samchain/econo-pairs-v1 huggingface dataset:
Still, the main features of the agreement are relatively clear at this point, and the Basel Committee is now working on the final details. However, I do not intend to focus on the details today, as they are many, but instead on the fundamental blocks on which Basel III is built. The reforms of banking regulation that lie ahead will strengthen global financial stability and this will be good and important for Sweden, which is a small and open economy. Moreover, it is largely Swedish authorities that determine how, more exactly, Basel III will affect the Swedish banking system. But I shall begin by providing some perspective on banking regulation in general and the work of the Basel Committee in particular. And let me point out that what I will talk about today is neither the first nor the last amendment to the regulatory framework for banking operations to see the light of day. The work on developing and revising the bank regulations is a continuous operation and should be so. I usually 1 [12]  * I would like to thank Tomas Edlund for his help with this speech. compare this task with cycling; if you stop pedalling then sooner or later you will fall off. One reason for this is that society is developing and changing over time. New values gain ground and new experiences are added to old. This is a general feature of standards and rules in society and it also applies to banking regulation. To be a little more specific.

The market share of Islamic banking assets of total banking industry has grown from only 6.9 percent in 2000 to 22 percent in 2011. The contribution of Islamic finance to the Malaysian economy has also been growing significantly, accounting for 2.1 percent share to the country’s GDP in 2009, as compared to only 0.3 percent in 2000. This has led to greater job creation where employment in Islamic financial industry accounts for 11 percent of total employment in the financial sector. On the international front, greater liberalisation of the Islamic financial system has seen greater foreign presence and participation in our Islamic financial system. There has also been an increasing trend in foreign participation in the domestic Islamic banking and takaful industry, as well as the Islamic capital market. Moving forward, it is envisaged that Islamic financial institutions in Malaysia will also expand beyond national boundaries to increase economic and financial linkages with other parts of the world. This rapid internationalisation of the financial system and technology advancement will demand a corresponding increase in quality skills and expertise of the industry. Talent upscaling will be even more important in the next decade, to steer the industry’s advancement in the increasingly complex and competitive financial ecosystem. A strong and dynamic workforce will be one of the important pillars for the industry to remain stable and competitive. It will also serve as a catalyst to spur innovation.
As the materiality of physical and transition risks increases by the day, investors are on the lookout for those companies that proactively take these risks into account in their daily operations and across all their activities. One of the essential functions of financial markets is to price risk and thus support informed and efficient capital allocation decisions. The accurate and timely disclosure of current and past operating and financial results is central to this function. To make it concrete: the more transparent banks are about their C&E risk profiles and their concrete efforts to align their portfolios with the Paris Agreement, the easier it is for market participants to compare banks, reward those which are taking the necessary steps to adopt risk management practices aligned with a carbon-neutral economy, and re-evaluate those with misaligned trajectories. Transparent disclosures also create a certain level of peer and stakeholder pressure, which is essential to making companies properly manage their risks. Investors and asset managers are seeking to develop and market portfolios that are aligned with the sustainability objectives of their own clients. As such, they are becoming increasingly demanding about corporate C&E disclosures. Banks’ own shareholders are becoming increasingly demanding, too, especially concerning banks that have publicly committed to achieving net zero targets. In fact, failure to disclose meaningful follow-up information on their climate commitments has already led to significant litigation and given rise to heightened reputational and legal risks for some banks.

And so, in May 2000, the Finance Ministers of ASEAN+3 gathered in the idyllic city of Chiang Mai in the highlands of northern Thailand, to discuss the establishment of a network of bilateral swap agreements. Thus was born the Chiang Mai Initiative. By October 2003, thirteen bilateral swap agreements had been successfully concluded, with a combined total size of roughly $ billion. 5. In May 2007, ASEAN+3 Finance Ministers agreed to transform these bilateral agreements into a multilateral agreement that would also provide a platform for mutual surveillance and dialogue. The Chiang Mai Initiative Multilateralisation, or CMIM, thus came into being in March 2010, with a war chest of $ billion. The CMIM operates as a common US dollar liquidity pool. A member state facing balance-of-payments or external liquidity problems can swap its local currency for US dollars from this pool. The size of the swap can be up to a fixed multiple of its contribution. 6. Today marks another important milestone in that journey – the opening of the ASEAN+3 Macroeconomic Research Office, or AMRO. AMRO is not just any research outfit. It is a critical component of the emerging regional architecture, based on mutual co-operation, surveillance and solidarity. Singapore is delighted and honoured to host AMRO. 7. But before I say more about AMRO, I want to touch briefly on the role of regional safety nets, and how they complement global safety nets. BIS central bankers’ speeches  1  Why regional financial safety nets matter 8.
And it is also probable that the buildup of leverage and bad debt itself would have been significantly restrained in the years before the crisis by the discipline imposed by shareholders and bondholders aware that they stood first in line to bear losses if the banks failed. We not only have to follow through domestically. There is further work to do to ensure that we can not only manage the failure of a bank large enough to be systemically significant in one jurisdiction, but that we can manage the failure of large, internationally active banks. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Again, if we want better options than bailout or insolvency, we need to continue working now, internationally, to put those options in place. This of course requires trust and cooperation between the home authority for the group and the host authorities of the jurisdictions in which it has major operations. But trust and cooperation, while necessary conditions, are not in themselves sufficient. Home and host authorities needs to agree, in advance, on the resolution strategy for a major cross border banking group. Hosts need to be confident that the chosen strategy is viable and that it will respect their own financial stability needs. In other words, confidence that local operations will not be cut loose in resolution and that, if necessary, hosts have the ability to draw down loss absorbing resources through the parent. We have made very significant progress in agreeing international standards on resolution.

To achieve this the Bank has set every UK bank (and building society) a requirement for the minimum amount of such loss absorbing resources – known as MREL – it needs to hold. This requirement will need to be met in full by 2022. MREL covers both the capital a bank holds in going concern and the capital and debt that can be bailed in if it fails and enters resolution. The biggest UK banks already have going and gone concern resources sufficient to absorb losses of almost a quarter of their risk-weighted assets, and are well on their way towards meeting their full MREL requirements. Current levels of loss absorbing resources mean that even if the major UK banks saw losses six times the losses they incurred over 2008 and 2009, there would be sufficient private sector resources that could be bailed in to recapitalise the bank and stabilise it without taxpayer support. And next week, alongside the Purple Book, we will publish for consultation the Bank of England’s proposals on how these loss absorbing resources should be distributed within banking groups. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  In setting the timetable for meeting full MREL requirements, the Bank has considered the balance of costs and benefits. Issuing MREL imposes costs on banks. These costs will be minimized if banks are able to build up their MREL loss absorbing debt to replace their existing debt as it matures.
The 100th anniversary General Meeting of Shareholders on 27 April will, of course, be turned into a special event. On 13 June, at our traditional joint dinner before the news conference in Berne, we will take the opportunity to toast our centenary together with you. The highlight of the celebrations will be the launch of our commemorative publication on 21 June followed by the official ceremony in Zurich on 22 June. I look forward to welcoming many of you to these festivities. We will conclude our anniversary year with a two-day event for our staff in Berne on 25/26 August. Apart from these anniversary events, we will realise two special projects in 2007: the publication of historical time series and the launch of an internet platform on macroeconomic issues. The new statistical publication series comprises several booklets which will be published on a quarterly basis in the first year and then at irregular intervals. The topics presented cover the fields that were, or still are, significant for the formulation and implementation of monetary policy. The data series go back 100 years, where possible. The printed publications will contain annual figures, while additional data series and series with shorter intervals (quarterly, monthly, etc.) will be available on the internet. The publications also include commentaries on the data series, describing the calculation method and, for some topics, the historical and regulatory background. The first issue – dedicated to the monetary base and monetary aggregates – will be published in the first quarter of 2007.

There is a risk, therefore, that the fall in the US current deficit will not be matched by a fall of surpluses in high surplus countries but a rise in deficits in other deficit countries. The imbalances could be transferred not reduced. So it is important that the current large gap between savings and investment in the Far East and oil exporting countries narrows. In the near term, the ability to increase spending will be constrained by the recent increase in inflationary pressures in these countries. But more exchange rate flexibility should be helpful on both fronts. And over the medium-term, in oil exporting countries, government spending is likely to increase further in response to past increases in incomes since part of the rise in the oil price looks to be permanent. This gives oil exporters the opportunity to spend more on diversifying production in their economies. It is encouraging also that in China the government has plans to increase its own expenditure on the infrastructure, encourage higher spending by households through speeding up financial sector reform and improving the safety net as well as allowing more flexibility than in the past in the exchange rate. Conclusion Given the growth of the foreign currency reserves in many EMEs, the emergence of SWFs making long term investments on financial criteria in a wider range of instruments is a positive development.
6  BIS Review 123/2010  The crisis set in motion a dangerous debt dynamic, which can be illustrated by the following simple formula 13 :  where changes in public debt (on the left) are determined by the variables on the right: the interest rate on the debt, nominal economic growth in the country and the budget surplus or deficit excluding interest expenses, referred to as the primary balance. If the changes in debt (left side) are set at zero, the right side of the formula yields various conditions that must be met to achieve stable sovereign debt. If the interest rate is equal to GDP growth, the debt will be stable when the government budget excluding interest expenses is in balance. If the interest rate is higher than the rate of growth, the debt burden will be heavier and the government budget will have to be settled in surplus before interest payments. If GDP growth is higher than the interest rate, the country’s economy can grow out of its problems and sovereign debt will remain stable even with some degree of fiscal deficit. The formula also provides an answer to the question of why sovereign debt rose so rapidly in many countries. The term indicated by the circle is known as the snowball effect and depends on the difference between the interest rate level and GDP growth. Low growth or a fall in GDP results in a rising debt burden.

While acknowledging the role of the microfinance as an important tool for ensuring development opportunities to small businesses that otherwise may never access financial resources, one should keep in mind that microfinance is sound if it is provided by sound institutions. There is not much benefit if such institutions fail because of lenience of their internal rules and procedures, and/or because the supervisory authority has closed an eye on them because of their social role. This will also make other institutions become hesitant in engaging in microfinance. The relationship between the microfinance institutions and the banking sector regarding their interaction in the economy financing, is a delicate issue. Their coexistence is certainly “peaceful” at the early development stage of at least one of these groups of institutions, but as the economy grows and competition increases, they tend to move toward each-other. At that stage, it is important to pay special attention for ensuring clear “rules of the game” for their activity and to provide adequate policies that allow for structural reforms of these institutions and of their market influence. In conclusion, microfinance is a very important mean to achieve a balanced economic growth, by providing financial support to small and medium businesses which are vital for the medium and long term economic growth. Compared to some other countries in the region, microfinance in Albania have shown higher growth rates with good quality. However, there is ample room for enhancing it further.
In either case, however, it would expose the authorities to risk of loss, and so would not always deliver the Objectives I think we share. It would not be assured to preserve orderly markets in all cases. And it would be insufficient if a firm was actually insolvent. A quite different, and rather more profound approach would be to deploy a super special resolution framework that permitted the authorities, on a rapid timetable, to haircut uninsured creditors in a going concern. By haircutting creditors in a going concern, there would be no need to close the business immediately (or, if regulators wished, even at all). That is a very high-level description. Variants obviously exist. Instead of haircuts, uninsured creditors could have part of their claim converted into equity. And it would need to be clear how the regime applied to the normal ranking in the capital structure, with common equity and subordinated debt being wiped out before any senior unsecured debt was haircut (or converted) at all. Precisely because investment banking is highly levered, relatively small percentage haircuts (or conversions to equity) could materially recapitalise a distressed firm. Creditors would recapitalise distressed LCFIs, not the state. In that, it shares some features of contingentcapital bonds, but would be on a statutory basis and could apply to all unsecured creditors in the extreme circumstances of systemic distress. The crucial feature is that haircuts/conversion would be applied up front to creditors of a going concern.

By contrast, under standard commercial-banking resolution regimes, the “bad bank” goes into an insolvency process as a gone concern, with de facto haircuts applied to its creditors ex post, after realisation of the assets by the liquidator – a process that almost always destroys value. A “going concern” approach would in effect combine features of standard regimes for resolving commercial banks (rapidity, public policy objectives) with some features of the US Chapter 11 for non-financial companies (haircuts for creditors in a continuing business). Of course, the kind of super-special resolution regime I am airing could not be an exact replica of Chapter 11 – if only because the capital structure of a distressed LCFI would have to be restructured very quickly, over a weekend if not overnight, and so could not rely on a negotiated settlement with creditors. For that reason alone, in common with the existing commercial-bank resolution regimes, there would plainly need to be safeguards. 1 Perhaps the most important might be that such  1  For safeguards in the UK SRR, see the Banking Act 2009 (Restrictions of Partial Property Transfers) Order 2009 (SI2009/322). 2  BIS Review 33/2010  super special resolution powers could be applied only where the authorities made a formal determination that the firm’s distress would otherwise seriously threaten systemic stability. The modalities would, I suspect, end up varying according to countries’ particular circumstances.
Whatever the motivation, a series of transactions have recently taken place that show that the pace of consolidation is picking up in Hong Kong. Last year, for example, we saw the acquisition by Standard Chartered of the credit card and retail banking business of Chase Manhattan and the purchase by Bank of East Asia of First Pacific Bank. This year, Development Bank of Singapore is in the process of acquiring Dao Heng Bank with the intention of eventually combining it with its existing locally incorporated subsidiary. Two of the Mainland banks, Bank of China and ICBC, are also consolidating their Hong Kong operations. The Bank of China move is particularly significant since it will create the second largest banking group incorporated in Hong Kong. What we have not so far seen in Hong Kong is merger among indigenous banks that are more or less of equal footing. This is perhaps not surprising. Such mergers are generally more difficult to arrange than straightforward acquisitions of a smaller bank by a larger bank. In the latter case, the acquirer is in a position to decide what it wants to do as regards management and staff changes, harmonisation of systems and the introduction of new products. With a true merger, these matters have to be settled by consensus, which may not be easy. Who for example is going to be the chairman or chief executive? It is probably better to avoid the Japanese solution of sharing each of these responsibilities among more than one individual.

Offshoring may impair the national capacity for systems operations, development and follow-up. It may also become difficult for the Norwegian authorities to coordinate contingency planning, if large parts of operations are managed from another country. Norges Bank sets conditions for interbank systems when tasks are moved abroad. Among these conditions are that hardware must be physically located in Norway. There must also be contingency arrangements in Norway that in a crisis can quickly take over tasks that are performed abroad. Norges Bank is of the opinion that critical providers of services to the payment system need to be more closely monitored. Norges Bank will, in consultation with Finanstilsynet (Financial Supervisory Authority of Norway), examine the contingency arrangements and security of the payment system’s critical ICT service providers and data centres. This will not entail a change in FMI owners’ responsibilities for outsourced operations. The banking and payment system in Norway is dependent on a very small number of ICT providers and data centres that are also vital to other critical infrastructure. This systemic risk needs to be followed up by the authorities. ICT service providers are not subject to direct supervision in the same way as entities in the banking and payment system. In its official report from last year, the ICT Security Commission found that the supervision of subcontractors may present a challenge for a number of systemically critical institutions.
Sources: Central Bank of Chile based on a sample of investment banks, Consensus Forecasts, IMF, and statistics bureaus of respective countries. Figure 11 Actual and expected monetary policy rates around the world (1) (porcentaje) 9 8 7 6 5 4 3 2 1 0  9 8 7 6 5 4 3 2 1 0 05  07 Developed (2)  09 Emerging (3)  11 Chile  (1) Simple average of monetary policy rates of each group of countries. Gray area, as from September 2011, shows market expectations in Bloomberg survey. For Chile, the averaged linear interpolation between the August EES and the FOS of the second half of August is used. (2) Includes the Eurozone, Japan, the U.K. and the U.S. (3) Includes Brazil, China, Colombia, the Czech Republic, Hungary, Mexico, Peru, Poland, South Africa and South Korea. Sources: Central Bank of Chile, central banks of respective countries and Bloomberg. 12  BIS central bankers’ speeches  Figure 12 Contribution to trading partners' growth (*)  (percentage points)  7 6 5 4 3 2 1 0 -1 -2 -3  8 6 4 2 0 -2 -4  90  95 Emerging  00  05  Developed  10  Trading partners  (*) Gray area, as from 2011, shows forecast. Source: Central Bank of Chile based on a sample of investment banks, Consensus Forecasts, IMF and statistics bureaus of respective countries.

Add to this that monetary policy interest rates are at their all-time lows, with which the capacity of central banks to increase the stimulus is also limited. In short, the tools traditionally used to boost growth have little room for maneuver in the developed world. Another source of risks that is being increasingly debated is the possibility of developed economies, especially the U.S., enduring a long time of slow growth. Excessive private debts, particularly of households, and public debt, combined with weak labor markets, are determinants of this assessment. This could shape a similar situation to that of Japan after the bursting of its housing bubble in the late 1980s, which gave way to a period of stagnation that has seen no end. Although we believe this to be an unlikely scenario, its consequences on the global economy could be severe. Amidst these conditions, emerging economies continue to grow strongly. The risks of overheating we saw only a few months back have diminished, partly because of the very action of the adopted economic policies and, especially, of monetary measures. There are still risks, however. For one, it is obvious that if developed economies continue to lag, the external demand facing the emerging world will fall, hurting their growth potential. Although in the current scenario some dynamism and a certain degree of decoupling are expected, this cannot go on indefinitely. Given the weakness of domestic demands in developed countries, they rely on their exports to grow and to resolve their global imbalances.