samchain/econo-pairs-v1 huggingface dataset:
As a result, the relevance of how credit institutions deal with this type of risk and how they identify and handle it is of paramount importance. In this regard, the precise calculation of provisions plays a crucial role in how banks manage appropriately their credit risk. An adequate level of provisions according to the risk profile of each bank is the basis for fairly dealing with the expected future losses that are intrinsic to the credit business. To put it bluntly, the recent crisis showed that the way banks traditionally measured their credit risk was far from suitable. In fact, the huge level of credit impairments and the low level of provisions accumulated led to a depletion of capital and created a significant need in many advanced economies for banks’ recapitalisation plans. Many of those plans were funded by taxpayers’ money. Looking back, we may remember that the new approach of recognition of credit losses and its materialisation in banks’ provisions emerged as one of the responses to the financial crisis. In that respect, G20 leaders urged accounting standard-setters to reconsider and, most importantly, overhaul the then-prevalent incurred loss model by assessing alternative approaches for recognising and measuring loan losses. Accordingly, the FASB and the IASB reacted by issuing two new accounting standards to determine credit impairment and how to measure credit risk.

In this regard, the correct calculation of provisions plays a crucial role in the way banks manage appropriately their credit risk. A consistent level of provisions according to the risk profile of each bank will prevent any undesired impact on solvency levels, which would be the final resource to absorb any loss arising from the ordinary activity of banks that has not been eliminated before by the correct application of provisions. In addition, appropriate macroprudential tools in the hands of policy-makers might help reduce the volatility of credit and business cycles. Allow me to express once again my gratitude to the co-organisers of the event for their excellent work, and to wish all the participants a fruitful conference and a pleasant stay in Madrid. We are all looking forward to hearing from the experts on the different challenges that the new provisioning paradigm entails, so without further ado I give the floor to Fernando Restoy, Chair of the Financial Stability Institute (FSI), to start with the first panel. 7/7
At the end of 2019, just before the pandemic started, the HKMA held an AML/CFT RegTech Forum to explore the role that technology could play in preventing and detecting financial crime. One of the key lessons that transpired from that event was the importance of bringing different parts of the eco-system together to discuss common challenges and pain points with Fintech firms who may be able to offer solutions. And we have followed up across the three breakout groups of banks, what we called accelerators, enablers and collaborators1, over the past year on concrete plans of individual banks. 22. In January this year, we released a report titled “AML/CFT Regtech: Case studies and Insights”. Through that, we shared comprehensive, hands-on experience from banks at different stages of AML/CFT Regtech adoption, and emphasised a number of key insights on the potential for technologies to assist in detecting and preventing money laundering and financial crime. 23. In that guidance, we have also deliberately and explicitly identified specific technologies and data applications, such as data analytics and the use of non-traditional data like IP addresses as well as robotic process automation in handling transaction monitoring alerts. Actually, some of those technologies featured prominently in the successes we saw in identifying and disrupting networks of mule accounts linked to COVID-19 scams and also the rising number of investment scams. 24.

This will help banks to identify fraud related accounts earlier – sleeper accounts before they are activated for example, and in doing so reduce the potential harm to victims. And thirdly, we are today 4/5  BIS central bankers' speeches  issuing guidance based on some of the good practices developed by our FMLIT banks, particularly with regard to how they integrate external information, data and alerts into their AML/CFT systems, and the use of data analytics tools more widely and other Regtech applications to produce better, more targeted outcomes. There has never been a clearer understanding of the overall objective across the public and private sectors to – improve the quality of data and intelligence going into the AML/CFT eco-system to drive better results – and the role of information sharing in achieving that. Conclusion 32. The priorities that I just highlighted – to be more adaptable in our implementation efforts, leveraging Regtech adoption, and the need to push further on information sharing – are intended to be a starting point to stimulate discussions over the coming two days. 33. And just as we at the HKMA, as a regulator, strive to make our regime increasingly focused on outcomes and effectiveness, I want to encourage all of you, whatever your sector or role in AML/CFT, to work with us in transforming our collective approach.
Assets of the insurance industry have now reached over RM100 billion and annual premiums generated by the industry are in excess of RM23 billion a year. The market penetration, that is, the number of policies in force as a ratio of the total population, has more than tripled to 38.7% from over a decade ago. At the same time, this growth has been underpinned by a transformation of the industry in terms of the distribution systems, product diversity, sophistication of business models and practices,  BIS Review 76/2006  1  and the state of the art technological advances. With this track record and the structural changes in the environment that are occurring, the prospects for continued growth will remain strong going forward. Importantly, the insurance industry continues to play an important socio-economic role within the economy. It is a signifant institutional investor in the capital market, with over RM49 billion invested in corporate and debt securities. In addition to providing basic insurance protection to individuals and corporations, insurance products have also contributed significantly towards expanding the breadth of financial planning options for individuals. This includes solutions that provide for individuals to finance their retirement needs, medical expenses and children's education, as well as solutions that enhance their investment income. All of you are therefore part of a key industry that forms an integral component of our social and economic fabric.

This implies reviewing the scope and content of certain regulations to ensure that the regulatory framework is favourable to innovation and neutral with respect to technologies, but also guarantees an appropriate and homogeneous treatment of risks throughout the financial system according to the “same activity, same risk, same rules” principle. (e.g. non-bank financial players, technology service providers, issuers and managers of crypto asset trading platforms) Thank you for your attention. 2/2  BIS central bankers' speeches
Firstly and most critically, future finance needs to have stronger links to the real economy by effectively having an intermediation role that is in the service to society. Financial systems have to be both value-adding and value-based – value-adding, in that they contribute meaningfully by intermediating and facilitating real economic activity, and value-based in that they aim to benefit society. Such finance that is value-adding and valuebased is deeply needed in the global economy. Many parts of the world, notably the developing world, require large amounts of funding to address infrastructure development. Financial inclusion also remains an important agenda to uplift the living standards of the marginalised segments of society in our global community. Secondly, a functioning regime practising value-adding and value-based finance needs to be built on a set of universal principles that will create a sustainable model for mainstreaming such positive finance in the global financial system. A regime that is deep-rooted in genuine productive activity that discourages excessive leverage that emphasises transparency, and that strengthens financier-client relationships would cumulatively be a positive force for the global financial system. Indeed, these are some of the core underpinnings of Islamic finance which has already garnered significance in many parts of the world. The central tenet in Islamic finance requires that financial transactions be supported by genuine economic activity, reinforcing the link between finance and value creation and aligning financial innovation to productive economic activity.

Not surprisingly, too, there is also strong political resistance in many countries, including notably the United States, to the idea that public - taxpayers’ - money should be used to bail out private creditors, especially foreign creditors. Alternative external financing need not come solely from the public sector. Private finance would, in principle, serve the same purpose, and in many situations market price adjustments may be sufficient to stem the capital outflow. But given the extent of the loss of confidence in the present case it would be optimistic to think that other private lenders were queuing up to volunteer to stand in place of those that are rushing for the exit. In practice in the present situation private support means persuading existing creditors that their assets will be better protected if they are prepared to leave them in place. And they may be prepared to do so, if all other major creditors agree to do the same, especially if official support is being made available in parallel. But in this case, too, difficult judgments have to be made. There is a danger  BIS Review 5/1998  -4-  that, if private creditors have to be in effect coerced into staying put, they will immediately cut their positions elsewhere, while they can, adding to the international contagion. Achieving a reasonable balance between market and macro-economic policy adjustment and official and private financing was never going to be easy.
When market participants obtain timely, accurate, realistic and latest information about the institution's performance, their investment and credit decisions can be a means of pressure and incentives for managers and boards of directors for managing their risks soundly. Equally important, the same market participants can penalize firms that fail to manage their risks soundly. Therefore, market discipline must be supported by adequate public disclosure and compliance with sound accounting standards. Knowing a company's risk appetite and its approach and methodologies for managing risk is essential to assessing the institution's future. Progress in the disclosure area, however, requires that accounting standards are enhanced to ensure proper valuation and to reflect innovations, in terms of both new products and modern risk management techniques. Accounting systems serve a variety of purposes, the most prominent of which is helping creditors and investors make rigorous and informed decisions as to which enterprises meet the market needs in terms of efficiency, competitiveness, and profitability. Sound accounting systems also enable investors in assessing the real financial value of enterprises. The systems also assist in attracting capital, both foreign and domestic. Looking ahead, I believe that a major challenge for directors and executive management is to find directors who are sufficiently independent but still knowledgeable about the business of the financial institution. Independence reflects qualities of objectivity, experience, insight, and force of character.

Thanks to these efforts, the institutions and the system have remained stable and steady, despite global economic crises and oil price volatilities. Dear Audience, We should not rest on these past successes. We must remain vigilant and continue to monitor changes in regional and global markets. We must continuously ensure adopting and implementing best international standards and principles. In this context, I wish to draw to your attention that SAMA is currently directing the banks in the Kingdom towards the adoption of Basle II Capital Adequacy standard by 1st January 2008. I expect all banks to easily meet the required capital requirements; and this will be positively reflected on fostering the risk management and corporate governance culture that is deemed essential for meeting the challenges of the forthcoming stage. In conclusion, I wish you a good stay in the Kingdom, and wish all success to your conference. Thank you for your attention. BIS Review 83/2007  3
At the fringes of finance, there may already be encouraging signs of network technology reshaping some elements of banking. Max Levchin was not too-big-to-fail. Prior to founding Confinity Inc. in 1998 (with Peter Thiel), his previous three businesses had all failed. His new business provided a method of secure payments between Palm Pilots. By early 2000, however, it was clear that more people were using the website, rather than handheld devices, to make payments, in particular for purchases across auction websites. Confinity merged to create a new company – PayPal. Even as traffic across the site grew, the stage seemed set for Levchin to make it four failures in a row as two of the world’s biggest banks entered the market. Wells Fargo and eBay together launched a new venture, Billpoint, for web-based payments. Citibank, too, entered the market with c2it. But, remarkably, PayPal saw both off. The key was superior fraud detection technology developed by Levchin using the information embedded in the web. eBay acquired PayPal in 2002 for $ billion and closed Billpoint. Today, it processes over $ million in payments globally each working day. In large parts of Africa, a different type of payments technology has also disintermediated banks – mobile phones. In March 2007, the Kenyan mobile phone company Safaricom launched M-Pesa, a service for making payments between phones. Today, it has around 15 million users reaching over 60% of Kenya’s adult population. The model has spread to a number of countries including Bangladesh, Uganda and Nigeria.

The key to progress was the joint recognition by market regulators and supervisors that earlier identification of credit losses is consistent both with financial statement users’ needs for transparency regarding changes in credit trends and with the prudential objective of safety and soundness.19 In the other direction, bank supervisors have typically insisted on the vital confidentiality of the information they receive, while securities regulators emphasise transparency. One could argue that, in many countries, the bank supervisors have done too well in this debate. That was brought home to me some years ago when, in a previous existence at the Bank of England, my then team realised that we could analyse large and complex firms most easily using disclosures made under SEC rules. As announced last week in the joint Bank of England/FSA document on how the future Prudential Regulation Authority will approach banking supervision, we plan in the future to publish prudential returns to the extent possible. Shadow banking and the prudential perimeter My second point about firms concerns shadow banking, defined to mean non-bank firms or structures that replicate the monetary and/or credit services of banks in some way, involving maturity transformation and/or leverage20. 18  See Recommendation 19, FSB Report on Implementing OTC Derivatives Reforms (2010); and the recommendations of the FSB’s Data Gaps and Systemic Linkages Group.
If credit becomes cheaper and more widely available, thereby increasing the stock of money (a “money supply shock”), households and businesses will increase their spending on goods and services and on assets, both financial and real, and this will push up on inflation. But if they wish to hold more money in their portfolios – a “money demand shock” – then the extra money will have few, if any, implications for inflation. So why have money and credit been growing so rapidly? Given the pace of their expansion, it is likely that there has been both a demand and a supply shock. The supply shock is that banks have become increasingly willing to provide finance. Credit has been readily available and the spread between  2  BIS Review 63/2007  interest rates paid by households and businesses and interest rates available in the money market has fallen. That is one factor behind the rapid growth of business investment spending over the past year. In light of the greater availability of credit, any person or family that borrows at a variable rate should recognise that the interest rate they will pay in the future may vary. Obvious though the point may seem, it is unwise to borrow so much that the repayments are affordable only if interest rates remain at their initial levels. Indeed, wider and cheaper availability of credit was a “shock” that boosted spending, and so was a further reason why the Monetary Policy Committee raised interest rates over the past year.

There is no simple or self-evident answer to the question of what path of interest rates will be necessary to bring inflation back to the 2% target and keep it there. By now you must be asking your own “why?” question – why is he keeping us from such a splendid dinner? So I will not detain you. I have tried to explain this evening why interest rates have gone up. Each month we try to spot the shocks, evaluate their implications for inflation, and set interest rates to meet the 2% target. We do that to provide a backdrop of macroeconomic stability so that you can focus on the really important questions for your businesses. Why is that product selling better than this one? Why is my competitor changing his prices? And, most important, why did the Wallabies run the Welsh defence ragged in Brisbane, where Wales lost by almost as big a margin as England did to South Africa? I don’t have the answers to those questions. But, of one thing I can assure you, in terms of the economy we will never stop asking “why?”  BIS Review 63/2007  3
Who would have thought that, four years later, we would be confronted with an even stronger franc and even lower – indeed negative – short and longterm interest rates? These extraordinary developments are ultimately a consequence of the global recession which hit the economy after the credit bubble on the US real estate market burst in 2007. As slide 1 shows, the banks around the world were, and continue to be, especially hard hit by this crisis and its consequences; since then, their share prices have performed significantly worse than those of other companies. This is principally due to the fact that many banks are still engaged in cleaning up their balance sheets and, where necessary, adopting costly restructuring measures. Furthermore, banks have been obliged to implement stricter regulatory requirements in the wake of the financial crisis. These requirements, which are needed to ensure systemic stability, are aimed at curbing excessive risk-taking. From the banks’ point of view, however, today there are lower potential returns in areas which were previously often lucrative but also highly risky. Banks are also faced with structural challenges. The accelerated pace of change in information technology and altered customer behaviour require high levels of investment. At the same time, the increasing digitalisation of distribution channels has stiffened competition, since it is easier for new rivals to enter the market. Another significant challenge for banks is the current economic environment. Weak global growth and persistently low interest rates in recent years are weighing on profitability in the banking sector.

A high standard of professionalism, laced with strong ethical values and integrity also form the prerequisites to create a new cadre of Islamic finance scholars. The pursuit for intellectual diversity and professionalism among scholars is best demonstrated through Shariah interpretations and lines of reasoning that evolve with peculiarity of circumstances, demonstrating a high degree of tolerance and respect of other Shariah school of thoughts. It is only by having talents with these ingrained ethics and characteristics that we could elevate Islamic finance to greater heights in our endeavour to improve the wellbeing of the ummah. Tonight, as we commemorate this prestigious award, let us celebrate this year’s and past years’ winners for their contributions to drive the Islamic finance agenda forward. It is not just their academic and working credentials that merit them this award, but it is also their relentless pursuit of al-falah (success) through their drive, knowledge and wisdom. I believe that this year’s RAIF winner and past winners have paved the path for future talents of 2/3  BIS central bankers' speeches  Islamic finance to embark on breakthrough ideas and thinking. It is for this very reason, that this year’s award is conferred to the visionary talents that had made impactful and significant contributions to Islamic finance.
Gratitude also to the leaders who maintained a steady hand during the 1990s in the run-up to the euro, in a very difficult environment. This anniversary is no time for complacency. But for continuous efforts, because the challenges lying ahead for Monetary Union will be numerous and demanding. As one of the major central banks in the industrialised world, we, like the others, have three challenges to cope with in our monetary policy-making: rapid technological progress, globalisation in all its dimensions, including the transformation of global finance, and population ageing. On top of those three major challenges, the ECB and the Eurosystem have to cope with two other important, self-assigned challenges. The first is the deepening of economic and financial integration at continental level, the progressive completion of a single economy with a single currency; we are the only central bank which is actively contributing to a major structural transformation of its own economy. The second is enlargement: we are called upon to extend progressively the euro area across the European Union as a whole; we are also the only central bank to undertake such an endeavour. Economic Union itself has its own challenges. I see three major challenges for the Eurogroup, for the governments of the euro area and for the Commission. The full and complete implementation of the Stability and Growth Pact, which is a crucial component of EMU in the absence of a European federal budget.

It's up to us to shape that destiny.” “Justement ici à Aix on comprend l’appel qui fait de l’Europe aujourd’hui notre destin commun. Il nous appartient de donner forme à ce destin.” A “common destiny”: the words of the man with whom General de Gaulle achieved reconciliation after so many conflicts. These words apply even more to the countries belonging to the euro area. In the ECB and in the Eurosystem we are fully convinced that, with our fellow citizens, 320 million of them, we share a destiny in common – wir teilen dasselbe Schicksal – nous partageons un destin en commun. I thank you for your attention. BIS Review 69/2008  3