samchain/econo-pairs-v1 huggingface dataset:
The solvency ratio across the banking sector would diminish from 17.1% to 14.6%. VI.2. Realistic solutions  The NBR advocates the implementation of customised solutions, negotiated between the parties directly involved in the credit agreement (i.e. the credit institution and the borrower). The solutions take into account the specifics of CHF-denominated loans, in particular, and FX loans in general on the Romanian market and combine: (i) free market principles, (ii) state support for vulnerable household groups, and (iii) the carrying out by the NBR of its legal tasks on safeguarding financial stability. The realistic solutions are complementary and each bank may apply an adequate mix tailored to each individual case. They are equally valid for loans in other currencies as well  BIS central bankers’ speeches  9  and may be optimised on a case-by-case basis. The solutions which may be deemed as both realistic and balanced include those whose outcome is keeping the domestic currency equivalent of monthly instalments of CHF-denominated loans close to the December 2014 level, with several options available to the parties to credit agreements: A. Converting CHF-denominated loans into lei at the market exchange rate and/or granting a discount on the debt service amount – which may be tantamount to a conversion at an exchange rate below the market rate  B.

Monetary policy  In order to deter foreign currency lending and, implicitly, to strengthen the traditional channels of monetary policy transmission, the NBR actively used as an instrument the minimum reserve requirements ratio on foreign currency liabilities. This ratio continued to be raised during 2004-2006, its level increasing by 5 percentage points each time in August 2004, January 2006 and March 2006 to 40%. Additionally, the NBR extended the scope of minimum reserve requirements to foreign currency-denominated liabilities with residual maturity of over two years, as follows: (i) starting February 2005, on the liabilities incurred subsequent to this date; (ii) starting July, on the liabilities incurred prior to February 2005. The high restrictiveness thus imposed on the minimum reserve requirements ratio on foreign currency-denominated liabilities of credit institutions was kept in place until 2009, when the knock-on effects of the economic crisis on Romania prompted the central bank to implement a countercyclical monetary policy. B. •  •  Prudential regulation In 2003, prior to Romania’s joining the European Union, the central bank issued norms setting forth certain conditions for granting loans to households, such as: –  capping the indebtedness level at 35% of the net income for mortgage loans;  –  requiring from borrowers a down-payment of 25%;  –  providing real and/or personal collateral equal to at least the amount of the loan requested for consumer loans that are not intended for goods purchasing;  –  capping the LTV ratio at 75%.
We therefore designed and implemented a regulatory programme that combined rule-making and enforcement with active education and advisory support to help firms understand our expectations and meet them. We also worked to build stronger cooperation arrangements with authorities in other countries with remittance links to MSBs in Malaysia. As a direct result of this programme, the share of MSB companies presenting higher risks continues to reduce dramatically. Earlier this year, we completed a year-long project within Bank Negara to further strengthen the Bank’s surveillance of ML/TF risks in the MSB industry and improve our ability to identify illegal or unreported MSB activities, through the use of data analytics. The industry itself, through the Malaysian Association of Money Services Business, has been instrumental in leading innovative approaches to public outreach and engagement aimed at capturing a larger share of informal remittances. In the coming quarter, the industry will introduce its own MSB App, providing consumers with convenient access to price comparisons, locations of service providers, customer reviews and the ability to lodge complaints and report illegal MSB activities. Regulatory changes to facilitate innovation It remains extremely important to the Bank that we continue to provide an environment that encourages innovation in the financial industry, including in the MSB sector.

We know this is what the people in Europe, and in Germany, aspire to. 2  BIS central bankers’ speeches
Keeping up with the international best practice is not an easy task, but we have much less choice in not doing so. It will also bring in new challenges for the supervisory and legislative community. The changes that occur at high speed, the new risks and complexities that cut across the financial industry at an international level may pose difficulties for institutions to be compliant at all times because their compliance today may not hold for tomorrow, but it is important to realize that today’s challenges are tomorrow’s history. So, it is necessary to act today. 4.4 Given the expansion of financial markets associated with rapid growth in India and China, it is essential for banking and financial institutions in the Asian region to analyze risks relating to innovative financial products that will be sold by these markets. In this regard, the wider financial system in Sri Lanka should be adequately robust and resilient to deal with complex risks associated with these new products. In this context too, Sri Lanka’s financial services industry should focus on GRC as a package and deal with these three pillars or imperatives within an integrated framework. 4.5 Introducing an “awareness culture” of GRC is also a serious challenge. It is necessary to ensure that the integrated GRC should be a prime concern of the employees and the Boards, as well as the senior management of financial institutions. Continuous training of relevant stakeholders would be a solution to this challenge. 5.

6.4 Northern Rock’s fall has become something of a parable for the times: a story of insecurity, mistrust and powerlessness that often seem to best describe some financial markets in our part of the world as well. It speaks to the fragility of the international financial system, which is directly impacted by globalization, of the capacity of the regulatory institutions and governments to shape events and the powerlessness of all stakeholders to halt an erosion of confidence in once solid institutions. 6.5 It is also important to note that markets and investors are much more vigilant than banks and financial institutions themselves. They may watch global events with bemusement or with justified suspicion and feel that nothing is straightforward anymore. We need to reduce such feelings in the public in our country and instill confidence in them. Given the severe impacts of the recent sub-prime crisis and low quality credit decisions in the US and Europe and large frauds in international banks, it is important that the financial services industry and the regulatory community reflect on what additional precautionary efforts should be initiated to ensure that Sri Lanka’s financial services industry continues to function as a stable and resilient one. I hope that the deliberations of this seminar will lead to the preparation of a roadmap, which would help to promote a competitive, resilient and dynamic financial sector with new initiatives on Governance, Risk Management and Compliance. Thank you. BIS Review 15/2008  7
Of course, progress has not been uniform across EMEs, and more work remains to further strengthen institutional structures in some countries. In particular, vulnerabilities remain in several important EMEs, and some EMEs are now being hit by a sharp adverse turn in their terms of trade due to the recent fall in global commodity prices. Still, the fundamental improvements I’ve cited leave many EMEs better positioned than in the past to weather those times in the cycle when the external environment becomes more difficult. The impact that changes in Fed policy can have beyond our borders has led to calls for us to do more to internalize those impacts, or even further, to internationally coordinate policymaking. As I’ve already noted, we are mindful of the global effects of Fed policy, given the central place of U.S. markets in the global financial system and the dollar’s status as the global reserve currency. Accordingly, we seek to conduct policy transparently and based on clear principles. Promoting growth and stability in the U.S., I believe, is the most important contribution we can make to growth and stability worldwide. There is, of course, the argument that Fed policy has been too accommodative for too long, creating risks for financial stability worldwide. Here, I think it’s important to consider carefully the counterfactual. Would countries beyond our borders really have been better off with a weaker U.S. economy – an economy that might have required exceptional monetary policy accommodation for a much longer period of time?

However, we need to be mindful that this shift in policy most likely will be accompanied by some degree of market turbulence. Moreover, the normalization of U.S. monetary policy could create significant challenges for those emerging market economies (EMEs) that have been the recipients of large capital inflows in recent years. This leads to an important question: what can the Federal Reserve do to address these risks? I will make three observations about the potential international spillovers from normalizing U.S. monetary policy. First, what we may see in terms of market strains and macroeconomic adjustment during this normalization process will not be new. Changes in Fed policy, and especially the tightening of monetary policy, have often created challenges for countries abroad, especially EMEs. Second, these EMEs, as a group, are better equipped today to handle those challenges than in the past. This reflects the fundamental improvements and stronger policy frameworks that many of these countries have put in place over the past 15 years. Third, given the dollar’s role as the global reserve currency, the Federal Reserve has a special responsibility to manage U.S. monetary policy appropriately in order to promote global financial stability. As always, what I have to say today reflects my own views and not necessarily those of the FOMC or the Federal Reserve System. 1 The U.S. economic outlook and the implications for monetary policy Since the official end of the Great Recession more than five years ago, the U.S. economy has grown at a disappointing 2.3 percent annualized rate.
Second, some life insurers with internal models have been growing in areas where the standard formula over-states the risks: in particular, illiquid assets within Matching Adjustment portfolios. Third, life insurers have been expanding unit-linked business and transferring an increasing proportion of longevity risk on new annuities business through reinsurance, both of which would tend to lead to faster growth in the best estimate of liabilities than capital requirements. In summary, the two benchmarks against which we compare internal model capital might not have been fully reliable measures of changing risks. Our ‘bottom up’ analysis of internal model outputs has also not suggested any generalised dilution of standards. Nonetheless, the significant reduction in internal model capital compared to the standard formula is not a trend we would expect to continue over time. We will be watching it carefully. 2  See Monitoring Model Drift and Standard Formula SCR Reporting for Firms with an Approved Internal Model, Prudential Regulation Authority, Supervisory Statement 15/16. 3 See Solvency II Regulatory Reporting: Internal Model Outputs, Prudential Regulation Authority, Supervisory Statement 25/15. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  One counter-balance to any selectivity in insurers’ model development is the PRA having its own model change agenda. For example, over the past couple of years, we have asked life insurers to adapt their interest rate modelling to include the possibility of negative rates and we have pushed them to improve their modelling of default and downgrade risks in Matching Adjustment portfolios.

  Running hundreds of thousands of scenarios through the proxy model in order to generate a distribution of probable balance sheet outcomes over one year; and  1  This definition is based on the one in Supervisory Guidance on Model Risk Management, SR Letter 11-7, Federal Reserve Board and Office of Comptroller of the Currency, April 4 2011 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2    Focusing on the tail of losses and estimating the 99.5th percentile of the distribution to identify the minimum amount of capital necessary to protect the insurer against a ‘1 in 200’ scenario. (see Chart 1)  The use of models in Solvency II is more ambitious than in banking regulation. Comparing use of models in banking and insurance regulation:   The insurance capital model framework encompasses the whole balance sheet whereas banking models focus on particular risks (market, credit, counterparty).
At the moment, the only open issue for us is the inflation criterion, but things are not clear-cut regarding it either. On the one hand, inflation is at high rates not only in our country but also in the entire EU. On the other hand, in October for the first time in more than a year the rate of inflation in our country reversed its trajectory of constant growth. We will closely monitor how this process develops, but it must be actively supported by adequate anti-inflationary measures, including by sufficiently disciplined budget. What we are currently focusing on as a central bank in relation to the euro area are two issues: the legal framework and the technical preparation. Regarding the legal framework, we expect the amendments to the BNB Law to be submitted to the National Assembly literally within days, with which to overcome legal non-compliance found in the convergence reports of the ECB. Serious progress has also been made in the preparation of a draft Law on the introduction of the euro within the framework of a working group under the Coordination Council for the preparation of the Republic of Bulgaria for membership in the euro area. Of course, this is just the beginning. I have no doubts that the country has the expertise and capacity to prepare all draft legislation on time and with good quality. What is needed is to have a Government to introduce them and a Parliament to approve them.

Dimitar Radev: It is extremely important to achieve the highest possible synchronisation of monetary and fiscal conditions in Bulgaria. With a clear direction of the monetary policy, the focus falls on the upcoming budget decisions Speech by Mr Dimitar Radev, Governor of the Bulgarian National Bank, at the opening of the "Banks and Business" Conference, organised by Capital newspaper, Sofia, 1 December 2022. *** Dear ladies and gentlemen, I am going to speak briefly about three subjects: macroeconomic environment dynamics; the state of the banking sector; and the path to the euro area. Macroeconomic environment dynamics The dynamics of the macroeconomic environment is strongly influenced by internal political and geopolitical factors. The unknowns surrounding the development of these factors increase the risks, and the uncertainty respectively, of macroeconomic assessments and projections. Such an environment entails, inter alia, an appropriate calibration and harmonisation of monetary and fiscal policies. The monetary policy outlook is clear. In brief, this outlook relates to the increase in interest rates and the gradual withdrawal from the unconventional measures that have been implemented in the past few years. For a quite some time now the real question has not been about the monetary policy direction anymore but about the parameters of the monetary policy tightening. These parameters seem to range between the neutral and the restrictive levels of interest rates. The purpose of this exercise is clear: to curb and reduce inflation down to healthy levels by limiting the demand which central banks can influence.
In order for the Riksbank’s legitimacy to be maintained, it is required that we show great openness on the grounds on which the monetary policy decisions are made. The conceptual framework and the decision-making rules that are guiding the monetary policy decisions make up the basic framework for our communications with the surrounding world. We describe how we conduct monetary policy in the inflation reports, minutes and speeches. However skilful we are, we cannot guarantee that we will always meet the target. The economic correlations change and unexpected events take place. We must therefore be evaluated on the basis of the quality of the assessments of growth and inflation that have served as the basis for the monetary policy decisions and the balance struck when we have arrived at decisions. It is therefore very important that we always state when we depart from the main rule I have described and the reasons for the departures. In this way, we will also avoid misunderstandings about our intentions. A high degree of transparency sharpens and improves the internal analysis as well since we are then exposed to continual review by experts outside the Riksbank in the academic world and in the financial markets at home and abroad. Clarity about the grounds on which we make our decisions creates good conditions for players in the financial markets to assess how the repo rate will develop in future.

In mid-2007, serious problems with structured products backed by sub-prime mortgages put an abrupt stop to the boom in securitisation. False incentives, inadequate control mechanisms, shortcomings in the rating system and insufficient personal responsibility on the part of investors were the main criticisms aimed at securitisation practices. What is important now, is to correct these deficiencies, so that the trust of market participants in these products can be restored. It would be wrong to ban the securitisation of mortgages, since these refinancing instruments generate substantial economic benefit and are an indispensable part of our modern financial system. The mortgage securitisation weaknesses revealed in the financial market crisis do not apply in the case of the Swiss mortgage bond. Consequently, it should definitely have the potential to play an even greater role in maturity-matched refinancing of mortgages in Switzerland in the future. In addition, banks can improve their liquidity by holding portfolios of Swiss mortgage bonds themselves. Mortgage bonds could be converted into liquidity quickly and simply, as required, by means of repo transactions – either in the Swiss franc interbank market or at the SNB. BIS Review 60/2008  1
Lower variability in output growth and inflation, lower inflation persistence, apparently weaker pass through of demand pressures – all told, this points to the importance of identifying and understanding the complex combination of structural changes affecting our economy. Today, I plan to give a broad overview of some of them, as they confront policymakers. Our standard tools of economic analysis – in particular, statistical modelling – are not especially well-suited to real-time detection or quantification of the underlying forces of change. They can, though, alert us to puzzles when the data persistently deviate from past patterns. Business managers, by contrast, are exposed to the reality of change day by day. Unable to shield yourselves from change, businesses can indeed succeed by embracing it – shaping your environment as well as responding to it. That underlines the value of the Bank’s dialogue with business, facilitated and led by our regional Agents across the UK. Colloquially, you enrich our grasp of what is ‘going on out there’. 1  My thanks to Peter Andrews, Ian Bond, Spencer Dale, Neal Hatch, John Whitley and Tony Yates for comments; to Damien Lynch for comments and research and to Sandra Bannister for secretarial support. 2  Benati L. (2004), ‘UK Monetary Regimes and Macroeconomic Stylised Facts’, mimeo, Bank of England. BIS Review 16/2005  1  Economic analysis then helps us to match your various real-world stories to puzzles we see in the data.

It plunged many economies into recession, considerably weakened public finances in many countries and, generally, entailed considerable losses in well-being. Fortunately, and this is a positive message worth emphasising, the authorities’ response was generally correct. In a relatively short time, sweeping regulatory changes – which you will be able to review in detail in this conference – were ushered in. Moreover, the euro area has managed, at unprecedented speed, to launch an institutional reform, namely the banking union, whose scope cannot be overstated and which entails the strengthening of the Monetary Union. In Spain, I believe the work done in reforming our financial system has had very satisfactory results. International agencies, in particular the IMF and the European Commission, have repeatedly testified to these results. So too have the markets, where there have been significant increases in the valuation of instruments issued by Spanish banks. And, most recently, there was further acknowledgement in the comprehensive assessment of the European banking sector by the ECB and the European Banking Authority. Given the importance of this exercise, as a prior step to the start-up of the Single Supervisory Mechanism (SSM), allow me to refer to the results disclosed yesterday, before discussing the most significant measures taken in Spain to strengthen the financial system and highlighting some of the challenges to be faced in the near future.