samchain/econo-pairs-v1 huggingface dataset:
  More generally, we have issued over 700 approvals and waivers under Solvency II; many of these allow for alternative approaches to calculating technical provisions and capital requirements. We have made full use of the flexibility within Solvency II to tailor regulatory requirements to the wide range of different insurance business models present in the UK.   We have set out our proposals to reduce the reporting burden on firms. Of the part of the reporting package that is within the PRA’s gift to change, our proposals would reduce the required reporting by up to half.   We have implemented a streamlined and tailored regime for the smallest firms, representing 35% of the firms we regulate, that fall outside the scope of Solvency II.   We continue to support new firm authorisations, having authorised 26 new insurance firms since 2013. Furthermore, we are exploring how we might improve our current authorisations approach to facilitate the entry of new insurers. Some have expressed concern that the PRA's focus on prudential matters may inhibit competition. I would argue that the opposite is true. Prudential regulation is integral to competition. Without minimum standards, 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  policyholders would be much more exposed to the risks presented by imprudently run firms. An absence of prudent standards would enable less scrupulous firms to drive out better-managed firms by engaging in unsustainable pricing practices in order to gain a greater market share.

Looking out for the policyholder Speech given by Sam Woods, Deputy Governor, Prudential Regulation and Chief Executive Officer, Prudential Regulation Authority  Association of British Insurers Annual Conference 2018, London 27 February 2018  I am grateful to Rebecca Pu for her assistance in preparing this speech and to other colleagues for comments and contributions. 1  All speeches are available online at www.bankofengland.co.uk/speeches  I will begin this speech with a bold claim: insurance regulation is fun! This is just as well, because it is half of what we do at the PRA. Parliament very wisely decided to put prudential regulation of banks and insurers together in one institution following the financial crisis. I think this works very well, because there are many synergies. Both sectors provide critical services to the real economy, bringing customers’ money directly onto their balance sheets. And I would argue, for instance, that the basic qualities which make a good chairperson aren’t materially different between banking and insurance. But there are also very big differences. An annuity writer is nothing like a building society. London Market underwriters I have sat next to do a very, very different thing to what goes on in banks. The eighty actuaries we employ as part of our insurance division speak a different language from our risk specialists sat on the floor above them at 20 Moorgate. Much of the time, this insurance activity goes on underneath the radar, relative to banking.
This discussion of equity is partly new, as central banks have previously been protected from losses by large seigniorages. However, along with a few other of the world’s central banks, the Riksbank is facing a new situation in that demand for cash is now so low that seigniorage is only just enough to fund running costs. 21 For historical reasons, this also applies to several of the countries in the Eurosystem. 22 The Bank of England is funded in this manner. In addition, the amount is adjusted so that the Bank of England's revenues are satisfactory regardless of the level of interest rates, at any rate as long as longer government bond yields are positive. 20 [25]  In addition, the earlier periods in which central banks have expanded their balance sheets have been fairly brief. If we are now instead facing a future in which the size of the balance sheet, even in normal times, can be expected to be larger than before, the framework surrounding our financial independence will have to reflect that. This means that the amount of equity needs to be proportional to the risks that the Riksbank may have to hold on its balance sheet. 23 The basic idea is that the probability that the Riksbank will have to ask the Riksdag for a recapitalisation should be satisfactorily low – only in this case can we say that we are financially independent.

The loans were often sold on to other financial institutions packaged together with other assets, until it was finally difficult to know which financial institutions were exposed to the impaired loans. When the uncertainty spread, it had unexpectedly large effects and repercussions on the entire world economy. Financial crises took place in several countries in the euro area and in the United Kingdom. The world's central banks reacted by implementing powerful measures – a lesson learnt from earlier crises is that the reactions of central banks are decisive for the sequence of events. Many say, for instance, that one of the reasons why the 1930s crisis in the United States became so serious was that the Federal Reserve’s monetary policy was too tight. Although it is difficult to distinguish the purpose of different measures, we can say that the financial crisis roughly entails three different types of problem for the central banks: liquidity problems, problems with market functioning and difficulties managing an unusually deep recession. In addition, a long line of solvency problems arose. The fact that different central banks, to some extent, chose different measures during the phases of the crisis reflects which problems needed to be counteracted at different points in time. Central banks offered liquidity during the crisis The acute liquidity problems arose when unease spread and various actors began to question their counterparts’ creditworthiness. This led to many financial agents having problems obtaining short-term market financing.
After the most recent financial crisis, which demonstrated how costly a crisis can be as a result of a large build-up of debt, the pendulum has swung towards the belief that monetary policy should to a greater extent lean against the wind, and take such imbalances into consideration. Personally, I think that as long as there are no other tools in place that can counteract the build-up of financial imbalances, monetary policy must take into account the risks the imbalances entail. Let me explain my view of these questions before I move on to summarise the information received during the summer. BIS central bankers’ speeches  3  Monetary policy and financial imbalances International experience shows that a high level of indebtedness in all its forms can pose major risks to the economy. It makes the economy more vulnerable to various types of shock, such as a fall in house prices, and it can also increase the risk of shocks actually occurring. The flexible inflation targeting conducted by the Riksbank is compatible with giving consideration to this type of financial imbalance in our monetary policy decisions. Such imbalances ultimately risk jeopardising both the stability of the real economy and the inflation target. In a really bad scenario the imbalances could also entail risks for financial stability. As the Riksbank’s two main tasks are to attain price stability and financial stability, we must take these risks into account.

To take one example of the complexities involved in making such an assessment, the natural rate of interest might face both downward pressure from expectations of severe weather events10 and upwards pressure from demand for investment to replace carbon-intensive capital stock (such as replacing petrol cars with electric ones). This dynamic is not unique to climate change. We see it in other structural shifts such as the post financial crisis trend of weak productivity, and the growth in intangible capital.11 To improve our understanding and better inform future monetary policy, we need more research on this topic. I am pleased to say that the Bank plans to do more in this space, both in its own capacity and through working with other central banks and international bodies. 3/5  BIS central bankers' speeches  As well as being relevant to the setting of monetary policy, climate change and the transition to net-zero are also relevant for the implementation of it. The Bank recently became the first central bank to set out a comprehensive framework for greening a monetary policy asset portfolio – the £ stock of sterling corporate bonds acquired via our Corporate Bond Purchase Scheme (CBPS).12 This will remain a monetary policy tool, with its overall target stock of assets set by the MPC in order to achieve its primary inflation objective.
U.S. inflation by most measures fell in half to an average for the CPI of about 2.5 percent. This positive inflation performance was more generalized across the major economies, with Europe and most all major economies experiencing a similar slowdown, and Japan, more famously, slipping into sustained deflation. •  Third, U.S. economic performance during this period was characterized by lower overall volatility in growth and inflation. This moderation, economists call it the “great moderation,” was reflected in a reduction in quarter to quarter volatility in output by about half. This more even pattern of growth was evident across most components of GDP. Some of the other major economies also saw some moderation in the variability of macroeconomic outcomes, but the trend is not as pronounced or well established. •  Fourth, productivity growth in the United States accelerated significantly with productivity growth in the non-farm business sector doubling from about 1.5 percent per year in the two decades up to the mid-nineties, to more than three percent on average over the decade since. This acceleration in productivity was not completely unique to the United States, but it has not yet been matched by the other major economies, though that may be in prospect. What accounted for these achievements? This is important to try to understand, because it is important to assessing whether these trends are enduring or temporary, and what types of policies are likely to sustain them.

Philipp Hildebrand: Key factors for the Swiss economy – financial market regulation in Switzerland Speech by Mr Philipp Hildebrand, Chairman of the Governing Board of the Swiss National Bank, Swiss Economic Forum, Interlaken, 4 June 2010. The complete speech can be found in German on the Swiss National Bank’s website. *  *  *  The financial system is the life blood of our economy. Key measures to increase the resilience of the financial system have already been implemented in Switzerland. However, they have not addressed the fundamental problem, which is that systemically important banks cannot at present be allowed to fail. The commission of experts set up by the government to examine ways of alleviating this problem published its interim report a few weeks ago. The report proposes measures in the areas of capital, liquidity and organisational structure. This approach is in line with the key points on the Financial Stability Board’s agenda. The interim report is an important milestone in the efforts to address the “too big to fail” issue. Naturally, we still face considerable challenges. Moreover, cross-border solutions are required for the “too big to fail” question. The commission’s proposals represent a constructive step towards global cooperation. If the key points on the Financial Stability Board’s agenda are not implemented in the major financial centres, we will ultimately be left empty handed. One of the few positive aspects of the financial crisis has been the unprecedented international collaboration to combat the crisis and the endeavours to cooperate internationally on regulatory reform.
A number of the measures in the programme are directly relevant to foreign banks and you may therefore be interested to hear about what we have done so far, and what more we have in mind. The current state of the banking sector The Consultancy Study was conceived just before the outbreak of the Asian Crisis and took place during it. The Hong Kong banking sector has now come through the crisis, and can be said to have clearly demonstrated its resilience and underlying strength. It is true that the number of foreign banks in Hong Kong has fallen sharply over the last two years. This reflects the fallout from the crisis that has led to the demise of some banks and has required others to cut back on their overseas operations and return to their home base. Hong Kong has certainly not been the only financial centre to witness this retreat. However, the important point is that the core of the Hong Kong banking system - represented by the local banks and the large foreign players - has remained intact. Although bad debts rose sharply during the crisis and a few banks lost money, the banks generally remained profitable and financially sound. The capital ratios of the local banks actually rose during the crisis period. No banks failed and no depositors lost money. The Government was not called upon to provide financial support. The results of the banks for the first half of this year show that their recovery from the crisis is well underway.

Thus, increased growth and globalisation have not solved all of the problems, far from it; there are still far too many poor people who are on the outside of the world economy and far too many countries with large environmental problems. However, existing shortcomings and defects do not mean that the present model needs to be changed; on the contrary, it needs to be defended, extended and spread further, and its weaknesses need to be managed. I believe that the positive effects of sustainable long-term growth, combined with the opportunities offered by continued internationalisation of the world economy, indicate that there are good grounds for optimism about the future. BIS Review 60/2004  7
The reserves are thus a rainy day fund, an endowment fund, and a stability fund. The imperative to hold a buffer against crisis is rooted in Singapore’s geography and history. Singapore is a city state smaller than Greater London. It has no natural resources and imports most of its food, including water. When it became independent in 1965, it had no hinterland and meagre financial reserves. It depended mostly on entrepot trade and hardly had an industrial base. It was not expected to survive, let alone succeed. An acute sense of vulnerability has been part of Singapore’s DNA since its birth. This sense of vulnerability, in turn, underpinned two convictions: first, that the only way to survive and make a living is to make ourselves relevant to the 1/7  BIS central bankers' speeches  world; and second, we must build up strong buffers so that we can withstand the shocks that come with being so small and open to the world. As Singapore grew and prospered as a business and financial centre, its vulnerabilities to the the vagaries of global trade and financial cycles also grew. The need to build up a sufficient rainy day fund to tide us through shocks and crises has remained as relevant as ever. Total trade is three times the size of the Singapore economy. Gross capital flows into and out of Singapore are 77% of GDP. The role of the reserves as a rainy day fund is not theoretical. The reserves have indeed served us well in past crises.

They helped underpin confidence in Singapore in the throes of the Asian Financial Crisis. And during the Global Financial Crisis, the reserves were drawn down to finance a package of measures, to preserve jobs by subsidising employers’ wage bills and to help viable companies stay afloat by sharing the risk of bank lending. A second purpose of the reserves is to serve as an endowment. This purpose has grown in importance – and salience - in recent years. The income from investing the reserves provides an increasingly important source of revenue to fund government expenditure. The size of government in Singapore is small. Government spending – comprising both operating and development expenditure – is just about 16% of GDP. But tax and non-tax revenues are even lower, at 15% of GDP. In other words, Singapore runs a structural deficit on its primary fiscal balance. This is where the investment income from the reserves comes in. The Constitution of Singapore bars the government from borrowing to spend or to spend surpluses accumulated from previous terms of government. Instead, it allows the government to spend up to half of the expected long-term real returns from the net assets invested by MAS, GIC, and Temasek. This is known as the Net Investment Returns Contribution (NIRC). The NIRC is already the largest single contributor to revenues in the government budget, accounting for about one-fifth of revenues.
ROMANIA: TEN YEARS AFTER THE GLOBAL FINANCIAL CRISIS Liviu Voinea, Deputy Governor, National Bank of Romania Macroeconomics Panel - 2018 FP Investor Days  Your Excellencies, Dear Guests, Ten years ago, in mid-September 2008, the Lehman Brothers’ collapse became the trigger of the global financial crisis. The main cause of the global financial crisis was, in my opinion, excessive deregulation, which fuelled speculative bubbles on many markets, primarily on the derivatives markets comprising mortgages. That crisis has thrown US and EU in the midst of financial turmoil, leading to recession, deflation, and forcing central banks to take unorthodox measures, including quantitative easing, which led to negative real and even nominal interest rates. Since then, US and EU have recovered, but the exit from these unorthodox policies proves to be harder in the EU, particularly because some countries are not better off in terms of public debt than they were before the crisis. Emerging markets were hit even harder, and their resources for recovery were limited. Everyone felt the wave of the global crisis, but in the case of some emerging markets that was exacerbated by their domestic vulnerabilities. Today, this is more evident than before, when we witness some emerging markets being hit not by a global crisis, but by their in-built vulnerabilities. This is why I would like to speak today about the Romanian economy, ten years after the global financial crisis. Are we better off? Are we more protected against contagion risks? Have we put in place stronger prevention mechanisms?

The question we ask is ‘could they reasonably be judged to be stretched?’ In global corporate bond markets, the answer is yes. As we highlighted back in November, corporate credit appears priced for perfection. Investors expect short-term risk-free interest rates to stay pretty low. And they are demanding little compensation for that being wrong or for the possibility of corporate default. Conviction that interest rates will remain low has meant the ‘term premium’ investors’ demand for holding longer-dated fixed income bonds has rarely been lower. Conviction that growth will be steady and corporations healthy has meant the credit risk premium investors demand for holding corporate bonds has compressed. All in, spreads between corporate bond yields and the estimated path of expected short-term interest rates are below pre-crisis levels. So it’s not just that, as in recent weeks, corporate bond yields are at risk from the – hardly radical – possibility that sustained global growth might mean higher global interest rates. They are also at risk of a reappraisal of how uncertain the outlook is for interest rates and corporate health. 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  The compression of bond yields has been especially pronounced at the riskier (‘high yield’) end of the market. The difference between yields on high-yield and investment-grade bonds has shrunk to levels seen prior to the global financial crisis. However you look at it, it’s cheap for companies to borrow in bond markets.
•  The MPC’s objective is to deliver price stability – defined by the Government’s inflation target of 2% – and, subject to that, to support the Government’s economic objectives including those for growth and employment. •  The FPC’s objective is to protect and enhance the stability of the financial system of the UK – and, subject to that, to support the Government’s economic objectives including those for growth and employment. 1  See for example, R Bryant (1995) International Coordination of National Stabilization Policies. Brookings, Washington, and the many references therein. 2  See for example some of the material in N Acocella, G Di Bartolomeo and A J Hughes Hallett (2013), The Theory of Economic Policy in a Strategic Context, Cambridge University Press, Cambridge. BIS central bankers’ speeches  1  •  The PRA has two statutory objectives: to promote the safety and soundness of deposit takers, insurers and major investment firms and, specifically for insurers, to contribute to the securing of an appropriate degree of protection for policyholders. It also has a secondary objective, to facilitate effective competition in the markets for services provided by PRA-authorised firms. The PRA Board The PRA Board is the least well known of the 3 committees and so I want to say a few words about how it operates. I have been attending as an observer since I moved to the PRA on 1 June.

First, it decided to continue to support ample liquidity conditions by conducting its refinancing operations as fixed-rate tender procedures with full allotment, at least until mid-January 2012. Let me point out that the outstanding Eurosystem credit in our refinancing operations currently amounts to about € billion and has come down since last year. The total value of marketable securities already presented and approved for Eurosystem credit operations amounts to € trillion and our counterparties have at their disposal almost € trillion out of the overall total of  2  BIS central bankers’ speeches  existing eligible securities of about € trillion. Therefore, this confirms that there is no liquidity or collateral shortage for the euro area banking system. Second, the ECB resumed its government bond market interventions under its Securities Markets Programme (SMP) in August. Via these interventions, the ECB Governing Council aims to help restore a more appropriate transmission of its monetary policy stance in an environment in which key market segments, such as those for government paper, are dysfunctional. The interventions do not influence our monetary policy stance. In order to sterilise the impact of these interventions on the liquidity conditions in the banking system, we re-absorb the liquidity injected. Let me underline that the secondary market purchases are not, and cannot be used to circumvent the principle of budgetary discipline as a pillar of Economic and Monetary Union.