samchain/econo-pairs-v1 huggingface dataset:
So to summarise... I welcome the amendments to the regulations regarding the banks’ capital requirements being discussed by the Basel Committee. Even if the final pieces of the  10 [12]  puzzle are not yet in place, the changes will most likely lead to more robust banks and an increased confidence and transparency in the banking system. They will also reduce the risks linked to internal models and lead to increased international harmonisation. This in turn will benefit the major Swedish banks, which compete in a global market. However, it is much too early to say yet exactly how the new regulatory framework will affect the real economy in Sweden. The effects will mainly depend on how Sweden's special national requirements change in the future and not on the Basel Committee’s global minimum standards. The time is now right to start a review our special Swedish requirements and this is work I welcome and to which the Riksbank would gladly contribute going forward. Thank you for listening.

Nevertheless, there still remain a number of challenges for banks and financial supervisory authorities with regard to internal models. For instance, the calculation of a bank's risk-weighted assets may mean that several thousand parameters must be calculated. Therefore, it is almost unnecessary to point out that the complexity of the calculations of the banks’ capital requirement can be considerable. It is then natural that some form of safety net is needed, to ensure the banks’ risk weights do not fall too low. ...and a floor for risk-weighted assets will be introduced The Basel Committee has therefore discussed introducing a new floor for riskweighted assets that prevents them from falling too low. The Basel II Accord contained this type of floor, but it has been implemented in different ways in different countries and now needs to be revised. The new floor will in practice mean that no bank is allowed to have risk-weighted assets below a percentage of what they would have been if the Basel Committee's standardised methods had been used. Within the scope of these standardised methods, the banks are not given the opportunity to use internal models to determine risk weights. These standardised methods are currently used by smaller banks that do not use internal models. There are several other reasons for this proposal as well. In addition to the fact that a floor would contribute to increased transparency it will make it easier to compare banks’ capital levels over time. This will enhance confidence in bank’s capital ratios.
For the time being inflation in Norway, although fairly moderate in absolute terms at just over 2 per cent, is considerably higher than inflation in the euro area. Narrowing this differential is a prerequisite for strengthening the krone and is thus the best contribution monetary policy can offer in the current situation. There are, however, obvious limits to how tight monetary policy can be. Interest rates cannot be set so high that it results in an unnecessary severe economic recession and deflation, because that in itself would reduce the credibility of monetary policy and most likely weaken the krone. Since August last year Norges Bank’s key rate has been 8 per cent – close to 5 percentage points higher than in the euro area. For the time being we find that our instruments are set in a manner consistent with bringing the krone back to its initial range over time. This illustrates the challenges of stabilising the exchange rate of a small, open, oil and commoditiesbased economy against that of larger, more diversified economies. Though a much larger economy, the UK has also over time experienced problems with exchange rate targets, most recently the events that led sterling to leave the ERM in 1992 and orient monetary policy towards an inflation target. The introduction of the euro from 1 January 1999 did not in itself require changes in Norwegian monetary policy. The euro could replace the ECU as the operational indicator of the external value of the krone.

There is reason to believe that capital intermediation via the securities market will increase at the expense of financial institutions. The elimination of foreign exchange risk, greater price transparency and harmonisation of market practices will increase liquidity in the market, leading to conditions similar to those in the US. Losing the advantage of operating in the national currency will result in keener competition in securities markets for brokers, issuers, investors and stock exchanges. National ties will be of less BIS Review 16/1999  –6–  importance as participants are drawn towards markets with the lowest costs. The integration of stock exchanges will increase. The Oslo Stock Exchange, for example, is one of several stock exchanges currently evaluating prospective partners. The possibility that the euro may lay the foundation for a European market for private bonds should be of interest to enterprises both within and outside the euro area. This market is large and well developed in the US, whereas European enterprises have primarily relied on bank financing. The introduction of the euro will also result in a broader and more differentiated selection of securities in a single currency, while increased competition in issue and investment services will probably make it less expensive to raise capital directly in the securities market. The elimination of currency risk in the euro area will also enable investors to focus more on credit risk, thereby improving their ability to evaluate this risk.
Companies were cautiously optimistic in the first half of the year, but summer saw a postponement of investment and recruitment decisions. Confidence loss slowed economic growth, easing inflationary pressures. In November and December, we thus lowered the interest rates to an all-time low. 3. Under normal circumstances, changing interest rates alone would have sufficed to influence prices and economic activity. Unfortunately, the crisis proved extensive  BIS central bankers’ speeches  1  enough to disrupt the functioning of the monetary policy transmission mechanism. The ability of commercial banks to issue loans to companies and households was thus significantly reduced. This compelled us to take various non-standard measures, starting from August. We supported the securities market in order to prevent paralysation of the activities of banks; we continued the unlimited provision of liquidity loans to banks; we offered banks three-year loans on highly favourable conditions; we expanded the list of eligible collaterals for liquidity loans, and lowered the minimum reserve requirement from 2% to 1% at the end of the year. 4. Looking back, it has to be admitted that the annual growth in consumer prices was faster than expected, amounting to 2.7%. Inflation picked up mostly due to the price growth of commodities. This is confirmed by core inflation remaining below 1.5%. Inflation expectations are also in line with our long-term goal. [THE PRICE OF CRISIS-TIME MONETARY POLICY FOR CENTRAL BANKS] 1. These bold and crucial steps came with a price – the risks inherent in the central banks’ balance sheets have increased.

Unfortunately, it has to be admitted that food and energy prices affect the cost of the consumer basket more than in older euro area Member States. Thus, consumer prices accelerated to 5% in Estonia. 3. Estonia stands strong, compared to the EU average. In the midst of a crisis, we demonstrated our ability to quickly fix the balance in times of trouble. We now need to make plans for regulating our behaviour at times of joy. 4. Our State Budget Strategy has set out a budget policy framework for the medium perspective. Unfortunately, we have yet to see the binding nature of the document in the decision-making process. For example, the budget strategy prepared in the spring of 2011 set its sights on restoring the consolidated budget surplus. As at 2012, the attainment of the objective has been postponed. This is worrying. It shows that the current framework enables to change long-term goals too easily. The current framework also provides no solutions to managing the cost increase at times of growth. It would thus be reasonable to establish rules for restricting expenditure alongside the established rules for ensuring a balance. These rules would reduce the volatility of the cost increase, prevent unjustified expectations and alleviate the pains of cost-cutting. 5. At the beginning of 2012, the euro area heads of state and government resolved to launch the European Stability Mechanism sooner than initially planned. 6.
DWF collateral is divided into four sets, depending on its underlying liquidity. Levels A and B are the same as the “narrow” and “wider” sets allowed in OMOs. Levels C and D go wider still (Table 1). The price for drawing depends on the collateral a firm has to offer: the less liquid the collateral, the higher the fee. Essentially, the haircuts play the role of protecting the Bank’s balance sheet while the fee plays the role of discouraging use except under stressed conditions and therefore avoiding market distortions in normal times. It also compensates the Bank for taking the liquidity risk. Table 1 Collateral eligible in post-crisis Bank operations  The Bank has been encouraging counterparties to “pre-position” collateral in the DWF, which allows us to conduct ex-ante due diligence and advise on the eligibility and likely advance rate of the collateral (ie the amount we would lend against it) were it to be called upon in a live draw. Pre-positioning provides counterparties with the insurance they need were an unexpected risk to suddenly crystallise. In that scenario, having a pool of collateral that has  5  4  See Fisher (2010), “Recent developments in the sterling monetary http://www.bankofengland.co.uk/publications/speeches/2011/speech487.pdf  framework”,  available  at  BIS central bankers’ speeches  already been assessed and is ready for use might significantly reduce the delay between an DWF draw-down application and the release of funds.6 That could be vital in a crisis.

6  BIS central bankers’ speeches  Changes in market prices can, of course, affect the value of the collateral the Bank has taken in its operations. As a result, the Bank calls margin on any shortfall.8 In its sterling operations, the Bank calls margin daily and is moving to that standard for all other transactions. Limits The Bank also manages the risk on its balance sheet using concentration limits. Those serve two purposes. First, they help the Bank diversify across institutions – for example, counterparties can only bid for a maximum of 30% of the funds on offer in the Bank’s ILTRs. That helps ensure that any single counterparty doesn’t corner the market for reserves (intentionally or by accident). Second, they help diversify across instruments in the wider collateral pool – for example, the Bank requires that the adjusted market value (AMV) of securities that any single issuer delivers to the Bank as wider collateral in OMOs is less than the greater of £ million or 25% of its total OMO collateral delivered. Other recent policy initiatives The Bank has, for a number of years, been refining and improving its collateral policy. In November 2010, the Bank announced that it would allow counterparties to use “raw” (i.e. unsecuritised) loans as collateral in the DWF. By removing the need to securitise assets, that initiative expands the range of collateral that banks would be able to use in times of stress.
Jessica Chew Cheng Lian: Distribution in a liberalised environment Keynote address by Ms Jessica Chew Cheng Lian, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the General Insurance Agents Convention “Distribution in a Liberalised Environment”, Kuala Lumpur, 5 August 2016. *  *  *  The profound impact of financial technology on the provision of financial services – including insurance – is set to gain more traction in Malaysia. Just last week, Bank Negara Malaysia issued a discussion paper which outlines the conditions for companies to test financial technology (also known as “fintech”) innovations in a safe environment. This responds to the innovations that we have seen emerge in the financial services industry; many of them tapping into opportunities now made possible by technology to enhance the customer experience, improve risk management and lower the costs of providing financial services. The insurance industry itself has just entered the first phase in the progressive liberalization of the motor and fire insurance tariffs which began on 1 July this year. After over 30 years during which more than 60% of the general insurance market has been regulated under tariffs, this is arguably the most significant reform of the general insurance market in decades. The implications of the reform are much wider than just an adjustment to premium levels. It will pave the way for a new wave of product innovation, significantly expanding choices for consumers.

Ultimately, the most important measure of success for the reforms that we are now pursuing in the general insurance industry will be how far they contribute towards addressing the protection gap that exists, in turn strengthening our foundations for growth and stability. Today, I would like to talk about how agents have a key role in this process. In a more liberalised environment, insurers will have much greater flexibility in the design and pricing of products based on their respective business and risk strategies. This should encourage pricing that is more aligned to risks (let’s call this point “A”), and place greater power in the hands of consumers to manage the cost of insurance by controlling the risk factors that influence pricing (let’s call this point “B”). This in turn can make insurance more affordable for more people and businesses, especially small businesses. However, interventions by an agent are what effectively connects points “A” and “B”. In a detariffed environment, the number and range of risk factors that determine insurance prices are expected to expand. Consumers will also have more choice on the scope and level of protection that they purchase. Agents, having both direct access to consumers, and intimate knowledge of an insurance provider’s underwriting considerations and products, are best placed to explain the insurance options that are available to the consumer and make recommendations on how to maximize the value of a purchase. A number of things will need to happen for agents to deliver on this expectation.
In my opinion, among the transforming effects of digitalisation in the financial sector, one stands out: the far-reaching change payment services are undergoing, both as regards the characteristics of the services per se, and the technology and players taking part. Undoubtedly, this is a significant phenomenon for central banks, given our responsibilities for promoting and ensuring the smooth functioning of payment systems. It is also significant in that digitalisation affords us new opportunities to redefine our role as providers of safe settlement assets. Indeed, as you know, within the Eurosystem we are, like many of our international counterparts, painstakingly analysing the possibility of issuing digital currency: a “digital euro” in our case. The digital euro would be a new form of central bank monetary liability which, like cash, would be conceived to be accessible both to households and non-financial corporations. As you can imagine, the introduction of such an instrument would be enormously complex and important. Accordingly, beyond the stimulating intellectual debate that opens up around its future possibilities, a thorough analysis is needed of its various implications and its possible configurations. Further, our role in this area obliges us to be technically ready should developments warrant its placement in circulation. The initiative to study the advantages and disadvantages of a digital euro stems from an ECB Governing Council decision to set up a high-level task force to further the analysis and 12  extend the knowledge of the Eurosystem in this field.

The third panel, chaired by Duvvuri Subbarao, will take up the question of how to deal with these vulnerabilities. What are the appropriate policy responses, and what is the role for regulation and capital controls? One policy response has been the accumulation of reserves, which can provide a temporary shock absorber. However, reserve accumulation entails costs for the countries accumulating reserves as well as for the world economy as a whole. Our last panel, chaired by Masaaki Shirakawa, will discuss alternatives to self-insurance. An obvious question here is the role of IMF lending facilities. 2  BIS Review 65/2010  As already mentioned, the questions we address today are difficult and complex. Someone who played an important role in trying to address them over several decades was Jacques Polak. Sadly, he passed away earlier this year. Reflecting on the efforts to reform the international monetary system since the Bretton Woods conference, Jacques Polak once suggested that “those of us who toil at the international monetary system would do well to adopt Sisyphus as our patron saint”. In honor of Jacques Polak, let us then push the stone back up the mountain once more and start with our first panel. Thank you for your kind attention. BIS Review 65/2010  3
As a component of trust, fairness involves being aware of such differences and to find ways to prevent, mitigate or compensate redistributive effects that are particularly undesired. Within an institution, fairness also involves the creation of a working environment that fosters productive exchange of ideas, free of harassment and discrimination. Fostering trust in a Central Bank The OECD taxonomy may be useful in providing a conceptual basis to go beyond generalizations on public trust and to take a more proactive approach to nurture it. In particular, it provides a good framework to develop ways to assess trust and to identify concrete levers that an institution can use to foster trust. However, can this framework be applied to a central bank? In my view, this is not only possible, but necessary as well. Assessing trust on a central bank by inserting a question in an opinion survey suffers from the same limitations as with government institutions and a few more. Answers to a broad question may be more reflective of prejudice than of attitudes that may shape the response to future policy decisions or incoming information and may come too late in a process of social or market change to make any difference. In addition,  Page 5 of 8  Central Bank of Chile July 2019  experience with opinion surveys in different countries has shown that no more than half of respondents have some basic knowledge of central banks.

This certainly underlies the growing popularity of inflation targeting and the forward guidance that comes with it. But even this may be challenging in a changing environment, where the business cycle overlaps with structural changes, and more so in areas, like financial stability, where policy targets may be hard to design and explain. From credibility to trust So, a broader approach to credibility-building may be needed. To this end, it may be useful to acknowledge that credibility is an attribute of a certain individual or institution: that of being believed or trusted. So surely, credibility does not depend exclusively on your own actions but on how far others trust you. Trust, in turn, is defined as a person’s belief or expectation that another person or institution will act in favor of one’s well-being (OECD, 2017). So we could think of credibility as an institutional asset that depends on the factors that influence trust from stakeholders and the public. Credibility in a central bank refers to public’s belief that future actions of monetary policy that are optimal today will be carried out even if they no longer seem optimal in the future. This is related to public trust, but the two concepts are not quite the same. One can imagine the public having trust in the central bank and at the same time the latter adopting a discretionary monetary policy strategy to retain full flexibility regardless of past promises.
Financial cohesion, in turn, ensures that the monetary policy signals are properly and evenly transmitted to all jurisdictions of the monetary union, without, however, levelling out the premiums for different credit and liquidity risks. In fact, during the crisis, the divergence of bank funding conditions at national level has led to cross-country differences in both the costs of financing and the availability of loans. The retrenchment of credit supply within national borders, coupled with funding pressures, has impaired the transmission of monetary policy. The need to counter these adverse developments has been a key rationale behind the extraordinary monetary policy actions undertaken by the ECB in the wake of the crisis, such as the full allotment, the longer-term refinancing operations (LTROs) or the relaxation of the collateral framework. At the same time, the emergency liquidity assistance (ELA) provided by the national central banks was used more intensively. Although this is carried out by the national central banks at their own risk and for their own account, it might lead to tensions between the national and European levels of monetary policy, which would not be sustainable. A renationalisation of the monetary architecture would not be effective. Our non-standard measures can and should only provide temporary support for two reasons. First, keeping our non-standard measures in place for too long can adversely affect agents’ incentives in the economy at large and lead to moral hazard.

This justifies the need for effective regulation and supervision of the operations of banks and non-bank financial institutions compared to other business operations. Further, with the increase in non-bank financial institutions, their level of risk has also risen. Accordingly, the sheer size of the sector is of systemic importance, hence, effective and efficient regulation and supervision is required to stem any systemic risks. Ladies and Gentlemen I am happy to note that this workshop is addressing, in greater details, issues relating to the regulation and supervision of the non-bank financial sector, so as to ensure that the financial sector is safe, secure and efficient. As I conclude therefore, I wish to urge the workshop participants to participate actively in the deliberations and use this opportunity to tap from the vast experience of the resource persons. I have every reason to believe that this workshop will provide you with the opportunity to share experiences and enhance your knowledge of issues pertaining to regulation and supervision of the non-bank financial sector. With these remarks, Ladies and Gentlemen, it is now my honour and privilege to declare this regional workshop officially open. I thank you. 2  BIS Review 12/2005