samchain/econo-pairs-v1 huggingface dataset:
Perhaps, from everyone’s point of view, the going was too good to obstruct; the expansion was too exciting to discourage; the resulting luxuries and wealth were too wonderful to hold back. No wonder therefore, that the financial world continued to happily tootle along this unrealistic path, at break-neck speed. Logically, the accident had to happen, and happen it did, and what an accident that was! A crash landing that was sudden and unbelievably disastrous, not only to the developed world, but to all economies of the globe! Mr. Chairman, the events of the recent past clearly suggest to us that the world’s financial and economic communities have, albeit unintentionally, placed the entire civilized world’s systems and structures at intense risk, and perhaps even endangered the gains of civilization built over several centuries. However, to the eternal credit of the world’s political and economic leaders, we could be relieved that we have been able to face that shock and  BIS Review 106/2009  1  emerge out of it, bruised and battered no doubt, but fortunately, with our systems still reasonably intact. Nevertheless, the major down-turn suffered by the world economy as a result of these shocks is yet to be fully overcome. The tight liquidity crunch that is suffocating our credit markets; the stubborn toxic assets that won’t go away; the suspicions with which banking and financial institutions view each other, are yet continuing, although there are signs of some abatement.

Specifically, the Review identifies: –  Market structures which presented specific opportunities for abuse, such as poor benchmark design, and which more generally were vulnerable to conflicts of interest, collusion, and thin markets;  –  Standards of acceptable market practice that were usually poorly understood, often ignored and always lacked teeth;  –  Firms’ systems of internal governance and control that were incapable of asserting the interests of firms – let alone the wider market – over those of close-knit trading staff;  –  Individual incentives that were skewed, with pay packages stressing short-term returns overlong-term value and good conduct;  –  And personal accountability that was lacking, with a culture of impunity developing in parts of the market. All these factors contributed to an ethical drift. Unethical behaviour went unchecked, proliferated and eventually became the norm. Too many participants neither felt responsible for the system nor recognised the full impact of their actions. For too many, the City stopped at its gates, though its influence extended far beyond. A good start has been made in addressing these deficiencies. The design and regulation of key FICC benchmarks has been overhauled and transparency in FICC markets is being enhanced. Compensation rules have, in the main, been transformed to align better risk and reward. From next year, senior managers of banks and insurers will be held directly accountable for failures in their areas of responsibility. And the best firms are improving the “tone from the top”, launching conduct training and revamping control structures.
I also wish to register our special welcome to all participants and for the 60 international participants from 14 countries, including our special guest from CAMLMAC, i.e., the Financial Intelligence Unit of the People’s Republic of China. The presence of renowned experts amongst us today from domestic and international institutions in this Conference is testimony to the fact that the areas that we will be discussing during the next two days are not only domestic issues, but universal ones as well. These issues are indeed global issues faced by financial institutions worldwide. On this note, I wish to thank the speakers and moderators who have made their way to Kuala Lumpur, many of whom are from half-way around the world. It is indeed an honour for us to have all of you here to speak at this Conference. The theme for the conference, i.e., “Strengthening Governance to Derive Value” is significantly relevant and timely. The increasing sophistication and the broadening of the reach and network of money laundering and terrorism financing (or ML/TF) globally have elevated the ML/TF threat to the next level. This calls for greater strategic action, more intensified efforts, and better coordination among key stakeholders, both domestically and internationally, to address this concern. Strong governance among the stakeholders, however, remains the key and integral component within the national AML/CFT framework, to prevent the escalation of ML/TF risks. More importantly, strong governance in financial institutions is and will remain a critical safeguard and is pertinent in the overall prevention of ML/TF activities.

The French insurance market has also enjoyed strong growth, with revenue up by almost 3% [2.7% and 3.1% in non-life and life insurance, respectively]. In response to the legitimate concerns that many of you have raised, I have chosen to focus on two main issues: the challenge of low interest rates (I) and our ambition for the Solvency II review (II). *** I. The challenge of low interest rates  A. The economic situation compels us to keep interest rates low I recently marked out the limits that I believe should be set for monetary policy. I thus feel all the more obliged to clarify why the low interest rates are needed, why they are going to continue, and how we have to adapt to them together. I hear your concerns with regard to low interest rates, and I fully understand them. However, it is important not to lose sight of the long-term perspective: low interest rates are not only driven by monetary policy – they are primarily the consequence of long-term structural trends, notably resulting from the  Page 2 of 6  change in the balance between a high level of savings and a fall in investment linked to an ageing population and the slowdown in productivity. The low interest rates thus reflect the historic low level of what economists refer to as the real natural rate of interest, R*, which has declined by around 2 percentage points over the last 15 years in both the euro area and the United States.
We will most likely still be producing petroleum in 40 years’ time, but oil production has declined in recent years after peaking in 2000. Gas production is rising, but not at a pace sufficient to sustain overall petroleum production. The idea of an oil fund was raised in the beginning of the 1980s 3. It was intended to be a buffer fund to smooth variations in government oil revenues. The Act relating to the Government Petroleum Fund was adopted in 1990 in the midst of the deepest economic downturn in Norway since the Second World War. Those at the Ministry of Finance working on the law at the time were probably in doubt as to whether any savings would ever be accumulated in the fund. And initially the fund structure was only an exercise in accounting. Government petroleum revenues were deposited in the fund, but the entire amount was transferred back to the central government budget to cover some of the non-oil deficit. But the Norwegian economy rebounded. See chart “First deposit in the fund” at the end of the speech. It took a generation from the discovery of the first oil field in the North Sea until it became possible for the government to set aside a portion of the economic rent. The first net transfer to the fund of close to NOK 2 billion was made in 1996.

While there were no big surprises for the CPIEFE regarding expectations in March, headline inflation figures were below projections, affected by some temporary factors which are expected to reverse in the coming months. On one hand, the decline in international fuel prices, along with an appreciation of the peso in the first four months of the year, reflected in lower energy inflation. The recent depreciation of the peso will help to reverse this situation soon. Electric power has also helped to keep inflation low, but this effect is reversible once the impact of refunds implemented in April and May fades away and the forthcoming entry into force of new price regulation. In addition, the low basis for comparison of June 2012 will mean that CPI inflation will enter the tolerance range in the coming months. With respect to the CPI measurement, and as I pointed out on when I presented the last Monetary Policy Report to this Commission, I want to reiterate that the measurement of this index and other statistics, poses many methodological and practical challenges that must be dealt with in a continuous and transparent fashion. The improvements announced by the National Statistics Institute to the measurement methodology of certain specific products in the basket, as well as other improvements to be made on the occasion of the regular review of the household basket, are most welcome.
The reliability of the mark-to-model approach, however, relies heavily on assumptions and on the availability of reliable data. Data on tail events (events that occur rarely, but have major repercussions) would be particularly beneficial for the calibration of models. There is, however, by definition hardly any data on such events. This begs the question as to whether the dangers associated with tail events are being correctly assessed using the available models, or whether model risks pose a problem. Thirdly, it is unclear whether the finance industry’s capital buffer – in the form of equity capital – is adequate to weather particularly bad storms. Like airbags in a car, equity capital is only rarely called into action. Yet, the more serious the accident, the more generously the bags should be filled with air. In the current economic environment, many market participants are highly leveraged, in other words, they have a low ratio of debt to equity capital. Low levels of equity capital can be compared to a thin airbag – they only protect against moderate shocks. It would only take a loss of 2–3% of the balance sheet total, for instance, for Swiss big banks to use up all their equity capital. Of course, a loss of this magnitude is highly unlikely. After all, the Swiss big banks are well-diversified, have sophisticated risk management models in place and have high risk-weighted capital ratios. This notwithstanding, such a loss cannot be ruled out.

Philipp Hildebrand: Current state of the financial system in Switzerland Introductory remarks by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the half-yearly media news conference, Berne, 14 June 2007. *  *  *  I would like to use today’s publication of our Financial Stability Report as an opportunity to share some thoughts with you on the current situation of the financial system. I will start with the most important message – the Swiss banking sector and the financial system in general are in very good shape at the moment. Based on our analysis, the outlook for the future is also essentially positive. As stated in our report, the favourable situation in the Swiss banking sector comes as no real surprise. Developments in the economy and the financial markets in recent years have been very positive, both in Switzerland and abroad. Although economic growth has been strong, it has had practically no impact on inflation to date. The credit standing of borrowers remained high. In addition, despite repeated, significant short-term price corrections – as was the case last week – the stock markets rose sharply overall in an environment of low volatility. How can these positive developments be explained? And are there any risks involved – in particular for the stability of the Swiss financial sector? The good performance is not solely attributable to the favourable economic situation. Structural aspects have also played a role.
The proposed transfer fell through – apparently the Directors of the Bank viewed the Canadian as ‘too Keynesian’. What that tells us about his views on monetary activism I do not know. But it is perhaps worth noting that Towers’ first Deputy Governor was a Mr. Osborne, who agreed to move to Canada from the Bank of England for a spell of ‘up to 5 years’. Sadly, the partnership between the Canadian Governor and Mr. Osborne lasted only three years, before the latter departed. But, Chancellor, remember that history doesn’t always repeat itself. In Britain, and especially in the City, we have always welcomed talent from around the world in academic, business, artistic and sporting life. Why should central banking be different? George, you are to be congratulated on Mark’s appointment. I shall of course be sad to leave. But Governors come and Governors go – it is institutions, and the ideas they embody, that matter more. I leave behind a strong, independent, muchchanged Bank now focused on its two main responsibilities. The lessons of recent years have been learnt and it is up to us all to remember them. The test of our monetary arrangements is to see them work successfully under new leadership, none of whom were present at the creation. No doubt some things will change. No doubt some things need to change. After all one does not change an institution in order to set it in concrete. A successful institution, just like the City as a whole, always adapts to new circumstances.

But we must also ensure that our financial system is truly reformed in a way that reflects the lessons of the financial crisis. At this Dinner six years ago, before the crisis began, I said, “Excessive leverage is the common theme of many financial crises of the past. Are we really so much cleverer than the financiers of the past?” We are all much wiser now. And this country can claim to have been in the vanguard in learning lessons. Much has been done. But we cannot be complacent. As the memories of the crisis fade, and those who saw it at first hand retire, it is vital that the ‘audacity of pessimism’ is not lost. We must deal once and for all with the problem of financial institutions that are too big, or too important, to fail. Some progress has been made. When the crisis hit, we in the UK had neither an effective deposit insurance scheme nor a resolution framework to deal with failing banks. Now we have both. But there is unfinished business. Although the UK is leading the way in the development of agreements among regulators worldwide as to how the largest banks could be resolved, managing cross-border resolutions is still fraught with difficulty. We also need to implement the proposals of the Independent Commission on Banking as soon as possible, including the ‘ring-fence’ to separate commercial from investment banking, and the leverage ratio.
Ardian Fullani: Recent economic and monetary developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the press conference on the Monetary Policy Decision of the Bank of Albania Supervisory Council, Tirana, 29 June 2011. *  *  *  Today, on 29 June 2011, the Supervisory Council of the Bank of Albania reviewed and approved the monthly Monetary Policy Report. Based on an analysis of Albania’s latest economic and financial developments and following discussions on their performance outlook, the Supervisory Council of the Bank of Albania decided to leave the key interest rate unchanged at 5.25%. The Supervisory Council holds that the actual monetary conditions are appropriate for meeting the inflation target and for continuing to stimulate the economic activity. Let me now proceed with an overview of economic developments and main issues discussed at today’s meeting of the Supervisory Council. *** Annual inflation pointed to 4.2% in May, remaining close to preceding months levels. Under higher foreign prices pressure, the prices of “processed foods” and “non-food consumer goods”, including oil, were the main contributors to inflation rates. In the meantime, the seasonal effect of increased domestic supply of fruits and vegetables is reflected in a lower contribution of the “unprocessed food” to inflation. The rise of some administered prices and the effect of higher excise tax rates for some goods continued to provide a constant, but positive, contribution to annual inflation.

The ASEAN+3 member countries have already taken steps to multilateralise the Chiang Mai Initiative towards a more advanced and robust framework for the effective pooling and utilisation of liquidity support in the region. The bilateral relationship between Malaysia and Korea Malaysia’s economic relationship with Korea is very much part of this integration process in Asia. The bilateral trade and investment relationships between Korea and Malaysia over the recent years has continued to increase with trade now averaging RM45 billion per annum. Both countries have already benefited from the growing production networks within the region as well as from the numerous trade and investment opportunities from an increasingly open and liberal business environment. Investment linkages, though still relatively modest, have been on an upward trend since 2006. Korean investment in Malaysia is predominantly in the manufacturing sector, particularly the electrical and electronics sub-sector. The opportunity for further co-operation in this area is vast. Korea, as a nation known for its knowledge-based and innovative capabilities, can leverage on the liberal investment climate offered by Malaysia to diversify into new growth areas such as green technology and biotechnology. In the area of finance, Malaysia now has a well-developed financial system, with deep capital markets including a comprehensive system of Islamic finance. The Malaysian bond market is the fourth largest in Asia in terms of volume after Japan, China and Korea. More than 55% of the outstanding bonds are Shariah-compliant and the sukuk market is the largest in the world.
For the renminbi to be considered an option for both exporters and importers to settle their trade obligations in addition to the major currencies. There needs to be an efficient and cost-competitive source of financing in renminbi and a diversified investment avenue. In particular, it is recognised that discernible progress in three areas are needed to be put in place at an early stage to support the use of renminbi, that is, to improve access to renminbi liquidity, to have the supporting infrastructure and framework and to provide information on the use of the renminbi for trade and productive investment transactions. More than three years ago, in early 2009, the Bank entered into a Currency Swap Arrangement (CSA) Agreement with the People’s Bank of China, which was renewed early this year with an expanded amount of Renminbi 180 billion. The objective is to ensure a ready supply of renminbi in the domestic financial markets to meet the demand by businesses. An important piece of the infrastructure that was put in place in 2010 was the provision of direct quotes between renminbi and ringgit in the interbank foreign exchange market on the China Foreign Exchange Trade System (CFETS). Efforts were also made to enhance the transparency in the exchange rate between renminbi and ringgit for the trade-related settlement transactions. In March this year, the real time gross settlement system in Malaysia was expanded to include settlement services in renminbi.

In the UK, the Financial Policy and Prudential Regulation Committees of the Bank of England annually test the core banking system against a very severe but plausible stress – a scenario in which banks have to withstand a combination of ‘tail risk’ domestic and global economic and financial market shocks.20 The scenario for the 2019 test, announced this week, includes a deep recession in the UK with GDP falling by 4.7 % from peak to trough, house price falls of 33%, falls in commercial real estate prices of 41%, recessions in the Euro Area, the US, and China and market stresses including a 41% fall in equity prices and a nearly 400bps widening of investment grade spreads.21 Last year, alongside the annual stress test, we also developed a worst case, disorderly Brexit economic scenario to give us confidence that the core banking system could withstand the losses and stresses that such a scenario would generate. We have also tackled the features of the financial system that amplified and spread the stress of the original losses. The systemic banks at the heart of the system have been capitalised to a higher standard, not because they are more risky but because of the impact on the rest of the system if they fail. In addition resolution regimes are being implemented to enable banks to fail safely, without disrupting the critical economic functions they provide – and without the taxpayer having to cover the losses.
We are particularly focused on your feedback in areas where our proposals will impact those products and services that are central to the mutual business model, like both owner occupied and buy to let mortgages. The consultation closed in late March. We are considering all the feedback received which will inform our final policies and approach to implementation, which we will look to communicate in due course. Strong and Simple Alongside that process and aligned with my earlier comments about tailoring rules to UK circumstances where appropriate, we are investing in our Strong and Simple project. Through this we will create a simplified prudential framework for domestically focused nonsystemic banks and building societies that is, when compared to the standards that apply today, more proportionate, easier to understand and less costly to implement. But importantly that simplified framework also has to be strong, by which I mean maintaining overall resilience which is equivalent to what we have today. Events in the global banking sector in recent months have clearly demonstrated why the ‘simple’ needs to be accompanied by the ‘strong’. As the target population of firms for the first layer of the framework is smaller domestic firms providing savings and lending products in the UK, many building societies are likely to be eligible to take advantage of the simplifications. Our Basel 3.1 consultation paper set out some proposed revisions to the scope of the first layer, including to address feedback on the definition of domestic exposures.

This course will provide first and foremost, an overview of the international standards relating to AML/CFT supervision matters, operational aspects of the supervision work by incorporating publicly available case studies in the training modules, technical aspects of anti-money laundering and combating the financing of terrorism, supervision of banks, conduct of on-site and off-site bank supervision, and sharing of real bank cases on supervision on AML/CFT. BIS central bankers’ speeches  1  I do hope that aside from benefiting from the course, participants will make full use of these forums as a platform to network and exchange views on key AML/CFT supervisory issues, collaborate, compare practices and share relevant information. On that note, I would like to once again thank all of you here today for attending this workshop and for the speakers, Mr Stuart Yikona, Ms. Pramita Moni Sengupta, Mr. Mehmet Kerse, Ms. Desiree Ann Chereebin and Ms Leonora Emini who are willing to share your experiences for the collective benefits of everyone here attending the workshop. Our appreciation again to the Government of Canada for the support for this programme. I wish all of you a successful and productive workshop ahead and please take the time to explore Kuala Lumpur and its surroundings. Thank you and have a pleasant and enriching day ahead. 2  BIS central bankers’ speeches