samchain/econo-pairs-v1 huggingface dataset:
The MA incentivises insurers to seek out assets which have the highest return relative to the regulatory benchmark used to estimate future losses – these may or may not be productive or indeed UK assets. To give just one example, one of the most MA-generative assets our team has come across so far is a 100-year bond issued by a Latin American country, which surely has nothing to do with the government’s investment objectives for the UK. It’s simply an asset that happens to pay a high return relative to the rating it has managed to secure. Indeed, looking at insurers’ assets six years into the regime it is notable that the MA currently tilts incentives towards assets like ground rents – and that infrastructure fares relatively less well (see Chart A). Now to help support the right kind of investment, we propose important changes to speed up approval processes and widen the range of assets in which insurers can invest – I think there is broad support for those changes, and this may prove to be the part of the reform package which does most to promote investment through time. For example, we would like to allow a less constrained approach for assets which are expected to have future stable cashflows but which include some flexibility on the timings of those cashflows, such as investments with an initial construction phase. We think this will encourage industry to invest at an earlier stage in infrastructure projects.

Page 1  Solvency II: Striking the balance − speech by Sam Woods Given at Bank of England Webinar  Page 2  Published on 08 July 2022  Sam Woods talks about reforms to the regulation of insurance providers. He says the key aims of the reforms are to make the insurance sector work better for the UK economy and to safeguard policyholders. Speech Introduction The UK’s post-Brexit review of insurance regulation is entering a critical phase, with important decisions shortly to come for us, government and Parliament. With that in mind I thought it would be useful to highlight some of the key points from the Prudential Regulation Authority’s (PRA’s) perspective, while HM Treasury’s current consultation on Solvency II is ongoing, with a particular focus on the main point of contention between us and parts of the industry. My main message is this. Following Brexit we have a once-in-a-generation opportunity to reshape insurance regulation to work better for the UK. We can do this while loosening parts of the regime which were over-calibrated by the EU and making it easier for insurers to invest in a wider range of assets, but we also need to strengthen it in one area in order to avoid risks to the millions of current and future pensioners who rely on insurers for their retirement income. The combined effect of these changes should support the government’s objectives for competitiveness, growth and investment in the economy.
The qualitative implications would be little changed if other mark-up shocks were used instead. 𝜃𝜋 and 𝜃𝑦 show the weights placed on the deviation of inflation from target and the output gap in the Taylor rule, respectively. The Taylor rule also contains a lagged interest rate parameter to allow for interest rate smoothing. Charts here show the deviation of annual CPI inflation, output gap and the policy rate relative to a baseline where no shock occurred. 35  All speeches are available online at www.bankofengland.co.uk/speeches  35  Chart 14: Variability of inflation and output gap with and without mark-up shocks  Sources: Bank calculations. Notes: Chart shows the model-based variance of the inflation and the output gap for different calibrations of the Taylor rule, which alter the weight placed by the policymaker on deviations of inflation from target and output from potential. When moving from the baseline to the red markers, the various price mark-up shocks in the model are turned off. Chart 15: Variability of inflation and policy rate with and without mark-up shocks  Sources: Bank calculations. Notes: Chart shows the model-based variance of the inflation and the output gap for different calibrations of the Taylor rule, which alter the weight placed by the policymaker on deviations of inflation from target and output from potential. When moving from the baseline to the red markers, the various price mark-up shocks in the model are turned off.

The relatively low participation of takaful operators in international business, is however set to change with the recently announced MIFC initiatives, to allow qualified local and foreign financial institutions to conduct the full range of Islamic banking and takaful businesses in foreign currencies. It was also announced in the recent budget that attractive tax packages in terms of 10 year tax holiday are given to all takaful operators on their international currencies takaful business. In addition, MIFC accords greater operational flexibility for the Islamic financial institutions to conduct Islamic financial services in foreign currencies from anywhere in Malaysia. To ensure effective delivery system under MIFC initiatives, the MIFC Executive Committee, with Bank Negara Malaysia as secretariat, has been set up to provide directions and drive implementation of policies and strategies to foster effectiveness and efficiency of the MIFC. Well capitalised and reputable financial institutions that possess sound track record are encouraged to set up international takaful operation in Malaysia to conduct out-out takaful and retakaful businesses. The Malaysian takaful operators should seize the opportunity to venture into out-out takaful business establishing an international currency business unit to offer takaful business in international currencies. Ladies and gentlemen, In tandem with the rapid changes and expansion of the Islamic financial sector, it is vital for us to have a strong, continuous support in talent management and development. Towards this end, several initiatives in regards to sustaining and improving the level of expertise in the industry have been put in place.
This prevented him from steering the ship towards the sirens himself, and the crew were prevented from hearing him when he would later succumb to temptation and order the ship to be steered towards the sirens’ island. The story cannot be directly transferred to economic management, but the concept of “tying oneself to the mast” is used in promoting mechanisms that prevent short-term objectives from taking precedence over long-term objectives. Precluding the possibility of breaking a promise makes the promise more credible. Ensuring accountability for promises made through reporting and review can be a mechanism that ties us to the mast. A central bank’s most important task is to ensure a stable value of money. The value of money relies on responsible economic policies. For a central bank to be able to keep its word and deliver a stable value of money, it must have the backing of the political authorities. Otherwise, the central bank will not be able to keep its word. In the long term, the instruments available to the central bank allow it to deliver only the promise of a stable value of money. Earlier, this promise was kept by regulating the amount of money issued. Today, the instrument is the interest rate. The central bank cannot steer real wages, the labour supply, employment or the level of unemployment in the long term. But it can contribute to curbing short-term cyclical fluctuations if price stability is firmly anchored. Throughout history central banks have attempted to bind themselves to the mast in different ways.

The promise made under an inflation targeting regime is easier to keep when the economy is exposed to major shocks than the promise made under a parity system. 33 From 1986 to the beginning of the 1990s, Norway pursued a fixed exchange rate against European currencies without devaluations. In practice, this meant that Norway also had to pursue the same inflation goal as those countries. In autumn 1992, the fixed exchange rate regime collapsed. Even if we no longer operated a formal fixed exchange rate system, in the following years monetary policy was still oriented towards maintaining a stable exchange rate at all times. 34 However, the currency turbulence in the latter part of summer 1998 demonstrated that like other central banks, Norges Bank could not make good on the promise to maintain a stable exchange rate from hour to hour, day to day or week to week. Domestic economic considerations indicated that there were limits to how high the interest rate could be set in support of the krone exchange rate. An excessively high interest rate would not have been credible since it would have resulted in an excessively sharp downswing in domestic economic activity. In August 1998, Norges Bank shifted policy to setting the interest rate with a view to keeping inflation low and stable over time. 35 The shift in monetary policy was explained in articles and statements in early winter 1999.
Asia will grow, and the demand for quality in finance will grow. As global financial institutions restructure, and as technology transforms jobs in the next decade and beyond, we must ensure we are well prepared with the skills, depth of expertise and innovative capabilities to stay relevant and competitive. We have to continue to build globally competitive teams in Singapore, by proactively developing our Singaporean core while remaining open to foreign professionals with needed specialised experience and skill-sets. Skills that make the financial sector of tomorrow In short, we can excel in finance and build rewarding careers for Singaporeans. We move ahead from a solid base: a well-reputed financial centre with extensive links to the world, and a competent and skilled workforce. As we look to the future, we must develop capabilities in five areas, which I will touch on briefly in turn: (I)  Deep Functional Expertise;  (II)  Cross-Functional Capability;  (III)  Regional Knowledge and Experience;  (IV)  Technological Skills and Adaptability; and  (V)  Leadership  (I)  Deep functional expertise  First, we need to deepen functional expertise, across all areas of finance – in banking, capital markets and insurance. We are seeing a greater demand for specialised skills, for example in structured trade finance, reinsurance and specialty insurance. Financial institutions need strong expertise in risk management and compliance. In wealth management, there is demand for more sophisticated investment strategies that better hedge risks, and for being able to execute these strategies efficiently.

I would like to take this opportunity to acknowledge the role of the Asian Institute of Finance (AIF). The idea of FSPB culminated from engagements initiated by AIF with the industry which was followed by a process of developing the conceptual framework to reflect the shared aspirations of the industry and the Board of AIF that has supported the establishment of FSPB. I would also like to take this opportunity to highlight the participative role that the financial services industry would need to have in enabling FSPB to meet its objectives. The value of the establishment of FSPB lies in the role taken to develop professional and ethical standards that are relevant and practical, which could, subsequently, be accepted and adopted by the global financial services industry as a gold standard. With this, let me congratulate the Board of FSPB with this launch. In taking this important initiative forward it is necessary for FSPB to reflect the business needs of the financial services industry whilst balancing the interests of the community that the industry serves. Bank Negara Malaysia and the Securities Commission Malaysia will continue to be committed in supporting this important agenda of the financial services industry. 2  BIS central bankers’ speeches
Secondly, FOMCA can serve as a medium to inspire the thinking and outlook of various nongovernmental consumer groups – in order to place higher importance for financial education in their agenda. Engagements with associations for women, parents, youths, athletes and even artistes can help convey financial education concerns and realign mind-sets at the organisational level. Financial education is also a two-way process. For it to be impactful, consumers themselves need to play a role and take charge of their financial well-being. Rather than ‘living for today’, the culture of ‘living within means’ should take centre stage in our society. This paradigm shift is critical to generate a financially responsible society. The third and final thrust is “Commitment”. Let me quote Abraham Lincoln, “Commitment is what transfers a promise into reality”. Unless full commitment is made, elevating literacy levels and achieving financial well-being will remain as only hopes and dreams of Malaysians. The FE Network is committed to play a leadership role to achieve the targeted outcomes of our national strategy. I urge other stakeholders to join us and to embark on this journey together. Commitment from various agencies at different levels is pertinent, especially in areas where they have the greatest strength. Financial education initiatives under the national strategy will be inclusive, be evaluated and enhanced over time to ensure that they remain relevant and impactful. To this end, I encourage the agencies represented here today to identify the levers that contribute to better financial decisions by consumers in different circumstances through consumer behavioural studies.

According to the Police, the number of financial scams reported in Malaysia has risen to an alarming 1,883 cases between 2015 up to the 1st quarter of 2017, accumulating a total loss of RM379 million. This suggests that greed and ignorance can give way to rational financial decisions for many victims. Based on these observations, a lot more is left to be desired on the state of financial literacy to realise financial well-being for Malaysians. It is acknowledged that improving financial literacy is an intricate and long term journey. Through continuous and effective financial education, consumers would be able to improve their understanding of financial products and services, and develop skills and confidence to make informed financial decisions in their daily life. Financial education would encourage consumers to better manage their finances, plan for the future and manage risks associated to financial matters. While we agree that financial education plays an important role in elevating financial literacy, engaging in financial education alone is insufficient. It is equally important that the acquired knowledge and skills are put into practice and lead to a positive change in behaviour towards a healthy financial lifestyle. To this effect, initiatives to improve financial literacy must be implemented holistically. The ultimate aim is to promote sustainable behavioural changes at all life stages.
Irma Rosenberg: Monetary policy and the conditions for growth Speech by Ms Irma Rosenberg, Deputy Governor of the Sveriges Riksbank, at an economics conference, Klippan (in the south of Sweden), 1 November 2004. *  *  *  Let me begin by thanking you for the invitation to come here and speak. The subject for this year’s conference is growth. This is a subject close to the hearts of economists and one that often crops up in debate. What factors determine economic growth in the long term, and what can be done to increase it? I intend to approach this question from a central bank perspective. Is it possible, for instance, for the Riksbank to use monetary policy to raise the level of long-term growth? Are there means of affecting growth? Long-term, or potential, growth is a many-faceted concept and I intend to begin by speaking about the prevailing theory with regard to links to monetary policy. I shall then go into more detail on the underlying determining factors behind the long-term growth rate and briefly describe trends in recent years. I shall also speculate on possible future developments and what can be done to improve long-term growth prospects. Long-term growth and monetary policy Let us start with Figure 1, where the blue line shows developments in real GDP in Sweden during the period 1950 to 2003. One can see that there has been a clear trend increase during these years.

The Riksbank has chosen not to specify any exact figure for potential growth, but instead has decided to state a range of between 2 and 2.5 per cent. We have not considered it possible to be more precise than this, given the difficulties in measuring growth, etc. If we look ahead, it is reasonable to believe that growth will in future be somewhere within this interval, although where depends on how far ahead one looks. Over the coming years, growth will probably be closer to 2.5 per cent than to 2 per cent. In the longer perspective, when the demographic effects on the labour supply are greater, it is reasonable to believe in a figure closer to 2 per cent than 2.5 per cent. How much closer depends to a great extent on how much the labour supply can be stimulated during the period. Thank you! Figure 1.GDP and an example of potential GDP 1950-2003, SEK million 2300000  2300000  GDP  2100000  2100000  Potential GDP (example)  1900000  1900000  700000  500000  500000 2000  700000 1995  900000  1990  900000  1985  1100000  1980  1100000  1975  1300000  1970  1300000  1965  1500000  1960  1500000  1955  1700000  1950  1700000  Sources: Statistics Sweden and the Riksbank  8  BIS Review 64/2004  Figure 2.
Action 3: Setting the system to manage confidentiality We all know that consolidation involves mergers and acquisitions of financial entities, which require clear understanding about the partnering entity. Since financial information of individual entities is highly sensitive and confidential, the Central Bank designed a set of legal documents for such entities to maintain the confidentiality of the information. Accordingly, several legal documents pertaining to the consolidation plan were drafted. These legal documents were then approved by the Monetary Board and were subsequently put in use in proceeding with the consolidation plan. Action 4: Communication policy and public awareness programmes The success of the consolidation programme would largely depend on the public confidence in the same. Since the media plays a very active role today, we decided to issue press releases on a monthly basis commencing January 2014 to update all stakeholders involved in the consolidation process as well as the general public. In addition, the Governor, the Consolidation Unit and the senior officials of the Central Bank participated at many knowledge sharing events and conducted presentations on the subject of consolidation. Outcome of phase I Under the first phase, all domestic banks and NBFIs submitted their initial consolidation plans as agreed by end March 2014. In addition, all foreign banks too submitted their respective medium-term business expansion plans within the stipulated timeframe.

The credit for this clear paradigm shift, elevating our economy into new heights, goes to our development strategy articulated under the “Mahinda Chintana: Vision for the Future”, which was first introduced in 2005 and then redesigned in 2010, aligning strategies to overcome the challenges in the post-conflict economy. Our dream of transforming Sri Lanka into the “Wonder of Asia” is an important topic that is being broadly discussed among the academia, international agencies and many Heads of Governments. Ladies and gentlemen, I hope most of you can remember our 60th Anniversary Oration Series held in 2010. There, one of the eminent speakers was Dr. Ngozi Okongo-Iweala, then Managing Director of the World Bank and former Finance Minister of Nigeria. She spoke on the topic “Becoming the Wonder of Asia: Accelerating the Inclusive Growth in Sri Lanka”. She had carefully studied the development plan of the Government, the “Mahinda Chintana: Vision for the Future” released in 2010, prepared just one year after the ending of the civil conflict. She was highly impressed about our development plan and explained the actions needed to make our vision a reality. She said, I quote, “It’s bold and ambitious. It’s good to be ambitious. It is the right time for Sri Lanka to think big”. She further said, “The vision is very clear and reminds us of a Japanese proverb ‘A vision without action is a day dream; action without a vision is a nightmare’”.
For risk management systems, this includes using stress scenarios to place appropriate limits on concentration and risk exposures. The use of value at risk (VAR) models that  BIS central bankers’ speeches  3  emphasize recent experience is clearly inadequate. In the case of compensation practices, firms and regulators need to continue to look for ways to tie compensation to the profitability of the firm over the cycle and rather than over shorter time frames, such as the calendar year, and making sure that compensation is appropriately adjusted for the risks that were taken. There also needs to be a framework for ensuring that collateral haircuts are high enough to provide meaningful protection in bad states of the world even if this means keeping collateral margins higher during the good times. Making progress on this front would help limit the propensity for leverage to increase when loss experience is low and to provide greater protection when volatility climbs and market conditions become less buoyant. In general, we need to continue to look to implement changes in systems and practices that will help dampen the pro-cyclicality of the system, and temper the amplitude of both booms and busts. Attention to the incentives created by infrastructure design is also important. Poor infrastructure design can serve to mask and obscure participants’ understanding of the credit and liquidity risks that they are exposed to. A good example of this is the triparty repo market, which plays a central role in providing funding on a collateralized basis.

Both its independence and ability to fulfill its mandate are guaranteed even in very adverse economic circumstances. While it should not lead to complacency and negligence, the existence of such buffers should alleviate any concerns about the potential risks that the expansion of the balance sheet may entail. Finally, huge Central Banks’ balance sheets may be seen as influencing the allocation of resources, or effecting implicit fiscal transfers, an issue of special sensitivity inside the euro area. To discuss this question, it is useful to refer to the famous Musgrave classification of public policies between three purposes: allocation, distribution and stabilization. There is no doubt that monetary policy is only and exclusively concerned with stabilization – and a very focused part of it : price stability. No monetary policy action should be taken for any other purpose. So to the extent that “unconventional” tools are implemented, there should be no ambiguity as to their close link with the Central Bank’s mandate of price stability. I believe that has been the case in all major countries and certainly so in the Eurozone. 4. How to mitigate unintended consequences? The truth is, however, that the real world does not always fit perfectly with the beauty of Musgrave’s classification. Some public policies may aim at several objectives. Others may inadvertently, have unintended side effects. All public policies with no exception, health, energy, infrastructures, unwillingly affect some citizens more than others. Those side effects should be minimized, but cannot always be totally avoided.