samchain/econo-pairs-v1 huggingface dataset:
When the  2  BIS Review 125/2008  markets deteriorate or cease to function in this way, individual financial institutions are also hit hard, especially the banks. We have seen the consequences of these developments now during the autumn, causing central banks and governments to take powerful measures to avoid a full-scale systemic crisis. Although most banks have satisfactory solvency levels today, the turmoil has developed into a serious liquidity crisis, based on distrust of the banks' ability to survive in the future. The entire problem can actually be summarised in a single word; confidence. Currently there is a lack of confidence in the financial sector as a whole. So what needs to happen to restore confidence? Before I attempt to answer that question, I thought I would say a few words about the situation in the Swedish financial system and about the role of the Riksbank and other Swedish authorities. The situation in the Swedish financial system Even if the situation has worsened in recent weeks it is important to remember that the Swedish financial system is far from the epicentre of the crisis. According to Finansinspektionen (The Swedish Financial Supervisory Authority) – and according to our own assessment – the Swedish banks continue to have strong balance sheets. Their capital situation is strong, credit losses are low and profitability has reached historic highs. The Swedish banks have been relatively conservative in their lending, and have not been exposed to any great extent to the worst-hit markets or institutions.

So that means Greece would not even need to be included in the government bond buying programme? C.N. Don’t jump the gun! The first question for the Governing Council is: should we decide to launch it? My personal reading is that if we were to decide to have a government bond buying programme, we should have a cap in terms of the percentage of what we would be buying, so that most of the financing will continue to rely on the private market. That would mean a relative limit of outstanding debt of each country? C.N. Yes, in my view, such a programme can be launched only if a majority of the debt were to continue to be held by private investors. So it should not be an absolute figure like 500bn? C.N. Personally I do not put too much trust in the absolute figures regarding caps. For me there is only one objective: to maintain price stability. That means we both need to have the credible prospect of returning to our objective of close to but lower than 2 per cent inflation, and we must ensure that expectations are not disanchored. If, thanks to the fall in the oil price, inflation, which was already very low, were to remain too low for too long, we would need to act to continue to ensure the credibility of our goal. There doesn’t seem to be a consensual view in the Governing Council? C.N.
The PPP is powerful as it puts the duty on insurers to really understand the risks they face and their resilience to them – it acts as a guardrail for how firms must invest their assets. For instance, the current Pillar 1 regime within the Solvency II[15] framework focuses heavily on reinsurers’ current credit ratings, solvency positions and probability of default. Whereas the PPP would also consider the reinsurer’s resilience over the whole duration of the exposures, as well as the potential impact from a mass recapture event where large concentrations to a small number of counterparties exist. And the PPP is flexible in that it can accommodate a range of investment strategies, risk management practices, business models and types of risk concentration. In 2019, when I last spoke at this conference, we had found that firms had not been implementing the PPP consistently, so we had just begun our consultation on Supervisory Statement (SS1/20)[16] aimed to address this deficiency. SS1/20 sets out PRA expectations of firms regarding their investment strategy and risk management framework, as well as their exposures to non-traded assets, intragroup loans and participations, and valuation uncertainty. It also reminds firms that the PPP applies to all assets including reinsurance arrangements. Since the publication of SS1/20 we have worked with firms to apply the PPP to address risk concentrations of concern to us.

Through the provision of long-term finance that is naturally enabled by the long-term liabilities taken on, insurers also play a vital role in supporting risk-taking and growth in the real economy. There are two trends within the UK life insurance sector that I’d like to cover today, their benefits but also the risks arising from them: The first trend – in two parts – relates to reinsurance: (a) the continued high level of longevity reinsurance; and (b) the emergence of more complex so-called ‘funded reinsurance’. The second trend concerns the continued growth of untraded or illiquid assets in life insurers’ portfolios. There are good business and risk management arguments for both of these strategies, which can  Page 3  also lead to improved pricing for customers. However, over-indulgence in either – or indeed both – could actually result in concentration risks increasing at individual firm-level and in the system as a whole. I’ll look first at why and how these trends have developed, and then set out what the Prudential Regulation Authority (PRA) expects of insurers’ boards and senior management in relation to their risk management. Longevity reinsurance For firms writing new annuity business, the continued use of longevity reinsurance is one area where concentration risk may arise. The long-term nature of longevity risk – i.e. exposure to the risk that annuitants live longer than expected – makes annuity writing capital-intensive, which has a strong impact on pricing. A longevity reinsurance industry has developed to manage this impact.
As good corporate governance is part of Islamic values, Islamic banking institutions need only to adapt to the code of ethics of the corporate governance to their business. In the Malaysian context, the same good corporate governance practices are applied for both conventional and Islamic banking institutions. To enhance the standard of corporate governance in the banking sector Bank Negara Malaysia has introduce measures including among others, specific guidelines on the code of conduct for directors, officers and employees of the banking institutions and guidelines on the directorship and the prohibition of loans to directors, staff and their interested corporations. The main objective of these guidelines is to engender public confidence in banking institutions and to ensure that the management and board of directors exhibit integrity and professionalism in the running of the banking institutions. Banking institutions are prohibited from the extension of financing and credit facilities to related parties including its directors and staff as well as family members and interested corporations. Such prohibitions are aimed at preventing misconduct and irregular practices in provision of finance whilst ensuring fair and equitable treatment to the public. These governance are universal in nature and therefore, Islamic banking institutions would not be faced with any difficulty in adopting these values. Secondly, the objective is to prevent conflict of interests and accord responsibility on the banking institutions to provide complete and accurate information.

Gent Sejko: Bank of Albania's achievements in 2022 and challenges for 2023 Address by Mr Gent Sejko, Governor of the Bank of Albania, at the end-of-year meeting with journalists, analysts and media representatives and the Governor's Award ceremony, Tirana, 20 December 2022. *** Dear ladies and gentlemen, I feel honoured and privileged to welcome in the historical hall of the Bank of Albania, media representatives and talented students who are brave in competing for "Governor's Award for the Best Diploma Theses". In the last year event, I emphasised that we experienced an unusual 3-year period, with the hope that 2022 would be different, more vivid and more optimistic. Nevertheless, the end of 2022 is proving a really challenging one, mainly due to the huge shock on commodity prices of energy, oil and gas, in particular. The increased prices - mainly engendered from the outbreak of the Russia's war in Ukraine - has generated strong inflationary pressures worldwide, triggering a difficult time for consumption and economic growth globally. Albania is facing the same challenges as well. In November, inflation stood at 7.9%, somewhat lower than in the previous month, though a high level which is the main threat to both the macroeconomic stability and to the sustainable and long-term growth of Albania. In this context, I would like to point out that the latest forecasts at the Bank of Albania show that inflation is expected to progressively reduce during 2023, and return to target in the middle of 2024.
As we review all published guidance, assess the broad volume of research that is already out there and come to consensus on an evaluation framework, we encourage firms to look at the fundamental commonalities across all best practices and build them into your ongoing/current activities. BIS central bankers’ speeches  5  7. Assessing the threat  To fully assess a threat or risk to a firm, we must first understand where the risk lies, who it affects, how it is defined, and what the associated costs are. In the case of assessing the risk and impact of cyber-attacks, I believe firms need to be cognizant that every business decision, every process, every change a firm makes ultimately has a cyber-related element to it. To add to the complexity of this, the firm’s self-awareness must extend beyond the four walls of their company and must also take into account the impact critical service providers have on the firm. You can outsource the service, but not the risk. Everyone should be using threat intelligence as we go about our day-to-day activities – using the potential of a cyber-attack as another filter through which we view every decision. As we think about the variables to be considered in the decision-making process, we must build in the potential for creating weaknesses, vulnerabilities or opportunities for cyber-attacks, and be aware of the associated costs.

I fear that until we can assign financial consequences to cyber risks, and ensure staff are taking that into account when making decisions, we will not get the commitment needed from every level of the organization to adequately address the problem. As long as decisions are made and actions are taken without this type of assessment, we are going to see more and more of these weaknesses exposed. These vulnerabilities are not necessarily new, but the exposure to them is increasingly being made available to attackers. For instance, a weak patch management process comes with the risk that systems may take longer to patch (or not be patched at all!) resulting in a much larger target window of opportunity for attackers. As we assess the potential impact, it is also important to remember that protecting against an attack is only half the solution – particularly because, as my InfoSec colleagues like to say: “It’s not a matter of IF we get hacked; it’s a matter of WHEN.” A strong cyber resiliency program is a good starting point to address this, but we also need to focus on limiting the impact following an attack by addressing the fundamental structure within the organization – how safe is the system, how compartmentalized are the core areas of technology, and what your ability is to isolate the threat. 8.
A major initiative during the year was to promote increased access to financing to the new areas of growth as well as to small and medium scale enterprises, including for micro enterprises. This aims to enhance the potential and capacity of domestic indigenous enterprises to grow and thus enhance their contribution to the economy. In the area of Islamic banking and finance, policy initiatives have been implemented to position Malaysia to become a leading international Islamic financial centre. Earlier this month, the Malaysian Government had launched the Malaysia International Islamic Financial Centre or MIFC initiative. This initiative is aimed at building greater intermediation linkages between the East Asian, the West Asian and Middle East regions which will in turn, further expand inter-regional trade and cross border investment flows. This would also contribute towards a more efficient allocation of capital and thus enhance the prospects for mutually reinforcing intra-regional growth. In addition, the enhanced opportunities for raising financing offers would also facilitate greater risk diversification. To achieve this goal, efforts and resources are being directed towards achieving two broad objectives: •  First, to become an international leader in the origination, issuance as well as trading of Islamic capital market and treasury instruments, fund and wealth management services, offshore Islamic financial services, and takaful and retakaful. •  Second, to position Malaysia as a centre of excellence for Islamic banking and finance education, training, consultancy and research.

Business’ demand for loans persists to be the sole lending increase source, whereas loan to households continues to shrink in annual terms, for the fifth consecutive month. During this period there are transmitted also the first signals on an easing of lending standards from banks, but this step is applied only on large-sized business. Fiscal stimuli developed at more controlled paces in the first 4-month period of year, providing a lower contribution on the economic activity during this period. Fiscal policy has  BIS Review 77/2010  1  maintained an encouraging character, but at a lower rate relative to the same period of previous year. Budget deficit amounted to ALL 5.3 billion, contracted by 47 percent in annual terms. The low economic activity is reflected on the low growth by about 3 percent of budged revenues during the first 4-month period of year. On the other side, budget expense recorded a reduction by about 2 percent from the rate recorded in the previous year. Bank of Albania continues to draw the attention that, notwithstanding the short-term positive effects the fiscal stimuli may generate; the long-term stability of public sector should remain the main leader of fiscal policy. The lesson from the current problematic situation involving many European Union countries, is the indispensability for consolidation of public finances and for that purpose the implementation of important correcting measures at quickest time, is a target of strategic importance.
Based on the discussions among panelists and attendees, it was evident that industry participants have taken onboard the directive that cultural and behavioral change is needed in the industry. A number of firms have begun to implement programs that are at various stages of depth, breadth and maturity. There were a few key themes that emerged that I want to share with you today: •  The role of regulation: There was a lot of discussion on the potential role of regulators and the public sector in developing and maintaining appropriate cultures at financial firms. While some voiced the opinion that regulators must play a role, others clearly indicated that trying to regulate something as dynamic and amorphous as culture would be counterproductive and would overstep the purview of regulators. I tend to agree. Of course, regulation is one thing; supervision is another. Culture may not be amenable to official rulemaking, but it falls squarely within a banking supervisor’s responsibility for financial stability. Financial institutions should expect greater supervisory attention to culture. •  Industry-led effort vs. first mover: Using the United Kingdom’s Banking Standards Review Council as an example, we believe that meaningful change will require an industry-wide effort. At the same time, the “first mover” issue fostered a general sense of skepticism around whether any firm would be willing to take on the risk of implementing a compensation structure, for example, that was dramatically different from others in the industry.

I would like to emphasise that undertaking such projects emphasises the mutual engagement of the EU and Albania with regard to deepening integration processes of our country, and reiterates Albania’s European perspective. Dear ladies and gentlemen, In the last decade, Bank of Albania has implemented a number of EU-funded projects. The first twinning project was implemented during 2012 – 2013. At that time, like now, Banca d’Italia – in partnership with Banque de France – contributed successfully to achieving concrete results in six areas of Bank of Albania’s activity. The second project – needs analysis for Bank of Albania’s approximation, funded by the EU – was led by the European Central Bank and was implemented during 2014. The aim of the sixmonth project was to assess the legal, regulatory and operational frameworks of the Bank of Albania vis-à-vis standards and best practices applied in European central banks. From this perspective, it should be underlined that the recommendations left upon the completion of this project are incorporated in the list of main priorities for Bank of Albania’s institutional approximation to the model applied in the European System of Central Banks. In addition, in light of addressing these priorities, the European Commission decided to allocate EUR 800 000 as under IPA 2015. After a long process of consultations and sharing information, for the first time, Bank of Albania’s experts put together a Twinning Project, which was submitted to the European Union Delegation to Albania.
The supervisory authorities can help remedy this by ensuring that banks’ assessment of risk in internal models is based on data from at least on complete business cycle. The supervisory authorities also have the possibility of imposing an extra capital requirement on a bank if the bank has large risk exposures. Banks must therefore perform stress tests to demonstrate that they have sufficient capital to weather a downturn. Regulatory changes can probably reduce fluctuations in banks’ eagerness to lend. Banks could be required to accumulate additional reserves. One example is that in a favourable economic situation banks could be required to make additional provisions for future losses, as is the case in Spain. 9 Another proposal 10 is that the capital requirement should be raised when lending growth increases. Banks may be forced to sell large volumes of assets in a crisis situation. Three US academics 11 have recently proposed a supplement to the capital requirements in order to reduce this selling pressure. They propose that banks acquire a form of insurance that is paid out when the banking sector as a whole has losses over a certain level. When a crisis occurs, banks will then be assured of a supply of fresh capital. Foreign-owned branches and subsidiaries have a market share in Norway of close to 35 per cent in terms of total assets. Most of them are chartered in the other Nordic countries.

For instance, with this crisis, we witness a breakdown in the key assumptions that form the basis of our thinking about the efficiency and the self-correcting nature of markets which, for a long time, underpin the rationale for globalization, liberalization, and deregulation. These assumptions are now being challenged. Next, in this crisis, the most damage comes from the most regulated sector of the economy, notably the financial sector. What we saw is that, even with regulation in place, the sector surprisingly exhibited important failure in risk management discipline across a variety of institutions and players, including banks, institutional investors, credit-rating agencies, and regulators. On this, a better way to manage risk to support the process of international financial intermediation still needs to be worked out. And finally, the global economy has never before been put in a position that it might have to deal with the consequences of the  BIS Review 92/2009  1  massive policy response that have been put in place both on the fiscal and the monetary fronts. These 4 consequences are the known unknowns, and the approach we choose to address them will importantly influence the direction that global finance will take going forward. Given the focus of this conference is on the stake of emerging economies in the international financial system, let me share with you briefly how emerging economies in Asia so far have managed in the current crisis, and how we see the direction of global finance evolving.
During the financial crisis, extensive government bank bailouts were necessary in many countries in order to sustain economic activity. When the bridge is unsteady, the authorities need to stabilise it. But when taxpayers foot the bill, banks take on excessive risk. Not until owners have to bear losses will banks’ balance sheets fully reflect risk. To achieve this, there is an international effort to improve tools for dealing with crises. It should be possible to wind up banks without causing major economic shocks and without governments assuming banks’ losses. Those who take risks must also bear them. BIS central bankers’ speeches  7  There are high ambitions behind the new financial regulations. However, it would be unrealistic to believe that we can eliminate all sources of financial turmoil. Unlike the sergeant, we cannot give the “route step march” command to break the cadence when bridges are to be crossed. Our ambition is not to control every step on the bridge. But we can make considerable headway by reinforcing the foundations of the financial system and cushion the load from marching in step. Conclusion I began by quoting Nicolai Rygg’s annual address from 1932. Near the end of his speech, he turns his gaze towards the future: “Unfortunately, not much can be said about the outlook for the coming year. It appears to be shrouded in darkness.” Rygg was referring to the international credit crunch and what he called “intricate political questions”.

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