samchain/econo-pairs-v1 huggingface dataset:
However, putting too much emphasis on regulations can also become a double-edged sword and hinder innovation and further development, should the pendulum swing the other way. To this end, it is rather pragmatic and sound policies that remain alert to developments in financial and asset markets, and strong macroeconomic fundamentals that are our best buffers. 8. It is trying times like these that remind us of how interconnected we are and how important it is for the IMF to continue to play its role effectively as the guardian of global economic and financial stability. In our view, the Fund’s role is determined by its mandate. The Fund cannot do what it was not built to do. For example, it is neither a regulator nor a central bank. As we see it, the Fund’s role is in analyzing and evaluating policies and its impact, facilitating dialogue and disseminating, both the warning signs and the lessons learnt, providing guidance and lessons learnt, forcefully where necessary. To this end, we see three areas where the Fund can be useful:  2  BIS Review 51/2008  •  The first is in providing policy guidance to individual members. Within its surveillance mandate, the Fund should be advising members what to do and how best to respond to the fallout from the crisis. •  The second is in the provision of appropriate financing instruments to ensure that members are able to ride out the turmoil. The recent market jitters are clear reminders of a still-fragile global financial system.

With their technical support, the Government, through the Balance of Payments Statistical Committee, comprising representatives from the Ministry of Commerce, Trade and Industry, Ministry of Tourism and Natural Resources, Zambia Development Agency, Central Statistical Office and Bank of Zambia, was able to undertake this very important survey. Distinguished Participants, As you are aware, the Zambian economy has recorded significant positive developments in the recent past, owing to the economic reforms the Government has been implementing since 1992. These reforms have facilitated foreign investments in various sectors of the economy. These reforms have also resulted in Zambia recording tremendous improvement in world ranking with regard to the ease of doing business. The favourable investment climate created has raised investor confidence in the Zambian economy thereby attracting both local and foreign investments. Ladies and Gentlemen, the survey findings we are disseminating today show that the overall Foreign Private Investment inflows in 2009, declined to US $ million from US $ million recorded in 2007. This was explained mainly by the notable reduction in re-invested earnings, due to lower profits recorded by enterprises during the year. The overall reduction in foreign investment inflows is also consistent with global developments. In fact, at a global level, foreign direct Investment inflows drastically declined to US $ billion in 2009 from US $ billion in 2008 and US $ billion in 2007. Nonetheless, new equity investment inflows in Zambia surged to US $ million in 2009 from US $ million recorded in 2007.
The overall growth of unsecured consumer lending persists. In that situation, competition is badly affected, too, and we fail to make the right impact, i.e. slowing down the issue of new unsecured loans. Therefore, we have proposed legislative amendments extending the Bank of Russia’s remit with the right to impose quantitative restrictions on high-risk consumer loans. The proposed tool would limit the proportion of high-risk loans for banks, while banks would not have to freeze their capital, as in the case of the add-ons, but would be able to direct this capital to ramp up mortgage and corporate loans. The draft law was introduced to the Duma in the spring session. I hope that it passes in the near future. In our view, there is an urgent need for this instrument. Importantly, such quantitative restrictions exist in many countries: we are simply borrowing the best practice. I have already mentioned another problem we have to address. Banks tend to perceive our measures, for example, the measures to check consumer loans, or our supervision over 3/5  BIS central bankers' speeches  how they sell financial services (our crackdown against tied services and the efforts to make sure correct information is available) as a cat-and-mouse game. We impose a ban, they come up with a workaround — which is essentially the same arrangement, but different in form. We do not like this at all.

Bandid Nijathaworn: The current financial crisis, lessons learned, and future implications Keynote address by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the 11th SEACEN Conference of Directors of Supervision of Asia-Pacific Economies, Bangkok, 29 July 2009. *  *  *  Distinguished Speakers, Participants, Colleagues, Ladies and Gentlemen, It is my pleasure to be giving this morning’s keynote address for the opening of the eleventh SEACEN Conference of Directors of Supervision of Asia-Pacific Economies under the theme: “The Current Financial Crisis, Lessons Learned, and Future Implications.” This forum gives us an excellent opportunity, at this crucial juncture, to discuss the recent global financial crisis and to share amongst ourselves the experience as well as the lessons learned, so that we can further strengthen and improve our financial systems and supervision. Looking at the agenda, it is certain that the discussion in the next two days will be a most valuable one. So far, the SEACEN economies, one way or another, have all been affected by the current global financial turmoil. As central bankers and regulators, we are faced with the important task of putting in place future regulation, and the obvious place to start is to ask the questions whether the crisis could have been prevented or mitigated in the first place, and how the lessons learned from the current crisis can be used to prevent the next crisis. These are not easy questions to answer.
All this should lead to a more harmonised regulation and supervision across countries, and as a result also foster financial integration. 2  BIS Review 47/2010  For central bankers, the part of the reform which directly concerns them is the establishment of the ESRB, a new independent body that will for the first time carry out a comprehensive macro-prudential oversight of the financial system of the EU. The ESRB will also issue risk warnings, and, where appropriate, recommendations, and follow up their implementation. This body will bring together the central bankers, the heads of the three supervisory authorities, the Commission together with the supervisors of the 27 EU Member States to regularly discuss and assess the financial stability conditions in the EU. In that respect, the ESRB shows some keen similarities with the Financial Stability Council in the proposed financial reform in the United States. The ESRB is expected to support financial integration through its contribution to financial stability in the EU. Indeed, if market participants are confident that the authorities take properly into account the interdependencies between countries and the various components of the financial system, they are likely to fully exploit the possibilities offered by cross-border activities in the EU.

Unicredit Group can probably be qualified as the quintessential European cross-border banking group, with operations in 22 European countries and, amongst these 22, in 19 Central and Eastern European countries. Alessandro is also the President of the European Banking Association. The last 2 to 3 years have been especially eventful for financial integration and stability, with once in a life-time developments. After Lehman Brothers filed for bankruptcy in September 2008, the global financial system experienced unprecedented stress and policy makers had to tread unknown territory in dealing with it. BIS Review 47/2010  1  The financial crisis has raised a host of policy issues that will provide food for reflection for generations to come. I will mention a few of them to set the scene and to kick-start the discussion. The first set of issues relate to the developments in the late nineties and early 2000s. The combination of high economic growth, ample liquidity, increasing financial integration and development, and “light handed” regulation sewed the seeds of the crisis to come. I believe that a number of people and organisations, including mine, identified vulnerabilities in the financial system before the crisis erupted. Nevertheless, we did not anticipate the timing and the intensity. We should ask ourselves what we missed in the run-up to the crisis and what the lessons are for the future. Once the crisis erupted in full force, a first casualty were the money markets, which provide the oil to make the banking system run smoothly. Money markets came to an unprecedented stand-still.
Norman T L Chan: Universal banking – Hong Kong’s perspective Keynote address by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the opening session of the Asian Banker Summit 2011, Hong Kong, 7 April 2011. *  *  *  Distinguished guests, ladies and gentlemen, 1. I am very pleased to address this important conference this morning as it provides a timely occasion for us to take stock of what is happening to our banking industry at a time when the international financial markets are recovering from the Global Financial Crisis. Indeed, the landscape of banking has undergone very significant changes since the eruption of the crisis in 2008. And more changes are in store. Some might even argue that banking will evolve beyond recognition when compared with what we knew previously. Of course the international banking reform package, ranging from the new capital, liquidity and leverage regime under Basel III, the treatment of Global Systemically Important Financial Institutions to the use of macro-prudential tools etc, will have different implications for different banks and different jurisdictions. It is not my intention to discuss today the new international standards that have been and are about to be adopted as these standards have been talked about very frequently amongst bankers and regulators.

As banks expand their risk taking activities, both on balance sheet and off balance sheet, some banks have become much larger and more complex, thereby rendering themselves “too big to fail”. 10. On the other hand, the proponents of universal banking note that diversification can be beneficial for banks and banking stability. If one area of business underperforms, others can make up for it – making the “whole” more resilient. It can also be argued that banks that are diversified in terms of businesses or geographical operations are better positioned to offer customers the depth and breadth of services these customers require, particularly as 2  BIS central bankers’ speeches  economic activities become ever more specialised and global. Broadening customer access to financial products enables increased flows of savings through the system, facilitating efficient investment and economic growth. These advantages are not to be dismissed lightly. 11. The HKMA takes a balanced and pragmatic view on this issue. Rather than mandating the dismantling of banks’ business structure to deal with the potential problems arising from proprietary trading and overly aggressive risk taking by banks, our preferred response is to ensure the proper risk capture and management of those parts of the operations that benefit from low cost funding and yet cause a disproportionate amount of risk. As part of our on-going supervision we need to critically assess whether banks really understand what sort of risks they are taking on and seek to ensure that such risks are managed properly in order to safeguard depositors’ interests.
In this respect, via ensuring the implementation of active policies to create employment and providing resources for new investments, the investment atmosphere should be improved by strengthening the relationship between the real and the financial sector. Additionally, educational policies oriented towards increasing the labor power compatible with the labor demand should be put into effect. Besides, having the unregistered employment registered, should be given priority because it leads to unfair competition and this necessitates decreasing the taxes and other burdens on employment gradually. Dear Guests, Finally, I wish to briefly mention current account deficit, which frequently occupies the agenda. Current account deficit is one of the sensitive points of the Turkish economy. With a retrospective look, we see that current account deficit grew faster in the periods when growth rate accelerated due to the structural peculiarities of the Turkish economy. The periods when the current account deficit  BIS Review 28/2007  7  decreased or surpluses were experienced have been the years in which the growth rate decreased or crises broke out. This structure shows us that the current account deficit bears a structural quality rather than a cyclical one. This process can be identified as followings: improvements recorded with respect to the macroeconomic stability decrease the general level of interest rates. This decline in interest rates increase consumption and investment demand and so the credit demand accordingly on the one hand; while leading to a decrease in domestic savings on the other.

The first one of these transactions is the daily foreign exchange purchasing auctions that are implemented transparently and under methods in accordance with certain rules to serve the Bank’s purpose of reserve accumulation. The Central Bank purchases foreign exchange from the market via  4  BIS Review 28/2007  these auctions when the supply of foreign exchange is abundant under a moderate reserve-increasing strategy. The second situation in which the Bank undertakes transactions is the direct interventions in order to prevent existing or possible excessive volatilities in the foreign exchange rates. These interventions are neither mechanic nor symmetric. The Bank evaluates all the changes occurring in the foreign exchange rates with regard to its own conditions and takes the decision for intervention accordingly. As a result of the foreign exchange purchasing auctions and the direct interventions implemented within the scope of the foreign exchange policy, net purchase of 44.8 billion USD from the market has been made in a period of five years as of 9 January 2007. Following the foreign exchange purchases embarked on as of April 2002, reserves of the Bank increased by 199 percent and reached 60.8 billion USD on 29 December 2006. Dear Guests, Now I would like to mention the growth performance of the Turkish economy and the things to be done in this respect. The Turkish economy has been growing consecutively for the last 19 quarters.
Emerging prudential lessons from the Covid stress Speech given by Victoria Saporta, Executive Director of Prudential Policy  Bank of England Webinar 21 July 2021  Many thanks to Hannah Burnett, Damien Lynch, Katie Low, Aakriti Mathur, Matthew Naylor, David Murphy and Aniruddha Rajan for help in preparing this speech. And thanks also to Andrew Bailey, Sarah Breeden, David Curry, Ronnie Driver, Simon Hall, Paul Hawkins, Simon Khong, Paul Nahai-Williamson, Alison Scott, Gareth Truran and Michelle Uhrick for comments. Errors and opinions are my own. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Good morning ladies and gentlemen. It’s a pleasure to be able to speak to you today on some emerging prudential lessons that I draw from our experience so far in managing the economic consequences of this terrible pandemic. I say “so far” because of course the tragic human consequences of the pandemic are ongoing, as is the economic fallout that followed it. And while we are not out of the woods yet, the progress made to date affords us space for reflection on how the prudential framework we put in place following the 2008 financial crisis has served us. And, to observe if there are parts of it that may not have worked as we expected. As the American philosopher and educational reformer John Dewey said: “We do not learn from experience…we learn from reflecting on experience”. Let me start by recalling the nature of the shock unleashed following the onset of the pandemic.

The chart shows the planned use of the real return on the Petroleum Fund, measured by the government budget’s structural, non-oil deficit as a percentage of mainland GDP. We see that the plans call for a gradual increase in the use of petroleum revenues over the government budget. This can contribute to avoiding abrupt shifts in demand. BIS Review 7/2002  9  The chart shows that the expansionary impetus varies substantially and is greatest in the first few years. The value of the Petroleum Fund will vary over time as a result of variations in the transfer of capital due to fluctuations in the oil price, petroleum production and the return achieved by the Fund. How the guidelines are to be applied has been discussed thoroughly in various political documents. The expected real return shall be used as a basis for the phasing in of petroleum revenues. Hence, the use of these revenues does not fluctuate in step with the actual real return. Moreover, the calculations shall normally be based on an estimate of the Fund’s size at the time the budget documents are completed. This means that fluctuations in revenues affect the budget with a considerable lag. The budget for 2002, for example, is based on the size of the Fund at the beginning of 2001. Estimates for petroleum revenues and the return through 2001are then added. These estimates are provided in the National Budget presented in autumn 2001.
Many people yearn for a pause in regulation, would perhaps rather leave the market to regulate itself – rely on self-regulation. At the moment in Europe, we are a long way off from self-regulation. And I hope that it will stay like this, even if people like to quickly forget bad memories. I do not believe in selfregulation, at least not in financial markets. You cannot have stable and functional banks without comprehensive regulation and energetic supervision. A sustainably stable banking sector demands a set of regulations which can keep up with the innovativeness of the financial sector and progress in banking, but which sets adequate limits in order to uncover and correct abnormal trends and excessive risks in their business activities. To this end, the rules have to be adaptable and both leave room for discretion and provide leeway for a clever supervisor with good judgement skills. 2. A retrospective  The past speaks for itself. A light touch in regulation and supervision, or even self-regulation, has not proven to be a convincing solution. Over the last two decades, global financial markets have been characterised by a high level of volatility, a series of rapid booms, major upheavals and severe slumps. The Asian financial crisis of 1997, the dotcom bubble of 1997–2000, the US subprime crisis as from 2007 and the European debt crisis are merely the most prominent examples.

The SSM allows us to compare and adapt supervision across 19 countries, to identify best practices and to ensure that they are implemented consistently through effective quality assurance. There are now completely new possibilities for comparative and cross-sectoral analysis than were available at the national level. For our tasks, we can use information and insights from banks with very different business models. This enables us to identify risks and undesirable developments more clearly and at an earlier stage, and to take suitable countermeasures. We can also put work on banks’ internal models, which have a significant influence on a bank’s capital requirements, on a new footing. We will use the opportunity, given the improved level of data and insight, to implement strict rules for the approval and ongoing supervision of internal models. Despite this progress, there is still a lot to do in the further development of supervision. The effectiveness and efficiency of supervision is dependent on the legal framework it applies, although this is not the sole determinant. Soft European standards or diverging national rules impair the SSM’s ability to take action and its effectiveness. And this does not just concern  4  BIS central bankers’ speeches  national rules that affect the quality of banks’ equity. The SSM applies 19 different national legal frameworks and not only when, for example, we examine the professional suitability of managers in large, internationally active banks.
With this in mind, the Basel Committee has established a Working Group to review the Committee’s existing guidance on corporate governance for banks. This guidance was issued in 1999, and while the principles contained in it remain relevant, the Committee believes that this is an opportune time to review them. First, the OECD last year issued revised principles on corporate governance. Since the Committee’s 1999 guidance drew upon the original OECD principles, we felt that it would be appropriate to consider their revised principles as well from our prudential perspective. Second, in light of the recent high-profile corporate governance breakdowns that I highlighted at the beginning of my remarks, we felt that it was important to consider whether there were any lessons to be learned that would apply specifically to our guidance for banks. Finally, the Committee has asked the Working Group to consider whether it would be appropriate to develop guidance on what I call “know your structure” elements. While it is too soon to report on the Working Group’s findings, they are expected to make recommendations to the Basel Committee this summer. We hope to issue a draft of revised guidance on corporate governance for public consultation in late summer or early fall. The IFSB has already expressed an interest in this work, and I certainly encourage everyone here to review the draft guidance when it is released and to send us your comments.

Investors who thought they had purchased safe AAA-rated assets found that these assets were very vulnerable to a housing bust and that the ratings were unreliable predictors of the risk of loss. The poor performance of these securities, in turn, made investors much less willing to invest in structured-finance products more generally. Secondary market liquidity evaporated, which exacerbated the difficulty in valuing the securities. This made the market even less attractive, causing risk premia to widen further, which only worsened the valuation problems. As this process unfolded, the result was a virtual shutdown of the securitization market for residential mortgage assets not backed by the federal government directly (Ginnie Mae) or implicitly (Fannie Mae and Freddie Mac). The subprime and the Alt-A mortgage markets,  BIS Review 28/2009  1  which relied heavily on the securitization process dried up. Of course, this just reinforced the downward pressure on housing prices, which, in turn, led to increased delinquencies and foreclosures. This deterioration undermined the value of the securities further. It was a vicious feedback loop in action. The poor performance of highly-rated mortgage securities caused investors to begin to shun securitizations more generally. The shutdown of the securitization markets led to significant pressure on bank balance sheets. Banks could no longer securitize non-conforming mortgages or the collateralized loan obligations associated with leveraged buyouts and other private equity activity that they had financed. Moreover, bank backstop liquidity lines were triggered as SIVs and conduits could no longer issue asset-backed commercial paper.