samchain/econo-pairs-v1 huggingface dataset:
Throughout the implementation of Solvency II, we have worked hard to ensure that progress in the regulatory agenda is not synonymous with unnecessary impediments on your ability to grow and evolve your businesses. At all times, though, insurers must be capitalised to deliver policyholder protection, and this must be commensurate with the risks they take. A priority in this area is the revitalisation of robust securitisation markets in Europe, many of which have yet to recover from the crisis. We have been working with the ECB and other European authorities with the goal of encouraging securitisation as a means for lenders to diversify funding and reduce concentrations – but not to arbitrage capital regulations. A growth in “real money” investors, such as insurers, will increase the diversity of funding providers to the real economy, avoiding the pre-crisis reliance on an unstable, leveraged investor base. A key goal is to improve transparency, simplicity and consistency so that investors can understand the risks associated with securitisations. For simple, transparent and consistent securitisations, we are prepared to review whether post-crisis regulatory requirements for investors and originators are too onerous. That includes Solvency II, where we welcome a recalibration of capital requirements for such simple, transparent and consistent securitisations, particularly at longer maturities. The 2  BIS central bankers’ speeches  ongoing participation of insurers – a major source of long-term finance – in this debate will be key to achieving results. We have got to a stage now where the path to Solvency II is clear.

These are more acute where the event – for example, a credit default or a windstorm – being modelled happens infrequently and historical data is therefore scarce, where events cluster rather than occur independently or where the underlying process behind the event – for example the structure of the economy or the natural environment – may have changed, so that history is an unreliable guide to the future. In such circumstances, significant uncertainty about model outputs may call for a more prudent approach. And the temptation to add additional parameters, making models more and more complicated, can often have the perverse effect of weakening model performance. This is why, in addition to scrutinising the technical components of models, we also look at the way they are used within firms. Only a good model can play an important role in a firms’ system of governance. Our expectations of their quality are high as Solvency II specifies that they become an embedded part of the risk management system of a firm. It is therefore not only important for us to rigorously assess them but that senior management have ownership of these models and continuously do the same. The Bank of England takes model approval very seriously indeed and we will not hesitate to hold back approval for the use of models where there are risks that cannot credibly be modelled or data are insufficient.
Moreover, a new Direction on Outsourcing of Business Operations was introduced to standardise outsourcing arrangements. A Direction was issued to regularise the valuation procedure of the LFCs and SLCs regarding immovable properties. In the interest of depositors and stability of the system, several resolution actions were taken in relation to distressed companies during 2018, including cancellation of some licences and introducing regulations on winding up LFCs. Going forward, the sector needs to cope with enhancement of the minimum capital requirement and higher loan loss provisioning with the introduction of Sri Lanka Financial Reporting Standards 9. Further, the change in the regulatory posture of the Central Bank will result in early interventions against noncompliant, distressed and high risk LFCs. This will include regulatory actions, such as the restriction of business through deposit and lending caps as well as suspension and cancellation of licences. Further, guidelines are expected to be issued applicable for financial reporting of LFCs and SLCs. We will also consider issuing directions on the ownership limits. Also, capital levels of the sector are expected to be strengthened as a result of enhanced capital requirements. The LFCs and SLCs, which are unable to comply, will be encouraged to consolidate on a voluntary basis. Non27  compliance will result in restrictions on deposit and business expansion and, where necessary, winding up of businesses. Therefore, it will be necessary for LFCs to give priority to capital augmentation plans in the near future. There will be no regulatory forbearance in this respect.

Clearly, greater use of the local system for real-time settlement of Hong Kong dollar versus US dollar transactions would bring real benefits in terms of reduction and diversification of risk. Banks in Hong Kong will no doubt be looking seriously at their existing settlement arrangements for such transactions, and at the greater use they can make of local services to achieve finality of settlement for the currencies simultaneously in our time zone. For our own part, the HKMA will continue to develop and reinforce our local financial infrastructure and to link it more efficiently with global systems. We have, for example, started on the development of a two-way linkage with Euroclear, one of the world's largest central securities depositories. The two-way linkage, which will be highly automated for heavy usage, will enable investors in the Asian region to gain trading access to securities lodged with Euroclear. The infrastructure providing for payment and settlement form the essential roads and bridges that connect banks and other institutions with each other. What of the banks themselves? In Hong Kong, they have seen declining profits at a time of increasing competition. Yet the banking sector remains remarkably strong, with an average capital adequacy ratio of 18%. With good reason, the general public, and the international financial community, have a very high degree of confidence in Hong Kong's banks.
In addition, we Executive Board members hold around thirty speeches every year, where we can describe our views of economic developments. This all means that there are good opportunities for the general public to find out how monetary policy decisions are made. This openness from the Riksbank makes it possible for all those who are interested to follow our policy and see whether we live up to our principles. I am convinced that transparency has been a central issue in gradually building up confidence in the Riksbank and the inflation target. Conclusion To summarise, let me observe that the changeover in economic policy in Sweden at the beginning of the 1990s, and to which I have described the background, has worked well. The inflation target for monetary policy has contributed to providing a stability in economic policy that was lacking in the Swedish economy during the 1970s and 1980s. There have also been significant developments in the monetary policy framework during the period we have practised inflation targeting and I hope that I have been able to give you some insight into how our monetary policy strategy has developed and how it works. How it works now, I should perhaps add. The strategy and framework are of course something we are constantly working on to refine and improve. This is something that will probably be discussed in the future economic debate in Sweden.

In due course, it would be beneficial to bring an EMF into the fold of the Community method, which means anchoring this institution in the framework of Union law [the Commission has suggested proceeding on the basis of art. 352 of the TFEU]. Within this framework – and only within it – it would make sense to entrust an EMF with a broader surveillance mission, including the task of monitoring compliance with the common rules, a role that is today assigned to the European Commission. II. A micro accelerator, including the completion of the banking union Let me now turn to the micro accelerator for the Economic Union: a Financing Union for Investment and Innovation. The aim is to better steer the euro area’s EUR 350 billion annual savings surplus towards productive investment, notably by shoring up equity which is the key to an innovation economy. Thanks to unified governance, this Financing Union would help circumvent bureaucratic barriers and foster synergies between the existing building blocks: the Juncker Investment Plan, the Capital Markets Union and the Banking Union.
2  “Allmänhetens syn på bankerna” (The Swedish public’s opinion of banks), Temo survey, March 2006, The Swedish Bankers’ Association. 3  The average consumer was defined as a 41-year old man with upper-secondary school education and an annual income of SEK 350,000–400,000 and who lived in a two-person household. 4  Synovate Temo, 2006. “Survey of banknotes, coins and use of cash and cards”, December 2006. 2  BIS Review 7/2010  A study of data from 2002 conducted by the Riksbank revealed that each cash payment cost society an average of SEK 4.6, while each card payment cost SEK 3.0. The costs associated with the use of cash included not only the handling and transport costs of the banks and shops but also an estimate of the time consumers spent on fetching and taking care of the cash. The variable costs are considerable, that is it costs more to handle a large sum than a small sum. Cash has to be counted, transported and stored. This is not the case with cards. There are major fixed costs in the form of an infrastructure that includes terminals and communication lines, but the variable costs are small. It is not more expensive to handle a card payment of SEK 50 000 than a payment of SEK 50. From this it was possible to calculate that, in 2002, it cost society less when payments were made using cash providing that the sum involved was less than approximately SEK 70.

The banks and the card industry can help by intensifying their efforts to protect customers against unauthorised transactions. One element of this may be to accelerate the phase-out of magnetic strips and replace them with chips or similar technology. The requirement that all card terminals and ATMs should use chips is a good first step as skimming and the use of stolen cards constitute more than half of all the cases of card fraud in Sweden today. 7 It is important that the customers feel that paying with cards that contain chips is simple and convenient. A uniform standard for how cards should be placed in card terminals can save time and reduce the risk of customers leaving cards behind after purchases have been made. The principle should be the same as for cars: Irrespective of the make of car, we know where the accelerator and the brake pedals are placed! Better reporting of the number of frauds and how much they cost the card industry would also be desirable. It is after all the cardholders that ultimately have to foot the bill and it is reasonable to expect that all the relevant information should be available to them. Such an approach would also increase the cardholders’ confidence in the cards. In France there is a forum for representatives of the authorities and the card industry. They work to inform customers, shop owners, car issuers and other authorities about the security levels in the various card systems.
The marked weakening in the economy would cast a pall over the earnings prospects of Swiss companies, and Swiss equities would come under pressure. Although short-term interest rates in Switzerland would no longer be negative, there would be little change in capital market interest rates owing to the deterioration in the economic outlook. All in all, the level of interest rates would thus remain low, and so too would the yields on long-term Swiss franc bonds. Ultimately, there would be scarcely any significant improvement for savers, pension funds, life insurers and banks. The same goes for the real estate market. Although its momentum would be curbed somewhat if we were to cease charging negative interest, there would be little change in the low level of interest rates and the impact would therefore be limited. In the current situation, the risks to financial stability must be addressed with focused macroprudential measures. This will then curb demand for mortgages and real estate and strengthen banks’ resilience. Ladies and Gentlemen, abandoning the negative interest rate in the current environment would weigh heavily on the Swiss economy. This would not help either savers or pension funds, nor would it be beneficial for financial stability. In other words, as things stand at present, removing the negative interest rate would not be in the interests of our country as a whole. Focusing on the big picture We introduced the negative interest rate after careful consideration of the advantages and disadvantages. We continually assess its effectiveness, and objectively analyse the costs and benefits.

A flexible exchange rate should help mitigate this risk. In addition, the development of the foreign exchange derivatives market should allow private agents to hedge against currency risk. In addition, capital inflows may be behind the development of bubbles in domestic asset prices, and there are also macro tools to deal with them. However, there are other risks that must be considered, which have implications on macro prudential regulation. Note that these risks may be relevant even when net capital flows are limited. Therefore, from the standpoint of financial stability, gross flows become relevant determinants of fragilities. These risks associated to capital inflows are: funding and credit risks. Regarding funding risk, large capital inflows in the form of short-term loans to local banks will tend to increase banks’ dependence on this external funding source, which has been shown to be a volatile source of funding. From the point of view of central banks, the accumulation of reserves may help mitigate the economy-wide consequences of this risk, but the soundness of the banking system must be safeguarded with the proper regulation. As for credit risk, large capital inflows in the form of loans to local banks and portfolio debt securities may translate into an increase in the credit supply as local intermediaries and corporations access more elastic and often cheaper sources of funding (beside currency risk).
In the 1980s and 1990s, many emerging markets put in place exchange rate systems that limited or altogether eliminated perceived foreign exchange rate risk. The objective was, in most cases, to reduce inflation. And in many cases the success was remarkable on this front. However, not surprisingly, firms, households and financial intermediaries were reluctant to hedge currency risk in this setting – accumulating liabilities in foreign currencies to finance assets in local currencies. When an external shock, or an increasing exchange rate misalignment, forced the countries to abandon the peg, the value of debts skyrocketed leading to very severe financial crises, as in Chile 1982 or Argentina 2002. Indeed, in these cases there is also a moral hazard issue, since currency mismatches tend to be exacerbated under the promise that the exchange rate will remain fixed, and if changes occur, the authority will have to bail out those who believed in their commitment. The popularly known Greenspan put, is another example. This strategy of relaxing monetary policy once a bubble has burst – although fully consistent with price stability – encourages risk taking by financial intermediaries, firms and households. As the burst of the housing bubble showed, this strategy is not always advisable. An additional example of the role of central bank policies on risk taking is the “great moderation” itself. There is an interesting stylized fact across banks in different countries.

So, establishing and maintaining financial stability should be high up everyone’s agenda, and we should embed financial stability as the objective of public policy towards regulating the financial system. You can reasonably ask, why is this difficult to achieve? Financial stability is difficult to define quantitatively and precisely. Some people say that you know it when you have it, but it might be better to say that you know when you don’t have it. What is being done to tackle the issue? A month ago, the Government issued a consultation paper which seeks to define the financial stability objective that will be given to the new Financial Policy Committee of the Bank of England under its plans. The objective is defined at the high level as protecting and enhancing the stability of the financial system of the UK. More precisely, the Bank’s objective “relates primary to the identification of, monitoring of, and taking of action to remove or reduce” risk to the stability of the UK financial system as a whole or to a significant part of the system, “with a view to protecting and enhancing the resilience of the UK financial system”. But the paper goes on to include in the objective the statement that: this does not require or authorise the Bank “to exercise its function in a way that would in its opinion be likely to have a significant adverse effect on the capacity of the financial sector to contribute to the growth of the UK economy in the medium or long term”.
Krzysztof Rybinski: Globalisation - opportunities, threats and implications for the economic policy Speech by Mr Krzysztof Rybinski, Deputy President of the National Bank of Poland, at a meeting with entrepreneurs who have participated in the economic climate survey carried out by the National Bank of Poland, Rzeszow, 10 March 2006. *  *  *  Ladies and Gentlemen, Welcome to the meeting in the regional branch of the National Bank of Poland in Rzeszow. First of all, I would like to thank very much the management of the branch for their efforts to organise this meeting. Since 1998 the National Bank of Poland has carried out quarterly and annual economic climate surveys of enterprises. Results of this survey allow a better assessment of the state of the economy and the outlook for inflation. They also constitute a vital element of the economic analyses carried out by the NBP. Therefore, I would like to thank all of you for your contribution to the accumulation of knowledge at the NBP about the current processes in the Polish economy. Such knowledge, gained from people who create jobs, make investments and face domestic and foreign competition on a daily basis, is particularly important in the environment of the changing structure of the economy. Structural changes may bias results derived from econometric models used by central banks.

The first day of our seminar is dedicated to this topic. The second day of the seminar targets mainly the corporate sector. The Small and Medium Enterprises’ access to finance is also important for financial stability. Small and Medium Enterprises constitute the overwhelming majority (99 percent) of businesses at European level, with important contributions both in terms of value added generated by non-financial corporations (57 percent) and employment (67 percent). Increasing access to finance in this sector is among the EU priorities. It is also 3  true that this portfolio accounted for the highest post-crisis NPL ratio in the European Union. At its peak, the average NPL ratio for Small and Medium Enterprises reached around 20 percent at European Union level. In Romania, the ratio was 35 percent, while the NPL ratio for microenterprises accounted for 53 percent. Therefore, the same lesson learnt from the household sector also applies here: the Small and Medium Enterpises’ financial inclusion should unfold in a sustainable way. On the other hand, the experience with macroprudential instruments for companies is extremely limited at the European level. For example, France has recently implemented a measure focusing on highly indebted firms, but it applies only to large companies. Therefore, I think that deepening this area of research is very useful for macroprudential policymakers. In Romania we have also tried to come up with solutions that might improve Small and Medium Enterprises’ financial inclusion.
Nor Shamsiah Mohd Yunus: Building trust and transparency collaborate, accelerate, strengthen Speech by Ms Nor Shamsiah Mohd Yunus, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 11th International Conference on Financial Crime and Terrorism Financing (IFCTF) 2019, Kuala Lumpur, 5 November 2019. * * * Last year, I spoke at this same conference about our shared responsibility to combat financial crime and the need for us to have a deep understanding of new and emerging risks. I also called on reporting institutions to strengthen their compliance functions. I was therefore delighted to learn that the theme of this year’s conference is “Building Trust and Transparency: Collaborate, Accelerate, Strengthen”. This afternoon, I would like to briefly expand on some of the ideas that I put forward last year, which will build on this year’s conference theme. First, on the point on collaboration. We speak a lot about how combating financial crime is a shared responsibility. This is because of its massive impact, imposing a cost to governments, businesses and individuals. A Thompson Reuters report from 2018 revealed that nearly half of 2,000 plus large companies surveyed were victims of financial crimes in the past one year, losing an estimated 3.5% of their turnover. This goes to show that this is a battle that needs to be waged together. Key to this is the sharing of information.

My main conclusion is that the international monetary system should be seen not as a series of bilateral relationships, but as a multilateral arrangement, albeit one where a small number of the key players can usefully communicate with each other. I believe that we need to rethink the role of the IMF in the international monetary system. I encourage the Fund to articulate a positive vision for the management of the international monetary system in its forthcoming strategic review. I am not convinced that the future of the Fund is primarily as an occasional international lender of last resort for middle-income countries suffering financial crises. At this Conference the emphasis is naturally on ways to promote productivity and enterprise. Monetary stability at home is now widely recognised as a necessary condition for a successful economy. It provides, as I said at last year’s conference, a springboard for enterprise. But international monetary stability is no less important if trade is to prosper. In The Importance of Being Earnest, Cecily is instructed by her tutor, Miss Prism, to read her political economy. But Miss Prism continued, “The chapter on the Fall of the Rupee you may omit. It is somewhat too sensational. Even these metallic problems have their melodramatic side.” What would poor Cecily have made of the recent melodrama surrounding the values of the dollar, the euro and other paper currencies?