samchain/econo-pairs-v1 huggingface dataset:
Since the turmoil of 1998, financial firms have made significant strides in the sophistication with which they assess and manage counterparty credit exposures arising from OTC derivative transactions. Rather than using the broad “rule of thumb” methods that were once the industry norm, OTC derivatives dealers now commonly assess counterparty exposures on a portfolio basis using more sophisticated approaches to capture both current mark-to-market exposures and the potential future exposure that could arise from changes in the contracts’ underlying rates and prices. These models make possible - but they cannot of course guarantee - an appropriately conservative assessment of the potential reduction in future exposure provided by netting agreements and collateral arrangements. Dealers have also made significant strides in developing and employing more sophisticated and exacting ways to stress test their exposures. Taken together, these approaches have resulted in more realistic measures of counterparty exposures and to better management of counterparty risk. Beyond these improved exposure assessments, the use of collateral is much more prevalent than in the past. For instance, surveys by ISDA suggest that the share of fixed income derivatives exposures covered by collateral has increased from 40 percent to 55 percent just since 2002. Collateral is almost universally posted by all counterparties except those with the very highest credit ratings. There have also been significant improvements in the legal certainty surrounding these collateral arrangements.

Hamad Al-Sayari: Review of the Saudi Arabian economy Speech by His Excellency Hamad Al-Sayari, Governor of the Saudi Arabian Monetary Agency, to the Custodian of the Two Holy Mosques, on the occasion of the presentation of SAMA's Forty-Second Annual Report, Riyadh, 14 November 2006. *  *  *  Custodian of the Two Holy Mosques, It is a great pleasure for me to present to You the Forty-Second Annual Report of the Saudi Arabian Monetary Agency which reviews the most salient domestic developments of fiscal year 1425/26 H corresponding to 2005G and latest developments during the current year 2006. Custodian of the Two Holy Mosques, Your government continued during 2005 and the preceding period of this year to make a number of important decisions and achievements in the area of updating regulations, restructuring the national economy, approving a number of great development projects, accession to the World Trade Organization which is a significant step towards further integration into the world economy, attracting foreign investments, opening and expanding markets and reinforcing the competitive capacity of the national economy. Therefore, an observer may say that the national economy is moving in confident and rapid steps on the right path towards more strength, diversification and employment of national man power. All these efforts would boost achieving sustainable growth. Custodian of the Two Holy Mosques, In pursuance of Your efforts aimed at regulating, streamlining and enhancing institutional work, You have recently approved the Homage System (Nidham Al-Bai'a).
In Malaysia, despite the increased significance of the domestic capital market, the banking sector continues to be the predominant source of financing in our financial system, as it evolves to offer more innovative financial solutions to meet the more sophisticated needs of customers and investors. The increasingly complex nature of their operations have had a significant impact on their risk profile over the years. The domestic financial environment has also become more competitive, following an intensification of the liberalisation and deregulation process. Domestic banking institutions have now also ventured beyond our domestic borders. Increasingly, supervisory attention is therefore directed towards ensuring that a robust risk management framework is put in place to support such business expansion and growth strategies. Against this background, the call for improvements in risk management through the adoption of Basel II and the discussions on the effectiveness of supervisory arrangements on cross-border banking and financial activities are most relevant. The case of the BCCI in the early 90's and Baring in the mid-90's have also brought to the fore the gaps in supervisory oversight activities and highlighted the need for greater cooperation between home and host supervisors. Similarly, the arrangements for cross-border activities involving either international branch networks or the operation of subsidiaries is a subject of much discussion within supervisory circles, particularly with respect to its implications on supervisory cooperation.

Such efforts would therefore need to be implemented within the agenda of the overall financial sector development programme in the individual countries. It is within this context that Malaysia has chosen to adopt a flexible timeframe, underpinned by four key implementation principles: •  First, for capacity building measures to be implemented;  •  Second, within these capacity building efforts, the emphasis on the enhancement of the risk management framework for all banking institutions;  •  Third, to emphasise on strong business justification instead of regulatory mandate in the adoption of the more advanced approaches; and  •  Finally, to enhance the supervisory methodology to assess the internal models and the advanced risk management systems. The rigorousness of the analytical process under Basel II will certainly be demanding for banking institutions. It is equally demanding from the supervisory perspective to develop an appropriate response and assessment framework on these processes. Instead of over focus on validating the detailed quantitative and statistical procedures, supervisory attention would need to ensure that the analytical processes are undertaken to support decision making, and not merely to meet regulatory  expectations. Supervisors also need to undergo early training to identify the relevant issues when undertaking the supervisory assessment. This underscores, the importance of efforts to accelerate supervisory capacity building efforts, particularly in the development of specialised supervisory skills to conduct model validation.
4  See, EBA (2017) “Final Report: Recommendations on outsourcing to cloud service providers”, December, available at: https://www.eba.europa.eu/sites/default/documents/files/documents/10180/2170121/5fa5cdde-3219-4e95-946d0c0d05494362/Final%20draft%20Recommendations%20on%20Cloud%20Outsourcing%20%28EBA-Rec-201703%29.pdf?retry=1 4  Let me stop here. I have no doubt that the quality of the discussions we have today will allow us to deepen our understanding of these challenges in order to draw useful conclusions in terms of economic policy. And allow me to express once again my gratitude to the co-organisers of this event for making this conference possible, and to wish all the participants a very fruitful meeting and a pleasant stay in Istanbul. 5

Two priority areas: That evolving regulatory approach is underpinning our approach to two pieces of policy I know are of keen interest to BSA building society members – Basel 3.1 and our Strong and Simple regime for smaller firms. 13 UK Deposit Takers Supervision: 2023 priorities (bankofengland.co.uk) 14 The regulatory foundations of international competitiveness and growth − speech by Vicky Saporta  | Bank of England  Bank of England  Page 7  Basel 3.1 In keeping with what I have set out, the PRA’s proposed approach to the Basel 3.1 standards15 maintains high levels of resilience and is aligned with international standards that we helped shape. The standards constitute a comprehensive package of measures that make significant changes to the way firms calculate risk-weighted assets for the purposes of calculating risk-based capital ratios. The proposed changes will make firms’ capital ratios more consistent and comparable. But we also need to make sure that the new rules work effectively, and in line with our objectives, both for banks and building societies. That is why we stressed in our recent Basel 3.1 CP that it was very much an open consultation and that we welcomed evidencebased analysis and feedback to help shape our final rules. Input from both the BSA and its members is core to that, and we are grateful for the feedback you have collectively and individually given.
I shall structure my address around four simple questions. What were the problems of the Spanish banking system? What was done to try to resolve them? What results were achieved? And, finally, what is left to be done and what challenges lie ahead? 2. The problems  Looking back, the crisis can be seen to have had an enormous impact – one not yet fully absorbed – on levels of employment and well-being. Likewise apparent are the significance of the banking sector in the development of the crisis and the efforts taxpayers have had to make to restore financial stability. And in this light, it is difficult to avoid having a very negative perception of the functioning of the banking system in the run-up to the crisis. That said, the Spanish banking industry has, traditionally, been a rather profitable one, capable of successfully pursuing a very effective commercial banking model, of developing valuable franchises built on a highly stable customer base and, in the case of the biggest banks, of significantly expanding their business beyond our borders. Moreover, thanks to the business model then prevailing and to the supervisory action, the industry remained immune to destabilising practices common to other banking systems, such as investment in complex products that were short on liquidity and inadequately valued, which triggered the global financial crisis in 2007. Undoubtedly, however, Spanish banks had particular shortcomings which, along with the turbulence on European debt markets, account for a relevant part of the crisis in the sector from 2010.

Otherwise, persistently high public debt/GDP ratios will leave us chronically vulnerable to the possibility of adverse macrofinancial shocks arising in the future. This programme should include a clear definition of the budgetary objectives and their timeframe, along with details of the measures needed to attain them. It should also be based on a prudent forecast of macroeconomic developments. Further, it should include an appropriate response to possible slippage, and be compatible with an improvement in the quality of public finances. In this respect, it will be a priority on the expenditure side to subject the various items to exhaustive review, with the aim of identifying the areas in which there is room to improve efficiency. It is important that the recommendations further to AIReF’s assessments be taken into account as soon as possible. We also need a comprehensive review of the tax system, in order to improve its revenueraising capacity and its efficiency. Comparison with the other European countries can guide us here. And, once again, the results of AIReF’s recently published review of tax benefits are a significant contribution in this connection. 11  Conclusions In sum, following an unprecedented recession, we face a gradual recovery in the economy, which is still incomplete and uneven, and subject to high uncertainty. Against this background, the ECB’s actions since the onset of this crisis and the recent approval of the European recovery plan are also an unprecedented common European response.
While the ONS have suggested that the official data are likely to be better at picking up small retailers and unconventional shopping channels, such as internet purchases, the conformity of the picture given by the Distributive Trades survey with other potential indicators of spending, such as consumer confidence and the Agents reports, have led us to place less weight on the official data on retail spending for the present. 2  BIS Review 95/2008  The surveys will not always provide the best coincident guide, however. For instance, during the 1999-2002 period, the official data suggested greater swings in manufacturing output growth than did the Industrial Trends survey (see Chart 3). Now, during this period, we know that there was a rapid expansion in ICT-related activities, followed by a sharp contraction. The simple balance of “ups” over “downs” in the Industrial Trends survey could therefore be expected to have failed to reflect adequately the sharp movements in that sub-sector’s activity. So, for this period, the official data probably gave a better picture of what was going on. BIS Review 95/2008  3  A second use of surveys is in the application of forward-looking questions to form a view of the near-term outlook. In that regard, questions on business and consumer confidence, and on the trend in orders and backlogs, can give some indication of likely trends in output and spending.

The share employed in the public sector is also somewhat higher than in Norway as a whole. Unemployment has also been markedly lower in the inland region than in most other regions in recent years. 2  BIS Review 79/2005  According to the most recent reports, the economic situation in the region is favourable. Participating companies report rising employment and solid growth in all industries. In retail trade and in the construction sector, activity is brisk and increasing, with a somewhat wait-and-see approach to future developments. Growth in manufacturing has slowed slightly, but is likely to stabilise. Investment is rising in all sectors. Enterprises in the region envisage a slight rise in prices in the period ahead. Inflation has edged up since the beginning of 2004. In October, the year-on-year rise in consumer prices adjusted for tax changes and excluding energy products (CPI-ATE) was 1.2 per cent. Adjusted for the estimated direct effect of the interest rate fall on house rents, the rise in prices is estimated at 1.3 per cent in October. Total consumer prices (CPI) rose by 1.8 per cent in the same period. Prices for domestically produced goods and services rose by 2.0 per cent in the twelve months to October this year. The rise in prices for domestically produced consumer goods exposed to international competition has been very low this year. In October, prices for these goods were 0.2 per cent higher than in the same month one year earlier.
Within the investment fund universe, we need to look at the related question of whether actual or prospective redemption requests generated additional pressures for funds invested in illiquid assets, how well liquidity management tools operated under stress and whether we saw any emergence of first mover advantages that could have created ‘run’ dynamics. One important element in the amplification of liquidity pressure appears to have been the unwinding of large positions in interest rate markets, particularly US Treasuries, by very highly leveraged hedge funds. These funds can help to stabilise market prices in normal times by arbitraging small differences that open up between the value of derivatives and the value of the cash instrument on which the derivative is based. In March, however, these highly leveraged funds appear to have become an amplifier of stress. Sharp changes in government bond prices, margin call and inability to rollover funding forced substantial sales of government bonds by these players (almost $ during March) which in turn generated further falls in government bond markets. Moves in government bond prices generated margin call liquidity pressures on pension funds and insurance companies adding to the pressure on core funding markets. See, for example, previous Financial Stability Reports, or the Financial Stability Paper No. 42 “Simulating stress across the financial system: the resilience of corporate bond markets and the role of investment funds” 13  11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11  I have mentioned the role of margin in providing resilience against counterparty credit risk.

Policies are needed to address the structural strains in the demand side (at household level), while structural reforms are still needed on the supply side as well. 1  Voinea, L. and Monnin, P. (Feb. 2017), “Inequality Should Matter for Central Banks”, Blog of the Council on Economic Policies, https://www.cepweb.org/inequality-should-matter-for-central-banks/  4  Figure 1. Home ownership percent 100 90 80 70 60  50 40 30 20 10 0 RO LT SK HU BG PL LV EE CZ ES SI PT CY FI  IT BE IE SE NL UK FR DK AT DE  Source: ESRB Report on Vulnerabilities in the EU residential real estate sector - 2016  Figure 2. Household gross debt-to-income ratio  Figure 3. Household mortgage debt-to-income ratio  Source: ESRB Report on residential real estate and financial stability in the EU, 2015  5  Figure 4. Overcrowding - Households with dependent children RO  70 LV PL  overcrowding %  60  BG  HU SK  50 IT  LT  40 CZ  30  AT  EE  20 DE  10  DK  SE  UK FR NL  IE BE  55  60  65  70  SI ES  FI CY  0 50  PT  75  80  85  90  95  100  homeownership % Source: Eurostat  Figure 5. Average no. of rooms per person No.
Almost 900 businesses responded to our last poll, some of which were from this area. If you, as a representative of a small business, would like to participate in our current poll, please pass your card to my colleagues, who are in the audience, or see me after the speech and we will be glad to add you as a respondent. Results from our prior polls stressed the problem of access to capital. In response we held two workshops at the Bank in December. In the first workshop, senior officers from the Export-Import Bank, the Small Business Administration and the Department of Commerce described the various loan programs available to small businesses from their agencies, as well as programs to help identify markets. The second workshop reviewed the business plans of 40 small businesses and matched them with potential lenders. We plan to hold a similar workshop in Upstate New York this year. As you know, even states that are wealthier, such as New York, have large pockets of poverty. So, we target some of our work specifically to low- and moderate-income groups. We have worked hard to help neighborhoods that face high foreclosure rates, although much remains to be done. We have provided housing advocates with the latest information on mortgage conditions, via mortgage briefs, roundtables, presentations and newsletters. We have developed an interactive online tool that shows monthly delinquency and foreclosure conditions, which we believe will aid the work of housing counselors and other parties seeking to help these communities.

I would be happy to take a few questions. BIS central bankers’ speeches  5
Kevin Stiroh: The impact of the pandemic on cultural capital in the finance industry Remarks by Mr Kevin Stiroh, Executive Vice President of the Financial Institution Supervision Group of the Federal Reserve Bank of New York, at the Risk USA Conference (delivered via videoconference), 16 November 2020. * * * Good morning and thank you for the opportunity to participate today, the first day of what looks to be a very interesting four days featuring a range of important and timely discussion items for the financial sector. As I looked through the agenda, I was impressed with the diversity of topics the panels will be covering, including traditional banking risks, emerging risks like climate change, and the industry’s response to the pandemic. Today, I want to focus my time on the importance of a firm’s culture in determining business outcomes and how that culture may be impacted by the Covid-19 pandemic. Through my remarks today, I will address two core sets of questions. One, what is cultural capital, why does it matter, and how does it evolve? Two, how is cultural capital impacted by the pandemic? I think we’ll hear more about how the pandemic is impacting financial firms in a wide variety of ways throughout the conference. Before proceeding, I will emphasize that I am speaking for myself and my views do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System. What Is Cultural Capital? First, what is cultural capital?

These differences in strategies are reflected in different action plans, some aimed at growth in loans or commissions, others at streamlining costs through various means, including digitalisation or externalisation. The options are varied and should be adapted to the actual circumstances of each bank. Conclusions In conclusion, my address has focused on the importance of reflecting on the banking business model as a cornerstone for being able to achieve a sustainable level of profitability over time. I have stressed certain elements central to this reflection, such as detailed knowledge of the reality of the business, a price-setting policy that reflects the risk and cost of each product, a strategy geared to strengthening capital and reducing non-productive assets, sound governance and an individualised and tailor-made strategic approach. 7/8  Banks are preparing for the future and the new times ahead, although nobody knows for sure what this will be like. What is clear is that only banks that are proactive and better prepared from the strategic standpoint will be capable of exerting influence over their profitability and sustainability over time. Thank you for your attention. 8/8
But I would frankly be surprised if it developed into a steep or protracted recession – that certainly is not the most probable outcome; it is not a necessary outcome; and it is one which the MPC will certainly seek to avoid – always consistently with achieving our inflation target. Mr President, I can promise you that the next two years will be eventful. The only other certainty is that we will be confronted by the millennium. But I would hope that by the time we meet at this Dinner again the situation will be both clearer and calmer. In the meantime, I thank you once again for your excellent hospitality and I ask you all to rise and to join me in a toast to the health and prosperity of the CIB in Scotland. ***  BIS Review 7/1999

Practice and model diversity is a challenge, but not an obstacle for implementing efficient resolution strategies We have heard today that DGSs may still be very diverse in terms of their status, functions, design, size, etc. This is also the case for supervisory and resolution regimes even though the international standards-setters have made considerable progress in terms of harmonisation. Let me take the example of banking resolution: one of the (many) remaining challenges is to make sure that the adopted resolution strategies will be recognised and applied cross-border. Under the aegis of the FSB, several initiatives have been taken (e.g. ISDA protocol for financial contracts) but this is not the end of the story and many further discussions will be necessary to remove all the obstacles to implementing, inter alia, a single point of entry resolution of a GSIB. In the EU we have now a common legal resolution regime and even a common resolution authority for the Banking Union but resolution measures continue to be implemented at the national level because insolvency regimes within Europe are not unified. Being optimistic, I would say that these difficulties are not an impediment to resolution, because the most important thing is to be mindful of such a difficulty and to deal with it.