global growth has been relatively subdued, with no significant pickup in sight. The latest IMF economic forecast puts global growth next year at 3.4 percent, a slight improvement from a disappointing 3.1 percent this year. Slow growth momentum is most pronounced in the core advanced economies, with 1.8 percent forecast for 2017. Yet, while this state of the “new mediocre” is more often associated with the advanced economies, there is risk that some emerging countries including ASEAN countries will sooner or later experience it as well due to spill-over effects and domestic structural constraints. The spill-over effects of the "new mediocre" go beyond the growth dimension, but well into the realm of financial stability. Given the low-interest rate and low-yield in advanced economies, investors have shifted their portfolios to many emerging economies including ASEAN in search of higher yielding financial assets. This “search-for-yield” behaviours with capital inflows, rise in asset prices, and higher debt ratio have already resulted in pockets of financial vulnerabilities in many countries. Yet the “new mediocre” is not only impacting the stability of the financial system and economic growth, but is also catalysing social tensions and geo-political changes. As Christine Lagarde said at this year's IMF annual meeting, global economic growth has been “too low, for too long, and benefiting too few.” 1  Across a spectrum of countries not only is the growth low, but it is also not inclusive, particularly for people at the lower end.

ASEAN regulators have taken on a number of initiatives to reduce costs of businesses through the support of greater connectivity, mutual recognition agreements and greater cohesiveness of rules and regulations. Additionally, usage of local currencies as a means of payment and settlement will facilitate our intra-region trade and investment. Common infrastructures for cross border payment and settlement such as through the Asian Payment Network are important to increasing efficiency of doing businesses and reducing costs of remittances and transfers. If we all work together in our various capacities we can together strengthen our region and improve ASEAN people’s standards of living. Ladies and Gentlemen, To sum up, I strongly believe that bankers play a critical role in the future of ASEAN economies and people’s lives. ASEAN banks, given their large scale and power of intellectual and capital resources, must be the force that drives our region forward and improve people’s quality of lives. During this period of VUCA world and changes in economic environment with technology disrupting business landscapes, we must focus on longer term goals. Working together, ASEAN banks must commit to strengthening our regional growth and to ensuring 5  sustainable development. Instilling proper behaviours and cultures into the organization and practicing sustainable banking will strengthen us from within. Looking at today’s agenda, I am delighted that ASEAN bankers will engage and work together to find ways to meaningfully impact our region on issues ranging from digital and fintech to sustainable finance.
The more a bank makes use of its risk rating system, the more confidence supervisors are likely to have in the results of the banks’ assessments of their capital needs. Data requirements and validation Clearly, a system is only as good as the inputs that go into it. Accordingly, banks using the IRB approach will need to be able to measure the key statistical drivers of credit risk. The minimum Basel operational standards provide banks with the flexibility to rely on data based either on internal experience or generated by an external source, as long as the bank can demonstrate the relevance of the external data to its own exposures. Regardless of source, sound data are critical for formulating meaningful internal risk assessments. From a broader risk management perspective, access to high quality data will enable a bank to evaluate the performance of its internal rating and risk estimation systems in a consistent and meaningful manner. The Basel standards outline the data history banks will need to use the IRB approach. The Committee recognizes that banks may not currently have all of the required information on hand. For this reason we have continued to engage market participants in a dialogue on this issue. As implementation of the New Accord approaches, we encourage banks to consider their data needs very seriously and to comprehend fully the techniques they will need to use to derive appropriate estimates of loss based on those data.

Jessica Chew Cheng Lian: Advancing environmental goals through sustainable finance initiatives in Malaysia Speech by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Launch of "Nature Nurtured/Pameran Lestari Alam" Exhibition, Kuala Lumpur, 19 January 2017. * * * Malaysia attracts millions of tourists each year, many who come for the beautiful and unique attractions that nature has to offer in our country. Today, we celebrate this through art, and by bringing art and nature together, we hope to draw more attention to both. This exhibition, ‘Nature Nurtured’, continues Bank Negara Malaysia’s efforts to preserve our natural heritage, and follows closely on the heels of steps that we took in 2016 to restore the natural habitat of the grounds in Shah Alam where the Bank’s brand new Automated Cash Centre now stands. The region’s natural treasures have been a magnet for merchants and travelers for centuries. Spices were what brought the European powers to Southeast Asia six hundred years ago, while the Chinese came in search of fine food and medicine. Almost exactly 200 years ago, General Farquhar, the Resident of Malacca, commissioned a team of artists to paint every aspect of the Peninsula’s wildlife. Efforts to document nature through art had, however, existed long before. I should mention that women, too, counted among the talented observers of life forms who went on to capture nature in vivid artistic creations that have informed and inspired generations.
Finally, addressing impediments to investment, increasing productivity and further improving the business environment remain key for strengthening potential growth. To conclude, my assessment is that significant progress has been made, but that ensuring prosperity on a lasting basis requires continuing the implementation of an ambitious reform agenda going forward. BANKING It is essential to complete the banking union. In this respect, the European summit on 28 and 29 June is very important. The European banking landscape is still characterised by one important feature: a strong exposure of banks to their national economy, including a high exposure to domestic public debt. The completion of the banking union will, over time, lead to a lower exposure to national economies. Regarding the situation of the banking sector, there is still a sizeable legacy of non-performing loans in some banks. An impressive effort has been made to reduce the level, but the situation has not yet been fully rectified. The banks are now much more capitalised. Their liquidity is much stronger. But, on the other hand, we have to be clear: for the large banks, the new regime under the Bank Recovery and Resolution Directive – BRRD, to use its English acronym – has still not been tested in the event of a crisis – luckily. The banks still have a strong national orientation: they have exposures to the public debt of their country and a strong focus on the domestic economy.

It was a risk about which bank management, investors, regulators and supervisors were all myopic. The socalled Fundamental Review of Trading Book Capital Requirements is, as Adair said, a very important opportunity to correct this. 5  See the Bank’s paper: “The role of macroprudential policy: A discussion paper”, November 2009 and Tucker P M W (2009e), “The debate on financial system resilience: Macroprudential instruments” at the Barclays Annual Lecture in London. 6  Tucker P M W (2010), “Shadow Banking, Financing Markets and Financial Stability”, Speech at a BCG Partners Seminar. BIS central bankers’ speeches  3  What that amounts to in practice is recognising that the degree of resilience of market liquidity matters a lot. I have been arguing that a market’s liquidity is unlikely to be resilient if demand is dominantly from leveraged investors and traders. They buy when prices are rising, but stop buying or even sell when the price stops going up, leaving prices without a firm underpinning – and often with prices perched on a precipice. That element of recent events is missing from Shleifer’s set up, but in the real world it is precisely what we might expect if one joins up his story about innovation induced by myopia with Hyun Shin’s earlier paper7 about the association of leverage and asset-prices fluctuations. If securities are fundamentally mispriced because of blindness to a type of risk and, further, are held dominantly by leveraged players, the adjustment when it comes will be all the greater.
Dear banking system executives, As I mentioned above, this is a good moment, while the future still bears some questions. The economy is not exempt from this overall consideration. I take the opportunity to bring to your attention the fact that the institution each of you represents has a certain role to play in the everyday economic and financial life of the country. Now that we know the already-announced objectives of the Government of Albania for 2018, it is understandable that 2018 is a rather challenging year to further boost economic recovery and strengthen the financial stability of Albania. From this perspective, I would like to affirm that, like in 2017, in 2018 the Bank of Albania will continue to focus on:  guaranteeing a stable economic environment, keeping inflation rates in check, and having liquid markets with low volatility. The monetary policy will aim at an adequate supply, in terms of both quantity and price. The final monetary policy objective will be unchangeable, while the accommodative stance implemented in the past years will be present during 2018.  boosting credit recovery in Albania. We believe that the further boosting of the economy provides a friendly environment for lending to the economy. In addition, we will continue to insist in the implementation of the joint programme for the reduction of non-performing loans. In this light, we expect the banking system to be proactive in lending to the economy.

To briefly illustrate the current state of play of our supervisory practices, I would like to mention the “suptech” approach underway at the ACPR: the supervisory authority’s aim is to take advantage of innovation to better carry out its missions at the best cost for the community and thus prepare the supervision methods for tomorrow’s financial processes. To date, four tools developed in intrapreneurship with the support of the Banque de France’s Lab, our space dedicated to innovation, have been created and should concretely increase the efficiency of our supervisors. But I would like to focus for a moment on the contribution that we can make, as a central bank and supervisory authority, to the development of the regulatory framework. In this area, I think it is important to recall a few principles that underpin our vision as a supervisor and central banker with regard to the changes in the regulatory framework of the financial system. First of all, I would like to stress that no regulatory framework is set in stone. We must keep an open mind, and have the necessary understanding and lucidity to adapt frameworks to technological evolutions - or even revolutions -, as well as to their challenges and associated risks. Secondly, this adaptation must, in my view, preserve and consolidate two fundamentals of financial sector regulation: the financial stability objective and the principle of monetary sovereignty.
Given our starting point, with inflation somewhat below target and expected to remain so for a while, we are relatively well placed to weather the storm if it begins to blow more strongly. BIS Review 33/2001  3

Since 2012, the New York Fed has devoted considerable attention to the rapid growth in student debt levels and delinquencies by publishing a number of reports. The findings in these reports were largely based on data from our Consumer Credit Panel (CCP), a nationally representative dataset sourced from Equifax credit reports. This unique dataset has enabled us to provide new insights into the overall state of the student loan market and into individual student loan borrowing and repayment behavior not available from other data sources. 1/3  BIS central bankers' speeches  Today, we will first provide a brief overview of aggregate household debt and its borrowers, followed by a presentation based on new research on student debt, which focuses on delinquency and repayment rates. We find that recent cohorts of college students are defaulting at a lower rate than those who left higher education during the recession. But, at the same time, their repayment rates are also lower. Despite an improving labor market, overall delinquency rates on student debt remain stubbornly high, and repayment progress has slowed further, likely reflecting the recent introduction of more accommodative payment plans. Payment progress is particularly low for those with larger debts and for those from lower-income areas. Much remains to be learned about the causes of the observed expansion of debt burdens and repayment problems among recent college graduates.
Responses to the low profitability environment In recent years, Spanish banks have partially cushioned the fall in net interest income by means of various strategies. To address the current low profitability environment, they should persevere in some of these strategies and embark on others. First, as I mentioned earlier, banks have made great efforts to reduce their nonperforming and foreclosed assets. But the non-performing loan ratio still stands at 5.3% for business in Spain and foreclosed assets amount to around € billion, in both cases well above the pre-crisis levels. Banks should therefore persevere with this strategy. To illustrate the room for improvement that still exists in connection with these non-performing assets, if the level of provisioning of average total assets were as low as in 2005 (which, at 0.26%, was the lowest level recorded since 2000), it is estimated that Spanish deposit institutions’ annual consolidated profit would increase by € billion. This would raise average ROA by 10 bp and ROE by 1.3 pp.4  4  In addition, in a hypothetical scenario in which all foreclosed assets were performing assets, earning a return equivalent to average ROA (0.49%), net profit would increase by around € million, a modest but far from negligible figure. 15/29  Second, banks have diversified their revenue generation and in particular there has been an increase in fee income.

According to the literature, the Basel III reforms give rise to capital levels within the range of estimates that point to positive net macroeconomic benefits for society as a whole, as a result of the greater financial stability and enhanced shock-absorbing capacity they provide. 3  Basel Committee on Banking Supervision (2019): “The costs and benefits of bank capital – a review of the literature”, June. 14/29  In short, there is no evidence to suggest that we have gone too far in calibrating the Basel III capital requirements. The priority, therefore, should be for jurisdictions now to apply these standards in full, consistently and within the periods agreed. This is the message reiterated by the G20 leaders, and banks are required to adapt to this new regulatory environment. We must fight against what has come to be known as the “regulatory cycle”, according to which (and there is empirical evidence to confirm this), over time, memories of crises and of their negative effects tend to fade, the pressure of individual interests grows and the temptation to ease regulatory standards increases. Clearly, a different question altogether is the need to ensure a level playing field. In particular, it is important to ensure that the risks associated with the non-bank financial intermediation sector, and those stemming from its interconnectedness with the banking sector, are properly regulated and supervised. This requires, among other things, close monitoring of the regulatory perimeter of the whole financial system, to ensure that market participants operate under the principle of regulatory neutrality.