samchain/econo-pairs-v1 huggingface dataset:
), which have increased their exposure to risk transfer instruments, even though their investment policies remain fairly conservative. Third, banks themselves may, via credit derivatives, improve their risk management. They diversify their risk profiles by gaining exposure to companies or sectors in which they do not have customer relationships and by hedging risks while retaining customer relationships. Credit risk transfer mechanisms are also used by banks to deal with single-name concentration risk. Consequently, major improvements in risk measurement have been made. From a prudential viewpoint, the Basel II framework takes better account of risk mitigation techniques employed by banks, including the use of credit risk derivatives, and applies specific treatment to securitisation. BIS Review 33/2007  1  2. But this evolution should make us more – not less – vigilant regarding the assessment and tracking of risks. The wider benefits that CRT can bring should not give rise to a false sense of security. Risks do not disappear as a consequence of their transfer. Banks need to pay attention both to "residual risks" (e.g. tail or extreme event risks) and all of the risks (e.g. operational risk, documentation and settlement risk, legal risk) arising from the use of CRT. Furthermore, the growing complexity and volume of CRT transactions call for enhanced monitoring. Actually, understanding where risk ultimately lies and how risky exposures can build up is an essential prerequisite for safeguarding financial stability. The argument is fourfold: First, historically low interest rates and abundant liquidity have prompted an intense search for yield.

History has shown that it is precisely in good times that the seeds of financial distress develop. In the present context of the desperate hunt for yield, risk transfer markets may encourage investors to take on more risk. Therefore, financial innovation should not only concentrate on extracting yield but also on pricing risk at a sustainable level. This is one of the most demanding challenges of the coming years for both the private sector and the public authorities. BIS Review 33/2007  3
This very fact that intellectual inputs from research are a precious resource in times of stress and multi-faceted uncertainty confirms me in my view that central banks’ investment in economic research, be it in-house or through partnerships with academia, is a very valuable asset. Therefore, I also warmly welcome this conference as being one brilliant illustration of the benefits brought by our three years long partnership with Toulouse School of Economics (TSE). Note however that, while the organization of high-level academic conferences has been an important achievement within this partnership, it is not the only one. Indeed, many avenues of fruitful collaboration have developed. Two series of regular joint seminars, one on monetary economics, the other on financial stability, and several workshops have notably contributed to strengthen the links between Banque-de-France and TSE researchers and stimulate the scientific and policy debates. I would also like to take this opportunity to thank Jean Tirole for his personal involvement in the exchanges with Banque de France. Last but not least, let me also advertise the new Banque de France – TSE Senior and Junior Prizes in Monetary Economics and Finance which purpose is to distinguish outstanding contributions by academics. The first prizes will be awarded for the first time on 16 March 2012. In the remaining of this address, I will first discuss the sovereign nature of the current crisis, its origins, implications and the associated challenges. Then, I will focus on the response of the Eurosystem to this crisis. 1.

I would like to recall again that, in the euro area, banks are the main channel for mobilizing domestic savings and financing investment. This explains why ECB’s non-standard measures have primarily aimed at enhancing access of the banking sector to liquidity and at facilitating the functioning of the euro-area money market. Given the topic of the current conference, I would like to take the opportunity to elaborate on one of these non-standard measures, namely the Securities Market Programme, or SMP. Sovereign yields are central in the transmission of monetary policy, in particular because government bonds provide a floor to the private-sector funding costs. This is the reason why we launched the SMP. 2  BIS central bankers’ speeches  I insist that, through the implementation of all its non-conventional measures – including the SMP – the Eurosystem has fully played its expected role as a lender of last resort (LLR), by which I mean that we have and we will intervene to stem liquidity crises that threaten the stability of the banking system. Having said that, it is clear that engaging in large-scale asset purchases of sovereign bonds is well beyond what should be expected of a central bank’s role as a LLR. Moreover, largescale asset purchases are not without risks. While they may help to alleviate upward pressures on long-term interest rates in the short run, they could also affect price and financial stability in the medium-run, by endangering the value of the central-bank money.
And the impact of these efforts on emerging markets can be quite unpredictable and inconsistent with economic theories, due to the international currency status of the US dollar and the safe haven status of US dollar investment. Distinguished audience, Against the background of quite an unpredictable external environment, I believe that the Thai economy would still turn in reasonable growth rate for the year 2011. On the demand side, I see consumption and investment continuing on the rise. Consumer spending is expected to benefit from a high level of farm income from rising output and agricultural prices, high employment, and good consumer confidence. Meanwhile, investment by the private sector is also expected to grow, though at a slower rate than the periods following the crisis recovery. Currently, business sentiment and future investment plans are still showing an improving sign. And, public investment spending remains a key factor to keep demand momentum going forward. What we need to assess more cautiously is the future export performance. Of course, our export sector would be affected by the slowdown in the global economy to the extent that a large proportion of final demand for Asian and Thai exports remains in G3 economies. Having said that, I believe that exports will continue to grow along with world trade as long as the US and EU growth slowdown does not cause another global recession. I also want to stress that the process of export diversification in Thailand has advanced continuously in terms of markets and products.

This produced an acceleration of some Lm7 million in the rate of increase of pension expenditures. Pension reform, which is vital for the long-term sustainability of public finances, should be implemented this year. Everybody has had a say and there is now a comprehensive, balanced set of proposals which answer to the widest possible range of concerns compatibly with having a viable system. It is time to move on to other pressing issues. 9. Property values continue to increase against a background of a rising volume of bank credit that is being channeled into construction and house purchase. Are there grounds for concern? Property values are estimated to have increased by about 9% in 2005. Although this represents a slowdown from previous years, it is still in excess of recent inflation and occurred despite a continuing high vacancy rate. The ready availability of credit contributes to rising property prices. While the volume of bank credit to the construction industry was more or less flat last year, borrowing to finance the construction or purchase of housing went up by 21% to Lm653 million. These numbers, moreover, must be viewed in the context of total household borrowing. Consumer credit, including through credit cards, increased by 13% in 2005 to Lm91 million. This is an area where the banks are marketing their products rather aggressively, encouraging borrowing for consumption rather than for investment purposes.
Abdul Rasheed Ghaffour: Solutions for safe, adequate, affordable housing for all Opening remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Cagamas - World Bank Affordable Housing Conference "Solutions for Safe, Adequate, Affordable Housing for All", Kuala Lumpur, 2 April 2019. * * * Thank you for inviting me to deliver the opening remarks for this conference. The issue of housing affordability is close to everyone’s heart. Having a family myself, I can truly understand the need and desire to own a safe, comfortable and affordable home. As such, I am pleased that the public discourse on this issue around the world and in Malaysia has been gaining traction over the past few years. This reflects the significance, concern and gravity of the situation. To ensure a fair standard of living, the United Nations recognises the provision of adequate housing as a necessary objective to pursue. Adequate housing includes ensuring affordability, habitability and accessibility, all of which are issues that this conference seeks to address. In my remarks today, I will touch on the responsibilities of individuals, the private sector and policymakers to realise the agenda of affordable housing, mainly from Malaysia’s perspective. For any individual, irrespective of income level, one of the biggest investments he or she will make in life is the purchase of a home. The downpayment and monthly mortgage represents a significant commitment, where for many, may even span a lifetime.

So far, more than 3600 people have completed the modules and a substantial number of them, one in five, have decided not to proceed with the purchase. This points to two things. Firstly, the module is successful in nudging participants to reassess their existing financial obligations before they can take on more than what they can handle. Secondly, it reinforces the need to continue pushing for financial education. Individuals need to know their capacity, and what they can afford before undertaking a commitment of this magnitude. We have established that every individual needs to play their part to ensure that they are fully aware of and are able to undertake the commitment of buying a house. However, the responsibility does not reside with the buyers alone. Industry players in the private sector also 1/3  BIS central bankers' speeches  have a role to play to support the national agenda of affordable homes. As one of the core players in the housing market, developers have a significant role to play. In providing the supply of homes for the public, developers should seek to provide homes at an affordable price point. Using international affordability metrics, houses in Malaysia are considered to be “seriously unaffordable” with a median multiple of five times. This, in turn, affects home ownership. Take the latest data of unsold residential properties of about 171,000 units. About 74% of them are priced beyond what ordinary Malaysians can afford.
The broader economy should see a recovery in the second half of this year alongside strengthening global demand and further progress in our vaccination programme. Trade-related activities such as manufacturing and wholesale trade will be supported by resilient global trade flows and robust upswing in the global tech cycle. Modern services, particularly the financial and ICT sectors, are set to expand at a firm pace this year, amid a pickup in credit intermediation activities and the ongoing digitalisation of business processes which has been accelerated by the pandemic. Moreover, compared to a year ago, Singapore is much better equipped to handle the pandemic, with more effective testing and tracing, swift isolation of infected cases, and vaccination. Singapore’s GDP growth could exceed the upper end of the 4 to 6% forecast range, barring a setback to the global economy. Last month, the official forecast range was maintained at 4 to 6% in light of the deterioration of the domestic COVID-19 situation and consequent Phase Two (Heightened Alert). MTI, together with MAS, will review the forecast range in August when preliminary estimates for Q2 GDP are available. The resident unemployment rate should continue to gradually decline. Total employment expanded by 14,000 in Q1 this year, the first expansion after four consecutive quarters of contraction. The Phase Two (Heightened Alert) measures and continued restrictions under Phase Three (Heightened Alert) however will have a transitory impact on employment in the domesticoriented services sector.

Assets under management in Singapore grew by 17% year-on-year, to $ trillion as at end-2020, driven by strong inflows into traditional and alternative investment strategies 10 as well as valuation gains 11 across major asset markets. The FinTech sector has also continued to do well. Investments in FinTech firms based in Singapore reached a record $ billion in 2020, an increase of more than 30% from 2019. In the first quarter of this year, FinTech companies here already raised more than $ million. The financial services and FinTech sectors created 2,500 net jobs last year. We expect the financial sector to continue to create good jobs this year. Financial institutions expect to create about 6,500 new hiring opportunities 12 this year, with strong demand in areas such as technology, wealth management, corporate banking, and insurance. 13 The financial services sector has exceeded both the value-added and employment targets set by the Industry Transformation Map (ITM) for 2016–2020. Growth in value-added during this 5-year period averaged 5.4% per annum, above the ITM target of 4.3%. The sector, together with FinTech, added an average of 4,700 net jobs per annum, above 7/9  BIS central bankers' speeches  the target of 4,000. MAS has started reviewing the ITM strategies and targets for the next 5 years. MAS has been studying in depth how the financial services landscape will transform and what Singapore must do to remain competitive in the coming decade.
And announced in the Green Finance Strategy that from this year the FPC remit letter will require that they have regard to the COP21 Paris Agreement when considering how to advance objectives and discharge their functions. In taking these actions, the Government has in effect reduced the FPC’s discount rate on climate-related financial risks. This means that GDP-at-risk will now grow more quickly in the FPC’s loss function. And by responding to this, the FPC will reduce climate-related exposures, and the private financial sector will help to pull forward the adjustment to net zero for the economy as a whole. There are three main areas macroprudential policymakers can act. 33 On reporting, climate disclosure standards under the TCFD must be enhanced to be as comparable, efficient and decision-useful as possible. And we need to develop pathways to mandatory climate disclosures. To manage risks, disclosures need to go beyond the static to the strategic. The Bank of England with the PRA and FPC will run the world’s first integrated bottom-up climate stress test for banks and insurers, including the catastrophic business-as-usual scenario, the ideal – but still challenging – transition to net zero by 2050, and the late policy action climate ‘Minsky moment’ scenario including economy-wide disruption that a delayed and disorderly transition will bring. Our stress test of the world’s leading international financial centre will show how major financial firms expect to adjust their business models, as well as the potential collective impact of these responses on the wider economy.

22  All speeches are available online at www.bankofengland.co.uk/news/speeches  22  Chart 15: FPC housing tools more efficient than monetary policy for addressing the same risks  Risks increasing as the GDP-at-risk tail grows larger  1yr ahead median GDP growth 4.0 forecast (%)  2004  If FPC housing tools had been in place  2004 2007  2014  3.5  3.0 2000  2015  2006  2.5 2005  If monetary policy acted to achieve same reduction in GDP-at-risk  1998  2001  2003  2017 2.0 2016 2010 2002  2013 1.5 2018  2008 2019  2011 1999  1.0  0.5  3yr ahead 5th percentile GDP growth estimate (%, cumulative)  2012  0.0 -6.0  -5.0  -4.0  -3.0  -2.0  -1.0  0.0  1.0  2.0  The FPC’s structural and cyclical bank capital requirements The UK’s bank capital framework optimises the FPC’s objective function by balancing the impact of higher capital on GDP-at-risk with the impact of higher capital requirements on the central GDP forecast. 𝑇  min ℒ𝑡 ≡ 𝐸𝑡 {∑ 𝛽 𝑖 [𝑓(𝐺@𝑅𝒕+𝒊 ) − 𝜙𝑦𝑡+𝑖 ]} 𝜌𝑡  𝑖=0  The capital framework includes structural requirements that are not designed to vary systematically over time, and a cyclical requirement that varies with the financial cycle to match the level of resilience with the level of GDP-at-risk.
These include (1) closer integration of global economy through stronger trade and financial linkages, (2) increasingly large and mobile capital flows due to lower costs on cross-border investments, (3) rapid spread of information made possible by advancement in technology, and (4) more pronounced reactions on the part of market participants in times of heightened uncertainties ever since the onset of the global financial crisis. The interplay between market players’ expectations, their self-fulfilling nature and spillover effects paves the way for market exuberance in response to a trigger event. As a clear case in point, the recent ups and downs of financial markets upon new information the market perceives from each round of the Fed’s announcements highlight the role of “shifts in beliefs” on market volatility. What made the post-2008 period particularly vulnerable to such self-fulfilling global turmoil is the current stage of the world economy characterized by lingering structural weaknesses of the crisis countries and limited policy space that reduce the potential of macroeconomic stabilization policy. All of these factors reinforce the role of global shocks and contagion through real linkages as well as expectation channel in transmitting volatility around the world. Notwithstanding the turbulence of the global economy, Asian economies had proven to be resilient in the face of negative external developments, with favourable macroeconomic performance and well-maintained stability during the past period, thanks to the region’s flexible policy framework, robust financial system, and improved risk management as lessons had been learned from the crisis of 1997.

Making headway towards sustainable growth Ladies and gentlemen, The success of Asian economies in weathering the global financial crisis is certainly commendable. But it would be a mistake to be lulled into complacency by this success of short-term volatility management. In particular, there remain important long-term challenges to the sustainability of growth in Asia. Indeed, latest economic indicators already pointed to a  BIS central bankers’ speeches  1  less upbeat growth trajectory of the Asian region including China. The apparent slowdown in Asia, despite gradual improvement of the advanced economies, lends support to the idea that Asia also has its own structural bottleneck issues to deal with. The time is ripe for all parties involved to look beyond short-term fluctuations and give serious consideration to longer-term structural issues that are holding back Asian potential growth. This is the second topic of my talk today: what can Asia do to sustain its high pace of growth in the post-crisis world? Since the onset of the global financial crisis, most policy responses in emerging markets have been focused on demand-side management, through monetary or fiscal policy stimulus. But boosting demand alone could only get us thus far. The real lift of potential growth of the economy must essentially come from supply-side progress. This refers to either the more abundance or the better use of capital and labor inputs in the economy.
Bank supervision added value by assuring counterparties and market participants that banking entities had clean and accurate balance sheets by forcing the timely recognition of losses. More recently, in response to the development of rating systems, the supervisory effort has shifted to the evaluation of the credit risk management process, and specifically the quality of each bank’s internal credit rating system. As supervisors we are no longer solely concerned with whether a bank has properly rated a troubled credit. Rather, we are now focused on the extent to which the bank can properly distinguish between loans across the spectrum of credit quality through its ratings, and whether these ratings are adjusted on a timely basis according to changes in a borrower’s performance. With Basel II, there are requirements for a meaningful differentiation of risk, for credit ratings with integrity, and for a warehouse of data to support the ratings (and requirements to ensure that historical data horizons cover appropriate economic downturn conditions). Moreover, banks will be required to test their rating system’s performance, resulting in more accurate ratings and capital assessments. In addition, through Pillar II, banks will be required to benchmark the results of their Pillar I credit assessments through rigorous stress testing.

Zeti Akhtar Aziz: Brief overview of the Islamic financial system Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of Commerce Tijari Bank Berhad, Kuala Lumpur, 15 April 2005. *  *  *  Bismillahirrahmanirrahim Y.Bhg. Dr. Rozali Mohamed Ali, Group CEO, Commerce Asset-Holding Berhad (CAHB) Ladies and Gentlemen, “Significant milestones have been achieved in our endeavour to build a comprehensive, efficient, dynamic, robust and resilient Islamic financial system. The Islamic financial landscape is now at the threshold of a new level of dynamism. The entry of foreign Islamic banking players, the transformation of Islamic banking windows into Islamic subsidiaries, the increasingly more vibrant Islamic financial markets, the enhanced inter-linkages with the global financial system, the enhanced consumer awareness, the strengthened regulatory, legal and Shariah infrastructure as well as the more conducive tax environment have culminated to open up new frontiers for the Islamic financial services industry in Malaysia, promising significant opportunities that will further enhance wealth creation and the potential for growth and development of the nation.” Ladies and Gentlemen, It is my pleasure to be here today to commemorate the official launch of “Commerce Tijari Bank Berhad”. Indeed, the emergence of Commerce Tijari Bank Berhad in the Islamic financial landscape will further enhance the diversity of the players in the Islamic financial system and will contribute to spur the growth of the Islamic financial services industry.