samchain/econo-pairs-v1 huggingface dataset:
A fourth reason why the DBU-ACU divide is of less relevance today has to do with the significant changes in MAS’ own banking regulations, aimed at reducing systemic risks. •  All banks will be required to meet enhanced liquidity requirements that apply to the entirety of their operations by January 2016. •  Banks which are designated as domestic systemically important banks (D-SIBs) in Singapore will be subject to additional supervisory measures over both their domestic and offshore businesses.1  •  In addition, where a foreign bank branch has significant retail presence in Singapore, it will also be required to locally incorporate its retail operations. The subsidiary will be subject to the same suite of regulation as the local banks, and the same supervisory regime aimed at minimising risks to local depositors. 23. Together, the enhanced global and domestic regulatory standards mean that the DBUACU divide is no longer useful. If we continue with the divide, it would merely impose undue administrative burden on banks, without materially enhancing prudential soundness or systemic stability. 24. Hence, MAS will be removing the DBU-ACU divide in its banking regulations. The details will be released in an MAS consultation paper by August. There is no rush. We will implement the changes in close consultation with the banking community, and phase them in over time. 25. This is a significant rationalisation in our banking regulation landscape.

In revising the existing framework on corporate governance, we intend to take the opportunity to address this issue by improving how we capture board roles and responsibilities at the organisational level,  BIS central bankers’ speeches  3  taking into account all the things that we currently ask boards to do. This will reduce the need for the Bank to direct matters that boards must approve in specific business areas. It does not however, obviate the need for boards to be fully engaged in approving core policies such as risk and capital management strategies. In other areas, the board should determine matters that are reserved for its decision, and the Bank will look to the quality of engagement with management, escalation of issues to the board and the means by which boards obtain assurance on matters that it does not specifically approve. This will be reflected in our assessment of the quality of oversight and risk control functions of the insurer. I hope that these insights to some of the Bank’s current policy considerations will provoke reflections of your own on how your organisations are currently organised and positioned to cope with an environment that will only become more challenging on various fronts. We have much work still to do and over the course of the coming months, we will be seeking industry feedback on these issues. We also have our own expectations of the industry.
Figure 12 Monetary impulse and fiscal packages 4.5 Korean Republic  Fiscal stimulus packages in 2009 (% GDP)  4.0 3.5 3.0 2.5  China Canada  Japan  Germany  1.5  Indonesia  1.0  Mexico  France  0.5  Italy  0  -200  Chile U.S.A.  Australia  2.0  0.0  Russia  India  -400  South Africa Argentina United Kingdom Turkey  Brazil  -600  -800  -1,000  -1,200  Current MPR versus maximum MPR during 2007-2009 (basis point) Sources: Central Bank of Chile, Bloomberg, International Monetary Fund and Finance Ministry. 12  BIS Review 9/2010  Table 1 Economic growth and current account (annual change, percent) 2007  2008  2009 (f)  2010 (f)  GDP National income  4.7 7.1  3.2 3.8  -1.9 -2.3  4,5 - 5,5 7.5  Domestic demand Domestic demand (w/o change in inventories) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports  7.8 8.2 12.0 7.1 7.6 14.9  7.4 7.9 19.5 4.2 3.1 12.9  -7.4 -3.3 -16.1 1.5 -4.1 -15.7  8.9 4.6 8.2 3.5 5.4 14.3  Current account (% of GDP)  4.4  -2.0  2.1  0.6  (f) Forecast. Source: Central Bank of Chile.

For policymakers this has created enormous challenges, as it has for firms, which have had to adjust almost overnight. Technology – the internet in particular – has proved indispensable for remote working, commerce and education. Digital laggards have had to invest in appropriate technologies, such as video conferencing, and accelerate the digitalisation of their customer interfaces and supply chains. Because of this significant investment, remote work and e-commerce will probably remain more common after the COVID-19 crisis ends. The pandemic is thus likely to have accelerated the trend towards a digital economy. One obvious example, which is relevant for central banks, is payments. Although cash payments are still very common in Switzerland, online payments and contactless payments have significantly increased because of the pandemic. We can see similar trends in other areas of interest for central banks. For example, the rise of ‘big data’ and digitalisation is affecting the financial system and financial markets. Before turning to these developments and how they affect the work of the SNB, we would like to reflect on just how extraordinary the COVID-19 pandemic shock has been and how unconventional the policy responses have had to be. COVID-19: new shock, new crisis The COVID-19 pandemic triggered an unprecedented economic shock and extreme uncertainty. The need for social distancing and the strict lockdown measures required to contain infections resulted in a sharp drop in consumption and production around the globe.
Otherwise you couldn’t achieve standardised capital requirements; and greater transparency is of limited value unless comparisons can be made. So the work being undertaken by the International Accounting Standards Board on a disclosure standard for insurance will be absolutely crucial in this respect. Conclusion My observations about the value of convergence in what I have called the ‘infrastructure environment’, come down to these areas of focus: First, convergence will enable better understanding of the reality, or absence, of systemic risk. In particular I’m talking about the potential for transmission of shocks between the insurance industry and the banking system. Second, it will discourage arbitrage that is based on technical accounting and regulatory factors. Instead, convergence will enable the market to focus on arbitrage which reflects the substantive evaluation of risks where real economic value may reside. And third, the added transparency of interfaces between the two industries will enhance confidence in the risk transfer arena. That will help dissipate the sort of unease which I sense around the place at the moment. The data deficiencies we confront today where the actual location of risk is so opaque is to my mind a major challenge. Better transparency will surely help to avoid adverse consequences of shocks which are inevitable from time to time. The infrastructure environment has to be robust enough to withstand these shocks. Of course there are challenges. For example: in avoiding over-engineering and over-prescription in regulation and accounting standards, and sticking more to a principles-based approach.

But in a country such as France, which already enjoys a high productivity level, there is still plenty of room for progress in the diffusion of ICTs, both in terms of the speed and quantity [slide]. The share of ICT capital stock in GDP is markedly lower in France than in the United States and the United Kingdom. Getting rid of this lag would deliver substantial gains in growth for France. 1. Third hypothesis, a dearth of investment? Catching up to the technological frontier will require investment in ICTs as well as in research and development. This investment is vital in order to incorporate innovation into production processes. Yet it is also a lot riskier than other types of investment, for example in construction. Indeed, it notably combines a low or non-existent resale value with uncertain future revenue flows. Like the rest of the innovation economy, therefore, it needs an appropriate form of financing – one that relies more on equity as opposed to debt. However, the cost of capital remains high despite the sharp drop in interest rates over the past 20 years. According to Banque de France calculations, the nominal cost of capital for France’s major listed companies is still between 8% and 9%, whereas the risk-free rate is currently around 0%. This particularly high cost places a drag on investment, and hence on innovation and productivity growth. 1. Are there any factors that are specific to France?
Serious measures to ensure relevant competencies and independence will greatly enhance boards’ effectiveness and go a long way toward ensuring they perform their increasingly critical role in overseeing the decisions of senior management. The role of senior management, in turn, is to set the business strategy, oversee day-to-day decisions made within the organization, and ensure their consistency with long-term objectives and policies as determined by the board. There are several aspects to effective bank-level management. First, I would underscore the importance of good corporate governance, the basic elements of which include: •  Independent and competent outside directors, as I mentioned a moment ago;  •  Capable and experienced management;  •  A coherent corporate strategy and business plan; and,  •  Clear lines of responsibility and accountability. Together, these elements contribute to an overall operating process conducive to long-term health and prosperity. A tightly run ship with a disciplined crew led by an experienced and competent cadre of officers is far better able to survive a long journey that will inevitably confront sudden storms. Closely related to good corporate governance and critical to any banking institution’s well-being is a rigorous internal control apparatus. Of course, effective internal control systems have always been centrally important to sound banking.

7  BIS Review 75/2000  At the same time, the respondents raised a number of important concerns and questions that the Committee is reviewing and considering carefully. The comments offered by emerging market and other “non-G10” countries have figured prominently into the Committee’s review of its initial proposal, and Claes Norgren, who is chairing the next session, will provide an update on the Committee’s thinking regarding these points. I’d like to take a few minutes to update you on our efforts, focusing on a few topics of special interest. Given the progress we have already made, it is clear to me that the Committee is well positioned to continue its momentum and to release a revised Consultative Paper early next year. Internal ratings-based approach The centerpiece of the new Accord is likely to be the internal ratings-based approach to credit risk. We envision that the internal ratings method will be applicable to those institutions that have in place strong internal rating systems accompanied by robust internal controls. Naturally, our new standards will also encompass guidance on supervisory oversight and provide for ample disclosure. The Committee is looking to establish standards that are rigorous and yet permit institutions willing to make the necessary investments to use the approach. I think that it is fair to say that the Committee now expects that many sophisticated institutions will seek to use the internal ratings-based approach. How will an internal ratings-based approach work? Simply described, there are three components to the internal ratings-based approach being developed by the Committee.
Nina Stoyanova: Adaptation and management of digital portfolios, digital banking services and client contacts in a pandemic crisis Speech by Ms Nina Stoyanova, Deputy Governor and Head of the Banking Department of the Bulgarian National Bank, at the opening of the videoconference "Adaptation and Management of Digital Portfolios, Digital Banking Services and Client Contacts in a Pandemic Crisis", organized by the Banker newspaper, 17 November 2020. * * * I would like to welcome you to the video conference on “Adaptation and management of digital portfolios, digital banking services and customer contacts in a pandemic crisis", organized by the Banker newspaper. In its “Strategy for the Digitalisation of EU Financial Services", the European Commission states that the future of finance is digital. However, we can safely say that not only the future but also the present of finance is inextricably linked to digitalisation. This was clearly seen in the unprecedented situation caused by the coronavirus, in which it was through digital technologies that the continuity of the provision of financial services to consumers and businesses was ensured. The pandemic is about to permanently change our way of life, accelerating the processes of digitalization in all spheres of life – work, entertainment, shopping, administrative services.

We are witnessing the emergence of new business models, services and solutions that create value, save time and effort, but at the same time are accompanied by new risks and challenges – both technological, This trend in the development of the financial sector is particularly visible in the dynamic and customer-oriented area of payments. Undoubtedly, the catalyst for these processes is the European legislation in this area, namely the Second Payment Services Directive, known as PSD2. As the main innovations in it we can highlight two aspects – opening access to payment accounts (the so-called “open banking”) and increasing the requirements for the security of electronic payments. These were the areas in which in 2020 the efforts and attention of both the business and the regulator continued to be focused. As part of the first aspect, the directive introduced two new types of payment services provided entirely on the Internet – payment initiation and account information services, and regulated the activities of providers offering them. The provision of new services requires interaction between payment service providers who maintain customer accounts (most often banks) and the respective providers that offer new services. Most payment service providers holding accounts in our market have chosen to achieve this interaction by creating special interfaces for automated access to their managed payment accounts (so-called application programming interface – API). Despite the created interfaces, the offer of the new services in Bulgaria, as well as in a number of other countries of the European Union, is still limited.
So the Committee also publishes a forecast conditioned on market interest rates, in order to provide a guide as to how the forecast depends upon the profile of short-term interest rates. The Committee has had more problems in trying to explain that there is no mechanical link between the central projection of the forecast for inflation two years ahead and the policy decision. This is for several reasons. First, the view of inflation both prior to and after the two-year horizon is important too. The optimal horizon over which to bring inflation back to target depends on the shock which moved inflation above or below target. Second, the risks to inflation around the central projection (defined as the mode of the distribution of inflation at future points) are also relevant to the policy decision. Third, there may be some risks to which the Committee does not wish to respond until they have materialised. But the Committee will continue to explain how its outlook for inflation relates to the policy decision, and, over time, we hope that this educational effort will pay off. Finally, there have been several miscellaneous suggestions for change to the MPC. First, the MPC has been accused of meeting too frequently and, as a result, changing rates too often. The EEF report suggested that the Committee meet only eight times a year, as does the Federal Reserve, because “meeting once a month could lead a central bank into changing interest rates too often in response to potentially misleading monthly data”.

Figure 5: Calmer developments on the housing market Index, January 2005 = 100. 300  300  250  250  200  200  150  150  100  100  50  05  06  07  08  09  10  11  12  13  14  15  16  17  18  19  50  Sources: Valueguard and the Riksbank. 20 [21]  Figure 6: Similar developments of currencies in small open economies Index, 5 January 2015 = 100. 120  120  SEK per EUR NOK per EUR AUD per EUR NZD per EUR CAD per EUR  115 110  115 110  105  105  100  100  95  95  90  15  16  17  18  90  19  Source: ECB. Figure 7: Declining use of cash in Sweden Percent of GDP. 12  12 Sweden  Norway  Other advanced economies  Euro area  10  10  8  8  6  6  4  4  2  2  0  00  03  06  09  12  15  18  0  Sources: BIS and the Riksbank. 21 [21]
Moreover, the absence of a social safety net in China creates a strong incentive for Chinese consumers to save rather than spend. Is the Norwegian economy also at a turning point? Household saving has also been low in Norway in recent years and corporate earnings have been offset by high investments. Excluding government financial and oil sector surpluses – which are redeployed abroad – Norway recorded a current account deficit of an estimated NOK 150 billion in 2007, or close to 10 per cent of mainland GDP. The corollary to the deficit on the basic balance is that Norwegian businesses, as well as Norwegian banks, borrow in foreign markets. It is the interaction between high household credit demand and an ample supply of credit that has resulted in low saving and large deficits. The banks now have to put more effort into procuring deposits and a little less into selling loans. Such a change in banks' behaviour may contribute to curbing growth in demand and output in the period ahead. There are now signs of a cooling housing market throughout the country. House price inflation peaked about a year ago when the housing market was marked by euphoria. Several large residential construction projects are now being shelved. Should weaker developments in the US lead to a broad-based pause in global growth, there may be various repercussions for the Norwegian economy: First, a downturn in the world economy may adversely affect activity and profitability in export industries and perhaps even the oil sector.

The search for yield and market shares may at times become too intense. A common feature of financial crises is that they are accompanied by considerable changes in the pricing of risk in many markets. Prices for equities and other securities are determined by economic agents’ income expectations. On occasion, these expectations turn out to be unrealistic. Unexpected events can change the economic outlook. When confidence and optimism shift to fear and uncertainty – and this can happen overnight – prices can rapidly plummet. The current turbulence has deep roots. US household saving fell markedly in the 1990s. When the dotcom bubble burst after the turn of the millennium, the Federal Reserve cut its key rate to low levels. Interest rates in Europe also showed a considerable decline. House prices and investment in real property then rose sharply through most of the Western world, and saving in the US and other Western countries showed a renewed fall. Low government and personal saving in the US has given rise to large trade deficits. The saving of the rest of the world is financing the US deficit. In isolation, such a large supply of  2  BIS Review 18/2008  capital would have pushed up interest rates. But even though the US increasingly had to rely on foreign financing, long-term interest rates fell. At the same time inflation remained low, partly thanks to cheap Asian imported goods.
Compared with standard practices, non-standard instruments of policy are arcane tools which are difficult to describe and interpret. Today I will try to illustrate how the ECB has fulfilled its mandate in an environment in which our traditional instruments have been tested to their limits. As you know, this situation led us – and many other major central banks – to vastly expand our toolkit of policy initiatives. Communication and the accountability of policies involving non-standard measures need to be intensified during a crisis such as the current one. In this vein, I will explain how to interpret the latest decision to conduct outright monetary transactions (OMTs) in secondary markets for sovereign bonds. I will conclude with some remarks on the democratic accountability of the central bank in these testing conditions. Mandate and strategy of the central bank A central bank receives legitimacy when it is assigned a clear mandate by the people in its jurisdiction. A mandate is a simple statement of duty. The Treaty on the Functioning of the European Union, for example, assigns the ECB the pursuit of a “primary objective of price stability over the medium term”. This formulation establishes – at nothing less than international Treaty level – a hierarchy of priorities. First, the ECB has to ensure that price stability is accomplished over the medium term. Price stability is, by the way, the most important contribution that monetary policy can make to achieving high levels of economic activity and employment.

Secondly, Estonia has avoided volatile short-term capital flows due to strong fiscal stance. While these "soft" policy principles support crisis prevention by providing relatively stable and transparent environment, the resilience of the system depends ultimately on the actions of market participants themselves. The task of the authorities is to provide an adequate regulatory framework and to undertake maximum effort for the supervision of the implementation of these regulations. There is another interesting, albeit still debated issue – to what extent should the supervisors rely on banks' internal risk control models and ratings. Estonian banking supervisors have taken relatively forward-looking approach in that respect by increasingly relying on risk-based approach of supervision. At the same time, and having in mind rapidly developing economy and currency board arrangement, we believe that our banking system should have also robust liquidity buffers as well as sufficient capital to withstand the fluctuation of asset prices. Therefore, we have set relatively high reserve requirement half of what the banks can meet by the holdings of high-rated foreign assets. We will further adjust the system of reserve requirements in the future as monetary policy framework will converge towards the eurosystem principles. Finally, I would like to stress that as an essential element of the safety net, the Deposit Insurance Fund is functioning well and has proved its usefulness already two years ago. The immediate task for Estonian authorities is to introduce the investor protection scheme for the other parts of the financial system.