samchain/econo-pairs-v1 huggingface dataset:
In fact, investment in technology, in which process savings banks have played a notable part, is an additional and important mechanism for attaining greater efficiency. This is because technological development allows processes to be undertaken more easily, simultaneously eliminating certain timeand labour-intensive tasks so that operating cost cuts are achieved. In addition the capacity to process massive amounts of data efficiently in real time allows for better risk management and also for services better tailored to client needs. In line with the foregoing, appropriate human resources management will also be conducive to achieving greater efficiency. The importance of the role of human capital is beyond all doubt, and all the more so in the sector we are discussing today. BIS Review 31/2003  3  Business risk In terms of not changing the risk profile while trying to gain efficiency, business and operational risks deserve some attention. I have signalled before some of the specific features associated with savings banks. Ensuring the objective of efficiency also involves moderation to some extent in those activities and risks furthest removed from their nature and character. A latent danger arising when cutting costs to improve efficiency, is an increase in the level of operational risk. As I mentioned, efficiency improvements may only be understood as such when the risk profile remains unchanged. As you know, operational risk is increasingly under the scrutiny not only of supervisors but also of institutions.

First, the efficiency of a credit institution introduces an additional condition; the issue is not only to maximise output by minimising costs, but also not to alter the institution’s risk profile. Here, then we have three elements output, costs and risk. This idea factors in significant constraints and makes it necessary to focus on improved efficiency as a balanced process in which attention must be paid to a series of management elements that cannot be run down in cost-cutting drives. For example, no clear efficiency gain is achieved if it is done at the expense of increasing operational risk. Second, in the financial sector efficiency can be analysed from a dual perspective: from that of the system as a whole, a macro perspective, and from that of the individual institutions, a micro perspective. The financial system and intermediation I shall refer firstly to the financial system as a whole, which enables saving to be channelled from agents wishing to lend funds, because they have a surplus of them, to others who wish to borrow funds, since they are lacking financing. Adding to this important function performed by the financial system is that of allowing the transmission of risks to those who have a greater wish or capacity to assume it. This is especially important in an environment of uncertainty. An efficient financial system will enable a greater volume of funds to be channeled towards productive investment and therefore will help to boost economic growth and to achieve greater levels of well-being.
The roots of insurance lie in those with mutual interests coming together to share risks, and mutuals continue to play a valuable part within the insurance sector. The pandemic has highlighted the risks of protection gaps and mutuals can play an important role in providing specialist cover and operating in markets under-served by other firms, such as sickness benefits or professional liability cover for those in unique occupations, from bus drivers to vets. Protection from risk, and a stable supply of such protection, is an essential service for individuals’ and companies’ security. It is also vital for the wider economy, and particularly important in supporting recovery from the impact of the pandemic. Both recovery from the pandemic and the transition to net zero will drive substantial restructuring of the economy, though, for example, change in working and travel patterns. This restructuring will lead to a decline in some existing sectors, and growth in others, the emergence of wholly new sectors. New or growing enterprises need certain insurance products to operate, and others to take away risk that they cannot efficiently bear themselves. Any protection gap slows investment and thereby impairs recovery and transition. Therefore the ability to eliminate any protection gaps is a clear opportunity for the insurance sector. Both the risks and opportunities from the post-pandemic recovery and the transition to net zero must be an important factor in determining your longer-term strategies.

Charlotte Gerken: Adaptability and resilience in the mutuals sector Speech by Ms Charlotte Gerken, Executive Director of Insurance Supervision of the Bank of England, at the Association of Financial Mutuals Conference, London, 4 October 2021 * * * Good afternoon and thank you very much for the invitation to speak today. Colleagues who have attended the AFM conference previously have valued this opportunity to meet AFM members face to face and I have already enjoyed that privilege today. I can’t say how pleased I am now, not to be speaking to a camera dot on a laptop screen. Over the last 18 months, supervisory colleagues at the Prudential Regulation Authority (PRA) have been working closely with insurers as they addressed the financial, economic and operational aspects of the pandemic, and the human impact it has had on their own people, the staff they rely on in other organisations and their customers and members. We have seen the mutual sector demonstrating its adaptability and resilience, through moving many of its in-person processes online and by providing financial support to members, such as premium rebates and payment holidays, where appropriate. Through the challenges of Covid-19, the PRA has taken a proportionate approach to supervision of mutual and other firms, by delaying thematic reviews, scaling back reporting requirements and extending regulatory deadlines all in the interest of ensuring a greater degree of flexibility, and where possible support for firms, during challenging times.
So, even though the EU membership has acted as a catalyst for country-level real convergence, the development gaps across the regions of Romania have actually increased. Shortly after the EU accession, there was a surge in economic optimism, translating into an acceleration in economic growth, along with a credit and real estate boom. Despite the efforts of National Bank of Romania, which maintained a prudent policy stance, macroeconomic imbalances widened: the current account peaked in 2007 and remained in the double-digit territory in the next year. Unfortunately, fiscal policy poured more gas on the fire by switching to a strongly expansionary stance after EU accession. Thus, when the global financial crisis hit Romania in the fall of 2008, the country had already expended all the bullets in its fiscal policy magazine and was in the unenviable position of having the second largest structural general government imbalance (around 9 percent of GDP) after Greece. There was no choice but to embark on a process of painful fiscal consolidation that was one of the largest and least gradual in the EU. Having prudently built policy buffers in the run-up to the financial crisis, monetary policy was able to maintain a countercyclical stance, yet it could not preclude a large contraction in aggregate demand in 2009 and 2010. Nevertheless, the ensuing correction in macroeconomic disequilibria created the conditions for resilient GDP growth and the loss in output was made up for by the end of 2014. Currently, we are in our ninth year of consecutive economic growth.

Thus, now more-than-ever, macro-surveillance process, early warning models, stresstesting, ever more vigilant risk-based supervision, and strong internal risk management by financial institutions will be instruments crucial for safeguarding our financial stability. In closing this introduction, I am certain that this seminar will be extremely useful and provide an important opportunity for building a close network amongst supervisors in SEACEN, as well as for fostering a closer cooperation between regulators in our region and the US-OCC. So, without further ado, let me declare the second SEACEN-OCC Advanced Seminar on Quantitative Techniques for Macro Surveillance and Determining Resilience of the Banking Sector open, and wish you all every success in this seminar, as well as in your career, and have a pleasant stay in Thailand. Thank you. 2  BIS Review 98/2007
Jean-Pierre Landau: Some thoughts on securitization and financial turbulences Remarks by Mr Jean-Pierre Landau, Deputy Governor of the Bank of France, at the Paris EUROPLACE, Financial Forum, New York, 22 October 2007. *  *  *  There is a paradox in the current situation. However we measure it (by the level of spreads or volatility), the shock created in credit markets by losses on subprime loans is without precedent. And yet, the losses themselves, while significant and spectacular for some institutions, would not seem to pose a major risk to the health of the financial system. Most notable, the turbulences occurred in a very favorable macro economic environment. This disproportion between the cause and the effect points to some existing fragilities – that need to be addressed – in the securitized model of capital markets. There is no rush to take measures, even less regulate. But there is no room for complacency either. Rather, we need to come to a diagnosis and think of the desirable characteristics of a robust securitization model. The current model of securitization, as it has developed in the last decade, has two distinctive features: •  One we were aware of: an increasing complexity of instruments, which combine an extensive use of derivatives with customization to individual investors' needs. This has made valuation and risk assessment more difficult. •  One we rediscovered during the turmoil: the fragility of off-balance sheet structures and vehicles which underpinned securitization. Conduits, especially SIVs, were not built to absorb shocks.

But, as I said, now is the time to analyze and think. BIS Review 128/2007  3
The krona was put under strong pressure by investors who expected Sweden to devalue again soon and, in November 1992, the Riksbank was forced to give up its defence of the fixed exchange rate. New policy with emphasis on long-term anchors The consequences of the crisis emphasised, with all desired clarity, that the type of policy Sweden had pursued for a number of decades had reached the end of the road and needed to be fundamentally reshaped. Instead of defending a fixed exchange rate, the task of monetary policy from now on would be to keep inflation low and stable. For its part, fiscal policy would focus considerably more than previously on keeping public finances in good condition so as to maintain market confidence. Gradually, the new order was confirmed through changes in the fiscal and monetary policy frameworks. The price stability target, which, in practice, had been introduced in 1993 in the form of an inflation target, was written into law in 1999, at the same time as monetary policy decisions were delegated to an independent Executive Board. In fiscal policy, the budget process was changed so that it would be easier to gain control over expenditure developments, while public net lending would, on average, show a surplus. The purpose of the latter was, of course, largely to bring the rampant government debt under control and to restore confidence in public finances.

Sources: Swedish National Financial Management Authority, Swedish National Debt Office, Statistics Sweden and the Riksbank  16 [17]  Figure 3. Swedish public debt ratio low from an international perspective Public debt as percentage of GDP, 2020 300  300  250  250  200  200  150  150  100  100  50  50  0  0  Note. Maastricht debt for countries within the EU. Sources: Eurostat, IMF and the Riksbank  17 [17]
The ECB will provide the secretariat and analytical, statistical, administrative and logistical support to the ESRB. As the ESRB will start to operate from 1st January 2011, we are intensifying the work needed for the definition of the activities that will underpin the ESRB analysis. This includes several strands of work. First, we have started to identify the analytical tools and methodologies that will support the identification and surveillance of systemic risk. This is quite a challenge in itself, as this is a new field in which further research is needed. Second, the risk assessment analysis will have to be supported by adequate information, to be provided by central banks and by supervisory authorities. This will include information both at aggregate level and, when necessary, related to individual institutions. The latter will be gathered through the European Supervisory Authorities. In particular, the ESRB may request information from the ESAs in summary or collective form, such that individual financial institutions cannot be identified. The ESRB may also address a reasoned request to such Authorities to provide data that are not in summary or collective form when the latter are not sufficient. In fact, the establishment of a framework for efficient cooperation between the ESRB and the European Supervisory Authorities is of utmost importance for the successful pursuance of the tasks assigned to the ESRB. This is recognised by the legislation that provides a duty of cooperation and reciprocal exchange of information between the ESRB and the ESAs.

The reason why a strong wealth position does not necessarily provide a good protection is probably that a large part of the wealth mass is not very liquid and thus its use as a buffer in times of crisis is limited. This applies in particular if the crisis leads to a fall in housing prices. A high level of wealth is thus no guarantee for avoiding problems; the best strategy is of course to try to prevent a crisis from arising at all. It may of course be the case that we in Sweden really are different. But I am sceptical to this. I think it is very risky to rely on this being the case. Now that we have seen that the costs in many countries have been so high, I at least draw the conclusion that there is reason to try to reduce the risk that we may also find ourselves in this situation, even if it is not the most likely development. As I mentioned earlier, monetary policy is to a large extent about managing risk. I have not so far felt that the short-term gains of a slightly more expansionary policy are sufficient to compensate for the threat of losses further ahead in a really bad scenario.20 But, once again, it is a question of balance and things may change over time. The policy we have conducted has actually been expansionary and mainly concerned sending signals that developments give cause for concern.
In conclusion I would like to say that the integration of Crimea into the Russian financial and payment system became an important part of our job last year. We implemented accelerated transfer of settlements from hryvnias into rubles. Initially, in compliance with the law, we had to complete this process by 1 January 2015, but it became evident that such a long period of circulation of two currencies is unreasonable. As a result the transition was implemented in two months. As many as 530 branches of Russian banks have been opened on the territory of Crimea and are ready to offer their customers a complete range of services. Cash circulation has been arranged and the necessary amount of coins and banknotes has been delivered. A few words about internal changes in the Bank of Russia. In 2014, the organisational structure of the Bank of Russia underwent serious changes aimed at increasing our efficiency and optimising the workforce. The improvement of the Bank of Russia territorial structure initiated in 2014 was completed in January 2015. As many as 79 main branches and national banks were transformed into seven main branches with subordinated divisions. Due to the accession of the Republic of Crimea and 4  BIS central bankers’ speeches  the federal city of Sevastopol to the Russian Federation, in 2014 a Division for the Republic of Crimea and a Division for the City of Sevastopol were established.

Against this backdrop the ruble started to appreciate and the situation even allowed us to start replenishing our gold and foreign currency reserves. Now I will give you the details of our monetary policy in 2014. We have decided to grant the access to the main refinancing instruments to a wider range of banks (the so-called 3rd tier banks) and promptly extend the Lombard List. In making the Lombard List we abandoned the exclusive reliance on the international ratings agencies in order to reduce the dependence on them and make our own asset estimation. We are developing special purpose instruments to compensate for the so-called market failures and support lending in certain areas amid low availability of loans, high interest rates, and lack of long-term money. I am talking about four instruments – support of investment projects, small and medium-sized enterprises, military mortgages and non-commodity exports. The total of 290 billion rubles is currently allocated for these instruments. The special purpose instruments will be limited in volume in order to avoid distortions in monetary policy mechanisms. However, since we have introduced these instruments, they must prove effective. Currently, our main objective is to increase their efficiency. To summarise the results of the monetary policy we implemented last year, I would like to emphasise that, first, we acted in strict compliance with the functions assigned by the Constitution and the Central Bank Law, second, in the challenging conditions we tried to be flexible and to apply non-standard approaches, yet using only market mechanisms.
Acting through these channels, monetary policy helps to ensure that the downturn is not needlessly protracted and helps to reduce the risk that unemployment becomes entrenched at too high a level. Inflation is now above the inflation target, but we have always held the view that this has been a transitory consequence of the sharp krone depreciation in spring 2020. Low economic activity and high unemployment have a dampening effect on wage and price pressures, and we expect inflation to fall below the target in the coming year. An expansionary monetary policy stance contributes to normalising economic activity, which will in turn contribute to pushing up price and wage inflation further out. Last year we were concerned that a fall in house prices would amplify the economic downturn. The situation has since reversed. High house price inflation over the past year reflects low interest rates, but the Covid-19 pandemic itself has likely increased the willingness to spend money on housing. We are at home more and are less able to spend money at restaurants, on travel or on other experiences. A sharp rise in house prices tends to be followed by faster growth in household debt. This may lead to a build-up of financial imbalances, which in turn could amplify a future economic downturn. Weight is given to this consideration when making monetary policy trade-offs. As economic conditions normalise, it will be appropriate to raise the policy rate.

Finally, it is only the speculators that  4  BIS Review 40/2004  are fuelling the rise in prices. While they know that the price increases are exaggerated, they do not know when the situation will turn. The slightest signs of an imminent change lead to large-scale selloffs, and prices plunge. In well-developed markets, participants that judge the price increases to be excessive always have the possibility to make a profit by taking offsetting positions. Uncertainty over when the situation will turn, coupled with reward systems that encourage short-term gains, are likely to result in an insufficient number of investors taking offsetting positions. Financial accelerator effects most likely lead to a situation where rising asset prices, regardless of whether they are being driven by short-term investors, also affect the real economy and thus can contribute to overinvestment. As regards house prices, the risk of a purely speculatively driven rise ought to be lower. This is true especially of economies such as the Swedish one, where regulations make it very difficult to own and let houses and apartments for speculative purposes. Empirical studies also indicate that the risk propensity of investors and lenders appears to increase according as economic activity strengthens, while it decreases markedly during economic declines. So, when economic activity has been improving over a long period, investors appear to interpret this as meaning that growth will continue to rise at the same high rate, without taking account of the risk of a slowdown.
The high penetration rate affirms mobile phone networks as an increasingly popular channel for Malaysians to perform a plethora of activities beyond voice communication, encompassing all forms of digital communication, commerce, banking and payments. Indeed, payments via text messaging has the potential to grow in importance. With 25 million mobile phone subscribers in Malaysia, there are immense opportunities to leverage on mobile phones to accelerate the migration to electronic payments, to widen the reach and appeal of electronic payment services, to deliver innovative mobile payment products that offer speed, simplicity and convenience at minimal cost for the public, as well as to provide an efficient and cost-effective method of delivering financial services even in the remote areas. Also of significance is the high level of financial inclusion in Malaysia. With a population of 27 million, the banking system in Malaysia has 55 million deposit accounts indicating that a high percentage of the population have deposit accounts with the banking system. This is confirmed by a survey of a sample of 5,000 in 2003 that indicated 97% of those surveyed have a bank account. The financialisation of savings is also confirmed by the high percentage of deposits to GDP at 152%. The high percentage of mobile phone subscriber and the high rate of participation of the population in the banking system are important pre-conditions for the significant use of the mobile phone as an ideal platform for personal payments.

Confidence in the credibility and stability of private money are fundamental components of financial stability. Innovation But let’s go back to stablecoins and innovation in payments. Stablecoins are digital tokens that aim to maintain a stable value vis-a-vis existing forms of money6. Their origin stories generally trace back to the crypto world. Most forms of cryptoassets, like Bitcoin, are too volatile to be attractive as a widespread means of payment. We have seen time and time again that if money is not reliably stable most people will not want to use or accept it as payment. There is no reason to think this time is different7. To solve this, stablecoins have turned to the age-old solution of anchoring their value to national currencies, often with a promise to ensure that the value remains 1 for 1 at all times. Stablecoins therefore could potentially serve as a substitute for a commercial bank deposit. Both stablecoins 2/5  BIS central bankers' speeches  and banks are offering a representation of what a private company owes its customers – an IOU – which can be transferred as a means to pay for things. Both are promising (or at least aspiring to) stability against and interchangeability with money issued by central banks. It is possible in this context that stablecoins could scale up and grow rapidly, and become widely used as a trusted form of sterling-based retail payments. To be clear – I don’t know if this will happen.