samchain/econo-pairs-v1 huggingface dataset:
This brings me to the Basel III which not only addresses the shortcomings of Basel II but goes far beyond by introducing a variety of new concepts which have raised the bar in terms of global supervisory standards. Some of these concepts emerged from the various lessons learned exercises that were carried out following 2007, while others are a product of serious research and reflection by the global banking supervisors. Basel III has introduced some fundamental reforms such as elevating the status of Common Equity capital as the key component of Core capital. It also has introduced the concept of a conservation capital buffer and even more importantly an additional countercyclical buffer on top of the minimum capital  BIS central bankers’ speeches  1  requirements. Also Basel III has recognized that liquidity is as important if not even more important than capital for safety and viability of banking institutions. It has recognized that there must be limits on leveraging by financial institutions so that bankers are restrained from excessive risk taking. Basel III also has taken a serious and perhaps a much needed closer look at risks in trading and investment activities and particularly for derivatives and off balance sheet transactions. In July 2009, as an interim measure, Basel Committee had issued a document addressing the market and trading book weaknesses in Basel II for immediate implementation. This document is known as Basel II.5. Basel III goes much further with refinements in areas such as counterparty credit risk, Credit Value adjustments, etc.

These measures should enhance the risk management, governance and supervision of such activities as securitizations, resecuritizations and credit derivatives. Also at the conceptual level there is far greater emphasis on stress testing by banking institutions for various risks. Banks are required to develop stress scenarios and demonstrate their ability to cope and survive under stressful situations. Basel III also requires supervisors to use stress testing at the systemic level. One related area of major concern that has kept Basel Committee very busy is the enhanced supervisory regime for Global Systemically Important Financial Institutions(G-SIFIs). These institutions will be subject to a more stringent, sensitive and effective supervisory regime and will also face a higher capital charge in form of common equity capital. They are already subject to supervisory colleges and to the emerging requirements of stronger resolution regimes. There is already an informal consensus that these rules will be equally applied to Domestic SIFIs. I do not want to delve into many details on these measures which I am sure will be covered by various speakers today. I just want to make a fundamental point that the Global supervision is reverting back to fundamental values of prudence, conservatism and simplicity. These are the same values that SAMA has always espoused and maintained and therefore for us the transition to Basel III raises no major concerns nor poses major challenges.
Source: Ministry of Finance, Medium Term Program (2010-2012). 28. The determined implementation of fiscal discipline in Turkey since 2002 has helped cut the ratios of government budget deficit and debt to GDP, to a level well below the average of both advanced and emerging economies. Although Turkey’s budget deficit expanded at a faster pace than in many other emerging economies in 2009, according to the MTP projections, government debt stock is likely to remain below the average of other emerging economies in the upcoming years. 10  BIS Review 68/2010  General Government Budget Deficit and Debt Ratio Average Values in Advanced Countries and Turkey  Average Values in Emerging Countries and Turkey  (Percent of GDP)  (Percent of GDP)  100  Aver age of A dvan ced Cou ntrie s**  80 2 008 70 2 003  2003  60 50  20 12  40 2 008  2003  2 003  60 55 2012 50 2 008  45  2012  40  Tur key  Tu rkey  2008  30  35  -2  0  2  4  6  8  10  Budg et D eficit  *Dashed lines indicate forecasts. **Includes USA, UK, Germany, France, Spain, Ireland, Iceland, Japan, Portugal, Israel, Greece, Italy, Austria, New Zealand and South Korea. Source: IMF. Turkish data is taken from the Ministry of Finance, Undersecreteriat of Treasury, Medium Term Program (2010-2012) and Program for 2009. 29.

Economic recovery in Spain requires structural changes that will encourage technologically dynamic productive sectors with high growth potential to take up the baton from construction. For this to occur, the labour market must function so as reallocate resources, increase and adapt workers’ skills to new demands, and make productive processes within companies more efficient. Reform should focus on ensuring that labour conditions adjust to the economy’s different cyclical junctures and, in particular, to the specific circumstances companies or productive sectors face. That should prevent the adjustment coming about through pushing large numbers of workers out of the market. Changes are also needed in hiring arrangements. These must allow workers who have lost their jobs to return promptly to active working life, so they do not spend long periods unemployed, the consequences of which were so adverse in the past. Improvements in labour market intermediation systems and in mobility and training for the unemployed are also very important. Resolute action here would help check business closures and lessen the risk of decapitalisation, which is admittedly very high at present. If, moreover, significant progress were made in eliminating administrative formalities, the Spanish economy would be better placed to resume a high growth rate once the world recovery began. To bring about a new productive pattern enabling high rates of potential growth to be regained, structural measures must span a wide range of fields. Improving the level of educational attainment of the labour force is vital for raising the quality and productivity of human capital.
The responsibilities of individual policy areas in ensuring sustained non-inflationary growth This brings me to a crucial issue: the single currency is the joint responsibility of all policymakers and Member States. Monetary policy is strictly geared towards the maintenance of price stability and thus also makes an important contribution to strong growth in output and employment. However, monetary policy needs the support of other policy areas. This is best achieved by having specific roles, clear mandates and agreed responsibilities for the individual policy areas. Let me go into these in a little more detail. The best contribution which monetary policy can make to sustainable growth is to achieve price stability. Indeed, inflation entails numerous costs and creates an uncertain economic environment. This is harmful to an optimal allocation of resources and thus hampers economic growth. Some costs of inflation are quite tangible, as is the case with those induced by the periodic revision of prices and indices or the increasing cost and time spent in cash transactions. More generally, increased inflation is accompanied by increased volatility of inflation. Stable high inflation has almost never been observed, and is seemingly a contradiction in terms. This volatility of inflation creates uncertainty which affects economic and social decisions.

BIS Review 38/1997  -7-  Diagram 3a  Real w ages and em ployed persons, EU and U SA, 1970-97 Index 1970=100 EU  170  USA  170  170  160  160  150  150  140  140  130  130  130  120  120  120  110  110  110  100  100  100  90  90  90  80  80  80  160  R e a l wa ges  150 140 130  E m ploy m ent  120  70  72  74  76  78  80  82  84  86  88  90  92  94  96  98  170 160 150  E m ploy m ent  140  110  R e a l wa ges  100 90 80  70  72  74  76  78  80  82  84  86  88  90  92  94  96  98  S ource : O E CD  As shown in Diagram 3a, since 1970 the average real wage in the United States has risen by a total of 15 per cent but by as much as 60 per cent in the EU area. The change in employment, as I mentioned earlier, has been the opposite.
So we need policies and principles that stand in the way of its weakening the resilience of the system, while allowing enterprise and our capital markets to flourish. 15  See the Bank’s recently published paper: “The role of macroprudential policy: A discussion paper” and Tucker P M W (2009e), “The debate on financial system resilience: Macroprudential instruments” at the Barclays Annual Lecture in London. 8  BIS Review 6/2010

There is no necessity to reinvent the wheel. Reinventing the wheel takes time and very expensive, and you would never be sure whether it can be successful. Established Islamic finance jurisdictions are more than happy to share their experiences. The more jurisdictions adopt Islamic finance, the better the future of the industry. There are already proven practices and documentation that bridge theology to practice. Many years of efforts have taken place. Accountants, lawyers, tax experts, regulators and bankers have put their minds to create standardised agreements and  BIS central bankers’ speeches  1  instruments, such as the Wakalah Agreement and Commodity Murabahah Master Agreement that are widely accepted across jurisdictions through bilateral and multilateral agreements. These agreements and instruments have stood the test of market and time. It is wise to adapt and customise them to the local environment. Shariah a pillar of Islamic finance. It is a factor that will determine whether Islamic finance would move forwards. I have both good news and bad news on this. The good news is, a lot of concepts and contractual characteristics are already resolved and widely accepted. These are many and the differences are very few. The bad news is, there is still a very small minority continuously asking the basic questions that I thought have been resolved collectively. While giving a dissenting view is not wrong nor discouraged, but if it is made by a well-known personality, it would create doubts and uncertainty.
Bwalya K E Ng’andu: The National Strategy on Financial Education for Zambia Remarks by Dr Bwalya K E Ng’andu, Deputy Governor (Operations) of the Bank of Zambia, at the launch of the National Strategy on Financial Education for Zambia, Lusaka, 12 July 2012. *  *  *  The Deputy Minister of Finance, Honourable Miles Sampa, M.P; The Minister of Education, Honourable Dr. John Phiri, M.P; The Chief Executive Officer of the Securities & Exchange Commission, Dr. Wala Chabala; The Registrar, Pensions and Insurance Authority, Mr. Martin Libinga; Your Excellencies, Heads and Representatives of Diplomatic Missions invited; Senior Government and financial sector industry officials; Distinguished Invited Guests; Members of the Press; Ladies and Gentlemen. Honourable Ministers, I am delighted to welcome you, on behalf of the three financial sector regulators, i.e. the Securities and Exchange Commission, the Pensions and Insurance Authority and the Bank of Zambia, to the launching of the National Strategy on Financial Education for Zambia. The launch is being done under the auspices of the Financial Sector Development Plan and represents a culmination of a wide range of activities which have been carried out within the scope of the Plan since 2002 with the objective of addressing challenges in the financial sector and strengthening and broadening access to financial services in Zambia.

This initiative grew out of the recognition of the fact that financial institutions and certain NGOs that were engaged in promoting various financial education activities and programme were operating in isolation. What was clearly missing was a coherent and well-co-ordinated strategy among these organisations for delivering an effective education to enhance financial literacy and inclusion. Consequently the FSDP identified the need to develop a coordinated approach to financial education as a meaningful way of bringing progress to this process. It therefore, started its intervention by commissioning a stock taking study of financial education efforts taking place in Zambia in order to establish its true status. DFID provided financial support in the form of technical assistance which enabled the FSDP to recruit FinMark Trust to carry out the study. Subsequently, a report was produced and presented to various stakeholders in November last year. The recommendations from the stakeholders meeting were then sent to the FSDP Steering Committee in April this year. This Committee endorsed the report and it is this report which is being launched today as the National Strategy on Financial Education for Zambia. Once launched, it will be implemented in earnest. Honourable Ministers, the activities that have been carried out under this programme have been made possible by the very generous financial support extended throughout the different phases of the programme by the IMF, World Bank, DFID, SIDA and the Government of the Republic of Zambia.
Both documents, the guidelines and the addendum, clearly demonstrate the attention the supervisor has been paying to credit risk in general, and to non-performing exposures in particular, and they represent the benchmark supervisory tool in the supervisory dialogue with banks. In July 2018, the ECB announced that, along with the foregoing, and with the aim of achieving similar coverage of the flows and stock of non-performing loans, the setting of bank-specific supervisory expectations in respect of prudential provisioning levels for the stock of non-performing loans would also form part of the supervisory dialogue. The better prepared institutions are for this dialogue, the more fluid it will be. Before addressing the last of the key strategic aspects I wish to talk about today, namely governance, I believe it should be said that any strategic reflection should also include appropriate liquidity planning. This should take into account those elements that may most affect it, with particular attention to monetary policy implementation decisions. To conclude these considerations on strategic reflection by banks, I shall refer to governance and risk management. The crucial element for being able to properly manage and attain profitable business models over time is to have suitable governance structures. Governance structures shape the decision framework on risks. They are thus determinants of how a bank’s risk profile develops and, ultimately, of its medium and long-term sustainability. They are a necessary and basic element without which success in any project cannot be expected.

In doing so, I will perforce refer to some of the findings included by the Single Supervisory Mechanism (SSM) in its recently published thematic review of the determinants of profitability and business models.1 A comprehensive reflection Taking the first adjective, when I say a comprehensive reflection is necessary I refer to the fact that a bank should examine its income and costs at the greatest level of detail possible: by product and not by customer, by business line and by geography. It should seek to gain detailed knowledge of which activities generate recurring profits, and which occasional profits or even losses, delving into the reasons that may explain each of these results. This will allow the bank to identify whether there is scope to turn the profitability of certain activities around, or whether it is better to change tack or abandon such activity. In addition, the bank will be in a position to judge whether the reality of its business, understood as its assets/liabilities mix, and the decisions taken in and bearing on such activity are appropriate or need adjusting. In short, if the bank has advanced tools to improve profitability, it can develop an appropriate, consistent and comprehensive price-setting policy to ensure that the price it charges for a product or service matches its total cost, including the risk premium.
Losses were low on loans to the household sector compared with loans to the enterprise sector during the banking crisis at the end of the 1980s and beginning of the 1990s. Despite high real interest rates and a decline in income, households were largely able to service their debt. High interest expenses and a decline in income, however, led to a reduction in household consumption. This led subsequently to lower turnover in the enterprise sector and weakened profitability and debt-servicing capacity. In this way, households contributed to an increase in banks’ losses on loans to the enterprise sector. The higher the household debt burden is, the stronger the spillover effect can be from households to enterprises. 4. The stability of the financial system  Given the current picture, a sharp increase in bank losses is not likely in the near future. This is also the assessment of the IMF, which recently evaluated the Norwegian financial system. The IMF concluded that the Norwegian financial system is solid and well managed, and that short-term vulnerabilities are low. Even with a strong negative shock to the economy, losses are expected to be far lower than during the banking crisis. This is probably because of the increase in the share of loans to households, for which losses are normally not very high, and because enterprises are now in a far stronger financial position than they were at the end of the 1980s and beginning of the 1990s.

On the fiscal front, cuts in wage and corporate income taxes differentiated across regions have been put in place last week to support the economy that is already growing at a moderate pace. 1  On March 15, 2009 Special Consumption Tax (SCT) rates were decreased on vehicles to %18 from %37, and on durable goods and other electrical household appliances to %0 from %6.7. These rates were increased on vehicles to %28, on durable goods to %2 and on other electrical household appliances to %6.7 on 16 June, 2009. By October 1, 2009, SCT rates were brought back to the levels before March 2009. Similarly, Value Added Tax (VAT) rates on furniture and IT products were slashed to %8 on March 30, 2009, before being raised back to the initial rate of %18 on October 1, 2009. BIS central bankers’ speeches  3  Dear Participants, So far I have touched on the impacts of movements in commodity prices on inflation and economic growth. Now I will talk about the impact of fluctuations in commodity prices on foreign trade balances. The dependency of the Turkish economy on energy imports makes the current accounts balance more sensitive to changes in commodity prices. Uncertainties regarding the global economy in recent years and the exceptionally loose monetary policies adopted by advanced economies, such as the United States, Japan and the Euro Area, foreshadow the high probability of continued excess volatility in commodity prices.
Indeed, despite the context of an increasingly uncertain global economy, Chile has continued to show significant growth rates, has reduced unemployment and has advanced in repairing the damages caused by the earthquake and tsunami that hit us last February 27th (27-F). At the same time, after a prolonged period of very low and even below-zero figures, inflation has returned to the defined tolerance range and is headed, according to our own projections and private expectations, toward levels consistent with the 3% target range (figure 1). That the stimulative monetary policy applied during all of 2009 bore fruit is without question. The extraordinarily expansionary conditions implemented more than a year ago by way of a historical reduction in the monetary policy interest rate, together with special liquidity facilities and the communication that the monetary policy rate (MPR) would be kept at its minimum level throughout the second quarter of this year, limited the persistence of the negative effects of the crisis on the capacity of households, firms, and financial institutions to repay their debts and generate income. Furthermore, these measures helped set the grounds for the vigorous economic upturn we are seeing now. The expansionary monetary stance of early this year permitted, also, to keep at bay the financial effects of the earthquake and provide a lending environment that would foster reconstruction.

Overall the euro area banking system is now far more resilient: in terms of capital for instance, the Common Equity Tier 1 ratio of significant euro area banking groups has risen from less than 7% in 2008 to more than 14% today. In this context, and within the banking union framework, we need to allow more cross-border bank mergers. These will enable banks to better shift savings across national borders towards where investment needs are. And obviously we should preserve and complete international financial regulation on both sides of the Atlantic. Cooperation on regulation has been a win-win game. Competition on regulation would be a destructive one. 3. How I see the future of the euro area: a call for action. This leads me to the question of the future of the euro area. Let me be blunt here: I see it as promising, if we act. Obviously there are challenges today, be they domestic – euroskepticism and unemployment – or global – uncertainty in the West (US and UK) as well as in the East. But I am convinced that the answer to the current challenges is not “less Europe”. Less Europe would be a mistake if we want to remain in control of our common destiny. That said, there is room for further improvement, for a “better Europe”. Twenty-five years ago, we spoke of an “Economic and Monetary Union”. Since then, we have made a success of Monetary Union, but we have not been very effective with regard to Economic Union.