samchain/econo-pairs-v1 huggingface dataset:
In other words, in the absence of strong governance, managers have strong incentives to exploit accounting latitude in order to achieve certain short-run performance goals that are linked to rewards. This raises a number of important issues for governance. For one, insurers will need to consider the adequacy of existing internal controls and accountability frameworks to ensure the integrity of financial reporting. For example, where actuarial models are used, to what extent are these models and the assumptions underpinning them subject to sufficiently robust validations? Insurers will also need to consider the depth of knowledge and expertise required at the audit committee level to enable the effective oversight and monitoring of management discretion. Part of this oversight includes the rigor applied by boards and audit committees in the appointment of external auditors to ensure their ability to act as an independent check on management discretion. It is also essential for insurers to develop strategies for improving communications with users of financial statements. A key risk will be that users fail to make sense of reported results which can lead to irrational behavior and unintended consequences. Equipping board members and senior management to communicate results effectively will be particularly important. These are also the issues that supervisors will be concerned with. Given the potential for heightened risks and uncertainty, the Bank will examine the need for regulatory prescriptions or 3/5  BIS central bankers' speeches  guidance – particularly in the early phases of implementation.

1/4  BIS central bankers' speeches  More will be done if necessary, of course, but the diagnosis that was reached yesterday by the Governing Council is that a little less is necessary today because growth is stronger and Europe is doing better. And to make this quite clear, how much will the ECB disburse in, say, 2017? The decision that was taken yesterday is to extend our asset purchases for a further nine months by buying € billion per month of various financial instruments, which makes an additional € billion euro. That’s the decision: we will add € billion to the € billion per month planned for the first three months of 2017, making € billion, so for the whole of 2017 that comes to slightly less than € billion extra compared with what we are doing already. And since March 2015? Asset purchases today come to around € trillion in total, so if we add 1,500 and 800 it means that, at the end of next year, we’ll be at just over € trillion. Yes, and you realise that with this € trillion growth is good, average, but it’s not stronger. What would happen without this € trillion? Well, without it, if the ECB wasn’t doing what it’s doing, growth would be between 0% and 1%, inflation would be close to zero and unemployment wouldn’t be falling in the euro area. But as you know, unemployment is now falling fairly quickly in the euro area.
But if people do not distinguish between the two things – and this is why I don’t like the word “currency” for these schemes – it would undermine confidence in the official currency. 3/5  BIS central bankers' speeches  And some of those who promote these new schemes want a currency which is not controlled by a government. So it’s a slightly sympathetic anarchic or libertarian approach, but unfortunately there is no libertarian law enforcement and there is no libertarian world government. You said in London last month that virtual currencies were not real money and that they wouldn’t be for the foreseeable future. So what would have to change for them to be considered money, what would need to be implemented? Without a trusted authority backing the stability of a so-called currency, an institution whose primary objective is to do just that, you don’t have a currency. A currency has three functions: a unit of account, a store of value and a medium of exchange. These tokens don’t fulfil any of the three functions, as I said in London. There is another sector growing without proper authority, and that’s shadow banking. A recent study has shown that it’s growing, and that the Luxembourg market – which is for the first time included in the study – could represent 7.2% of all shadow banking. How would you judge whether activities like securitisation represent a threat to financial stability? Let me first say that you cannot call everything that is not a bank a shadow bank.

At the moment they declare Brexit or at the moment you start the transition? This is all unclear. I can’t give you all the answers, but neither am I one of those who believe that the EU will go under without London. How would you define your cooperation with the Luxembourg regulator? I consider that the central bank side is working better because it is constructed differently. We are a Eurosystem, while supervision is not. For the supervisors there are still a lot of national regulations to respect. If a supranational body like the Single Resolution Mechanism (SRM) were to use only European law, things would be clear. That would be our preference. But in supervision sometimes national law prevails and there is still a lot of divergence between national laws that the single supervisor has to respect. How would you centralise the whole thing? Different agencies exist, such as the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA). But they only have what is essentially a coordination role at the moment. The Single Supervisory Mechanism (SSM) at the ECB has the effective supervisory function for banking. For all the agencies, there are proposals for improvement on the table. For securities markets, another important piece of draft regulation is the European Market Infrastructure Regulation 2 (EMIR2).
Moreover, the first round impacts of the recent hikes in end-user electricity and natural gas prices on end-2008 inflation are expected to be around 0.6 percentage points, which is higher than what we assumed in the previous Inflation Report. Meanwhile, considering the lagged impacts of last year’s drought and elevated prices of agricultural commodities in global markets, we now envisage that the price increases in processed food will persist for a while and the inflation in this item will stay at relatively high levels throughout 2008, albeit a slight decline. Upside revisions on the assumptions for food and energy inflation imply that it may take longer to bring headline inflation to 4 percent than envisaged in our previous Inflation Report. Therefore, in the absence of a significant correction in food inflation, headline inflation will most probably exceed the target level of 4 percent at the end of 2008. Forecast Range*  Medium-term Target  Uncertainty Band for 2008  Output Gap  2009-  2009-III  2009-II  2009-I  2008-  2008-III  2008-II  2008-I  2007-  12 10 8 6 4 2 0 -2 -4 -6 2007-III  Percent  Figure 15: Forecasts for Inflation and Output Gap  *The shaded region indicates the 70 percent confidence interval for forecast.

Whether it concerns developing a European system of financial supervision or setting up a Systemic Risk Council under the auspices of the ECB and the ESCB, these ideas are truly conducive to greatly strengthening the surveillance of risks both at individual institution level and for the European financial system as a whole. The reforms that I have just described should make it possible for the incentives of financial system players to be compatible with the stability of this system. The crisis has highlighted two types if not of incompatibility, at least of divergence that need to be corrected. First, within the financial industry itself. Financial innovation and developments in the business models of financial intermediaries have weakened credit discipline in favour of a strict return-oriented discipline. Regulators are working on correcting the regulatory sources of these incentives, which are dangerous for financial stability. I am thinking notably of the work aimed at reducing regulatory arbitrage and at countering the short-termism encouraged by certain prudential and accounting provisions. Second, we need to reconverge the incentives of private- and public-sector players. Their divergence is a natural phenomenon in periods of economic and financial boom. In these periods, regulators and supervisors find it harder to limit risk-taking when the risks to financial stability are unclear and competition is fierce. Maximising profit and competition considerations stand in the way of prudence and the prevention of financial imbalances. Countering these forces requires in particular the implementation of an independent macroprudential policy.
They are also well above the levels generally seen in neighbouring countries. For example, European banks of a size similar to Iceland’s banks have capital ratios of just over 18% and gearing ratios of about 8%. Elsewhere in the world, capital ratios are higher than those in Europe in some cases. Furthermore, many observers consider the actual capital in the European banking system is too limited and that Europe is therefore not the best reference for Icelandic banks. Nonetheless, there is some scope to lower the banks’ capital ratios — and gearing ratios in particular — with dividend payments and changes in the composition of capital. On the other hand, the banks are being cautious in maintaining a so-called “management premium” over and above the Financial Supervisory Authority’s minimum requirement, as it could erode confidence in the banks if their capital ratios fall below the minimum were they to face only mild headwinds. Moreover, the banks must bear in mind that the countercyclical capital buffer is currently 1.25%, but the Financial Stability Council has signalled that it could increase it in stages to 2.5% as the financial cycle gets more wind in its sails. In assessing a desirable level for the banks’ capital, it is important to remain aware of the costs and benefits. At times, international discussion of this topic has been somewhat misleading and, to some extent, affected by bank executives’ interest in maximising their own remuneration through risk-taking, knowing that a portion of possible losses would be absorbed by taxpayers.

I don’t want to reveal too much now, but there are a few points worth considering in this context. First of all is the importance of real-time settlement, which enhances efficacy and security. This has been a feature of payment intermediation in Iceland for a decade and a half, and it is where other countries are heading. It is therefore vital that we preserve that feature during the changes now taking place. Second, it is important to keep the cost of domestic payment intermediation down. New and more diverse solutions that, for example, work directly with core financial market infrastructure, such as bank deposits and the Icelandic Banks' Data Centre’s systems, could help in this regard. Third, it is important that it be impossible to stop domestic payment intermediation through some sort of foreign intervention. Fourth, there must be alternate routes in the system, in case anything goes wrong. This could call for some diversity in payment intermediation, using different types of technology. Electronic krónur could play a role in this. But the topic of electronic krónur gives rise to big questions that must be discussed — questions about the possibilities for the general public to use electronic claims against the Central Bank (and indirectly against the State) as a medium of payment instead of bank deposits, and questions about the repercussions this could have on the role and stability of the banking system. The discussion promises to be an interesting one, and it is just beginning.
And, neither bankers nor traders have a monopoly on this capacity -- corporate treasurers and institutional investors can pull up most of the same screens we can. At one time, a presence in a local market and access to early newspapers could provide a trading advantage for a large market maker. Today, news from that market is available electronically worldwide with almost no lag. Information is cheaper and easier to come by than ever before. The result? A global market that reacts quickly and efficiently to new data, and participants who have more time to analyze information because they need to spend less time gathering it. One consequence of this improved transparency in information technology is that information gets reflected in asset prices more quickly and more smoothly than ever before. A closely related development that has also contributed to increased transparency in the foreign exchange market has been the rapid evolution of the price discovery process in the past several years. Electronic brokerage and electronic interbank dealing systems have evolved that have smoothed the dissemination of current pricing and improved market liquidity. Whereas truly competitive pricing was once the province of only the largest market makers, smaller interbank dealers -- and even some foreign exchange end-users -- now also have access to narrow bid-ask spreads. The result so far has been a deeper market and, again, a more level playing field for all market participants, with pricing no longer dominated by a few large players.

Within the framework of the Treaty establishing the European Community (EC Treaty), the Governing Council shall be held accountable for the maintenance of price stability in accordance with its published definition. The Governing Council is neither responsible for the content of these projections, nor should its performance be judged against them. While macroeconomic projections are a useful instrument for undertaking the forward-looking assessment on which monetary policy decisions are based, the limitations I have outlined imply that such projections cannot be the only tool used by the Governing Council. The Governing Council should no more assume responsibility for the staff macroeconomic projections than it does for the content of other analyses that constitute inputs into its policy decisions, such as the monetary analysis under the first pillar or the evaluation of developments in individual indicator variables or financial prices and yields. Assuming responsibility for one input into its decisions would detract from the Governing Council’s true responsibilities, first for monetary policy decisions and ultimately for the maintenance of price stability. Given the Governing Council’s overriding commitment to the maintenance of price stability, the only forecast for which it could take responsibility would be one that was consistent with price stability. BIS Review 109/2000  4  Such a forecast - which, by its nature, would not change over time - would not, in itself, be very informative about the Governing Council’s assessment of the prevailing economic situation.
Some assets will be stranded – such as those in carbon-intensive sectors – while others – such as those in the renewable energy sector – could enjoy strong tailwinds. The value of global financial assets at risk from climate change has been estimated at $ trillion by the London School of Economics1 and $ trillion by The Economist2. Investors cannot ignore these potential changes in asset values. Second, approaches to sustainable investing have developed significantly in recent years. There is growing evidence that investments incorporating strong ESG considerations can reduce exposure to systemic risks and improve resilience to market shocks. Some recent research has found a strong correlation between market performance and ESG ratings, for both equity and fixed income portfolios.3During the early weeks of the COVID-19 crisis, there was also some evidence that major ESG funds were able to outperform broad indices like the S&P 500. Sustainable investing is becoming mainstream. 1/7  BIS central bankers' speeches  More than $ trillion of assets globally are being managed in ESG investments, up 34% from 2016. 4 Global funds linked to ESG principles more than doubled in 2020 compared to just a year before. 5Global investors plan to further double ESG assets over the next five years. 6 Third, investor preferences will change as wealth is handed over to the next generation. We are on the cusp of the most significant inter-generational transfer of wealth in history. $ trillion of assets is expected to change hands between generations by 2030.

Annual inflation, as measured by the national consumer price index, stood at 1.0% both in the fourth quarter of 2002 and the first quarter of 2003. In April, inflation dropped to 0.7% and amounted to 0.4% in May. This decline is primarily attributable to a basis effect. While inflation of domestic goods has remained fairly stable as of late, inflation of imported goods was relatively volatile. This is a result of oil prices having fluctuated sharply in the recent past. With regard to domestic goods, it is striking that rents have not risen for a while now while prices for other services - particularly public services - have augmented at an aboveaverage rate. The core rate of inflation calculated by the National Bank has stood at slightly below 1% for a while. This year the National Bank began publishing its inflation forecast once every quarter. Our inflation forecast of March 2003 (the dash-dotted green curve in the graph) shows that at that time we assumed, based on a stable three-month Libor rate of 0.25%, that inflation would gradually rise to 2.5% in the fourth quarter 2005. This inflation forecast was based on the assumption that the US economy would see a decisive recovery already from the second quarter of 2003, followed by an upswing in Europe toward the end of 2003. This proved to be too optimistic a scenario. In our latest inflation forecast (red dashed curve) we anticipate a renewed delay in the global recovery of just over half a year.
Ladies and Gentlemen, Looking back through history, one of the best-known microfinance success stories is perhaps the Grameen Bank of Bangladesh. Its success may be expressed in terms of its staying power and that it has offered to help disadvantaged groups to enable them meet basic needs. This has been attributed mainly to its concentration on lending to women groups. Around the world, various Grameen models have been replicated, especially in South America. Within Africa, microfinance organizations have emerged in Bukina Fasso, the Gambia, Ghana, Kenya,  BIS Review 22/2003  1  Malawi, South Africa, Tanzania, Uganda, and Zimbabwe, to mention a few. However, what appears to be the common factor in all these areas is the lack of adequate supervision for the sector. In the Zambian case, the principal financial legislation, the Banking and Financial Services Act of 1994 (BFSA) did not provide for the regulation and supervision of microfinance organizations until the 2000 amendment. Chairperson, Ladies and Gentlemen, In most developing and transitional countries, microfinance institutions are using field-based “best practices” that have emerged from many years of world-wide experience in providing credit and savings to lower-income groups. However, best practices alone cannot guarantee the success of microfinance programmes in the absence of an appropriate legal and regulatory framework. Practioners and policy makers worldwide now realize that without appropriate regulatory and supervisory framework, support from commercial banks and appropriate infrastructure, most microfinance services will continue to be donor-dependant and will remain limited in outreach.

2  BIS Review 74/2008  But the U.S. economy and economies worldwide are still in the process of adjusting to the aftermath of rapid asset price growth and unsustainably low risk premiums. This process will take time. As we continue to work with other central banks to ease the adjustment now under way in the U.S. economy and globally, we are working to make the financial system more resilient and to improve its capacity to deal with future crises. We are working closely with the Securities and Exchange Commission (SEC), with banking supervisors in the United States and the other major economies, and with the U.S. Treasury to strengthen the financial foundation of the major investment and commercial banks. We have encouraged a significant increase in the quality of public disclosure. We have supported efforts that have brought a very substantial amount of new equity capital into many financial institutions. These efforts will help mitigate the risk of a deeper credit crunch. And even as the Federal Reserve has worked to mitigate the liquidity pressures in markets by implementing a new set of lending facilities, we have worked with the SEC and others to ensure that the major institutions are strengthening their liquidity positions and funding strategies. We are also initiating important steps to strengthen the financial infrastructure.
The Bank’s Financial Policy Committee set out a pilot impact tolerance in March 201913, stating that it would be prudent to expect the financial system to complete all critical payments by the end of the day, but recognising that firms would not be able to meet this in the most extreme circumstances. The Committee, which is responsible for monitoring and reducing systemic risks for the UK’s financial system, also agreed a pilot stress test based on the temporary unavailability of payments infrastructure.14 As the operator of CHAPS, we are participating in the pilot, any lessons learned from which will further enhance our understanding of the end-to-end resilience of the CHAPS system. 11  https://connect.vocalink.com/2018/december/mits/ https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/816215/201922_Economic_Crime_Plan.pdf 13 https://www.bankofengland.co.uk/-/media/boe/files/financial-policy-summary-and-record/2019/march-2019.pdf 14 https://www.bankofengland.co.uk/-/media/boe/files/financial-policy-summary-and-record/2019/march-2019.pdf 12  6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  We are also working through an enhanced programme of regular testing for our tertiary solution – MIRS, the Market Infrastructure Resiliency Service which is a geographically-remote and technologically diverse solution provided by SWIFT. MIRS is designed to, within a small number of hours, pick up CHAPS payment processing and other RTGS settlements in the event of a major issue with our own RTGS infrastructure. This should means that all critical CHAPS payments are completed by the end of the value date in line with the FPC’s pilot impact tolerance. The testing programme is not just technical but ensures sufficient familiarity across staff within the CHAPS participants of the tertiary service.

A deep capital market remains critical to economic development and to ease macroeconomic adjustment in the face of global shocks. The shallowing of our domestic capital market over the past few years has deteriorated the access of firms and households to long term finance. This puts into focus the need to reestablish long term savings as well as ease the functioning of our markets. The recent proposed legal changes included in the Resilience Bill, as well as the broad support that the proposed pension reform should promote long term savings are welcomed, and should support financial stability. Thank you. 3/3  BIS - Central bankers' speeches