samchain/econo-pairs-v1 huggingface dataset:
Over the next years, supervision and regulation within EU will change and improve significantly with the ECB and NCBs playing an important role. Being part of ESCB, BNB is going to take an active part in the process. Third, the next six years will be crucial to accomplishing one of the country’s major commitments stemming from the EU accession Treaty, namely the adoption of the euro as a national currency. The preparation for this has been a priority for the BNB over the past six years with a significant part of the work in legal, technical and operational terms having already been completed. This task will continue as a major priority in the next six years. Adopting the singe currency by an EU member state is not and cannot be a unilateral decision. In addition to fulfilling the Maastricht criteria, we should also be able to convince all our EU partners of our readiness and capacity to be part of the euro area. This is why the BNB and its Governor need the utmost confidence; this is why I resigned to make it easiest for the Parliament to take a decision. In conclusion, demonstrating effectively compliance with the principle of predictability, I am going to submit to the Office of the Speaker of the National Assembly a nomination for the election of a Deputy Governor in charge of the Issue Department as this Deputy Governor’s term of office expires on October 22.

Thomas Jordan: Real estate prices falling in the US, rising in Switzerland – implications for the SNB’s monetary policy Summary of a speech by Mr Thomas Jordan, Member of the Governing Board of the Swiss National Bank, at the Hochschule für Technik und Wirtschaft, Chur, 18 December 2007. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Developments in the real estate market are important for monetary policy. Real estate markets can influence inflation and economic cycles, but also the stability of the financial system. Property bubbles can result in a massive misdirection of capital and thus give rise to lengthy and difficult adjustment processes. Therefore, the SNB closely monitors developments on the real estate markets both in Switzerland and abroad. The economic outlook is still clouded by undesirable developments on the US real estate market, notably in the period 2004-2006. Given the size of the United States and the broad international spread of investments in the US mortgage market, these distortions have had a serious impact on the world’s financial markets and on global economic development. For some years now, Switzerland too has been experiencing a construction boom and a relatively sharp rise in property prices in certain regions and in given market segments. Comparison of the Swiss and US real estate markets shows, however, that these markets differ in a number of key respects.
1.3 The necessary constraints on model risk that the package contains should not be gold plated in the European transposition 1/3  BIS central bankers' speeches  The Basel 3 Final Agreement constrains overly aggressive internal models thanks to the introduction of the output floor at the highest level of consolidation. The EU should beware of not adding unnecessary constraints that would increase the impact of the output floor in a superequivalent way. In addition, in Europe, Pillar 2 requirements also cover model risks – whereas it is not the case for US banks, which do not have a specific Pillar 2 add on in their capital requirements. We therefore have to find a way in Europe, in some form or another, to eliminate any overlapping capital charges. 1.4 The need for a stabilization of the regulatory framework after the implementation of Basel 3 finalization We are now coming to an end of this regulatory cycle with the implementation of the Basel 3 finalization. Back in November 2020, the GHoS clearly committed the BCBS to abstain from major regulatory changes in the Basel framework in the near future. We need that banks focus now on other challenges in particular those related to the sustainability of their business models and those related to the new risks such as climate related risks or cyber-risks. 2. The stress testing framework in Europe: past, present and future Now, let me turn to the topic of the stress test in this second part of my remarks.

This exercise proved to be both very useful and reassuring: thanks to the improvement of banks’ capital position with the implementation of Basel 3, and despite the high level of uncertainty triggered by the ongoing pandemic, it shows that the European banking system is resilient to a very severe adverse shock. 2.3 Stress testing should also prove helpful for banks to assess and manage their exposure to climate change related risks The forward-looking perspective of stress tests should prove particularly helpful for banks and their supervisors to handle emerging risks such as climate change. Building on the work carried out by the Network of central banks and supervisors for the Greening of the Financial System (NGFS): we, at the ACPR and Banque de France, have recently conducted such an exercise, with French Banks and Insurers. Beyond helping us identify at an early stage their shortcomings and limitations that we will need to overcome, such stress test have provided us with initial 2/3  BIS central bankers' speeches  assessment of climate change-related risks, exposures of French financial institutions, which appears actually to be moderate. But may be more importantly, it has proved helpful to us in incentivizing financial institutions to give the proper level of priority and resources to the monitoring and management of climate-related risks.
I should add that while IAS 39 applies to all users of financial instruments, I illustrate its implications below with particular reference to banking. Who and what are accounts for? It is widely accepted that published audited accounts are prepared first and foremost for the owners of a business, that is the shareholders. However, it is often maintained that this information also meets the needs of other stakeholders, including creditors, customers, employees and so on. And so it does up to a point. Yet there are many users who have an interest in the financial position of a firm. On the face of it, it would be rather surprising if a single presentation was ideal for all of them. Let me try to illustrate this for the financial world - where the Bank’s financial stability remit runs - by looking at the respective needs of shareholders, depositors and regulators of banks. Shareholders are particularly interested in the returns being earned by a bank (its profitability), both current and prospective. They are looking mainly at the economic value of the going concern. The focus of depositors, regulators and authorities concerned with systemic stability, on the other hand, is likely to be on whether bank liabilities will be repaid on demand or when due. Two specific examples may help to illustrate these different perspectives: the treatment of “own-credit risk” and the valuation of sight deposits.

With pressures on their capital and new capital expensive where it is available, banks are likely to attempt to increase their margins and to slow down new lending, thereby reducing their capital requirements, for example by tightening non-price terms and conditions on new loans. One factor which regulators are watching carefully at present is the impact of the shift this month to the Basle II system of capital requirements for European banks. While Basle II improves on its predecessor and removes many undesirable incentives, it retains some procyclical features and any transition needs to be managed carefully. 8 The impact on expectations and confidence The other channel by which the financial market turbulence is likely to have macroeconomic effects is by prompting more cautious behaviour by households and firms. This might simply reflect uncertainty about the future. Firms may temporarily postpone investment because of greater uncertainty about the future path of demand. We saw an effect like this after 9/11 for example. But it might also reflect a revision by households and firms about the sustainable path of income and wealth in the coming years. The change in expectations may reflect the higher costs of borrowing and a higher risk of unemployment. Again a reduction in confidence about future growth may lead directly to lower consumption and investment. It is also likely to affect equity and property markets. Potential buyers may decide to wait before purchasing if they sense that there is a chance that prices may fall. Such behaviour can be self-fulfilling.
These cover, in particular, monetary and financial statistics, namely MFI balance sheet data, MFI interest rate statistics, investment funds statistics and statistics on securitisation, as well as consolidated banking data. Information from market data providers, available via the ECB’s Market Database, as well as from international institutions such as the Bank for International Settlements (BIS), Eurostat or the International Monetary Fund (IMF), which is part of the datasets collected by the ECB, complements the set of information to support the ESRB’s analysis and deliberations. Cooperation is under way to ensure that the new legislative initiatives of the three ESAs incorporate ESRB requirements to the extent that they can be addressed by using supervisory data. Extensive work has already been carried out with the EBA and EIOPA on the new supervisory templates to be introduced in the next few years. Given the need for agility in responding to new data to cover ESRB requests for information, work on procedures to conduct ad hoc surveys has been carried out, ensuring that the confidentiality issues are duly resolved. All this work requires a very close and ongoing cooperation not only within the ESCB, but also with the ESAs and national supervisory authorities, within other collaboration fora and with many other stakeholders, in particular in the industries concerned, as well as with international organisations in the context of the G20 initiatives. This cooperation is ensured through a Contact Group recently appointed by the ESRB Steering Committee at my request, and it has already proved to be very useful.

Finally, I will highlight what is missing and mention a number of important ongoing initiatives that could help to overcoming the key challenges in terms data that we still need to deal with. 2. The macro-prudential oversight function and the role of the ECB  Let me start by reflecting on the macro-prudential oversight function. There are three main components in the macro-prudential oversight process. The first concerns the surveillance needed to identify plausible and (systemically) important sources of risks and vulnerabilities on the basis of an analysis of the individual and collective strength and robustness of the constituent parts of the financial system – institutions, markets and infrastructures. The second involves the assessment of the potential costs and the ability of the financial system to cope with these costs should some combination of the identified risks and vulnerabilities materialise. This requires the ability to measure (and model) the potential costs and to calibrate the plausibility and importance of the various risks. The third component is the possible policy response that needs to be clearly justified and interlinked with systemic risk assessments. In particular, it should inform policy decisions on the appropriate timing of interventions and the selection of tools. The role that the ECB and the national central banks of the EU Member States play in contributing to financial stability is set out in the Treaty on European Union.
FIDE Forum and ICILF – working together to increase their impact and influence It is against this backdrop of growing demand that FIDE Forum has stepped in to offer financial institutions a platform to connect with potential directors from both within and outside Malaysia. The Directors Register achieves this in two ways. Firstly, by identifying board-ready individuals who already have the necessary skills, knowledge and experience. And secondly, by initiating into the talent pool individuals who have the calibre to serve on financial institution boards, but require development in certain areas, such as those specific to the banking or insurance industry. By significantly widening the supply sources, this initiative is in many ways a game-changing initiative to strengthen the talent pipeline for financial institution boards. The Directors Register complements the education programmes that have already been introduced for financial institution directors under ICLIF. The FIDE programme has become a standard bearer for exceptional directors’ education with its deep dive into the nuts and bolts of practical governance, its link to supervisory expectations, and a delivery approach that effectively combines the use of exceptional faculty and the rich experience, knowledge and insights of the participants. To date, more than 600 directors from financial institutions, including directors from the regional offices of both foreign and domestic financial institutions, have attended the FIDE programme. This has had a visible impact that in bringing about important positive changes in how boards function and interact with senior management.

Conclusion As a source as well as a destination for investments, Asia presents compelling prospects for the hedge fund industry. Singapore’s strategic location makes us well-placed to serve as a hub with strong physical connectivity, trade and financial linkages to the rest of Asia. Together with our strong commitment to growing a well-regulated fund management industry, this makes Singapore an ideal vantage point for asset managers to understand Asia and to manage pan-Asian investments. So it leaves me now to congratulate SALT on its inaugural Asian leg of the SALT Conference. I wish all of you a fruitful conference ahead. Thank you. 7  Preqin/Global ARC Study of Asian Institutional Hedge Fund Investments 2012  BIS central bankers’ speeches  3
The causes of this downturn are very different from those of most recent recessions and, as I have just described, the policy response on this occasion has been much quicker and more decisive. There is also a third factor that needs to be borne in mind when drawing lessons from history. This is the first recession in the UK for nearly 20 years. The structure of our economy has changed significantly since the early 1990s, and even more so since the early 1980s and 1970s. The UK economy has undergone extensive reforms and deregulation, and businesses have been transformed by the implementation of new technology and the effects of globalisation. It is hard to quantify precisely the various ways in which the structure of the economy has changed. The appropriate data are not always available and it may be a long time until the effects are discernible in aggregate economic statistics. Importantly, the significance of some of these structural reforms may not be fully apparent until the economy is subjected to a substantial shock. For example, one consequence of globalisation is that supply chains around the world are far more integrated. This is likely to have played an important role in the speed and synchronisation of the world downturn, as the effects of falling demand in a few countries were translated into lower orders and production in many in a matter of weeks. That increased integration is also likely to affect the speed and nature of the recovery.

Note: standard deviation of inflation is calculated from quarterly observations of annual inflation; standard deviation of output growth is calculated using annualised quarterly observations of output growth. BIS Review 36/2005  13
Many might believe that since Norges Bank’s key policy rate is set every six weeks, there might be scope for correction should it transpire that economic developments were not as expected. To a certain extent this is the case. But since it takes time for the effects of our decisions to come into evidence, our scope for correction is in reality rather narrow. Setting the key rate at an inappropriate level for a period of time, may have serious consequences for the Norwegian economy. Without complete and reliable information at our disposal, it is easy to err. A number of studies have shown that in such situations humans often resort to more or less qualified guesses, gut feelings or rules of thumb. Allow me to offer an example involving distance judgement. Ordinarily, the closer an object is, the more clearly we will see it. Thus, if they see an object clearly, most people will perceive it as nearby. But when the astronauts landed on the moon, they had great difficulty judging distances, nearly always underestimating them. The reason was that visibility was unusually clear and they were in a landscape without known references. 11 One approach to uncertainty is to do what others do in similar circumstances. The UK decided to abandon the gold standard in summer 1931. In practice this meant a devaluation of the pound sterling against the US dollar. A few days later, Norway and the other Nordic countries decided to follow suit.

This exceeds the typical life span of a bank exposure, as well as the typical 1/4  BIS central bankers' speeches  control and planning horizon of a financial institution. Risk management tools, models and scenarios are not designed to capture the long-term nature of climate-related risks.3 Nonetheless, real impacts are already being felt and we must develop the tools to assess and manage them. Second, climate change is complex—the impacts are uncertain, non-linear and hard-to-predict. Trusted credit models, for example, may prove less useful if the historical patterns of the frequency and severity of weather-related shocks become a poor guide to the distribution of future losses. Asset prices may move sharply, and unpredictably, as consensus views change and future impacts are priced today. Moreover, transition risks may stem from second-order, indirect effects like the impact on supply chains, sectoral shifts or worker productivity, which are inherently difficult to model and predict. Third, we face significant data gaps. Climate change is a global phenomenon, but risks should be assessed locally, which requires new data such as asset-specific, geo-spatial data. Borrower-specific analysis requires data, for example, on asset utilization and climate effects for particular industries at particular locations. Such granular data is currently limited and requires significant resources to acquire and process, but greater transparency about the physical location of assets will allow institutions to better assess exposures to at-risk borrowers or to specific geographic risks. As supervisors, we can consider climate-related risks in terms of both microprudential and macroprudential objectives.
But I think that, rather than an expense, we should consider enhanced systems or governance as long-term investments. Despite the difficulties, we are seeing adjustments to bank business models, partly as a result of the pandemic but also in response to a trend that had been under way for some time. Headway is being made in digitalisation and process optimisation, which may impact internal control functions. We are also seeing greater resort to outsourcing, and nimbler and more flexible ways of working are being implemented. All these trends involve changes that redress problems and improve efficiency. But, regrettably, they also pose additional risks. It thus seems that neither banks nor supervisors can lower their guard as regards risk. In fact, I believe future work is guaranteed for those of us who make a living from risk measurement and management. Financial education I will conclude referring to an area which I believe is not given sufficient attention, despite it being crucial for ensuring a responsible financial culture that will contribute to the future economic viability of banks, companies and individuals. Clearly, end-financial consumers, especially individuals, are the weakest part of the customerbank relationship. That makes it important for banks to take the utmost care when they advise customers to take up their services. 5/6  BIS central bankers' speeches  But we must acknowledge that a shortfall in financial knowledge among citizens is the starting point here. And this may have prompted mistaken decision-making.

Moreover, as we have witnessed, these losses tend to increase precisely during the immediate aftermath of a crisis, when some of the questionable commercial practices are exposed. Consequently, a clear procyclical effect may ensue. For all these reasons, we supervisors and banks must focus our efforts on mitigating nonfinancial risk. How can we reduce it? Unlike other risks, it is not a case of considering what banks should do, but how they should do it. The issue is to improve the quality of internal procedures, IT systems, the governance structure and the compliance function. In addition to material aspects, many of these improvements involve a cultural change which, undoubtedly, is doomed to fail unless resolutely supported by each bank’s management. What is needed here is the involvement of the board of directors, which should consider the management of non-financial risk as part of its regular monitoring tasks, instead of confining itself to reacting to problems that may arise in the event of control failures. Naturally, the board cannot perform its functions if it does not receive the appropriate information from its operating and risk-management and control units, known as the “first and second lines of defence”. And, of course, it also needs to have an internal audit function as a third line of defence. Obviously, considering a strengthening of control functions is not straightforward in the current context. Such improvements usually entail additional expenses that add pressure to the sector’s already-diminished profitability.