samchain/econo-pairs-v1 huggingface dataset:
Prudential rules, by linking the development of banking loans to the level of banks’ capital and by weighting the loans according to their risks, create a capital constraint that is especially harsh in times of crisis when the weighting increases with the risks and when due to accounting rules, which impose marking to market for certain assets, the capital base is eroded. The second constraint is a liquidity constraint. It is linked to the ability of financial players to access markets to refinance themselves. When banks cannot refinance  BIS Review 57/2010  1  their portfolios, they are forced to shed assets and cut back on new credit. The recent crisis has featured the combination of these two constraints. Let me now turn to the main points I would like to discuss. How can we make our financial systems more resilient on a long term basis? It is clear that the level and quality of pre crisis capital in the banking system has not been adequate relative to the types of losses that have been experienced and that may be expected to materialize in a broader economic downturn. Larger capital and liquidity buffers are necessary, especially for trading activities. The recent reform package of the Basel Committee will lead to a much more robust and resilient banking system in the future, with both a stronger capital and liquidity base.

As techniques for managing and allocating risk became more sophisticated, the network of counterparties expanded in scale and in complexity. This was clearly a systemic change that was properly understood but not fully captured by regulators at the time. The definition of systemic entities should rely on different criteria beyond size, such as interconnection, complexity or substitutability, and depend on the context in which the entity evolves. Various initiatives to deal with systemic entities are currently being discussed, including tighter cooperation between supervisors, compulsory actions on banks’ structures and, more controversially, additional capital charges and/or taxes and levies. They certainly require further thorough analysis. It is essential to avoid threshold effects and never forget that risks are continuous in nature, time-varying and state-contingent. The debate about systemic firms also echoes concerns about the activities and business models of some institutions. The presumption is that smaller and leaner financial institutions would pose less risk to financial and macroeconomic stability than larger and more diversified ones. Yet, facts suggest that this cannot hold as a general lesson from the crisis. Indeed, the banks that suffered most from the crisis were precisely those that were more specialized, such as investment banks. By contrast, large universal banks, reliant on a large deposit base, were able to withstand the shocks comparatively better. To deal with systemic risks, there is a lot of merit in taking a closer look at what I would call “market options”.
The Bank of England has adopted a schedule for our Discount Window Facility under which the rate charged increases with the size of a drawing relative to the bank’s size, and also with the illiquidity and riskiness of the collateral provided. We want to underline that banks will end up paying more to draw on the insurance line if they are overly reliant on illiquid, risky collateral – implying that their balance sheet was overly exposed to liquidity risk. These considerations have to be taken into account if central banks are to lend against very broad asset classes; for example, as we flagged earlier in the year, the Bank of England will be deciding over the coming months whether to extend the collateral eligible in our Discount Window to portfolios of loans to companies and households and of equities. The Bank of England also charges a premium rate if a bank borrows from us against assets comprising securitisations of loans they originated themselves. This is because there needs to be an incentive to make such securities marketable; and, more important, it can help to protect us against one of the most basic risks in banking – the correlation between the quality of a bank’s underwriting standards and its solvency. Although central banks need to be ready to lend against a wide range of collateral, we do still need to be careful about precisely what we take.

xvi Newton, L (1990) “Overconfidence in the Communication of Intent: Heard and Unheard Melodies.” Unpublished doctoral dissertation (Stanford, CA: Stanford University) as cited in ‘The Curse of Knowledge’ by Heath, C and Heath, D, Harvard Business Review, December 2006. Available at: https://hbr.org/2006/12/the-curse-of-knowledge xvii Luhmann, N (2000), “Familiarity, Confidence, Trust” and H. Farmer, R. McKay, M. Tsakiris. “Trust in Me: Trustworthy Others” “in Gambetta, Diego (ed.) Trust: Making and Breaking Cooperative Relations, electronic edition, Department of Sociology, University of Oxford, Chapter 6, pp. 94 – 107 and Farmer et al (2013). xviii The Bank aims to move female representation at senior levels from 30 to 35 per cent by 2020, and BAME representation at senior levels from 6 to 13 per cent by 2022. xix Social Mobility Commission (2016a), “State of the Nation 2016: Social Mobility in Great Britain”, November;; Cabinet Office (2016), “Socio-Economic Diversity in the Fast Stream”, February; and Social Mobility Commission (2014), “Elitist Britain?”, August; Institute for government research: https://www.instituteforgovernment.org.uk/blog/civil-service-fast-stream-six-charts . See also Friedman, D and Laurison, S (2015), “Introducing the ‘Class’ ceiling”, LSE sociology department working paper; and Social Mobility Commission (2016b), ”Socio-Economic Diversity in Life Sciences and Investment Banking”, July. xx A US study showed that gender and ethnic representation in the US economics profession (academic and student populations) remains below that in other disciplines. Interestingly, diversity had improved in Science and Technology (STEM) subjects and business and management studies, but not in economics.
The pressure exerted by low interest rates does not only affect Spanish banks but is common to most European entities, albeit with differing intensity depending on balance sheet structure and the predominant type of banking business. Hence, the adverse effect on profitability of interest rates holding at low levels is all the greater the higher the percentage of loans extended at a floating interest rate, the lower the percentage of assets recorded at fair value or the greater the proportion accounted for by deposits in the bank’s financing structure. That is to say, the current environment of low rates particularly affects the traditional banking business of financial intermediation, namely that which prevails in Spain. Additionally, it should be borne in mind that the impact of changes in interest rates on bank profitability is not linear. Any reduction in interest rates, in what is an environment with already very low levels, affects bank margins with particular intensity. Indeed, the work performed at the Banco de España shows (see Chart 2) that, for high levels of interest rates, a moderate reduction in the Euribor exerts a positive impact on net interest income, since the stimulus effect (quantity effect) exerted by lower rates on the demand for credit offsets the reduction in the unit return on the loans (price effect).

Nonetheless, the NPL ratio can be an imperfect indicator of the effect that non-productive or problem assets may have on a bank’s solvency, since it does not take into account the asset collateral or the provisions set aside. The so-called Texas ratio, an approximation to which is  2  According to data for Spain from the EBA 2015 transparency exercise (consolidated data, significant institutions). With data for business in Spain, drawn from individual financial statements, the related ratio for the resident private sector in Spain stood at 10.4% in December 2015. BIS central bankers’ speeches  3  illustrated in Chart 4, offers a much broader view in that it also includes in its calculation the provisions and capital available to the bank. Chart 3  Chart 4 TEXAS RATIO PROXY (a)  NPL RATIO  1.6  %  30  1.4  25  1.2  20  1.0  15  0.8 0.6  10  0.4  5  0.2  0 UK  DE  FR  EU Avrg. SSM Avrg. (a)  ES  DECEMBER 2014  PT  IT  IE  JUNE 2015  0.0 UK  DE  FR  EU Avrg. DECEMBER 2014  ES  SSM Avrg. PT  IT  IE  JUNE 2015  SOURCE: European Banking Authority. Transparency Exercise 2015 (104 institutions). SOURCE: European Banking Authority. Transparency Exercise 2015 (104 institutions). a. The SSM average includes data on 15 of the 19 euro area countries.
There are many forces that would drive the green technology industry into the future; demographic change, urbanisation, globalisation, scarcity of resources and the challenge arising from climate change. These forces would inevitably transform society towards a green economy. Its usage in traditional industries would promote the development of new technology and recast existing one. Green technologies have also proven to drive modernisation in the traditional industries, in terms of better utilisation of energy and natural resources and could prove to be a strategic advantage in doing business. Some have aptly compared the green revolution to the industrial revolution, an era that had profoundly changed our civilisation. Just as the transformative 19th-century innovations changed businesses, so too will green technologies alter industries, companies and societies for the environmental good, thus with these changes create new opportunities for businesses. The shift towards a green economy affects all stakeholders – decision makers, and policy formulators, companies and their customers. Increasingly, investors are emphasizing sustainability to the environment as an important investment criterion. In Malaysia, the New Economic Model incorporates sustainability as one of its key principles and it has been identified as a Key Strategic Reform Initiative. In 2009, we have made a commitment in Copenhagen to reduce up to 40% in terms of carbon emission intensity of GDP by the year 2020. The National Green Technology Policy launched during the same year provides direction and motivation for the growth of the green technology industry and to enhance its contribution to the national economy.

First of all, in a Monetary Union which covers an area stretching from Lapland in the north of Finland to Andalusia in the south of Spain, we cannot expect complete homogeneity of the economic cycle or of economic conditions in a more general sense. Therefore, it makes sense for the euro area Member States to maintain control over the remaining tools of economic policy so as to be able, if necessary, to respond to developments which are particular to their own economies. On the other hand, when formulating their economic policies, euro area Member States must give sufficient consideration to the impact that these policies will have on the rest of the euro area economy. This is particularly important in EMU since euro area countries are no longer exposed to the discipline of financial markets to the same extent as used to be the case when they conducted their own autonomous monetary policies. Prior to the introduction of the euro, unsustainable economic policies were penalised by the markets in the form of higher interest rates, substantial risk premia and exchange rate pressure. In EMU, however, where financial markets take an increasingly euro area-wide focus and where the exchange rate risk associated with national currencies no longer exists, the effects of inappropriate policy choices in any one country tend to be largely spread across the entire euro area. Only relatively small risk premia remain.
This article begins by raising the question “What is mankind’s greatest invention?” It says, “... it is nothing but ‘Financial Contracts’, merely because it has performed an indispensable role in human development, at least in the last 7,500 years, playing three important roles, the ‘Economic Time Machine’, the ‘Safety Net’ and the ‘Engine of Growth’”. In order to provide an efficient service, the financial institutions need to consider the strategic repositioning of their organisations and expand businesses in a cost effective manner while improving the service delivery to deepen the public trust and confidence. Currently, most financial institutions are dependent on short term funding, which increases the rollover risks, and this has to be addressed with priority by gradually shifting to long term funding, which provides greater stability to the entire industry. Further, when financial institutions become larger and more stable, obtaining international ratings and raising lowcost funds from international capital markets would be easy. Other challenges faced by the sector are lack of new technology in most financial institutions to be competitive in the industry while lack of staff training has resulted in efficiency and hence productivity has been stagnant. Therefore, it is essential to reposition the financial sector to improve productivity and deliver a cost-efficient service. Reason 6: Improving compliance and governance in the financial sector As the regulator, the Central Bank also faces several challenges in regulating our highly fragmented financial sector today.

As we strive to reach these new milestones, our current macroeconomic indicators are bound to undergo a massive transformation. As a part of this transformation, the greater challenge would be to make Sri Lanka a popular, emerging financial centre in the region, where setting up a financial hub in Sri Lanka would be a key task. To strengthen and expand the dynamism, the financial sector will have to possess technology-leveraged financial services to improve operational efficiency while diversifying funding sources by tapping the international capital markets to mitigate risks and improve cost efficiency. Further, expanding delivery channels and business networks beyond domestic territories, enabling them to grow and exploit opportunities while addressing external vulnerabilities and spillovers are also essential. Meanwhile, a stronger capital base, a high quality pool of human capital and a high level of corporate governance to meet the enhanced regulatory framework are required in the financial system to steer the country towards attaining a sustained growth. To facilitate accomplishing this task, it was identified that the financial sector of the country has to be strengthened and stabilised further by implementing an appropriate set of policies in a timely manner. Reason 2: Necessity of maintaining stability in the local financial system amidst the growing complexity in the global financial system Ladies and gentlemen, we all accept that a stable financial system is a crucial element for a conducive business environment supportive of sustained economic growth.
The fiscal surplus has reflected the simultaneous decline of public income and expenditure, respectively 5.3% and 5.5%, year on year. As regards expenditures, capital expenditures decreased whereas current expenditures increased during this period. Foreign trade data point to about 8.7% annual contraction of Albanian exports, in January, while imports annual growth rates slowed down to 4.5%. These developments in the foreign trade were materialised in wider trade deficit, which expanded by about 13.8% from a year  BIS central bankers’ speeches  1  earlier. The performance of this indicator during the first two months of the year may be subject to temporary factors. Its dynamic and developments in the future will be monitored. Foreign demand has been the main driver of our aggregate demand over the last two years and, in Bank of Albania’s view, will continue to provide small positive impact in 2012. Monetary developments were in line with the performance of the real economy. Their analysis confirms the existence of low monetary inflationary pressures on the economy. Broad money, monetary aggregate M3, decelerated its annual growth to 8.1% in January. On the demand side, this performance has been affected by low demand for funds by the public and private sectors in January. Annual private sector credit pursued the downtrend that had started in the last quarter of 2011, settling at 9.9% in January. Its performance has reflected lower demand for credit by both businesses and households.

Overall, factors that affect inflation showed low activity intensity and prices of other goods of the basket do not signal for inflationary pressures on the economy. From the macroeconomic perspective, the downtrend of annual inflation is dictated primarily by rapid decline of pressures on the supply side, notably: slowdown of commodities price rise in international markets and low inflation in our main trade partner countries; cancelling out of the administered price rise effect; and stability of the national currency. Although these developments had been factorised by our analyses and projections, their influence was higher than expected. On the other hand, inflationary pressures originating from the aggregate demand continued to be low, in the context of below-potential economic growth and anchored expectations on inflation. Figures on real economy developments in early 2012 are scarce. Indirect statistical data, available for the monetary, fiscal and trade sectors of the economy, signal for slow economic growth in the first quarter of the year. As expected, aggregate demand was sustained less by the fiscal stimulus, in response to the prudent fiscal behaviour for 2012. Similarly, the contribution of foreign demand, during this period, is assessed as low, owing to economic activity slowdown in our partner countries. Moreover, despite signals for its recovery, the domestic private demand remains slow, given the consumers and private business hesitation to spend and invest. Fiscal sector data for January reveal positive budget balance for this year, about ALL 1.6 billion.
I have argued, however, that, given the global nature of the problem and the risks that even the best regulated economies are exposed to, the most lasting and fundamental solutions must lie in long-term prevention and joint action. These preventive measures should include urgent reforms to the international financial architecture to enable it to cope with changing market practices and to reduce the extreme volatility in fund flows that has been such an important factor in this crisis. In the medium and longer term, they should also include efforts to develop stable and transparent debt markets in the region, and greater monetary cooperation, which might also include the development of an Asian Currency Unit. At today’s symposium we are both celebrating a fiftieth anniversary and addressing some of the difficulties that we currently face in this region. This is not a time for complacency, but it is perhaps useful to step back for a moment from present difficulties to reflect on how far we have come, as a region, in the past fifty years. Fifty years ago most of this region was still recovering from the devastation of World War Two; many countries were to face more upheaval in the years that followed. But over the last few decades the region has, through a variety of economic strategies and in differing degrees, enjoyed growing prosperity, greater stability, advancing crossborder co-operation, and, increasingly, freedom from the poverty and strife that confronted earlier generations. This has all been achieved in a context of globalization and economic liberalization.

Until now, the U.S. dollar has played a dominant role in world trade quite out of proportion to the size of U.S. trade flows. This is particularly the case in Asia, where, despite Japan’s strong commercial and financial influence, the yen has failed to play a major role as an anchor. While the Hong Kong dollar has been well served by its solid link to the U.S. dollar, less solid commitments to the dollar in other economies have proved to be expensive and disruptive. Thus, despite the pre-eminence of the U.S. dollar, the Asian region as a whole lacks a viable exchange rate anchor. This is a problem that has to be addressed, and we would do well to look into it, especially once the current crisis has subsided. We have benefited from our own peg to the U.S. dollar, and other countries could similarly benefit from links to key currencies when they are in a strong enough position to make such links fully credible. The introduction of the euro will challenge the supremacy of the dollar elsewhere in other hemispheres by introducing a second currency pole in the global currency system. It will also offer another solid investment option to Asian central banks. The time may come when we might want to consider the possibility of our own Asian currency - perhaps something along the lines of an Asian Currency Unit - that would form an anchor currency for our region.
Eventually, they raised the credit rating of the Kingdom to advanced grades. This environment promoted the interest of foreign investors to participate in and benefit from the various investment opportunities available in the Saudi economy. The Saudi banking system has played a vital role in the enhancement of the national economy. Thanks to its use of the latest technologies and various banking products, the banking system has witnessed good development under a supervisory system which is very keen to meet domestic requirements and legislation and to comply with international standards, including Basel Capital Adequacy Standard. The banks operating in the Kingdom are very serious in the application of this standard. As a result, the Kingdom's banking system has become one of the advanced systems, not only at the regional level but also at the international one. Dear Audience, Basel II Standards are the most important supervisory initiatives of this decade, and they will have a considerable impact on changing the conduct of risk management at all banks regardless of their size and location. The Standards aim at achieving a number of objectives, including ensuring the capital adequacy of the banking sector to encounter any latent risks and the assessment of banks' risk management systems so that the supervisory authorities could ensure that they are appropriate, in line with the risks that banks might encounter, and up to the best banking practices in the area of effective banking supervision.

No banker should tolerate charging excessive and hidden fees to unsuspecting customers and use these fees to excessively enrich themselves. No banker should tolerate unethical and illegal behaviour of a fellow colleague. No banker should tolerate any wrong doing or misconduct. The currency of bankers is not money but trust. Loss of trust is calamitous for the profession. 1/4  BIS central bankers' speeches  For us in Malaysia, our approach to ensure professionalism, trust and confidence rests upon a two-pronged strategy. The first is to create a system that upholds the values of honesty and integrity. Professional organisations such as AICB play a crucial role in this, with the Chartered Banker accreditation as a tool. The syllabus for this qualification places importance on ethics and professional standards. The requirement for fresh graduates to undergo an induction course on ethics is also a good starting point. There are other initiatives in store, we will step up efforts to ensure that the roles, responsibilities and accountabilities of leaders of financial institutions are clear and transparent. To this end, consultations with the industry will be conducted this year on proposals to sharpen accountability of individuals holding senior roles. The second complementary strategy is to create an enabling environment to empower financial institutions to make informed and sound hiring decisions. Effective 1 July 2018, it will be a requirement for financial institutions to screen all new hires, except those performing ancillary functions. This includes their employment history and criminal records.