samchain/econo-pairs-v1 huggingface dataset:
This includes firms, systems that support the industry, third party vendors, consultants, regulators, and law enforcement. 6. We need to leverage best practices  Leveraging a common set of best practices across the industry will be an important first step in closing the gap on the current vulnerabilities. Unlike the approaches taken by other supervisors to address cybersecurity concerns, our initial focus in this area is on better understanding the vulnerabilities, how firms are addressing them, what progress has been made by firms and assessing where the industry stands as a whole. Yes, we want you to address the weaknesses, but this is a lot bigger than the weaknesses identified at one firm. We will be looking to firms to leverage guidance around best practices to identify their weaknesses, and we want firms to bring forward other issues, concerns or vulnerabilities they encounter in doing so. We need to identify, as an industry, where the risks truly lie and what we are doing about them. There has been a lot of work done in this area by experts, including the NIST, the FBIIC, FINRA, PRA, FFIEC, NCUA, etc. – the list goes on. And, there are a number of sets of best practices already published. We are aware that firms have been looking for guidance on which approach to take or framework to adopt.

While we have begun to address other areas of systemic risk, I feel the industry as a whole is just beginning to scratch the surface of the potential system-wide impact of a significant cyber-attack. This risk can be referred to as “single point of failure.” What is this? These are areas that, despite all of the work that has already been carried out, are significantly more vulnerable than others. We need to identify where they are and focus our combined efforts on understanding their systemic impact and addressing them. I want to be very clear here. I don’t think that this isn’t a regular topic of conversation among directors, executives and managers – in fact, based on discussions I’ve had with many of you, I know that it’s quite the opposite. There is a lot of discussion within firms about the topic – and there’s quite a bit of activity more broadly that suggests that many different people are talking about cyber. There are conferences on cybersecurity every week. Consultancy firms are working with the industry on how to protect against attacks. Law enforcement agencies are investigating and cracking down on attacks and those behind them. Everyone is talking about this! And, I think that’s appropriate and necessary – this is everyone’s issue. As we engage in discussions on the subject and flesh out our plans to address this risk, there are a number of topics that are key to keep in mind.
The fact that around one third of all Swedish covered bonds are owned by foreign investors is both an opportunity and a risk. The opportunity to spread funding has been positive, at the same time as we have previously seen that foreign investors tend to be the first to sell their holdings in times of unease, and that this can start a sales spiral. We saw this type of selling behaviour in 2007, for instance, when unease on the financial markets increased and the Swedish banks’ exposure to the Baltic countries made investors want to sell the Swedish banks’ covered bonds, which were perceived as high risk.5 Investors then sought safer assets, such as government securities. During the second half of 2007, foreign investors reduced their holdings of Swedish covered bonds by as much as a quarter, from SEK 450 billion to SEK 330 billion.6 It was primarily investors with a short-term investment strategy who withdrew, which meant that bond yields rose. With the exception of the acute global financial crisis, however, the market for covered bonds has functioned well. Foreign investors’ interest in Swedish covered bonds is currently high, which is evident in the low yield levels. But the more the banks become dependent on a particular source of funding, the more vulnerable they become if this market were to suffer problems.

Naturally, we wish to avoid this. But at the same time, I think it is important to begin to take action. In the long run, it is no sustainable for debts to continue increasing at the same pace as today. So why does the Riksbank care about household indebtedness? The Riksbank is concerned about household indebtedness partly because international confidence in the Swedish housing and mortgage markets are necessary conditions for our financial system to function smoothly. Financial developments in turn are linked to developments in the real economy. The indebtedness of Swedish households can thus affect the Riksbank’s conditions to carry out its statutory tasks, price stability and financial stability. It is therefore important that the Riksbank continues to follow developments, analyses and highlights risks linked to household indebtedness. 8  See Barclays 2012. (Over-promising? Encumbrance at European Banks, Barclays Capital Equity Research. 9  See Financial Stability Report 2013:2, Sveriges Riksbank. 8  BIS central bankers’ speeches
Having sound and resilience finances is especially critical in navigating through the current challenges such as rising cost of living and periods of low return on nonfinancial assets. And these challenges are on the back of depleting buffers for some of the households given the hardship experienced during the pandemic. Importantly, beyond ensuring the ability to sustain their wellbeing in the face of financial adversity, strong finances allow individuals and households to take reasonable risks, to invest and engage in economic activities. It allows individuals to take opportunities for growth to achieve their full potential, and this not only contribute to enhancing their productivity and livelihood, but also add value to the nation. On this note, it is important to recognise the need for concerted efforts in supporting Malaysians to build resilience as we emerge from the economic crisis. In tandem with efforts by the public sector, financial industry and other organisations, Bank Negara Malaysia (BNM) is also committed to educating the public and, in inspiring and instilling sustained behavioural change through our Financial Education Network initiatives. For those of you who are not familiar, the Financial Education Network, or FEN is an inter-agency platform of eight partners comprises two Ministries and governmentrelated agencies including BNM. FEN is committed in raising the level of financial literacy in Malaysia. MFPC is listed as FEN's partner that supports FEN's initiatives.

Lars Heikensten: The Riksbank and the euro Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at the Society of International Treasurers Convention, Stockholm, 17 June 2003. *  *  *  Let me begin by thanking you for the invitation to come here and speak on the subject of EMU. Approximately three months remain until 14 September when the Swedish people will vote on whether to participate in monetary union. In the event of a “yes” vote, Sweden will enter monetary union in 2006 and introduce the euro as its currency. The right of determination over our interest rate level will then be transferred to the European Central Bank (the ECB). On the other hand, a “no” vote would generally imply “business as usual” for the Riksbank. Today, I will be speaking about some of the implications for the Riksbank and our operations in the event of a “yes” vote in the referendum. I will begin by speaking about the preparatory phase, that is, from 14 September until 1 January 2006, during which time preparations will be conducted in the Swedish economy for a changeover to the euro, and the krona will join the exchange rate mechanism, ERM2. Subsequently, I will talk on the issue of monetary policy as it will be conducted by the ECB and point to differences as well as similarities with how it is conducted today. Thereafter, I will touch upon the effects of a changeover on our work with financial stability.
This would primarily have direct effects for the members of the Executive Board but is not something that worries me. However, it could also affect our ability to attract employees. Certain categories of employee may no longer consider us to be as exciting a workplace. For others, the opposite may be the case, particularly for those that want to work in a more international environment. Transparency is and has been a guiding principle of the Riksbank for many years. Should Sweden decide to join monetary union, the Riksbank would continue to be a transparent institution. In some respects, our actions would be naturally restricted by the common regulations for the euro area. To the extent we perceive this to be a problem for our operations and an obstacle to the transparency we safeguard, we would of course seek to effect a change. Concluding remarks Approximately three months remain until 14 September, when the Swedish people will be saying “yes” or “no” to the euro in a referendum. In light of this, I have addressed some issues today that are directly relevant to the Riksbank’s operations and the preparatory work that we are carrying out in the event of a “yes” vote. During the preparatory phase, Sweden may - if the government so decides - join ERM2. We are well prepared for this, having an economy that is in step with that of the euro area.

The Riksbank also has an internal preparation process with broad participation. Finally, we publish the minutes of Executive Board meetings in which the opinion of each member is evident. The latter issue has a different “charge” at European level since there is a risk that a genuinely single monetary policy would be undermined if individual positions were made public. Monetary union and financial stability in Sweden The Riksbank not only has the task of maintaining price stability but also that of promoting a safe and efficient payment system. In light of this, allow me also to say something about the potential implications of entry into monetary union from this perspective. The financial markets in Europe have developed rapidly over the past decade, partly as a result of the fact that the freedom to trade financial services is fundamental to the cooperation in the EU. Competition for the national banks has hardened. The single currency has contributed to the evolution of a far better capital market outside the banks, which has increased competition further. In several large European countries, a process of structural transformation in the banking systems is underway, much like that experienced in Sweden in connection with the banking crisis at the beginning of the 1990s. When competition grows stiffer, it can of course pose a threat to stability, especially if the banks are not accustomed to competition and are also weakly capitalised.
This raises a series of questions such as: how to optimize the size and use of international reserves while combining them with multilateral tools? How to strengthen resilience and avoid financial protectionism which may hide behind macroprudential policies? Indeed EMEs have accumulated international reserves, developed local currency bond markets to avoid currency mismatches and resorted to macroprudential tools or even capital controls. Multilateral responses have also been enhanced. Here, I should mention the scaling up of global safety nets, including the diversification of IMF lending facilities, and closer cooperation between central banks, through extensive dialogue and the agreement on a number of international swap lines. Today’s Symposium will close with a Panel on the future of the policy mix that could help address many of the policy challenges mentioned earlier. In particular, while central banks have clearly played a pivotal role in the global policy mix in recent years, they cannot deal with all problems by themselves. In other words, questions asked to the Panel may include to what extent central banking can help governments buy time, and for how long they can bridge financing while waiting for structural reforms to bear fruit. Indeed, central banking cannot replace decisive structural reforms, which are necessary both for increasing aggregate supply and demand and enhancing our economies’ resilience to shocks. However, I shall not stand in for the Panel and will thus shortly conclude this introduction by welcoming in advance the fruitful sharing of experience to which all of you will contribute today.

The delegation of monetary policy decisions to a central bank is underpinned by the need to create stable expectations concerning economic developments and by the favourable experiences of countries such as the US and Germany and the less favourable experiences of countries where interest rate changes have been decided on the basis of more short-term considerations. Delegation to a central bank promotes credibility, confidence and consistency because the central bank must adhere to the mandate laid down by the political authorities. Democratic governance is safeguarded by the government authorities, who define the mandate and assess the results. The mandate provides for professional judgment in a defined area. A year and a half ago, the Government and the Storting adopted new guidelines for economic policy, which stipulate annual spending of petroleum revenues over the central government budget equivalent to the expected real return on the Government Petroleum Fund. One of the aims is to answer the question of when petroleum revenues should be used. The uncertainty and the speculation surrounding central government spending of these revenues, which could have adverse effects on the mainland economy, can thereby be reduced. At the same time, the Government issued a new operational mandate for monetary policy. Norges Bank shall set the key rate with a view to maintaining low and stable inflation.
Instead, it is important to analyze the loan growth in broader economic policy context where due consideration should be paid to the credibility of macroeconomic policies and the impact other policies may have on the incentive structure in the financial markets. As I stated earlier, the presence of Nordic banks in the Baltic market is, of course, a hugely important positive factor. Parent banks are sometimes considered to have an implicit responsibility for the stability of the banking systems in the Baltic countries. It is said that the Baltic banks are too small to fail. International experience lends support to this view, although the evidence is not always in one way. Hence, there are also potential risks. If parent banks are active in many countries of the region, a shock affecting exposure in one country may lead to a reduction in their exposure across the region. Build-up of exposures to common risk factors in a region may also increase the potential for contagion - a reduction in lending to countries not affected by a crisis. The potential for contagion is naturally higher in highly integrated economies. Another potential risk factor is the smallness of the banks in the Baltics combined with their high profitability. While the Nordic banks have high profitability in all of their markets, profitability in the Baltic market is especially high. As a result, the share of banking groups' assets in the Baltics is significantly lower than the share of profits banks make in this region.

Financial stability is a necessary condition to allow the pursuit of other good objectives of public policy – avoiding mis-selling, competition in the provision of financial services etc, things that are rightly not done by the  BIS central bankers’ speeches  3  Bank of England but are important to society. Financial stability is not a superior objective to these other goals, but it is in my view a necessary condition to achieve them. And, in reforming regulation we should have in mind that a healthy and competing industry is one that does not rely on the support of public money, either explicitly or implicitly. Thank you. 4  BIS central bankers’ speeches
Firstly, as Professor Dasgupta made clear in his Review, nature and many of the ecosystem services it provides are often “mobile, silent and invisible”, and therefore incredibly complex to fully appreciate. We may understand the price of wood and some of the services provided by forests (such as climate regulation or flood prevention) but we will never understand all the interactions that exist within nature. Secondly, different social groups and individuals relate differently to nature, as the IPBES made clear in its recent report on the diverse ways of valuing nature.xxv For instance, a poor fisherman or an indigenous person may not be able to put a high price tag on the fish he catches or the forest she lives in, yet their entire livelihoods directly depend on the existence of specific ecosystems. In other words, nature does not have a fundamental value but rather means 6  Page 7 sur 12 different things to different people. Recognizing this diversity of values, at the global level, is key to enable its protection. We cannot say how much a seaside or a bird song represents. Thirdly, even if we could perfectly account for the points above (complexity and multiplicity of values), nature remains only very partially substitutable. This means that we risk underestimating the costs of losing ecosystem services. For instance, Professor Dasgupta provocatively but insightfully reminds us that if we only look at how much pollination contributes to agricultural outputs in highincome countries, we may end up with a very small percentage of GDP.

The improvement we have seen in the economy over the last year and the abovetarget inflation we have experienced point to the need to begin the process of withdrawing the very substantial level of monetary stimulus which was put in place to counter the big financial shocks we experienced in late 2008 and early 2009. Such a policy should not be a threat to the recovery. In my view it is the key to sustaining the recovery. It is the right response to an economy which is growing but experiencing persistent above-target inflation. It would reduce the risk of a future shock to confidence if current above-target inflation does become more deeply embedded and interest rates then need to rise more sharply to combat it. And it would provide more confidence to the public and the business community that the MPC takes its remit seriously and is determined to ensure that this recovery is built on the solid foundation of price stability. BIS Review 134/2010  13
The public authorities had no means of directing the insolvency process to prioritise the protection of depositors, the continuation of the bank’s critical functions or wider financial stability concerns. There was no way to recapitalise a failing bank by bailing in its creditors. As a result, when faced with the failure of a bank of any size, the UK authorities had only a stark choice between a very disruptive insolvency, putting financial stability at risk, or a taxpayer bailout. The UK was not of course the only jurisdiction to discover in the financial crisis that it did not have an effective regime for dealing with the failure of banks. And, as we discovered when Lehman Brothers failed, the authorities in different jurisdictions had no preagreed means of coordinating with each other on how to deal with the sudden failure of a major cross-border bank. Nor had they any confidence that the actions taken by authorities in another jurisdiction would align to their own national interest. With hindsight it is clear we had been lulled into a false sense of security. In Britain, Northern Rock represented the first major run on a bank since the failure of Overend Gurney in 1866. Unlike, for example, th  the US, the UK had not experienced bank runs in the 20 century. Banks in the UK had failed.

The key difference from SIVs was that the underlying assets were largely purchased from third-parties and not necessarily in securities form. 6  BIS central bankers’ speeches  We now want to turn to an example of a structure that did at least partially survive the crisis: UK RMBS master trusts. These are versatile structures that allow an issuer to transform a portfolio of assets into a very different investment product. In principle, the master trust purchases mortgages from the bank and issues tailored bullet-maturity securities. The assets and the liabilities can be very different, e.g. the demand for the securities may be stronger in US dollars than in sterling, so an FX swap converts the cash-flows into dollars. Or most of the mortgages may be floating rate, whereas investor demand is stronger for fixed-rate product, and an interest rate swap(s) converts the cash flows accordingly. Mortgages typically pay down somewhat randomly and relatively quickly, whereas investors prefer straight-bullet maturities. The master trust can accommodate this by allowing on-going reinvestments of the pay downs and conversely allowing the trust to put assets back to the bank if the cash-flows are not sufficient to make a particular principal repayment. The downside is clearly that the on-going linkages between the issuer and the trust remain very strong, and it is thus hard to identify where economic risks ultimately reside. RMBS master trust securitisations are designed to be called on their bullet maturity date and that is how they were priced and traded.