samchain/econo-pairs-v1 huggingface dataset:
This requires significant due diligence, and we are seeing insurers seeking more advice from third party specialists such as property valuation experts both for illiquid asset valuation and to calibrate adequate market value haircuts. Alternatively, we have seen deferrals of premiums incorporated in deals giving pension schemes time to dispose of such assets in an orderly fashion[9]. These premium arrangements can be complex and potentially capital intensive due to the increased uncertainty they can create. The PRA welcomes innovations in this market as insurers seek to better support their clients. At the same time, we want insurers to understand the additional risks and uncertainties when accepting premium that includes such assets. Even if firms use external expertise to price or manage these deals, Boards remain accountable for the decisions taken. They need to understand the basis for advice from third parties and to challenge the advice robustly. Straightforward questions need good answers: are these risks within appetite? have the bespoke features of the deal been considered over the full lifetime? how has the inherent uncertainty present been captured within the decision-making process? As noted in our 2023 Supervision Priorities letter[10], we are carrying out a thematic review to assess whether BPA writers’ risk management processes are keeping pace with their growth ambitions and expanding risk appetites.

In practice, given the lumpiness and finite nature of this market, I see strong incentives for insurers to stretch their supply capabilities in the short term, to capture as much of the new business while they can, before leaner years arrive. So, let us move to the main course, and examine three areas where we see this stretch arising in practice. An expansion of risk appetites As deals become larger and increasingly focussed on buy-outs of complete schemes, we observe BPA writers expanding their risk appetite, sometimes outside their current core expertise. Firstly, our supervisory work suggests there is an increased appetite to insure deferred pension scheme members: the younger, not yet retired individuals. They bring several additional risks for insurers  Page 4  including much greater uncertainty in the longevity risk, as assumptions have to be made over a much longer period of time, together with risks stemming from policyholder options, such as cash commutation, flexibility on retirement age and transfers outs[6]. This appetite is supported by reinsurers, who provide both pricing expertise and capital. Secondly, the disruption in the UK gilt market last autumn resulted in some pension schemes being overweight in illiquid assets[7] as gilt values fell significantly, and schemes sought to reduce their leverage under liability driven investment strategies[8]. We see insurers increasingly developing solutions to accept illiquid assets as part of the BPA premium, as pension schemes may be reluctant to dispose of these assets in the open market, potentially at a large discount.
A deep understanding of risks provides the foundation for stability and growth. The research and educational activities of EDHEC-Risk Institute will help enhance our understanding of risks, and the development of talent. We welcome EDHEC-Risk Institute to our research and financial community in Asia. Your presence adds to another important strand in the deepening relationship between France and Singapore. I congratulate EDHEC-Risk Institute on the opening of its Asian centre, and wish Professor Amenc, Professor Ducoulombier and your colleagues every success. 19. 4  Thank you. BIS central bankers’ speeches

And even those who look mainly to the United States - where both the market and the currency relationship have been more stable - faced intensified competition from the rest of the world. BIS Review 5/2000  2  These effects were not, of course, peculiar to Scottish businesses. They applied equally to all similarly internationally-exposed businesses throughout the UK. Each region has its own particular business characteristics so that some were affected more than others - with some English regions worse affected than the overall economy here in Scotland. But the effects were just as damaging to similar businesses wherever they were located, so that the differential impact was felt within regions throughout the UK not just between them. These cries of pain from the most severely affected businesses and sectors right across the UK I really do understand. The question is what can we do about it through the operation of monetary policy? The problems - as I have explained - derive essentially from developments abroad, and there is not much that we can do directly about them, although both the Bank and the Government are very actively involved in the wider international debate on how to bring about greater stability and better balance in the global economy. Of course we take full account, in our forecasts and in our policy judgements, of the implications of the international environment for our own economy. That is why we moved aggressively to cut interest rates from the autumn of 1998 and early last year.
2  BIS central bankers’ speeches  Climate change is the Tragedy of the Horizon. We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors – imposing a cost on future generations that the current generation has no direct incentive to fix. That means beyond: •  the business cycle; 9  •  the political cycle; and  •  the horizon of technocratic authorities, like central banks, who are bound by their mandates. The horizon for monetary policy extends out to 2-3 years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade. 10 In other words, once climate change becomes a defining issue for financial stability, it may already be too late. This paradox is deeper, as Lord Stern and others have amply demonstrated. As risks are a function of cumulative emissions, earlier action will mean less costly adjustment. 11 The desirability of restricting climate change to 2 degrees above pre-industrial levels 12 leads to the notion of a carbon “budget”, an assessment of the amount of emissions the world can “afford”. Such a budget - like the one produced by the IPCC 13 – highlights the consequences of inaction today for the scale of reaction required tomorrow. These actions will be influenced by policy choices that are rightly the responsibility of elected governments, advised by scientific experts.

Solvency ratio of the banking system percent 20 18 16  14 12 10  Solvency ratio  mar.-18  sept.-17  mar.-17  sept.-16  mar.-16  sept.-15  mar.-15  sept.-14  mar.-14  sept.-13  Minimum regulatory capital requirements = 8%  Note: Solvency ratio = Total own funds/ Risk weighted assets  Source: NBR  mar.-13  sept.-12  mar.-12  sept.-11  mar.-11  sept.-10  mar.-10  sept.-09  mar.-09  sept.-08  mar.-08  8  Source: NBR Source: NBR NPL ratio (NBR definition)  Jun. 2018  percent  Mar. 2018  Dec. 2017  Sep. 2017  Jun. 2017  Mar. 2017  Dec. 2016  Sep. 2016  Jun. 2016  Mar. 2016  60  Dec. 2015  Loan-to-Deposit ratio, %  Sep. 2015  70  Jun. 2015  90  Mar. 2015  100  Dec. 2014  percent  Sep. 2014  Dec. 2017  Apr. 2017  Aug. 2016  Dec. 2015  Apr. 2015  Aug. 2014  Dec. 2013  Apr. 2013  Aug. 2012  Dec. 2011  Apr. 2011  Aug. 2010  Dec. 2009  Apr. 2009  130  Aug. 2008  Dec. 2007  Figure 11. LTD and NPL ratio Non-performing loans  25  percent 61  120 60  20 59  110 58  15 57  56  10 55  80 54  5 53  52  0 51  NPL Coverage Ratio (rhs)  Figure 12.
Much progress has been made in making the U.S. financial system safer and less prone to 2/3  BIS central bankers' speeches  panics. Still, there is more to do before we can say that we have ended “too big to fail.” This is work that we absolutely must complete. In particular, U.S. bank holding companies must do more to make their organizations resolvable under either Title I bankruptcy or Title II resolution. This requires having clean parent holding company structures, less corporate complexity, and essential service and support operations that are able to continue to operate even when the parent company becomes non-viable. Also, while there has been significant progress in terms of developing a workable resolution regime—the Single Point of Entry regime established under Title II of the Dodd-Frank Act—we still have to ensure that this regime can be safely utilized on a cross-border basis. This requires fully implementing the TLAC framework, and defining more explicitly the expectations and responsibilities of the different supervisory and regulatory oversight bodies that would have to work together internationally. In particular, this includes how liquidity would be provided to an insolvent firm during the early stages of resolution, so that the firm’s operations could be wound down in an orderly way without destabilizing the global financial system. Finally, I would like to address the issue of bank culture and conduct. Although there has been considerable effort here, there is still much more to do. Banks must restore their trustworthiness.

Yet, we could make greater progress more quickly if this effort were coordinated across the industry. I think bank leaders could benefit from sharing best practices and participating in surveys that would allow them to benchmark their strengths and weaknesses versus others on an ongoing basis. Building a financial system that is more resilient and robust, having a bank resolution regime that credibly ends “too big to fail,” and building strong cultures that restore the trustworthiness of the financial industry are all goals we must continue to pursue. Without success on all three fronts, I don’t think we can say that we have fully addressed the problems made evident by the financial crisis. Thank you for your kind attention. 3/3  BIS central bankers' speeches
When there is confidence that the inflation target will be attained, high wage growth creates expectations of a tight monetary policy and relatively high interest rates. High returns make it attractive to take krone positions. Increased demand for our currency boosts the international value of the Norwegian krone. If wage growth slows , and we can be confident that it will remain low for the next few years, the interest rate differential against other countries can be narrowed. This will normally lead to the krone depreciating. Over the last thirty years, manufacturing has been scaled back in waves, and particularly sharply in the period 1977 to 1987. In the years leading up to the periods of contraction, profitability weakened in the manufacturing sector. It can take time before such a deterioration translates into lower output and  BIS Review 49/2002  11  employment. But when the turnaround hits, it tends to hit fast and hard. It now appears that a new period of downscaling is under way. Several factors point to this: first, a trend analysis indicates that manufacturing employment will be reduced in the period ahead, partly because petroleum investment is expected to decline and productivity growth in manufacturing to be somewhat higher than in other industries. Second, manufacturing costs have increased sharply since 1998 as a consequence of high wage growth. Up to the summer of 2000, this cost increase was to some extent offset by a weaker krone. The appreciation of the krone has revealed and exacerbated the deterioration in cost competitiveness.

And third, progress in building the Capital Markets Union is essential to increase the resilience of the EMU to macro-financial shocks, better spread the costs of asymmetric or idiosyncratic shocks, reduce the risks of financial fragmentation, and provide a more favourable environment for private investment. At present, the relatively small size of equity markets and the substantial national bias in asset portfolios limit risk sharing in the area. In addition, a deeper Capital Markets Union can improve the channelling of abundant aggregate savings into investment in infrastructure, energy and innovation, areas where private investment is crucial. In this regard, a key element for a truly deeper and more integrated EU capital market would be a sufficient volume of pan-European safe assets. An EU safe asset would become a common benchmark for investors, allowing security prices across the EMU to better reflect the risk of their fundamentals. It would also facilitate the development and integration of the area's financial markets, and movements in search of credit quality would no longer produce cross-border flows to countries considered safer. It would also boost the confidence of international investors in the European project, helping to strengthen the international role of the euro. All this is particularly relevant in a context of geopolitical tensions and asymmetric shocks. 6  The consequences for monetary policy Let me now turn to the third part of my talk: are all these recent global developments relevant for the conduct of monetary policy?
First, since the global financial crisis, the UK economy has been subject to a series of major supply shocks, which, for reasons that I will explain, create a tension between short-term inflation and output stabilisation. And second, there has been a renewed recognition that, in extreme circumstances, the monetary authority may have to take into account financial stability considerations in setting monetary policy with potential consequences for the short-term path of inflation control. These are big decisions, decisions subject to considerable uncertainty, and decisions which entail potentially large welfare costs, arising from high unemployment and unevenly distributed costs of inflation. They deserve scrutiny to ensure that they are consistent with society’s preferences as expressed in statute and remit. 1. Monetary policy remit For most of the Bank’s history, an assessment of whether it was acting in a way consistent with society’s view of the public good could not be made. As former Governor Eddie George remarked, during the half century that followed its nationalisation in 1946 “the Bank operated under legislation which, remarkably, did not attempt to define our objectives or functions.” 7  They were, instead, “assumed to carry over from [the Bank’s] earlier long history.” In that regard, the Bank’s ‘constitution’ resembled that of the United Kingdom more broadly, comprising a rich history of law, principle and convention.

Exogenous changes  0.5  in firms’ pricing power are one example – so-called cost-push shocks. Shocks to the exchange rate, the  0 Source: Bank calculations. economy’s supply capacity, or commodity prices also  10  See Blanchard, O., and J. Galí (2007). "Real Wage Rigidities and the New Keynesian Model". Journal of Money, Credit, and Banking, 39(1), pp. 35-65. 11 See Broadbent, B (2013), “Conditional guidance as a response to supply uncertainty”, speech at the London Business School. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches  6  Chart 2: … whereas after the financial crisis, the economy experienced a challenging monetary policy trade-off  have this flavour. 12  Because monetary policy’s  influence on inflation is predominantly an indirect one, via demand, in such circumstances inflation can only  Financial crisis and after  6  Inflation (%)  be controlled by delivering an opposing movement in aggregate spending. If something pushes up on  5  inflation directly, monetary policy can only bring inflation back down by causing a reduction in  4  spending via higher interest rates. The speed with 3  which this adjustment is delivered is determined by the monetary policy maker guided by their remit.
Food price inflation also rose in August, (to 10.6 per cent), reflecting higher input costs related to energy, disruptions of trade in food commodities, and adverse weather conditions. While supply bottlenecks have been easing, these continue to gradually feed through to consumer prices and are putting further upward pressure on inflation, as is recovering demand in the services sector. The depreciation of the euro has also contributed to the rising inflationary pressures, together with the aforementioned supply and demand factors. Governing Council latest meeting decision In response to these developments, in our latest meeting, the Governing Council of the ECB decided to raise the three key ECB interest rates by 75 basis points. This significant step frontloads the transition from the prevailing accommodative level of policy rates towards levels that will enable the timely return of inflation to our two per cent medium-term target. Undeniably, the key current challenge for the ECB as well as other major central banks is raising interest rates to deal with inflation while recession risk is high. However, the risk of high inflation becoming entrenched in inflation expectations is a greater threat. The longer inflation remains elevated, the more harm it will cause to individuals and companies. While monetary policy will act decisively to restore inflation to our target, fiscal policy must be targeted in order not to counteract monetary policy and safeguard the most vulnerable people's incomes. Domestic economic developments Let me now turn to domestic economic developments.

Jean-Pierre Roth: Life in a two-headed monetary system - the Swiss experience Speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the 50th Anniversary of the Bank of Israel, Jerusalem, 29 November 2004. * 1. *  *  Introduction  It is almost a common-place to state that the birth of the euro on January 1, 1999 was a milestone in the process of European integration. Giving up national sovereignty in monetary matters was without doubt a very bold move of historical proportions. It will have long lasting economic and political consequences. It is meant to promote efficiency, transparency, and growth. The creation of a single currency should also act as catalyst towards further European integration. Moreover, and this is really what I would like to focus on today, the creation of the euro has changed the world’s monetary landscape. I believe that one can say without fear of exaggeration that it has led to a new international monetary order. Countries such as Israel and Switzerland, situated on the periphery of the euro area, are affected as well. I would like to share with you some of our experiences in this regard, and I would be very interested to know to what extent these findings apply to your country too. 2. Our pre-euro worries  Quite frankly, my colleagues and I at the Swiss National Bank were somewhat worried before the introduction of the euro.
Birgir Isleifur Gunnarsson: Review of economic and financial development in Iceland in 2003 Address by Mr Birgir Isleifur Gunnarsson, Chairman of the Board of Governors of the Central Bank of Iceland, at the Bank's annual meeting, Reykjavík, 23 March 2004. *  *  *  On behalf of the Board of Governors of the Central Bank of Iceland I welcome you all to the Bank’s 43rd annual meeting. The Bank’s financial statements for the year 2003 have been ratified today by the Prime Minister. The Bank’s annual report has also been published. It includes a survey of the Bank’s activities and performance, along with a detailed report on the Bank’s monetary policy and actions, the financial system, financial stability and the financial markets, and the main features of economic developments in the course of last year. Price developments Three years have now passed since Iceland’s monetary policy framework was changed and a formal inflation target was adopted with a joint declaration by the Government and the Central Bank. Under this framework, the target of monetary policy is price stability. The Central Bank is obliged to aim at an average rate of inflation, measured as the annual 12-month increase in the CPI, of as close to 2½% as possible. Since monetary policy aims at maintaining price stability, it will not be applied to achieve other economic targets such as a balanced current account or a high level of employment, except insofar as these are compatible with the Bank’s inflation target. Prices were stable in 2003.

As a result they will not shift the underlying macroeconomically-relevant monetary trends in the economy, which ultimately pin down developments in the price level. They are not intended to cap or control longer-term interest rates or to offer more favourable underlying financing conditions to the institutions involved – or, for that matter, to the Government – than would have prevailed in an orderly market environment. In the spirit of the famous Bagehot rule addressing the threat of bank deposit runs, yesterday’s intervention is intended to prevent painful, adverse self-fulfilling market dynamics emerging. That is why yesterday’s intervention is a “temporary and targeted financial stability operation”. It is intended to allow the inevitable and necessary re-pricing of financial assets stemming from recent macroeconomic news – including last week’s fiscal announcements – to take place in an orderly way. So yesterday’s intervention was not a monetary policy operation. The temporary and targeted character of the Bank’s intervention is key to the distinction between financial stability and monetary policy that I have emphasised here. With that in mind, let me now turn to the responsibilities of the Monetary Policy Committee (MPC), of which I am a member. The MPC will make a comprehensive assessment of the macroeconomic and monetary situation ahead of our next meeting in early November, before coming to a decision on the monetary policy stance. Hopefully, what I am about to say is self-evident. But in current circumstances it bears saying nevertheless.