samchain/econo-pairs-v1 huggingface dataset:
However, the cloud computing market is highly concentrated and Amazon Web Services has built a dominant position. As the core financial functions lift and shift to the cloud, the risk of a single point of failure will emerge, and yet cloud providers are unregulated and out of the direct reach of financial supervisors. This raises questions about the effectiveness of the strategy followed so far by regulators vis-a-vis financial institutions’ third party service providers, which in essence consists in setting requirements on financial intermediaries regarding their contractual relationships with their service providers. The evolving balance of power to the benefit of dominant Bigtechs service providers may challenge the effectiveness of such a strategy going forward. Second, the question of conduct. Our regulation deems certain practices acceptable and others not. Technological developments are making it possible to use information that was previously out of reach of a financial intermediary. This could potentially allow a more accurate assessment of risk or a more “responsive” pricing of service. But what is possible may not be (socially) acceptable – to take one example, the current development of “social network informed credit scores” raises questions about financial intermediaries’ governance and risk control frameworks, when privacy concerns or discriminatory bias are at stake. (B) Let me now turn to new risks, which are non-financial in nature but closely intertwined with the digitalisation of finance. In my view, two in particular merit financial supervisory scrutiny. First, the strategic independence of incumbent banks.

Denis Beau: Financial regulation and supervision issues raised by the impact of Tech firms on financial services Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the ESSEC – Centre d’excellence, Paris, 30 January 2019. * * * Ladies and Gentlemen, Dear students, It is a pleasure to be at the ESSEC Centre d’excellence today to discuss the financial regulation and supervision issues raised by the impact of Tech firms on financial services. To date, in Europe, we have been accustomed to a bank-centric intermediation model. However over the last decade we have witnessed the rise of Fintech start-ups and the entry of Bigtechs in the financial sphere. Do they bring anything new to the way financial systems operate? According to some commentators they should bring a structural shift and see the replacement of the “old world” of bank-centric financial intermediation with disintermediated peer-to-peer systems. Others consider that rather than eliminating intermediation, if left on their own these new comers will more likely bring new intermediation models, in which Fintechs and Bigtechs intermediate banks. Hence I would like to focus the first part of my remarks on the possible impact of these new competitors on the traditional bank-centric financial intermediation model (1). I will then highlight some of the risks that go hand-in-hand with the changes underway and the regulatory and supervisory challenges they raise (2).
Norwegian banks have made good use of the solid earnings and low loan losses of recent years. Banks have built up their capital and adapted to new buffer requirements. The buffers can be used in the event of a pronounced economic downturn. Banks will then be able to absorb loan losses without a significant reduction in new lending. The build-up of financial imbalances can be difficult to identify. Financial crises can occur suddenly and unexpectedly. When they do occur, the banking system must be solid. Most regulatory components should be as stable as possible. The aim of macroprudential supervision cannot be to fine-tune the economy over the business cycle. But when financial turbulence occurs, the authorities must be prepared to act quickly and in concert. In Norway, the Ministry of Finance has the overriding responsibility for macroprudential supervision. It is natural that the political authorities make decisions regarding the framework and permanent regulations. It would be an advantage to delegate the responsibility for timevarying instruments to an independent authority with a view to ensuring effective implementation and predictability over time. Conclusion After two decades that can be described as a golden age, the Norwegian economy is heading for a demanding period. We have always known that the long oil-driven expansion would come to an end, either because the activity level would pass the peak, or because oil prices would fall. We have now reached that juncture. The challenges are twofold.

I have already spoken about the general prerequisites needed for a financial market to flourish. Within the scope defined by the operating conditions mentioned, market players are basically responsible themselves for what they do or don’t do. Their prime concern is to stay solvent at all times by adopting sound business practices and putting an effective organisation in place. To prevent problems from occurring, the responsible bodies at the individual banks must be able at all times, and with a minimum of delay, to accurately assess their risk situation and to take rapid and appropriate action. Of course, it is never possible to rule out the possibility of an individual bank running into difficulties. In such cases, a solution must first be sought through the market. Solidarity among the other market players should provide a “first line of defence”. Seeking funds from the central bank can only be contemplated in the last instance - hence the expression “lender of last resort”. Obtaining credit from the central bank presupposes that the liquidity requirements are only temporary. If the solvency of a BIS Review 26/1998  -4bank is in peril because of a threat to its capital, the problem is a matter for the supervisory authorities and possibly for the state itself. In practice, the boundary between liquidity and solvency problems can be a fluid one. In my view, it is important for everyone involved not to lose sight of these principles which are in fact quite simple.
Since the 1996, the National Accounts have painted a picture of a boom in household spending, with the volume of personal consumption growing by 3 ¾ per cent a year on average, compared with real GDP growth of 2 ¾ per cent. But for the past couple of years at least, the Bank’s Agents have been talking about a much tougher world ‘out there’, with demanding shoppers on a ceaseless ‘search for value’ using new technology to search out bargains as well as to make purchases, driving an endless round of discounting across a wide range of consumer goods. It’s a fact that in value terms, the growth in household spending has been slowing since the middle of 2000. Much of the strength in the volume of consumption reflects lower prices which have boosted consumers’ spending power, for given incomes. Since 1998 the price of durables has fallen by 14%, while the price of other goods and services has continued to rise. The falls have been spread across a range of categories, including cars, clothing and sports goods, though the fall has been particularly marked in IT/audio visual goods. So it is not surprising that spending on durables accounts for virtually all the growth in the volume of consumption - an average of over 8 per cent a year compared with around 2 per cent on other goods and services. The interesting questions are why this has happened, how far it will go and how long it will last.

As it happens the projections in the February Inflation Report do project a pick up in supply over the next few years, but that reflects improved labour availability rather an assumption that there is an ICT led productivity miracle in the making. But we could easily be wrong. Given recent experience, there is clearly some risk of undue pessimism, though it has to be said that past policy errors have more often been the result of too much optimism. One thing is for sure: we can’t afford to sit back and wait for the data to tell us the answer. By the time we have that degree of certainty policy will have moved on. So productivity will remain a key issue for us over the coming years. Conclusion Which brings me to my final challenge for policy makers: how to handle uncertainty in taking and presenting policy decisions. The MPC has met this challenge head on from the beginning. Within the discipline imposed by a shared inflation target, the Committee has been very open both about uncertainty and about the disagreement that is likely to go with it. Published MPC forecasts have explored rather than glossed over risks and uncertainties. The individual accountability of MPC members reduces the incentive to search for consensus.
These include a rate of inflation no higher than 1½% above that in the three EU countries where it is lowest, a one-year record of average nominal interest rates on long-term bonds no more than 2% higher than in the three EU countries where inflation is lowest, and membership of the ERM for at least two years without devaluing the currency and without exceeding the deviation band. Iceland will obviously not be fulfilling these conditions in the immediate future. Some form of EMU membership in the future would therefore not release Iceland from the obligation to bring inflation down to a similar level to that among its trading partner countries. It may be added that even if Iceland fulfilled all these conditions, it is extremely unlikely that it would be able to negotiate, in the foreseeable future, associate membership  4  BIS Review 95/2001  of the EMU or some kind of other bilateral currency cooperation with it. All the signs point in the opposite direction, whatever the phrasing of individual articles in the Treaty of Rome and Maastricht Treaty might suggest. Furthermore, it should be pointed out that twelve Eastern European countries are waiting to be admitted to the European Union and, later, the EMU. The ECB and Community leadership have firmly underlined that these nations should fulfil all the conditions for participation in EMU. Thus the EU is highly unlikely to agree to set any precedent which these nations could take advantage of as a short-cut into the EMU.

And such a winding down was necessary, too, since great macroeconomic imbalances had emerged, reflected most clearly in an unacceptable current account deficit and inflationary pressures. It is therefore inevitable that the output gap will narrow in order to bring down inflation, and that national income will drop even further in order to achieve a significant reduction in the current account deficit, which is far beyond a sustainable long-term level. High interest rates can be painful, not least for the households and businesses that have been imprudent in their consumption and investments recently and have relied too heavily on the facilities of credit institutions. It is out of the question for the Central Bank to base its interest rate policy on the actions of the least prudent members of the community. This can only be based on provisions made in laws and the joint declaration by the Government and the Central Bank this March, i.e. to promote price stability. This is the guiding aim of central bank activities in industrial countries around the world, because it creates a climate for economic growth and greater well-being for citizens. In a world of free capital movements and greatly enhanced access to credit compared with earlier times, businesses and households, and credit institutions too, must find their bearings for themselves. Understandably, many people complain about high interest rates, but the lively debates in recent weeks have often revealed excessive faith in the effect that an interest rate cut would have on economic developments.
Over the past six months: •  the level of unconfirmed trades has fallen substantially, for probably the first time since the inception of the credit derivatives market,  •  the practice of assigning positions without the knowledge or consent of all counterparties has stopped, and the market has adjusted with relative ease to a regime that now ensures that firms actually can capture their exposure to their counterparties,  •  there has been a dramatic increase in the share of active participants in these markets that are able to use the automated confirmation platforms, and a significant increase in the share of transactions conducted on those platforms,  •  the length of time between trade dates and confirmation is becoming shorter,  •  industry participants are making progress toward an agreement on a settlement process for credit events that will build on the approaches taken in the Calpine and Dephi cases and reduce the risk of price dislocations in cash markets given the large size of notional derivatives positions relative to the value of the underlying obligations, and  •  the Depository Trust and Clearing Corporation announced a plan to establish a "trade information warehouse" for all OTC derivative transactions that would provide for a centralized repository of derivatives contract terms and specifications, which will, in a more fundamental way, improve all aspects of the post-trade cycle.

The labour market is also expected to strengthen, with the unemployment situation improving for the rest of the year. Against this backdrop, MAS shifted to a policy of modest and gradual appreciation of the $ in April 2004. This policy stance was assessed to be supportive of economic growth, while ensuring low and stable inflation over the medium term. Let me now turn to other aspects of MAS’ work during the past year. II  Regulation and supervision  First, in the area of regulation and supervision, we issued the “Objectives and Principles of Financial Supervision in Singapore” monograph earlier this year. This will help the financial institutions we regulate and supervise better understand the desired outcomes of our supervision. Let me say a few words specifically on risk-based capital. We issued details of changes to the capital adequacy requirements for Singapore-incorporated banks in May 2004. We believe the new requirements are prudent but competitive, and more sensitive to the banks’ actual risk profiles. These changes will give the banks greater flexibility to manage their capital while maintaining a prudent buffer against future shocks. The Basel Committee on Banking Supervision finalised the New Basel Capital Framework last month. We intend to adopt the New Framework at the same time as the G10 countries. We will continue to work closely with the Singapore-incorporated banks to assess the impact of the New Framework and determine how best to adapt the proposals for Singapore.
They are well within the reference limits that the IMF, for example, applies in classifying countries according to whether the use of foreign currencies is important for them or not. Accounting in foreign currencies is confined to a handful of companies with multinational operations and generally speaking the króna is overwhelmingly predominant. However, it is true that among the advanced economies, Iceland has one of the highest levels of external debt and exchangerate sensitivity. Bearing all this in mind, there is hardly any question about the solid position of the króna in the Icelandic economy. Nothing gives us any reason to expect that to change. As in other countries that earn considerable revenues from tourism, foreign currencies are always used to some extent, but this is probably a much more common practice in countries with long borders with other currency areas, such as Canada or Switzerland. It seems highly unlikely that the króna’s position as a trading currency would be so severely undermined that other currencies would be preferred in domestic transactions. Continual movements in the exchange rate of the króna would create a broad risk in using other currencies, unless all liabilities - and that includes wage settlements - were to be converted into the same foreign currency at virtually the same time.

In 2002 the Central Bank began building up its foreign reserves again, purchasing foreign currency for the equivalent of 4.5 b.kr. Last year the Bank stepped up these purchases to the equivalent of 43.2 b.kr. Nonetheless, the Bank’s purchases only amounted to 3.6%  2  BIS Review 18/2004  of total turnover in the FX market during the year. By mid-2003 the Central Bank had repaid its foreign short-term borrowing in full and at the end of the year the foreign reserves amounted to more than 58 b.kr. This year the Bank has continued to purchase currency in the market, but on a smaller scale than in 2003. It thereby aims to strengthen its foreign reserves even more this year. Ample foreign reserves are an obvious prudential measure and one of the factors that international ratings agencies consider when evaluating the creditworthiness of Iceland’s sovereign and corporate debt. However, a high level of reserves does leave the Central Bank’s operations much more exposed to changes in the exchange rate, as reflected in the minor operating loss reported for last year, which was described earlier at this meeting. Financial stability The Central Bank is obliged by law to promote price stability and also an efficient and safe financial system, including payment systems domestically and with foreign countries. In most countries these are he main objectives of central banks.
Per Jansson: How do we stop the trend in household debt? Work on several fronts Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at the SvD Bank Summit, Stockholm, 3 December 2013. *  *  *  Accompanying figures can be found at the end of the speech. The original idea of the organisers was that I would talk about the current situation from a monetary policy perspective. However, wanting to focus instead on questions of principle, I was able to persuade them to let me do so. Now, it may not make much difference in practice, as the current monetary policy debate in Sweden so largely concerns questions of principle. I intend to start by looking back at how the Swedish economy has developed since the financial crisis broke out around five years ago, as well as at the debate about monetary policy during this period. I will then look ahead and give my views on the new policy area, macroprudential policy, and what I believe we need to do to escape the situation that has arisen with a high and increasing level of debt in the household sector and a persistent upward trend in housing prices. The conclusions we draw from looking back are important, as they may affect our view of what is the appropriate future course of action.

I’d like to illustrate the difference between the short and long-term consequences of a stabilityoriented economic policy with a classroom metaphor. In most school classes, there is a particularly enthusiastic pupil, the “swot”. For swots, the immediate effect of good academic achievement is negative, as they become excluded by the other pupils. Should they perform less well, simply to avoid this unpleasant situation? In the short term, the result would be positive, but in the long term they would probably regret it. Switzerland as an economic centre faces a similar dilemma. The result of the successful economic policy, and the associated stability, is that the Swiss franc has a tendency to strengthen, demanding constant adjustment from companies and their workforces. So should Switzerland throw its principles overboard and pursue an irresponsible financial and monetary policy? This would automatically reduce the pressure to appreciate and to adjust. And in the short term, that probably would bring some relief. However, in the medium and long term, such a policy would certainly come at the huge cost of endangering the hitherto successful “Swiss model”. The Swiss franc’s role in SNB monetary policy strategy What does this mean for monetary policy in practical terms? As a rule, monetary policy should not focus on the short-term impact of a strong franc on price competitiveness. Therefore, a monetary policy geared towards long-term macroeconomic stability does not normally involve any fine-tuning of the exchange rate.
So let me make it more real for you by giving some concrete examples of issues we have been working on in this broad area. As we mark today the 150th birthday of the BSA, an obvious place to start is the UK housing market. For deposit-takers including banks and building societies, this is the biggest single loan exposure, and it is also the biggest liability of UK households. And in insurance, firms are taking on more exposures to housing in response to the developing financial needs of consumers. So this will always be an important asset class for the PRA. But there are a number of areas to which we are paying particularly close attention currently. First, as all borrowers and lenders are well aware, we have seen something of a price war in the mortgage market over the last couple of years. This may be good news if you are, for instance, a young supervisor in the PRA looking to buy your first property. But it is less good news if you are a lender concentrated in mortgages, given the impact on net interest margins. The response of such lenders has been entirely unsurprising: a material move up the risk curve. You can see this absolutely clearly in several ways: a dramatic fall in spreads demanded over the risk-free-rate; a marked shift in the high-LTV share of new lending by building societies; and a significant increase in firms’ appetite for higher LTV and higher LTI lending (see Charts 1 to 4).

‘Building Societies’ excludes Nationwide.