samchain/econo-pairs-v1 huggingface dataset:
The system was able to serve in – what were at least perceived to be – bad times as well as good. Now, it would have been easy in the aftermath of the crisis to swing the regulatory pendulum right the other way; to demand that banks fund themselves with huge amounts of shareholders’ equity. The system would certainly have been safer. There is a respectable academic case for very high levels of bank equity. And with past banking crises costing 75% of annual GDP, an empirical base for it too. 4  But two changes mean the baseline level of resilience does not need to be supercharged further. The first is the advent of legal regimes to resolve failing banks and the powers to effect that. We now have the powers to step in to recapitalise a failing bank using investors’ – not taxpayers - funds. There is more to do to here. But as long as major banks continue building debt that can be bailed in and making the necessary structural changes, there is every prospect that bank failure in the future can be less damaging to the economy than in the past. The second change is our duty to keep regulation up with the risks the system faces. Baseline standards do not need to be supercharged at all times for risk levels that prevail only some of the time. This, of course, makes it all the more important that levels of resilience keep up with the macro trends as they develop.

Third, it is timely for financial regulators to engage non-financial regulators such as telecommunication authorities at a global and national level, in order for regulation to keep abreast with the latest developments in financial inclusion solutions. Technology plays a significant role in rapidly scaling up financial inclusion by lowering the cost of delivery as well as increasing convenience and quality of services for the masses. Technology enables us to bypass legacy systems and constraints. For example mobile banking, where banks partner with mobile network operators to offer banking services anywhere, any time and in real time, that has enable reach beyond traditional boundaries without the need for a huge investment in infrastructure. Importance of the Global Symposium to galvanise action This leads on to why we are gathered here at this symposium. The Global Symposium will discuss and highlight the detailed next steps to implement proportionality in practice. This Symposium uniquely brings together the relevant key stakeholders to deliberate the issues of proportionality in practice. The AFI’s Working Group members on Digital Financial Services, SME Finance and Global Standards will share their perspectives on regulatory and supervisory matters. The private sector banks and remittance service providers share practical realities in the market to comply with international standards. In addition, we have international experts from the SEACEN, Toronto Centre and World Bank, who have a pivotal role in implementing effective projects to advance Proportionality in Practice.
In the office space sector, new square meters built were not matched by an equivalent increase in demand, generating a significant increase in the vacancy rate, as we warned in previous Reports. These levels could remain for a prolonged period due to the inertia of the market and the incorporation of new projects (figure 11). Aggregate household indicators remain relatively stable, but with some of them showing a marginal deterioration. The debt over disposable income rose in 2014, while the financial burden remained around 14 percent of income, due to low interest rates (figure 12). The lower interest rates facing households are also the result of a change in debt composition, away from higher-rate consumer loans to lower-rate mortgage loans. No changes in indicators of bank default are seen, whereas in non-bank lenders a new increase is observed. This latter phenomenon is partly explained by regulatory adjustments, although a worsening of the credit portfolios of said lenders cannot be ruled out. Commercial and consumer credit exhibit bounded growth rates, not so mortgage loans, which remain strong (figure 13). The behavior of commercial and consumer loans is in line with the slower growth in private spending. Demand-side factors could be behind these dynamics, as suggested by the Bank Lending Survey. The expansion of mortgage lending is largely explained by the increase in the average debt, which is consistent with the dynamic of housing prices and debt to collateral ratios, which have remained stable. Bank financial indicators have been stable.

We must therefore first do our utmost to stop the slow erosion of basic skills observed in the various international surveys (PISA, TIMSS). We must then ramp up the recent takeoff, since the 2018 Avenir Pro law and the 2020 1 jeune 1 solution plan, of apprenticeships, a fantastic tool for training and professional integration. The record number of close to 700,000 new contracts signed in 2021 must be just a starting point, from which to rethink the financing of work-study programmes. Page 11 sur 15 As regards seniors, France lags behind in terms of the employment rate and this gap widens as people approach retirement. This is another economic reason – in addition to ensuring the smooth financing of the old age insurance scheme – why it is necessary to reform our pension system. This reform must be fair, and companies will have to make more room for older workers. There remain three measures in order to raise the supply of labour for all workers: - beyond apprenticeships for young people, vocational training for all. The Personal Training Account, resulting from the 2018 reform, has proved a great success (demands for training have increased by 40% compared to 2019)xv. However, it will have to be optimised, in order to control its costs and above all to better steer it towards skill needs, in particular in the digital and industrial professions of the future. I have noted that, on the key issue of skill enhancement, France is still among the European laggards.
Guidelines for identification of Important Business Services Given this divergence in approach, you might reasonably ask me whether these differences are justified, what the ‘right’ answer is, and why the regulators do not just specify what it is? In response, I think it’s important to recognise that we have deliberately built some flexibility into the policy to allow firms to identify IBS in a way that best suits their specific business models. So a degree of difference is absolutely expected. As we continue our supervisory work we will be asking firms to clarify how they have incorporated the key points of the policy that make clear that IBS should: deliver a specific outcome or service to an identifiable external user. This means if it’s more than one outcome, or the user cannot be identified, then the granularity is too high; be granular enough that they are distinguished from business lines which are a collection of services; be at a level where one impact tolerance per regulatory objective can be set; not be at the level of internal services (where the granularity would be too low); and be at a level where boards can make prioritisation and investment decisions. We expect these guidelines for setting IBS to inform firms thinking and that differences in approach will narrow over time. Bodies such as UK Finance also have an important role to play in facilitating and encouraging information sharing across firms, which in turn is likely to help increase consistency where appropriate.

This builds on the two-way dialogue we have enjoyed to date, and industry bodies like UK Finance also have the opportunity to play a key part in facilitating information sharing and the building of expertise across the sector. In taking forward this work, we will continue to build on the close and collaborative approach we have taken to date with our fellow regulators; both domestically with the Financial Conduct Authority (FCA), and also internationally though standard setting bodies like the Basel Committee, supervisory colleges and the bilateral engagement we have with other supervisors. We recognise the importance firms attach to a coordinated approach on this topic. Implications from other relevant upcoming policies Finally, I would also like to highlight some other areas of ongoing work that have implications for Op Res. In particular, the Bank of England’s (Bank) Cyber Stress Test5 and the work the Bank, FCA and PRA are undertaking with HM Treasury on potential ways to address the risks posed by Critical Third Parties (CTPs). We published information on the first of these, the Cyber Stress Test, in the FPC’s March 2022 record6. Whilst it is a distinct exercise to the topics I have outlined today, we expect the findings will prove valuable in informing thinking about operational resilience more broadly. And on the second topic, CTPs, this a complex topic and to make sure our thinking is fully informed by industry perspectives the FCA, Bank and PRA are planning to publish a joint Discussion Paper on CTPs in 2022.
A conclusion that should be drawn from the crisis is that neither price stability nor interestrate policy is sufficient to achieve financial stability. Instead, a separate financial-stability policy is needed. In particular, monetary policy and financial-stability policy need to be conceptually distinguished, since they have different objectives and different appropriate instruments, even in cases where the central bank has responsibility for both. 1 Financial stability as an objective of monetary policy makes little sense, but it does makes sense as an objective of the central bank, if the central bank has the instruments required to fulfil this responsibility. Let me elaborate on these issues. 1  For a more detailed discussion of these issues, see Svensson (2010, section 5.2). BIS central bankers’ speeches  1  Monetary policy after the crisis Is there any reason to fundamentally modify the framework of flexible inflation targeting given the experience of the financial crisis? I think not. Flexible inflation targeting has worked and continues to work well – before, during and after the crisis. Flexible inflation targeting implies that the central bank aims at stabilizing both inflation around an inflation target and resource utilization around a normal level. This implies choosing a policy-rate path such that the corresponding forecasts of inflation and resource utilisation best stabilise inflation and resource utilisation.

However, the fact that monetary policy is not just directed towards stabilising inflation, but also towards stabilising resource utilisation has, in the absence of quantitative measures of stability in these variables, made it difficult to measure and evaluate target fulfilment in this stability dimension. This makes it difficult to decide which policy-rate path best stabilizes both inflation and resource utilization. My suggestion is to use mean squared gaps for the inflation forecast and for the resourceutilization forecast as measures of the stability of inflation and resource utilization. 3 Figure 1 provides an example, using graphs from Norges Bank’s Inflation Report of June 2005. Figure 1 Monetary policy with mean squared gaps (Norges Bank, June 2005)  In figure 1, the top left panel shows three alternative policy-rate paths, the main path chosen by Norges Bank at the time and two alternative paths, a lower and a higher path. The top right panel shows the corresponding forecast of inflation according to the index CPI-ATE, the consumer price index adjusted for tax changes and excluding energy products. The bottom right panel shows the corresponding forecasts of the output gap, the gap between output and potential output. These three panels are shown in the June 2005 Inflation Report. We see that there is a tradeoff between stabilizing inflation and resource utilization, measured as the output gap. The lower (higher) policy-rate path stabilizes inflation better (worse) around the  3  See Svensson (2010a, c) for details.
The Commission's assessment is that the fundamental reason is the lack of competition in Swedish trade and industry. One indicator of the lack of competition is that prices on a large number of goods are much higher in Sweden than in other countries. Other indicators are the many public regulations of the market, the agreements between companies that limit competition and the monopoly-like market structure in many sectors. The limitations to competition are a clear example of how vested interests dominate over general consumer interests." More recently, this type of question has arisen with regard, for instance, to the EU Commission's revelations of price collaboration between the airline companies SAS and Maersk. From an economic perspective, these are important questions that motivate a broad discussion. From a monetary policy perspective, an influence on price developments from changed conditions for competition is one of several important areas that we at the Riksbank must consider, as the potential growth rate depends on how effectively resources are allocated. To summarise, there has been considerable change in the Swedish economy in recent times. The external framework is currently characterised by significant fiscal and monetary stability, which facilitates planning and decision-making by both households and companies. These fundamental conditions, together with a pronounced increase in openness towards the outside world give reason to expect a continued favourable development in productivity. At the same time, one should remember that several markets in Sweden still show clear signs of poor competition. This involves considerable cost.

The longer the krona remains 2  2  These calculations are based on a Cobb-Douglas production function with a constant returns to scale. BIS Review 78/2001  undervalued, the greater the risk of bad investments being made in domestic businesses. I do not intend to go into these issues in greater detail here and now, but would nevertheless like to point out that undesirable effects on business can arise through a misaligned currency giving flawed relative prices. Companies may make decisions regarding investment and employment on the basis of these relative prices. The foremost risk here is that too many resources will be drawn to the export sector and to the import competition sector before there is a return to the equilibrium exchange rate and to corresponding relative prices. At that point, the resources overinvested in these sectors will be transferred to other sectors. We know from previous structural changes in, for instance, shipping, steel manufacture and the property sector, that such a development would result in considerable costs to the real economy. One should not underestimate the importance for welfare of a correctly valued Swedish krona. Openness is important Factor productivity is also affected by a country's capacity to utilise technological progress in the outside world. This capacity in turn depends on how open the country is to impulses from outside, which is determined by the barriers that exist to ideas, goods, services and production factors moving freely across the borders.
Some proponents of reorganisation would like to begin by making all financial regulation the responsibility of a single Government Department - the Treasury. They suggest that this would clear up accountability for the legislative framework, and for the powers and sanctions in the regulatory regime and create consistency of regulatory approach across sectors. Straightforward administrative tidiness may also be a factor. While there may be merit in both these arguments, such machinery of Government questions are for the Government to determine, and I happily leave such matters to them. Most of the discussion about regulatory structure in the UK has concentrated on the area covered by the SIB and the front-line financial services regulators. It is in this part of the system that the arguments about duplication of function, unnecessary cost and poor communication are most often heard. The various alternative models all feature some degree of consolidation, and some would go as far as to fold all the main financial services regulators into a single body. Others propose two bodies, each reporting directly to the Treasury, with one covering wholesale business and one covering retail, acknowledging the different regulatory imperatives, especially in the conduct of business field, of the two sectors. The aim would be to reduce the number of domestic regulators large institutions would have to deal with, and to improve the match of regulation to function. Even more radical changes have been proposed, encompassing not only the SIB area, but the prudential supervision of banks and insurance companies as well.

The ECB has indicated it will keep its benchmark interest rate low through 2017, while the Bank of England and the U.S. Federal Reserve are expected to raise their benchmark interest rates next year. Some policymakers worry there is a risk of “snapback” when the process of returning to more normal monetary policy begins. Mr. Singer said the central bank has the power to ensure that doesn’t happen, and could intervene to counter an overly rapid appreciation of the koruna. “We will not tolerate snapback,” Mr. Singer said. “Our promises are credible to the markets, and obviously we are willing to prevent snapback.” The central-bank head said that for the time being, the balance of power in the foreignexchange markets had shifted towards central banks, since tougher capital standards mean banks have fewer resources with which to move a currency against policy makers’ wishes. “Temporarily, the power of central banks vis-à-vis market players has increased,” he said. 2  BIS central bankers’ speeches
Given the concentration of growth and development in emerging economies, going forward, the extent of underinsurance is a concern. In many of these economies, efforts are being aggressively pursued to increase awareness of the importance of insurance protection in helping one manage risks, and to develop an effective insurance market to meet these needs. The insurance industry in Malaysia currently stands at crossroads of implementing important reforms being introduced by Bank Negara Malaysia both in the general and life insurance sectors. The objective of the reforms is to further enhance the competitiveness of the industry, ensure its continued resilience, and encourage greater innovation in solutions offered for households and businesses to better manage risks. To this end, two aspects of the reforms are significant. The first is the progressive strengthening of prudential standards that aim to improve underwriting and risk assessment capabilities within insurance companies, while substantially strengthening incentives for insurers to differentiate themselves in the market. The second is the structural changes that are being introduced to reduce market distortions and drive efficiency improvements. Beyond domestic borders, the Bank also continues to pursue further liberalisation in the cross border provision of insurance in certain sectors, such as the Marine, Aviation and Goods in International Transit (MAT) sector, both to enhance capacity and reduce costs for businesses. This is primarily being advanced under regional integration plans, focusing in particular on ASEAN.

Traditionally – and this is true of the industry globally – financial institutions dealt with business transformation through a simple hire-and-fire strategy: hire from the market people with the skills to do the new emerging jobs and fire those in jobs that have become less relevant. This strategy will no longer work. The combination of deep domain skills, broad lateral skills, and the digital skills of the future does not often come in a package. The superior strategy is to continually train, upskill, and transform the existing workforce. This calls for a comprehensive workforce transformation strategy that is closely aligned to the business strategy. All the industry CEOs that I have spoken to understand this well. Together, let us build an agile and responsive training ecosystem that will transform the financial sector workforce. Let me now invite Mrs Josephine Teo, Minister for Manpower, to deliver her keynote address. 3/3  BIS central bankers' speeches
Richard Dzina: Four questions on the state of cyber resilience and endpoint security Remarks by Mr Richard Dzina, Executive Vice President of the Financial Services Group of the Federal Reserve Bank of New York, at the Clearing House and Bank Policy Institute's 2018 Annual Conference, New York City, 26 November 2018. * * * As prepared for delivery I want to thank The Clearing House for this generous invitation and, especially, for assembling such a compelling and topical program. The relationship between The Clearing House and the Federal Reserve is multi-faceted: across one plane competitor, as CHIPS and the Fedwire Funds Service, and EPN and FedACH, vie for volume across common service lines; across another plane collaborator, as peer infrastructures seeking to maximize the value and minimize the disruption to customers in response to common industry initiatives, with our coordinated plans for adoption of ISO 20022 standard message formats representing a cardinal example; and across a final plane as overseer and overseen. When it comes to the resiliency and security of our infrastructures, however, there is no ambiguity in role or relationship: we rise, or fall, as one. Standing before an audience like this never fails to elicit a visceral sense of accountability. When the subject is the resiliency and security of the foundational elements of our nation’s financial system, on which market function and economic vitality ultimately depend, that sense of accountability resonates even more keenly.

Alternatively, could it encourage an FMI to endeavor to return to normal operations prior to assurance of complete confidence in and sanitization of a production environment? To put it plainly: could the 2-Hour RTO unwittingly exacerbate rather than assuage the impact of a severe 2/5  BIS central bankers' speeches  disruption and/or impede prospects for recovery? Reflecting upon these important questions, allow me to offer the following practitioner’s interpretation, which I hope maximizes the value of the intent of the 2-Hour RTO while minimizing the downside risks of its mis-application. Rather than spending valuable time and industry resources re-litigating established supervisory guidance, we should consider the 2-Hour RTO as a vital organizing objective for planning purposes in peacetime, an aspiration to mobilize our best critical thinking to achieve, rather than an inviolable requirement that must be met in all circumstances recognizing the fog of war. A common understanding of this nuance across policy makers, supervisors, and operators strikes me as an important step forward both to focus our resiliency preparations in advance of an extreme event and to promote sound decision making in its remediation. Provocative Question Number 2: To what extent does the proliferation of risk management and information security frameworks to which FMIs must comply risk creating a “check the box” mentality to security and resilience that diverts resources and management attention from other critical initiatives?