samchain/econo-pairs-v1 huggingface dataset:
In particular, the IASB issued the IFRS 9 based on the expected current loss model while the FASB issued its own Standard introducing the notion that provisions should cover the whole expected loss of the loan from inception. Regardless of the technical differences between the two, the crucial element is that both use as a key element the expected loss concept to account for credit losses. In any event, it is fair to say that the new provisioning standards introduce major changes compared to pre-crisis practices. One important change refers to the way that credit loss provisions should be recognised in a timely fashion because it was perceived that the incurred loss model, in force when the crisis took place, considered credit losses “too little  3/7  and too late in the cycle”, and that affected directly the amount of provisions set aside by banks (deemed very small and highly insufficient). A direct consequence of the implementation of the expected loss model is a more timely recognition of credit losses together with an envisaged improvement in banks’ credit risk management. These two elements are expected to positively and significantly contribute to the stability of the banking system. Nonetheless, this assumption largely depends on banks’ awareness and commitment in terms of their ability and willingness to appropriately capture the risk embedded in their loan portfolio. All in all, to understand the performance of the loan book, one has first to look at the specific process of granting loans.

The time dimension of bank provisions, particularly potential pro-cyclicality and financial stability implications of the new approach, sets the stage for an exciting Panel 4. Admittedly, there is still little evidence gathered so far, given the short period of time over which the expected loss model has been in force, to arrive at definitive conclusions; intuitively, moving from the incurred loss paradigm to the expected loss model should reduce the procyclicality of provisions in the future. I am sure that this issue will attract interest from academics, supervisors and practitioners not only during this conference but far beyond it as more evidence and data are gathered. Whether provisions are pro-cyclical or not is a key matter for financial stability. Finally, learning from the implications and interactions between the new provisioning standards and other types of regulations to which banks are subject – most notably financial market regulations and micro- and macro-prudential regulations – will prove a perfect topic  5/7  for the final panel of the conference. In this regard, the Banco de España experience2 with the setting-up of so-called dynamic provisioning3 , which shares many characteristics of the current countercyclical capital buffer and is close to the concept of the expected loss model, serves as a good example of how closely linked provisioning standards, capital and macroprudential policies are. From a financial stability perspective, the fact that supervisors are given macroprudential tools should allow us to deal better with lending expansions and contractions in order to protect the economy from financial excesses.
It is important to have such a tangible point of reference for standards of conduct, but setting the right tone requires more than lofty exhortations for good behaviour. First, lead by example. Management must take time and effort to clearly articulate the firm’s core values and purpose. They have to demonstrate commitment and credibility by “walking the talk” with concrete policies, processes and actions. The firm’s leaders must themselves be seen to be guided by those same qualities they want their staff to emulate. And programmes to build a culture of trust and ethics cannot be a one-off exercise to fend off bad publicity or to placate the regulator. Shaping culture demands a sustained effort. Second, create a safe environment for whistle-blowing. This means providing the necessary mechanisms to challenge, question, and report ethical breaches. •  A number of banks in Singapore have put in place new channels for whistleblowing and enhanced the escalation and investigation processes to facilitate staff reporting. Third, align human resource policies to a culture of trust and ethics. I have already mentioned compensation as being an important way to create incentives for the right behaviour. But the incentives for ethical conduct must go beyond compensation and encompass all HR policies: recruitment, on-boarding, appraisal, training and coaching, promotion, and career development. •  An organisation’s HR policies and practices are the clearest demonstration of its value system, the qualities it regards as important.

Christian Noyer: Re-examining central bank orthodoxy for un-orthodox times Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at the conference of the Global Interdependence Center/Bank of France, Paris, 26 March 2012. *  *  *  The unconventional policies implemented during the crisis have transformed the face of central banking. But will these changes prove permanent and will “the unconventional become the new normal?” There is not yet definitive answer to this question. We may not, as easily as we would like, be able to revert exactly to the status quo ante. However, I strongly believe we must make sure that the gains from the pre-crisis period, in terms of monetary and price stability, are not compromised in the process. Prior to the crisis, a description of central banks would have centred on four characteristics: They were focused with price stability being their primary or key objective, and no responsibility was sought or given for financial stability; They were of limited size with very small balance sheets and interest rates as their only policy instrument; They were independent, a condition recognised as necessary to anchor inflation expectations, and embodied in very strong institutional frameworks; And they were successful: the “Great moderation”, a period of exceptional low volatility in output and inflation, was widely seen as a product of efficient and wise monetary policies.
We must never become complacent and satisfied with the status quo, or else we will soon be overtaken and left behind. MAS will strive to create an environment where market forces, enterprise and innovation can thrive. We will stay abreast of market developments, and be sensitive to the needs of the industry, without compromising on supervisory standards. Our experience has shown that the two are not incompatible; indeed listening to industry players, without being overwhelmed by them, helps us to become better regulators and supervisors. I am grateful for the full support and cooperation which the industry has extended to MAS, and to me personally, over the years. I am also grateful to the staff of MAS, whose professionalism, dedication and hard work have enabled us to reorientate our approach and transform the financial sector smoothly and safely. MAS and the industry will need to continue to work together to realise the vision of a more dynamic, competitive and vibrant financial sector in Singapore. That is the ultimate test of the success of our efforts to grow the sector, and make Singapore a key financial hub in Asia. 6  BIS Review 39/2004

The global economic recovery might also be delayed reaching the region, increasing the likelihood that the crisis may cause more persistent economic effects. Despite this difficult situation, remittances have proven pandemic-proof1 and have behaved countercyclically in most of the region’s countries, assuming a more important role as a source of external financing. This subject is crucial to Spain, since it is the second-ranked issuer country of remittances to Latin America. Some of the topics we will address today (such as the growing importance of digital money remittances, the role of fiscal stimulus measures in the resilience of remittances and the function of the informal economy) are key to understanding the behaviour of the flow of remittances in this crisis. Undoubtedly, today’s event will allow us to better understand these developments and – I hope – 1/2  BIS central bankers' speeches  to draw some useful conclusions on how to tackle them from the central bank standpoint. Thank you for your attention. Remittances barely fell by 1.6% in 2020, compared with their 4.8% decline during the 2008 financial crisis. 2/2  BIS central bankers' speeches
Undoubtedly, the DGS Directive will further strengthen and harmonise depositors’ protection, thereby enhancing financial stability in the EU. It will ensure that deposits will continue to be guaranteed up to € 000, per depositor and bank, in all Member States. Furthermore, it will strengthen the financing of the DGS in all Member States, notably by requiring a significant level of ex-ante funding (0.8% of covered deposits) to be met in ten years. However, a full-fledged scheme to foster financial integration would imply the setting up of a euro area wide deposit protection scheme. In particular in times of widespread financial instability, deposit insurance payoffs depend not only on the legal framework they are based on, but also on the ability of the deposit insurance fund to cope with large-scale banking failures. Doubts on this ability, due to concerns on the fiscal health of the sovereign, could for instance easily reinforce the possibility of local bank runs. From a central bank perspective, the establishment of a common deposit insurance scheme is of less urgency than the other components of a Banking Union. Still, it is an important element that that should be pursued later, as it will be important to fend off bank runs on cross-border banks, thereby enhancing trust in the European banking sector. The completion of Banking Union is however not the end of the journey.

Ladies and Gentlemen, The effectiveness of cross border arrangements would be easier to achieve when there is a greater consistency in the regulatory rules and standards as well as supervisory practices among the home and host supervisors. The new capital accord was therefore intended to accelerate the convergence process with respect to the adoption of international standards for capital adequacy in the global environment. In reality, however, total convergence cannot be expected given the varying levels of sophistication between developed and emerging countries. At any point in time, differences in rules and standards can be expected to exist. Our main task will be to find areas where convergence can be accelerated. There may also be room for greater mutual recognition of supervisory assessments among fellow supervisors that could avoid duplication of efforts and resources that could contribute towards reducing compliance costs to the banking institutions. While we deliberate on the complex issues relating to cross-border implementation of Basel II, supervisors and banking institutions operating in emerging markets also need to take into account the broader implications of Basel II on the economy as well as the access to financing for specific economic sub-sectors, such as the small and medium size enterprises (SMEs). The highly risk sensitive framework could indeed have a potential adverse impact on bank lending behaviour. There has to be continuing discussion between supervisors and the banking institutions on the broader supervisory issues and the effectiveness of regulatory and supervisory framework that could mitigate such potential adverse implications.
higher wage claims. Indeed, despite large increases in oil prices inflation in OECD countries oscillated around 3 percent in the past year and core inflation (CPI excluding food and fuel) drifted from 2 percent to 1.8 percent in the same period 5 . However, in my view, further prolonged increases in energy prices, especially those stemming from supply constraints or related to political risk could result in more elevated inflationary pressures in the short term and could seriously harm global growth prospects in the medium term, also because they would contribute to further worsening of global imbalances. The issue of global imbalances has attracted enormous attention, both from academics, investors, policy-makers and, of course, central-bankers. You may find a detailed description of the issue of  1  International Monetary Fund, World Economic Outlook, April 2006. 2  European Commission, Directorate General For Economic and Financial Affairs, Economic Forecasts, Spring 2006. 3  See endnote 1. 4  Walton D. „Has oil lost the ability to shock?”, speech to the University of Warwick Graduates’ Association Senior Directors’ Forum at the Commonwealth Club, London, 23 February 2006. 5  OECD “OECD Consumer Price Index“, various releases. BIS Review 61/2006  1  global imbalances in my earlier speeches posted on the NBP website (www.nbp.pl publications speeches/lectures). Today I will only say that never in a human history has the largest economy run such a high current account deficit reaching 6.5 percent of GDP, not to mention that this economy is a provider of the global reserve currency.

At this time, given better growth prospects for emerging markets in the near-term, there could be a resurgence of strong capital flows to emerging markets once the current global crisis subsides. As large capital inflows are known to be one of the key contributing factors of many financial crises in the past, preparing the economic and financial system to effectively intermediate it and manage the associated risk to maintain financial stability, will be the first and foremost challenge for SEACEN regulators and  2  BIS Review 96/2009  policymakers. In the past, what happened was that, in response to the strong capital inflows and abundant liquidity, banks tended to relax their underwriting standards, which gave rise to the formation of asset price bubbles. Therefore, going forward, risk management of banks must continue to be strengthened and regulators must be prepared to use macro-prudential measures proactively as necessary to reduce such risk. This means credit standards and bank capital rules must remain vigilant regardless of the abundance of liquidity. Second, the issue of procyclicality has gained the attention of regulators and the banking industry for quite some time in the context of Basel II. Since then, especially at the start of this crisis when credit crunch has slowed economic activities, a number of proposals have been put forward to deal with this issue. So far, the debate remains open.
Our main scenario for the years ahead is still relatively good activity in the Swedish economy, with inflationary pressure that gradually rises from a low level. But uncertainty about the future path has been further accentuated in connection with the financial turbulence. There is an increased risk of a weak international development. In addition, the continued stock-market unrest has made domestic demand more difficult to assess than before. Meanwhile, the weakening of the krona is the opposite of the tendency on which our main scenario in the Report was based. At the Riksbank we are keeping a close watch on developments. That is a self-evident component of our work for promoting financial stability in the economy. It is also a necessary part of the work on monetary policy. At present there are no grounds for altering the direction of interest rate policy. BIS Review 81/1998

The constant need to invest in key payment infrastructures in this country is in line with technological advancements and the changing needs of consumers and businesses. In this regard, MyClear should be responsible to facilitate the pooling of resources and adoption of new technology to expand the network reach and resilience of its payment infrastructures. Financial institutions on the other hand, should leverage on the common platform to compete by providing innovative and value-adding products to their customers. Such synergistic collaboration will prevent unnecessary duplication and wastage  BIS central bankers’ speeches  3  of resources in the payment landscape. It shall reduce the cost of transactions over the long run. Modernising payment and settlement infrastructure MyClear is embarking on a multi-year programme to modernise Malaysia’s payment infrastructure. In the area of retail payments, a new real-time Retail Payments Platform will be developed to serve both as a catalyst and enabler for innovative payments in Malaysia. As for large value payments, the Real-Time Gross Settlement System or RENTAS is currently being enhanced to adopt a multi-currency system that leverages on the SWIFT messaging standard. The enhanced RENTAS would cater for multiple messaging formats including the internationally-recognised ISO 20022 which supports the transmission of richer remittance data and facilitates interconnectedness with other economies within the region. Enhancing capital market infrastructures With respect to the capital market, Malaysia’s debt securities market is the largest in Southeast Asia.
My proposal was therefore to keep the repo rate unchanged in May. What significance the new information will have in more concrete terms for monetary policy in the future is something we will return to at our next monetary policy meeting in June. Conclusion Let me conclude by briefly summarising what I have said. I have mainly focussed on the debate on monetary policy and unemployment. I have also briefly described the current labour market situation, as I assessed it at the previous monetary policy meeting. I think it is good and necessary that a debate is held on the significance of monetary policy for unemployment. But I consider it essential that this debate is conducted on the basis of reasonable expectations of what monetary policy can and should achieve. The fact that inflation has undershot the target in recent years is mainly due to unexpectedly high productivity growth. The high productivity has been beneficial as it has contributed to good growth. However, it may at the same time explain why employment has shown relatively weak development for some years. It is not because of monetary policy that unemployment now is much higher than it was in the decades immediately prior to the 1990s crisis. There are many indications that the explanation for this is structural problems in the Swedish labour market. Problems that have increased over time and were long concealed by the unsustainably expansionary economic policy conducted earlier.

The sheer number of financial contracts that would have to be unraveled in the context of a default, the challenge that a former colleague of mine likes to refer to as "unscrambling the eggs," could exacerbate and prolong uncertainty, and complicate the process of resolution. As is typical during periods of rapid innovation, these markets grew much more quickly than did the supporting infrastructure. Take credit derivatives, for example. For most of the early years of this market, much of the post-trade processing system was not automated and required substantial manual intervention. Positions were assigned without the knowledge of counterparties. Confirmations backlogs rose to very high levels. As Alan Greenspan put it, the market was using 19th century methods of dealing with 21st century financial instruments. This created a greater risk of operational problems and uncertainty about exposures in the event of stress. The capacity of market participants to mitigate these risks by improving the infrastructure was hampered by classic collective action problems, magnified by the greater number and diversity of participants. All these challenges merit attention. They describe some of the risks that have accompanied the substantial benefits of credit market innovation. And they help illustrate why these broad changes in financial markets may have contributed to a system where the probability of a major crisis seems likely to be lower, but the losses associated with such a crisis may be greater or harder to mitigate. What should policymakers to do mitigate these risks?
Just as in Finland, the Swedish price stability target was initially a self-imposed commitment on the part of the central bank, but afterwards it received expressed support from the Swedish parliament and government. I shall now briefly describe developments in Sweden following the introduction of the inflation target. The Riksbank's target of an inflation rate of 2 per cent +/- 1 percentage point would apply, according to a decision by the General Council in January 1993, with effect from 1995. During the interim period from allowing the krona to float free until 1995, inflation and expectations would be brought down from the high levels that had prevailed during the 1980s. Confidence would be regained. The Riksbank decided to publish regular Inflation Reports in order to attain greater understanding for the drawing up of our policy and the bases on which our decisions are made. The importance of transparency was reinforced in conjunction with the Riksbank being made more independent and its objectives being laid down in a special act, as of 1999. Transparency makes it easier for our employers, the Swedish parliament, to evaluate us. The Riksbank now publishes four Inflation Reports a year, where we describe clearly and in detail actual inflation trends, report the bank's assessment of the future path of inflation and draw conclusions for the direction of monetary policy. In Sweden we have also chosen to publish minutes of monetary policy discussions at our meetings and to report how the Executive Board members vote on this issue.

Many people have travelled to the UK and Ireland in particular, and the barriers to inward labour migration may be greater in the Norwegian labour market than in the British and Irish labour markets. Activity is edging up in the central European countries. Therefore, there is uncertainty about how large the supply of labour will be from these countries in the future. There is also considerable inward labour migration from other Nordic countries, but measured in terms of number of persons, the supply of labour from these countries has not changed substantially in recent years. Swedish nationals have comprised the bulk of the supply of labour from the Nordic countries. In view of the tightening taking place in the Swedish labour market, there may be reason to expect a reduction in the supply of Swedish labour to Norway. The supply of labour is also affected by developments in persons on disability benefit and sickness absence. The trend in sickness absence has reversed and is now rising, and the number of persons on disability benefit continues to show a steady increase. This is offsetting the rise in the supply of labour stemming from inward labour migration when we look at the labour market as a whole. Behind us, we have a period of moderate wage settlements. It appears that the wage settlements this spring will, as expected, result in somewhat higher wage growth.