samchain/econo-pairs-v1 huggingface dataset:
The new approach amplifies the focus on institution-specific risks in the supervisory assessment and rating process. Importantly, the framework serves to mutually enhance understanding by the institutions and the Central Bank of the inherent risks faced by the respective institutions, and thereby establish the common expectations regarding the management and control of those risks, taking into account the nature, scope, complexity and risk profile of the institution. This process, in turn, facilitates appropriate supervisory and institutional responses that are proportionate to the risk assessments of individual institutions and their systemic impact. Similarly, the implementation of the risk-based capital framework for insurers will further reinforce the regulatory focus on risk. The adjustments to this framework will take into account the feedback received from the industry on the concept paper released by Bank Negara Malaysia in December last year, as well as the results of the impact study that was concurrently carried out to assess the potential capital adjustments required by insurers. Specifically, the adjustments to the framework are being made to achieve greater consistency between the valuation bases for assets and liabilities, and to fine-tune the asset risk charges. A second consultation paper, incorporating these changes, will be released for further industry comments later this year. Insurers will no doubt welcome the greater degree of investment flexibility that will be allowed under the risk-based capital framework. It is an important improvement over the current "admitted assets" framework, and one that is also expected to significantly raise the profile of the investment management function within the industry.

Under normal circumstances, supply shocks are expected to have a temporary impact on relative prices, not changing the course of medium-term inflation. Nevertheless, the emergence of multiple shocks at the same time and their persistence for a considerable period aggravated the risks on pricing behavior. In fact, the research conducted by the Central Bank staff indicates that economic agents increasingly focus on past inflation while forming their inflation expectations. After evaluating the said developments, the Central Bank concluded that the increases in food and energy prices in recent years reflect a structural change stemming from the global economic environment. In other words, these shocks are likely to prevail for a longer time period, contrary to previous forecasts. There is no clear evidence at this point that this trend will reverse in the short term. Moreover, our revised projections suggest that even with the maintenance of a cautious monetary policy stance for the foreseeable future, reaching the 4 percent target is going to take an extended period of time. Dear Guests, In light of these evaluations, the Central Bank of Turkey announced the framework of its monetary policy for the upcoming period in the April 2008 Inflation Report and in the letter on inflation targets that was sent to the Government on June 3, 2008. The first pillar of the monetary policy framework is the target revision.
In June the evaluation exercise was completed, enabling an estimate of the capital needs for the whole system to be made, and confirming that they were clearly below € billion; at the end of August the Royal Decree-Law on credit institution restructuring and resolution was approved, constituting a new code in this area; at the end of September the exercise was completed, enabling the capital needs for each of the banks participating in the exercise, which accounted for 90% of the Spanish banking system, to be determined; and, last Thursday, the Decree which will regulate the activity of the Asset Management Company for Assets Arising from Bank Restructuring (SAREB) was approved, another key step in the implementation of the programme agreed with the European Commission. The analysis concluded in September enabled the classification of banks for restructuring purposes to be confirmed. Previously, the banks without additional capital needs had already been determined (Group 0) as had the banks controlled by the FROB (Group 1), to use the terminology of the Memorandum of Understanding; this classification was completed, dividing the other banks with capital needs into: a) those with plans to achieve the capital levels required using their own means; and b) those which will require State aid to do so. The latter were requested to provide restructuring plans which are currently being studied.

The correction of imbalances will be essential for regaining market confidence. And here, both budget policy and further structural reforms will be a pivotal contributing factor. The year 2013 poses considerable challenges and difficulties. If we manage to overcome them, they will put us on the path of economic growth and job creation. BIS central bankers’ speeches  5
Uncertainty prevails over exactly when and how Brexit will take place; we can expect recurrent bouts of market volatility in the months ahead. Central banks across the world have said they will do what it takes to safeguard financial stability and maintain smooth functioning of their markets. We expect the global financial system to stay resilient, given ample liquidity and the generally stronger balance sheets of banks. But the UK economy is expected to take a hit and there will be some fallout on the EU. Uncertainty, especially over the terms of the UK’s exit from the EU and its future access to EU markets, will weigh on business confidence and investment spending. Growth in the EU will be weighed down by Brexit, on account of its significant trade and financial linkages with the UK. This in turn is likely to have a small dampening effect on global growth. The political and social implications of Brexit could have more significant economic consequences over the medium to long term. But it is too early to tell what these implications might be. There are several key elections taking place in Europe next year. They will determine the ability of governments to maintain support for structural reforms as well as for the European project. Destabilisation of politics in Europe could impact global markets and global growth. The US is expected to stay on a moderate expansion path. The consensus growth forecast for 2016 is 1.9%.

But in a world in which capital flows freely, local attempts to control the pace of credit creation, particularly within the financial system, may not work. All of that will need to be thought through. But first we need to concentrate on the immediate challenges. Summary In a speech four months ago, I stressed that “we must try to avoid a vicious circle in which tighter liquidity conditions, lower asset values, impaired capital resources, reduced credit supply, and slower aggregate demand feed back on each other”. I identified monetary policy, liquidity policy, and regulatory capital policy as being amongst the instruments the authorities would need to use. That remains the case, as the stress in the global financial system has  4  BIS Review 38/2008  continued and, in the US at least, evidence of a feedback loop is apparent. Each of those instruments is constrained in some degree. That underlines the need for close co-operation between the authorities and the industry, and internationally. BIS Review 38/2008  5
8  BIS central bankers’ speeches  The Icelandic authorities have a strategy in place to lift the capital controls gradually, as conditions permit, without unduly undermining exchange rate and financial stability. The strategy is currently under review. It is clear that the process will be significantly affected by how the króna problem associated the winding up of the old banks is dealt with, as an amicable solution could greatly expedite the removal of the controls. But the basic thinking will remain the same. The first element is to secure the framework conditions for lifting the controls, such as at least balanced public sector finances, an underlying current account surplus, and adequate FX reserves. All of this is either in place or well on its way. The second element is to put in place the economic policy frameworks and prudential rules that will make it possible for Iceland to deal with the risks associated with free and volatile capital movements. That is also underway. The third element is to reduce the overhang of liquid offshore krónur to a safer level, either through release at a discount or by tying the offshore krónur up in longer maturities and real investments. That is underway as well, although some are of the view that the process is too slow. The fourth element is to open market access and, through other means, generate longer-term inflows to replace the capital that wants to leave. History shows that those who jump early on such a bandwagon have a lot to gain.

Literacy and numeracy are prime examples here, where there is universal coverage during the early school years. This makes perfect sense in building the educational basics. Take mathematics. This is compulsory for every student in the UK (and in many other countries), at least up to age 16. The bottom of the educational pyramid is, in effect, population-wide. After that point, the educational pyramid narrows quite sharply (Figure 1). Only 12% of the population studies maths between the ages of 16-18. And less than 1% study it beyond age 18, at college or university. This degree of specialisation also makes sense. Not everyone wants, or needs, to be Stephen Hawking. 50 51 52  Patel and Gibbon (2017). ING-Economics Network Survey of the Public’s Understanding of Economics (2017). Report prepared for the National Council on Economic Education by Harris Interactive (2005). 13  All speeches are available online at www.bankofengland.co.uk/speeches  13  How well the UK educational systems provide students with even the essentials of numeracy is another 53  matter. The statistics here tell an ugly story, with 17 million adults in the UK having numeracy skills no  better than those expected of a primary school child. illiteracy, where the figures are equally ugly. 55  54  And it is a short hop from innumeracy to financial  Nonetheless, in coverage at least, maths education has a  broad base, as befits a subject needed by almost everyone almost every day of their lives.
So far, I have been talking about what I refer to as “vertical” co-operation, in the sense it addresses the relationship between home and host supervisors in relation to specific institutions and groups. But there is also a horizontal aspect that will be crucial for the future. This is supervisory convergence - the fourth level. Greater consistency in supervision is essential in promoting consistent approaches across borders, and thereby a level playing field. My view is that without convergence of supervisory practices across the EU, the consolidated or lead supervision model seems likely only to lead to fragmentation, with different groups being supervised in potentially inconsistent ways. This is why the work of the new Committee of European Banking Supervisors, or CEBS, is so important. This is the first time that the EU has had a committee that is formally charged with promoting co-operation between supervisors and convergence in supervisory practices. Danièle Nouy, who will speak shortly from her perspective as Vice-Chair of CEBS, is, of course, much better placed than me to talk about the work of this committee. But I think that CEBS has already made excellent headway, and will undoubtedly be the driver of progress in the future. And I’m sure that the industry will keep up the pressure to ensure that this is the case.

4/6  BIS central bankers' speeches  As we continue to see the impact of technology and big data in other parts of financial services, one interesting question is how innovation and enhanced technology will support the measurement and management of culture. The potential of big data analytics to revolutionize approaches in many areas of business has been talked about for years, and is now beginning to become a reality. For example, we might see firms routinely leverage broader data to make stronger predictions about potential misconduct risk, which could be useful to help focus scarce compliance resources. Some may view the official sector as an impediment to the adoption of new technologies, but I don’t think that needs to be the case. In the context of compliance risk management in the U.S., the five federal banking agencies recently encouraged financial firms to explore innovative approaches to meet their compliance obligations related to money laundering and further strengthen the industry against illicit activity.15 Similarly, in the U.K., Rob Gruppetta, head of the Financial Crime Department at the Financial Conduct Authority, has spoken about the “balancing act” the FCA faces as a regulator trying to encourage progress and innovation while also mitigating danger and imprudent risk-taking. He points out that data from new technologies has also allowed the FCA to be more consistent, effective, and risk-based in its supervisory approach toward conduct risk.16 This leads to a question about how firms can use similar tools and techniques to mitigate misconduct risk and promote healthy cultures.
In particular, we can’t be confident about how much fiscal drag will blunt growth. Ultimately, though, the drag should abate. When that happens – presumably later this year, the economy should strengthen. Inflation, as measured by the personal consumption expenditure deflator, is currently below the Federal Reserve’s 2 percent objective (Exhibit 9). Substantial slack remains in labor and product markets, and underlying measures of inflation are subdued. With weak labor compensation growth, the trend growth of unit labor costs is less than 1 percent annualized, which is well below price inflation. Moreover, inflation expectations remain well anchored at levels consistent with our 2 percent longer-run objective. Thus, I conclude that the risk that inflation could significantly exceed our 2 percent objective is quite low over the next few years, even if the recovery were to strengthen considerably. U.S. monetary policy initiatives Beginning in September, the FOMC made a number of important changes to monetary policy in order to promote a stronger recovery in the context of price stability. First, the FOMC began purchasing an additional $ billion of agency mortgage-backed securities (MBS) each month.4 Second, the FOMC stated, for the first time, that it would continue buying assets and employ its other policy tools as appropriate until there was a substantial improvement in the labor market outlook5. Third, the FOMC stated its intention to maintain a highly accommodative stance of monetary policy for a considerable time after the recovery strengthens. Two additional initiatives followed in December.

It is quite difficult to isolate the specific impact of European Monetary Union, due to the fact that large issuances during the 1999-2001 period were also linked to the refinancing needs arising from intense merger and acquisition activity. Looking ahead over the medium-term, growth in the bond market is likely to be driven by such elements as the development of pension fund assets, while retail savers may move away from bank deposits to invest in other savings products. In turn, the design of savings products will benefit from the standardisation and diversification of fixed income 5 issuance . The integration of interest rate markets in the euro area has been accompanied by a new phase in the development of derivative markets. The proportion of worldwide open interest contracts traded on  2  BIS and IMF statistics – quoted in RAJAN and ZINGALES – 2002. 3  OECD – Debt management and Government securities in the 21st century – 2002. 4  from about EUR 100 bios in 1998 to about 300 bios in 2000, 2001 and 2002 – source Bondware. 5  RAJAN and ZINGALES – 2002 – Second ECB international banking conference. 2  BIS Review 71/2002  6  European derivative exchanges went from less than 1% to more than 15% in 15 years . As derivative markets enhance the ability to manage and trade risk, they are at the heart of modern finance and the backbone of financial innovation.
The practice of banking:  For almost a century after Bagehot wrote Lombard Street, the size of the banking sector in the UK, relative to GDP, was broadly stable at around 50%. But, over the past fifty years, bank balance sheets have grown so fast that today they are over five times annual GDP. The size of the US banking industry has grown from around 20% in Bagehot’s time to around 100% of GDP today. And, until recently, the true scale of balance sheets was understated by these figures because banks were allowed to put exposures to entities such as special purpose vehicles off balance sheet. Surprisingly, such an extraordinary rate of expansion has been accompanied by increasing concentration: the largest institutions have expanded the most. Table 1 shows that the asset holdings of the top ten banks in the UK amount to over 450% of GDP, with RBS, Barclays  BIS Review 140/2010  1  and HSBC each individually having assets in excess of UK GDP. Table 2 shows that in the US, the top ten banks amount to over 60% of GDP, six times larger than the top ten fifty years ago. Bank of America today accounts for the same proportion of the US banking system as all of the top 10 banks put together in 1960. While banks’ balance sheets have exploded, so have the risks associated with those balance sheets. Bagehot would have been used to banks with leverage ratios (total assets, or liabilities, to capital) of around six to one.

For the moment, the signs of output deceleration in the emerging world are moderate and consistent with September’s forecasts. Manufacturing production is down in some economies, and distrust has increased. Worth noting is the slowdown in Brazil and, to a lesser extent, in China (figure 2). Considering forecasts of slower global growth and its effects on the inflationary outlook, a number of central banks at both developed and emerging economies have begun to increase the monetary impulse. 2  BIS central bankers’ speeches  In Chile, these events have had limited effects. The financial market is showing somewhat tighter conditions echoing the situation in the global markets, which can be seen also in other emerging economies (figure 3). In recent months, Chile’s sovereign and corporate long-term debt premiums increased 50 and 70 basis points, respectively, mainly from August and coinciding with a reduction in investments in local bonds by international investors. After being stable for a long period, the cost of short-term bank credit rose to spreads around 110 basis points lately – 45 basis points more than in September. It is worth noting, however, that the local banking system has a diversified credit base. It recently reduced its funding from European banks, but compensated with increased funds from the United States, Canada and Asia. The higher volatility has also affected stock, fixed-income and currency markets, a phenomenon that is also present elsewhere (figure 4).
But to reap all the benefits, central banks have to be up to the technological challenge, which is huge. They have also to face a much larger competition in the new data Era, with a view to maintaining trust in public information. They have therefore to become Big Data players and not only observers. This requires significant efforts. Let me illustrate this in five avenues to adapt to the digital evolution. a)  The Big Data era implies large changes in the IT infrastructure and a strong  determination to address novel technical challenges and to build a forward-looking data management and analysis scheme. At the Banque de France, we are building a Data Lake that covers all the new data functionalities, from data collection to machine learning. 3 b)  Central banks should also organise themselves to answer the legitimate  request from academics to have access to a wide range of granular data, in a modern and researcher-friendly way. At the Banque de France, we opened just one year ago a Data Room which gives access to 600 million of anonymized series, and it has already attracted more than 30 research teams. Harvesting Big Data capacities is only beginning and central banks should be in the race. c)  Data quality should be maintained at the same time. There should not be with  central banks input/output process any ‘garbage in, garbage out’.

It will in particular change the relationships between the members of the financial community and between this community and the non-financial world  II. Regarding Big Data, central banks will have to switch from an observer status to a user or player position, which implies significant changes in performing part of their activities  III. Big Data raise regulatory issues that cannot be solved within a national context but require a global reflection from public authorities. I. Big data will have significant economic effects. Entry costs for carrying out financial  transactions have already been reduced and will be lowered further in the future. Customer knowledge, in particular regarding the conditions applied by financial institutions, will be enhanced and more generally information asymmetries between clients and providers of financial services will narrow. Big Data can be a powerful card to play by GAFAs or other native non-financial firms to develop new activities. The financial industry has therefore to adapt rapidly to face the data revolution and compete with the new entrants, while protecting privacy against increasing cyber risks in particular. All in all, competition will increase, which is beneficial to the economy. The flip side can be enhanced risks for financial stability, implying a new form of vigilance for central bankers in particular. I will elaborate a bit more on this later on. II. Terabytes of data are available and more will be coming soon. Central banks will  collect more and more granular data. This is a clear opportunity for better forecasting and even nowcasting.