samchain/econo-pairs-v1 huggingface dataset:
Sam Woods: Prudentist Speech by Mr Sam Woods, Deputy Governor for Prudential Regulation of the Bank of England and Chief Executive of the Prudential Regulation Authority (PRA), at the Mansion House, London, 22 September 2021. * * * I sometimes feel that regulators are a bit like dentists: they are necessary but no one, apart from a few masochists, really enjoys a trip to see them! One of the more surprising things about the last year has been, despite Covid infecting our patients, the extent to which we’ve had to rebuild our toolbox for reasons entirely unrelated to Covid. Some of you may complain that this is because fertile minds within the PRA are always dreaming up unpleasant new types of regulatory drills and toothbrushes, and that we should just stick with the old ones. Others of you may have seen the 1970s movie Marathon Man, in which the hero (played by Dustin Hoffman) is tortured by an evil dentist who keeps asking him: “Is it safe?” Given the PRA’s objective of safety and soundness, and in the spirit of post-Brexit de-regulation, perhaps we could actually just scrap all the rules and adopt this approach with CEOs instead, in the form of an annual visit to the prudential dentist. It might actually be rather effective. But honestly, I think we are just keeping pace with the world around us.

I refer of course to the review of Solvency II, led by the Treasury with close involvement from us. This is a great example of an area where we can tailor a regime designed for 28 countries to work much better for the one we inhabit, cutting bureaucracy and supporting competitiveness while maintaining high standards. I am grateful to actuarial teams and other colleagues in firms who have been hard at work preparing quantitative and qualitative submissions which should allow us to understand the potential impact of any changes. It is important that this work moves forward at a good pace, but it is also important that we get it right – no one will thank us if we accidentally drill a hole in a perfectly sound tooth, or put a cap on the wrong one. Some of those in the debate whose job it is to promote the interests of shareholders favour a straightforward weakening of the regime. We, with a statutory objective to protect policyholders, are cautious on weakening. This difference of perspectives is of course entirely unsurprising and a natural part of the reform process. For our part though we have reached no firm views on any proposals at this point, because even before consulting we will need to be informed by the data which will shortly come back in from firms.
Only the public can measure the degree of success and our goal is to provide the public with elements and emotions related to our national identity, through a worthy banknote series, created by renowned brands in the banknote production industry such as G&D, De La Rue and Oberthur, whose logos have been present on our currency since it was first issued. 2/2  BIS central bankers' speeches

Closing address At the end, let me thank the colleagues from the EBRD for the highly insightful presentations on the state of the economy and the main challenges of the WB region as well as the main findings of the Transition Report, which primarily focuses on digitalization. This does not come as a surprise knowing that digitalization has been significantly boosted during the pandemics, bringing a number of benefits to the societies, including support for faster transition and income convergence. Despite the efforts, income gap of the Western Balkan economies in comparison with the EU still remains wide - regional income is only about 38% of the European income. This largely correlates with the level of productivity in the region that significantly lags behind the EU productivity. And, the increase in productivity can be achieved only by structural and institutional reforms, including digitalization that can lead to more efficient allocation of resources. Thank you. 3/3  BIS - Central bankers' speeches
Caleb M Fundanga: Supervision of non-bank financial institutions Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the opening ceremony of a MEFMI/ACBF/IMF - East Afritac Regional Workshop on “Supervision of non-bank financial institutions”, Lusaka, 14 February 2005. *  *  *  •  The Executive Director, MEFMI, Dr. Maruping  •  The Executive Director, Africa Capacity Building Foundation  •  Representative from the IMF  •  Distinguished Workshop Participants  •  Ladies and Gentlemen  On behalf of the Macroeconomic and Financial Management Institute for Eastern and Southern Africa (MEFMI), the African Capacity Building Foundation (ACBF) and the East African Technical Assistance Centre (AFRITAC), I wish to welcome you all to this important workshop and to the beautiful city of Lusaka. May I also welcome our distinguished resource persons and thank them for accepting our invitations. I hope their participation will enrich the deliberations of this workshop as well as enhance the knowledge of the participants. Having perused through your programme, I noticed that you have a tight schedule. However, I urge all of you to find time in your busy schedule to visit some interesting places that the city of Lusaka has to offer, including shopping malls, museums, cultural villages, to mention but a few. Allow me also to thank the Executive Director of MEFMI, Dr. Maruping, for having invited me to officiate at this regional workshop on “Supervision of non-bank financial institutions”.

The end result is the deep suspicion which the poor would have about the entire microfinance industry. The authorities too would view microfinance as a destabilising and fraudulent element in the financial system. This leads to a credibility issue and a reputation risk in microfinance industry. Once the industry loses its reputation, it is difficult to regain the same irrespective of whatever is being done by some genuine microfinance practitioners. The damage to the industry is done by some “black sheep” who are not controllable by other genuine performers. In this manner, the quick returns are earned by “ill-willed” practitioners, but the social cost has to be borne by the entire industry. Hence, the major challenge faced by microfinance industry today is to save itself from the spurious micro-financiers. Who is a poor person? The poor are normally defined by reference to income level or calorie intake or the level of opportunities available. All these definitions represent some aspects of the poor which are important. Yet, they do not accurately depict the real nature of the poor. A poor person is a person who is unable to assess the risks faced by him and take the required mitigating measures to avoid them. The risk factor is more suitable to identify the poor, because the poor have to operate in a market which is full of risks. If he can successfully wade through the risks, he could succeed in the market as well.
9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  Chart 8: G7 growth increasingly reliant on consumption Investment Private Consumption Net Trade Other GDP  Contributions to four-quarter growth (%) 3  2  1  0  2011  2012  2013  2014  2015  2016  2017  2018  -1 2019  Sources: Eikon by Refinitiv, IMF WEO, OECD and Bank calculations. Notes: Growth in real purchasing power parity (PPP)-weighted GDP. As the experience of Brexit has shown, the indirect effects of trade tensions on business confidence and investment can be much more material than the direct effects alone. UK business investment has flat-lined since the referendum, underperforming both previous recoveries and the international experience (Charts 9a and 9b). There is also evidence that these uncertainty effects are holding back foreign direct investment in the UK.7 The UK’s experience can be used to assess the extent to which the deteriorating trade outlook can explain the sea change in financial markets. 7  Data from the Department for International Trade indicate that the number of new FDI projects in the UK in 2018/19 fell to its lowest level in five years.

After all, reputation and legal risks can be costly too. 20. The MAS expects boards and senior management to have ownership and oversight of ML/TF risk control issues. FIs therefore must put in place an effective reporting framework to keep board and senior management well apprised. In turn, Board and senior management must oversee proper resolution of ML/TF risk control concerns as flagged out internally by your staff, by auditors or regulators. 21. The next area relates to risk culture. Clearly, culture is not easy to prescribe as a practical matter. Every staff in the FI, not just its management, contributes to its culture. However, management usually has decisive influence on a firm’s overall culture by setting the right “tone from the top” which must be reinforced through supporting actions to secure the commensurate “echo from the bottom”. Those in the various lines of defences must be empowered and recognised for doing their jobs well. 22. My remarks so far have discussed the MAS’ approach to Regulations and Supervision. Let me now touch on the next element of our framework – Enforcement. No matter the amount of regulations and notwithstanding the heightened intensity of our risk-based AML supervision, those bent on breaking our ML/TF laws will always try to find ways to exploit any weaknesses in control systems or practices. This can happen especially if an FI’s governance and culture fall short and appropriate due diligence is overlooked in lieu of business motivations.
As you know, since the Second Consultative Document’s release 21 months ago, the members of the Basel Committee have worked collaboratively and publicly with supervisors, banks, and others to revise the proposals so that they best serve the needs of modern banking. We’ve published and discussed thousands of pages of proposals and studies with the industry and the public. The size of – and depth of detail in – those volumes demonstrates how hard we’ve been working and how great the challenge is. Challenges the Committee is resolving Indeed, while our consultations over the years have reflected on some of the finest – and occasionally highly esoteric – points of contemporary banking, the Committee encountered a few central concerns expressed by the industry – and sometimes by supervisors as well. Some of the overarching issues include the complexity of the proposals and their potential to be "procyclical." Other respondents have weighed in on proposed charges against operational risk and other particular exposures. I’d like to share with you now the latest news on how we are resolving those challenges. BIS Review 52/2002  3  Complexity of the New Accord First, to the issue of complexity. Anyone who’s dared to download the proposals in their entirety from the BIS website may have been surprised to find out how much paper it requires to print them out. The New Accord is truly weighty, in all meanings of that adjective.

Given the disappointing fiscal developments in some countries and the challenges which have emerged to the EU fiscal framework, we welcome the moves to correct or prevent excessive deficits, i.e. the implementation of excessive deficit procedures in the case of Germany and Portugal and the early warning issued to France. Countries with remaining imbalances are urged to prepare sufficiently ambitious consolidation plans for their forthcoming stability programmes. Emphasis should be placed on a growth-oriented consolidation policy that strengthens the productive forces of the economy. The Governing Council considers the recent Commission communication to be a good starting point for rebuilding confidence in the budgetary framework. As already reflected in the Statement on the Stability and Growth Pact of 24 October 2002, we fully support the Commission's main objective, namely to improve the implementation of the Pact within the existing framework of rules. Finally, I should like to stress again that there is still an urgent need to implement decisively the structural reform agenda. We note with some concern the slow progress in many euro area countries and call on governments to take determined action. The medium-term impact of these reforms on the economic growth potential of the euro area is likely to be substantial. A prompt implementation of structural reforms in the labour, product and financial markets is particularly important at this juncture since it would contribute to strengthening confidence in the euro area, thereby also supporting economic activity in the short term. We are now at your disposal for questions. 2  BIS Review 72/2002
Possibly because they held back from selling their holdings because they were reluctant to go underweight a large component of an index they tracked (or were measured against). How to improve the performance of the asset management industry has been relatively neglected. That matters because in a market economy regulators should not be the first line of defence. Myopia Agency problems and incentives are not, however, the sole source of exuberance. I doubt that, in managing their banks, many bankers deliberately or even consciously drove the system over the cliff. Rather, like others, many were myopic about the risks in the system. Innovations in technology, the opening up of the world economy, new markets for transferring risk, and years of smooth growth, apparently attributable to better macroeconomic policy frameworks – all of this encouraged a sense that the world had become a safer place. High actual returns were extrapolated forward into required future returns. Add in to the mix, complexity obscuring the risks in the system as a whole. And, although UK policy rates were relatively high for a number of years, accommodative global monetary conditions fuelled a search for yield and underpinned confidence in resiliently liquid capital markets. 2 Distorted incentives, myopia, complexity, easy global monetary conditions: a heady mix. And a mix which the prevailing regulatory regime was singularly ill equipped to address, and in some respects had done much to create through inadequate capital requirements and an absence of liquidity requirements. In fact, a toxic mix.

In this regard, the Bank of Albania considers remittances as an important source of income in the economy and a contributor to the Balance of Payments. From a narrower perspective, remittances are estimated to have a significant impact on Albanian households, for reducing the poverty and improving the quality of life. Even in the case of Albania, the studies performed by the Bank of Albania and the World Bank show that the income from remittances are allocated mainly for consumption, medication, and education, as well as for savings and investments, the latter mainly for residential properties. In addition to the above, the Bank of Albania treats remittances also from the perspective of their inflow channels in the Albanian economy. Recent studies show that the formal transfer channels dominate, mainly through money transfer financial institutions, and less through banks. In the meantime, remittances in cash remain at high levels, which is worth for an in-depth analysis. The World Bank survey conducted in 2016 concluded that the reasons for the limited use of the banking channels are the high costs on money transfers and the perceived cumbersome and complex procedures. To illustrate my point, according to this survey, the costs of remittances toward Albania are estimated at 9.4 per cent of the amount sent, compared to the 7.2 per cent average in the region. We are all aware that the more financial channels are used, the more finances penetrate in the economy.
A positive factor is that the rate of increase in lending to households has slowed down recently following the very high rates of increase we saw in the years before the financial crisis. Housing prices have also levelled out recently. Both monetary policy and the mortgage cap have probably played a role in subduing lending to households. 2 However, the debt ratio, that is debt as a percentage of disposable income, is still very high and higher than in many of the countries that have had problems in recent years as a result of substantial falls in housing prices (see Figure 12). A high level of household indebtedness can have serious consequences. When the households have large debts they become vulnerable. For example, a substantial fall in housing prices could give rise to extensive debt consolidation on the part of the households, which would risk leading to weak consumption  1  Since the monetary policy decision in October, we have also received the National Accounts for the third quarter. These figures show that growth declined somewhat, approximately in line with our assessment in October. 2  The mortgage cap was introduced as a general recommendation from Finansinspektionen in the autumn of 2010. In simple terms, it imposes a maximum loan-to-value ratio of 85 per cent when purchasing housing. BIS central bankers’ speeches  3  demand and high unemployment. Ultimately of course this would also lead to the risk of higher loan losses at the banks and risks to financial stability.

This persistence has partly reflected a series of transitory developments, such as the indirect effect of previous oil and food price increases and a limited changeover effect. However, structural factors in the labour and product markets have also played a role, as mirrored, in particular, in the upward trend in wage developments observed until recently. This trend has only just shown signs of stabilisation. Services price inflation has also remained stubbornly high. Indeed, structural rigidities have impeded an appropriate adjustment of wages and prices. As a result, annual inflation rates have remained above 2% during most of 2002, including November, as has been confirmed by Eurostat's flash estimate, which indicates an annual HICP inflation rate of 2.2%. Second, when looking forward from now until the early part of 2003, although recent developments in oil prices have lowered short-term price pressures, there are still some factors that could keep annual inflation rates above 2% for several months to come. Yet this short-term outlook is related both to base effects and to indirect taxes and administered prices, i.e. to temporary developments. Third, when looking beyond the short term, we consider that both the overall economic environment and the euro exchange rate, which has strengthened since early this year, will contribute further towards reducing inflationary pressure. Moreover, we expect the indirect effects of previous increases in oil prices and other factors to further unwind. Although wage-related risks remain in place, they are judged less likely to materialise as long as the economic environment does not change substantially.
International capital markets play an important role for Norway. We drew on borrowing opportunities abroad when the petroleum industry was under development. We did the same in order to expand welfare schemes and to finance the countercyclical policy of the mid-1970s and the early 1990s. In the past 15 years, international financial markets have enabled us to convert national oil and gas resources into foreign equities and bonds. See chart “Real return on the fund” at the end of the speech. Since its establishment in 1998, the fund’s average annual real return after costs has been 2.9 per cent, or somewhat lower than the expected long-term return. This figure is marked by the challenging character of the financial crisis. The fund lost NOK 633 billion 4 in 2008, but a market reversal in 2009 has resulted in a positive return of NOK 716 billion over the past five quarters. So far, the fund seems to have fared relatively well through the most severe financial crisis for many decades. We still consider a real return of 4 per cent as realistic over time. This is based on the assumption that investment in sound government securities in the market can provide a reliable real return of about 2½ per cent. At the same time, the fund can reap a return of 2 to 2½ per cent in the long term from the three-fifths equity portion, some gains on corporate bonds and returns from active management.

The concept Dutch disease stems from the negative effects on the Dutch economy of the spending of revenues from the substantial gas resources of the Groningen field. From the end of the 1960s, these revenues financed strong growth in public expenditure, which led to higher costs and a decline in manufacturing. The situation went too far, resulting in large balance of trade and government deficits which required tightening measures. This in turn led to a sharp rise in unemployment in the first half of the 1980s. But the Netherlands is not the first example of a nation that failed in this respect, and far from it 2. A very clear example is provided by Spain as early as in the 17th century when the colonisation of South and Central America provided the country with access to vast natural resources and gold. The historian David Landes describes the effects on Spanish society in his book “The Wealth and Poverty of Nations” where he cites a happy Spaniard who proclaimed the following in 1675: “Let London manufacture those fabrics of hers to her heart’s content; Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocades: Italy and Flanders their linen, so long as our capital can enjoy them. The only thing it proves is that all nations train journeymen for Madrid and that Madrid is the queen of Parliaments, for the world serves her and she serves nobody.”  1  See Report no.