samchain/econo-pairs-v1 huggingface dataset:
Christian Noyer: Beyond Pittsburgh – the future of financial regulation Keynote address by Mr Christian Noyer, Governor of the Bank of France, at the Paris Europlace International Financial Forum, Singapore, 26 October 2009. *  *  *  Ladies and Gentlemen, I am delighted to address this distinguished audience at the Paris Europlace forum in Singapore. I will take this opportunity to present my analyses on the lessons learned from the crisis regarding the essential reforms in financial regulation. Since the crisis started, in August 2007, we have gone through the most difficult years in our modern financial history. We have mobilized enormous resources to ensure the survival of the financial system and preserve its integrity. We have implemented exceptional measures, both on the fiscal and monetary front. We have acted in permanent cooperation between all countries, industrialized and emerging alike. That spirit of cooperation was on full display during the G20 Summit that took place recently in Pittsburgh. The cohesion shown by G20 members has powerfully contributed to restoring confidence. Today, we can be reasonably assured that we have stabilized our economies and avoided the worst. Current forecasts by the IMF show reasonable prospects for growth in the world economy in 2010. But there are many downside risks and adverse scenarios that could still materialize. Above all, we have a duty, and a mandate, to make sure that the causes of the crisis are addressed and that our economies do not fall victim to such shocks in the future.

Nothing could be further from the truth. Indeed, one major risk in the period to come is the emergence of a "business as usual" mentality. Once the immediate dangers have receded, the incentives to reform may become weaker and the opposition stronger. It is essential that we keep up the momentum. First, it is clear to everyone that recent profits in the financial sector, while welcome, are, for the most part, a result of public policies implemented to combat the crisis. They would have  BIS Review 133/2009  1  not been possible without the low interest rates which currently prevail and the public guarantees still in place. Second, there are signs that parts of the financial industry have resumed risk taking practices reminiscent of those which led to the crisis. This impression may be reinforced by compensation packages which, although formally compatible with G20 agreed rules and principles, may appear out of line with the underlying performance of the industry. At the same time, bank credit to the business sector is faltering, especially for small and mediumsized companies, and most of the negative effects of the economic downturn on balance sheets are still to come. It is therefore crucial that we keep focused on our long term goals. Our economies need more robust and better capitalized banks. They need greater transparency and regulation of non-bank financial entities. They need more countercyclical prudential and accounting rules. They need sound infrastructures for clearing and settling credit derivatives, in order to minimize systemic risk.
Through our statutory objectives, Parliament has asked us to look out for the policyholder – but in an environment where insurance is provided by private sector firms. This means that other actors – particularly firms’ management, employees, shareholders and creditors – have an important role and a valid claim on our deliberations. As the regulator we need somehow to balance these various interests as best we can, but we do have a particular duty to represent the interests of the policyholder. 2  All speeches are available online at www.bankofengland.co.uk/speeches  2  How should we go about delivering this responsibility? The best way into that question is to ask another one: why do we bother to regulate insurance companies at all? We all in this room probably take for granted that we need prudential regulation of insurers; but every now and then I think it is worth reminding ourselves why this is so. Insurance comes in many different forms and many people rely on insurance for their livelihoods. Some rely on insurance proceeds to ensure they have a comfortable retirement. Some rely on insurance pay-outs following a serious accident, for example from a workplace injury or a car crash. Insurance allows us to go about our daily lives secure in the knowledge that there is a financial safety net should we get into trouble. And this is a huge business – for instance, in the UK there are around 6 million pension annuities in force and around 27 million motor insurance policies.

I also spoke to a group of small business owners, and was struck by how reliant many of them are on insurance for running their businesses. One of them was held liable for another company’s goods damaged in transit, and would have gone bust if it wasn’t for the insurance pay-out. I also remember another case. A middle-aged woman suffered a brain tumour, and became unable to work as a result. Her chief concern was not her own well-being, but a crushing fear that – given her lost income – her son would no longer feel able to go to university, without a bit of financial support from her. It all hung on whether the insurance company would pay out on her term assurance policy. It was a very, very intense moment when this insurance company called her to explain that they would indeed pay out. When you hear the huge relief of people when an insurance company comes through in their hour of greatest need, you realise two things: how important this industry is, and how important it is that insurance companies are safe and sound. But this is not only a life insurance issue. General insurance also serves a very important role, and similarly when things go wrong the consequences can be severe. A string of high-profile failures in the 1960s and 1970s included the failure of Fire, Auto and Marine, which left 400,000 (mostly motor) policyholders uninsured, and an even bigger failure in 1971 when Vehicle & General, with 1.2 million policyholders, collapsed.
That means that the UK has three times as many assets from overseas banks as a share of GDP as does the US from all banks operating there. In addition we supervise in the UK more than a third as many assets from US banks as do US regulators from US banks operating in the US. Furthermore we have almost twice as much international banking activity booked in the UK as anywhere else. Understanding the benefits and risks of international banking matters a lot to us. We also have a unique perspective given the range and nature of business undertaken in the UK. We are host to the largest investment banks, and to global capital markets trading activities in particular. This makes us and the US one of the most interconnected countries in the global financial system. Given the inter connectedness and potential complexity of the UK’s part of the financial system, its health undoubtedly matters a lot for global financial stability. But in addition we are host also to a great many firms which are neither focused on the domestic UK economy nor are they globally systemically important. These banks instead use the UK as a base for wholesale banking activity and trade finance whether their roots are in Europe, the Middle East, Africa, Asia or the Americas.

At best, some  BIS Review 44/2004  1  small banks might be required to allocate capital for operational risk through the basic indicator approach. In the case of larger institutions, they will be allowed, at first, to implement only the foundation IRB approach. For the advanced IRB approach more time will be necessary for the banks to improve database quality and for supervisors to improve their experience in validation. Also for operational risk, in the first moment, only the alternative standardised approach will be available. The advanced measurement approaches will have to wait a while longer. No significant impact is expected in terms of capitalisation levels after Basle II. As previously explained, current capital requirements in Brazil are 11% and this buffer has allowed banks to face periods of high volatility with no major impact. Two important challenges expected in the implementation of Pillar I are the construction of adequate databases, either of pooled or individual data, and the incipient stage of operational risk management in the industry. As for Pillar II, with the New Capital Accord, it will be necessary for institutions to further develop their own processes for the internal assessment of capital adequacy and for the supervisory authorities to increase their supervisory focus on such processes. Cross-border supervision is another issue where occasional problems are expected to occur.
Correspondent banks are also heavily dependent on the use of cross-border payments messaging through the network maintained by the Society for Worldwide Interbank Financial Telecommunications (“S.W.I.F.T.”) to advise and confirm payments. To provide some sense of the magnitudes involved here, consider that the Fedwire and CHIPS systems process a combined $ trillion in funds transfers on an average day (split roughly evenly between the two systems). While S.W.I.F.T. itself does not transfer funds, its messaging network carries over three million messages per day relating to financial transactions worldwide. The many interconnections of the global financial market infrastructure imply that financial market participants in the United States could be affected by Y2K-related disruptions in other financial markets. In assessing the scope of any such potential problems, we should be realistic in accepting that some disruptions are inevitable, while also recognizing that not all countries confront Y2K problems of similar magnitudes. The problem simply affects too many organizations and too many systems to expect that 100 percent readiness will be achieved throughout the world. Nor are the best efforts of supervisors and regulators capable of completely eradicating the risk of disruption. Ultimately, the work of fixing the Y2K problem rests with firms themselves, and even some of the most determined and well-funded Year 2000 efforts may miss something.

It naturally adapts to the different economic development stages the country and the state go through. I do believe there cannot be a developed and well-integrated economy without open, integrated, efficient, transparent and well-regulated markets. Therefore, it comes out clearly that the development of the interbank market is in all stakeholders’ interests: the banking system itself, the Bank of Albania and the economy on the whole. Being fully aware of this, the Bank of Albania has built a clear strategy in terms of: 1. Deepening and broadening the money market in Albania further;  2. Creating relevant market instruments;  3. Establishing a close and rational cooperation with the banking system and the financial market in general;  4. Ensuring a clear and constant communication with the market operators and the public at large;  5. Providing modern technological solution. As a result of these initiatives, our monetary policy is now entirely based on indirect instruments of monetary management, which operate in line with the open market logic. Our operational framework allows the banking system to manage the liquidity effectively, being a counterparty of the last resort to meet the system’s aggregate needs for liquidity or invest it. Via the required reserve, the Bank of Albania has provided you with enough room to cover your unexpected liquidity needs, at a remuneration rate close to the market interest rates that  BIS Review 97/2010  1  avoid the distortions the required reserve may yield to your banking business.
Joseph Yam: Hong Kong Institute of Bankers Beijing Representative Office Address by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the inaugural ceremony and dinner, Beijing Representative Office of the Hong Kong Institute of Bankers, Beijing, 10 June 2005. *  *  *  Chairman Liu, Vice Governor Xiang, Mr Sullivan, Ms Li, ladies and gentlemen, I would like to thank the Institute of Bankers for inviting me to attend this inaugural ceremony of its Beijing Representative Office. On behalf of the Hong Kong Monetary Authority, I would like to extend our warmest congratulations to the Institute for making a major step in its development. As we all know, the savings rate in Mainland China is among the world’s highest, accounting for more than 40% of its GDP. The effective channelling of private-sector savings into fixed-assets investments is a major function of the financial system. Such is also an important responsibility of the many employees engaged in the normal workings of the financial system. The proper functioning of the financial sector, with effectiveness in financial intermediation, is crucial for the promotion of economic growth and development. Mr Deng Xiaoping once said, “Finance is very important; it is the core of modern economics.” Presently Mainland China relies preponderantly on the banking system in intermediating funds. Last year bank financing remained the most important channel for raising new funds for the non-government non-financial sector, accounting for over 90% of total funds raised.

This is precisely one of the objectives of the Institute of Bankers, and with its newly launched Representative Office in Beijing, the Institute will extend its existing good work to the Mainland. It will help promote the training of bank employees on the Mainland, thereby contributing to the effective financial intermediation and smooth functioning of this crucial part of modern economy. The economies of the Mainland and Hong Kong are now highly interdependent. The Institute’s Beijing Representative Office will not only serve to enhance professionalism of the Mainland’s banking sector as a whole, but also contribute to the financial stability and development of both the Mainland and Hong Kong. Let me end this address by wishing the Institute’s Beijing Representative Office every success in its future endeavours. BIS Review 45/2005  1
I would like to take the opportunity this morning to talk about some of the measures that Bank Negara Malaysia is taking to support growth in the financial services sector, encourage innovation and strengthen resilience. My remarks will touch on the areas of regional financial integration, fintech development, systemic focus on regulation, governance and the role of banks in ensuring an inclusive financial system. Advancing regional financial integration The ASEAN Banking Integration Framework (or ABIF) that was finalised last year was a significant milestone towards greater ASEAN integration. An agreement forged between 10 key economies at different stages of economic and financial systems development is in itself a remarkable achievement. This is in sharp contrast with recent global trends. In the decades leading up to the 2007 financial crisis, global financial integration took unprecedented strides forward as capital markets and banking systems expanded and diversified, increasing the mobility of capital. But of late, there has been a reversal of this trend. A recent study by McKinsey found that following the crisis, banks globally have shed $ billion in assets and operations, of which almost half were foreign-based. Cross-border flows have also declined significantly, remaining at 60% of pre-crisis levels. To some extent, this is expected as markets undergo corrections and new regulations were introduced to address weaknesses in existing models for integration.

Banks must also put in place a transparent whistleblowing policy that enables the escalation of concerns without the risk of reprisal. Good governance is ultimately driven by a workforce that is committed to the highest standards of knowledge, competence and conduct. Competition for talent in the financial industry has intensified greatly, in an environment where public opinion of banks globally is also at an all-time low following the last crisis. Recent trends among graduates of leading business schools worldwide indicate a shift towards other well-paying alternatives to careers in banking, notably to technology and consulting firms. According to the Financial Times, the popularity of banking as a career has dropped 41% since 2008. Globally, banks’ reputations have also been dented to varying degrees by poor quality of service, staggering control failures and misconduct. The professionalisation of the banking industry is therefore critical to strengthen the talent pipeline, while restoring and maintaining public trust in the banking industry. An important step in this direction is the transformation of Institut Bank-Bank Malaysia (IBBM) into the Asian Institute of Chartered Bankers (AICB) as the professional body for bankers and the Asian Banking School as the education service provider. The AICB plays a key role in spearheading the vision of professionalising bankers through the development of professional qualifications, a specialised certification track to support continuing professional development and a membership framework that subjects members to a strict code of conduct, professionalism and ethics.
It is important to bear in mind that this instability is inherent in financial and property markets. We cannot rely on the memory of market participants. Interaction with income formation A precondition for a stable krone exchange rate against European currencies is that price and cost inflation in Norway must over time not exceed the corresponding aim for inflation of the European Central Bank (ECB). The ECB orients monetary policy instruments towards price stability, and has defined price stability as an inflation rate below 2 per cent. The rise in prices for imported goods is expected to continue to be relatively low, leaving room for a somewhat higher rise in prices for domestically produced goods and services. Corporate profits and margins vary and influence price inflation from one year to the next, but are to some extent self-regulating. High margins tend to result in stronger wage growth, while low margins lead to tighter cost control. Profits will thus revert to previous levels. Over time, productivity growth therefore determines the level of wage growth that is consistent with stability in prices and the exchange rate. With productivity growth around the average for the 1980s and 1990s, ie in the order of one and a half per cent per year, nominal wage growth should be brought down to between 3 and 4 per cent. There will be room for higher wage growth if productivity growth increases, as seems to be the case in Sweden and Finland.

BIS Review 14/2001  7  The government’s asset position and wealth management  Government assets and liabilities Estimates in billions of NOK Assets  Liabilities  Petroleum Fund National Insurance Fund  390  Direct ownership  300  Bonds and Treasury bills  170  50  Minor holdings  100  State banks  165  The table shows in simplified form the central government’s financial assets and liabilities, with estimates for the balance at the end of 2000. The government’s most important assets are the Government Petroleum Fund, assets in the National Insurance Fund, and the state’s direct ownership interests in enterprises. The estimate for the government’s direct ownership in the table includes Statoil, Norsk Hydro, Telenor, Statkraft and DnB. In addition, the state has many smaller stakes and direct loans through the state banks. The government has loan debt. In the table, the figures for the National Insurance Fund are consolidated as the Fund’s claims on the central government and the central government’s debt to the Fund are offset. The table shows that the central government’s loans through the state banks are approximately the same as the central government’s loan debt. The central government raises loans in the bond market and lends through the state banks. The interest rate on the loans and the pricing of risk are market-related. If we exclude this credit intermediation, the management of government wealth is primarily linked to state ownership interests in the Norwegian business sector, the National Insurance Fund and the Government Petroleum Fund.
During this period, the Central Bank adopted the following regulations in order to ensure the efficient functioning of the foreign exchange market and to strengthen foreign exchange liquidity in the banking system in case of liquidity problems: (i)  On 9 October 2008, the Central Bank resumed its intermediary activities in the foreign exchange deposit markets in Foreign Exchange and Banknotes Markets with a view to contributing to the enhancement of the mobilization of foreign exchange liquidity in the Interbank Foreign Exchange Market. (ii)  Transaction limits for the banks in the Foreign Exchange and Banknotes Markets were revised on 14 October 2008 and limits were doubled for each bank on 24 October 2008 to reach a total of USD 10.8 billion. (iii)  On 21 November 2008, the maturity of the FX deposit borrowed within predetermined borrowing limits by the Banks from the Foreign Exchange Deposit Markets in terms of USD and Euro was extended from one week to one month and the lending rate that had been previously set as 10 percent in the said market was reduced to 7 percent for USD and 9 percent for Euro. (iv)  On 5 December 2008, the FX required reserves ratio dropped from 11 percent to 9 percent, providing the banking system with an additional foreign currency liquidity amounting to USD 2.5 billion. In such a challenging environment, efficient utilization of foreign exchange reserves by developing countries assumes the utmost importance.

In this way, I trust, we can reconcile those who feel left out, including many of the protesters gathered in Frankfurt this week, with a process of integration that has already generated so many benefits for three generations of Europeans. Let me conclude. This building is a credit to all those who have worked to bring it to fruition. It is a landmark for the city of Frankfurt. And it provides the ECB with an impressive new home to pursue its mandate. But it also stands as a powerful symbol of what European integration is about. It reminds us of where we have come from and where we have come to. Of the horrors that can happen when we split apart, and the huge steps forward we can make when we work together. So let us not undo what has been achieved. Let us not hanker for the past. Let us draw on the past to unite us in the present – to build a complete Union that can deliver the stability and prosperity we need. We as the central bank will do our part in this process by ensuring the integrity of our single currency. Our shared money is the most tangible sign of the trust we place in one another. As the ECB’s first President, Wim Duisenberg, put it at the launch of the euro more than 16 years ago: “A currency is far more than just a medium of exchange … A currency is also part of the identity of people.