samchain/econo-pairs-v1 huggingface dataset:
The Committee has also published for consultation a proposal on the setting of further restrictions on the use of internal models to measure credit risk. These restrictions would consist in limiting modelling of the so-called “low-default portfolios” for which there is an insufficient history of default to be able to use advanced models. This would be the case, for example, of portfolios of banks, specialised lending or large corporations. In addition, in portfolios deemed suitable for modelling, minimum levels would be established for parameters (for example, probability of default and loss given default) so as to rule out abnormally low estimated values. Lastly, the Basel Committee has also published for consultation the possibility of setting a floor or minimum values for RWAs resulting from internal models. Not only the advisability of this is being discussed, but also, if approved, the design and calibration of these minimum values. Essentially, it would be a question of limiting to a certain percentage the maximum capital saving that institutions may obtain by modelling risk on their own account, rather than measuring it using the standardised approach. Conceptually, and provided it is correctly designed and calibrated, a floor of this kind can be a useful tool in the aim to reduce unwarranted and unwanted variation in RWAs: it would set for all institutions the same maximum level of saving obtainable using models, and it would help to ensure a minimum desired level of capital for a specific level of risk, and all without relinquishing risk sensitivity.

To illustrate this problem we can cite certain analyses published in 2012 which concluded that around half of all investors did not believe banks’ RWA figures, while 80% considered that the risk measurement framework should be simplified in order to be more credible. The Basel Committee conducted various studies attempting to cast light on this matter. Work on the credit and market risk areas was carried out. While this type of study should be viewed with all due caution, it is worth recalling some of the conclusions reached. 4/7  For instance, according to a study by the Committee published in July 2013, when different banks applied their own internal models to a single portfolio selected for the purposes of the study, there was seen to be high variation among the resulting RWAs. Only a portion of this variation was due to genuine factors, i.e. to risk factors, and to methodological differences permitted by the supervisors (and which were, therefore, in principle, acceptable or relevant differences). What was most interesting, or worrying, depending on one’s standpoint, was the fact that 25% of the variation could not be explained by either of the factors I have just mentioned. Market criticism and doubts, combined with the findings of the studies, led the Basel Committee to launch a far-reaching internal debate. At the risk of excessive simplification, at one extreme are those who have lost confidence in banks’ capacity to properly use their own models, and also in supervisors’ ability to validate and oversee increasingly complex models.
Their brains have license to diverge and roam free. 18 Education and adulthood put a stop to that. They constrain cognitive freedom. But there are means of freeing our brains from these constraints. For example, convening diverse groups can be seen as a means of adults rediscovering the creativity of childhood. It is a synthetic way of manufacturing divergent thinking, a sociological recipe for artificial intelligence that does not require a robot or a PhD in physics. As childhood individualizes the creativity process, diversity can collectivise that process. At a micro level, there is fairly strong evidence for such an effect in communities, organisations and cities. In early societies, there is evidence of brides being given to other tribes and introducing new ideas and technologies. 19 Inter-group marriage was, in effect, a vehicle for technology transfer. And, later, waves of migrant-merchants are believed to have served as a major stimulus to technology-transfer across civilised communities – for example, from the ancient Orient to ancient Greece. 20  15  Mill (1848). 16  For example, Anderson and May (1979). 17  For example, Alesina et al (2015). 18  Land and Jarman (1993), and Land (2011). 19  Manning (2005). 20  Goldin et al (2011)  BIS central bankers’ speeches  5  Coming closer to today, within organisations there is widespread evidence of diverse leadership teams improving firm-level performance. 21 There is also evidence of diverse workforces improving firm-level productivity, at least under certain conditions.

This evidence suggests it is far better to be born rich and stupid than bright and poor. Moreover, these early-stage differences in educational attainment, shaped by socio-economic background, have a life-long impact. That is why there is a very high degree of intergenerational persistence in incomes and wealth, even once account is taken of ability. As one diagnostic on that, consider the following evidence, courtesy of the Commission on Social Mobility and Child Poverty: although independent schools comprise only 7% of pupils in the UK, the independently-educated comprise over 70% of the upper echelons of the judiciary, 55% of permanent secretaries in the civil service and 62% of senior armed forces officers. 70 Branching of the opportunity tree starts early, it appears, and then keeps widening. At present, as with cognitive diversity, there is often a lack of recognition of these inbuilt socioeconomic biases. And, as with cognitive diversity, one reason for this lack of recognition is a lack of measurement. There is no agreed set of metrics for measuring someone’s socioeconomic background. In the UK, the Social Mobility and Child Poverty Commission has begun to develop some metrics. But there is widespread recognition that we are still in the early stages of measurement. Measurement would enable organisations to draw their own experiential diversity maps. As with cognitive diversity, beyond that there is potentially value in making transparent those maps to provide incentives for purposive action if experiential diversity is found to be wanting.
EXPO 2020 DUBAI WOMEN ON BOARDS KEY ISSUES AND CHALLENGES IN THE MENA REGION  SPEECH OF MR. ABDELLATIF JOUAHRI GOVERNOR OF BANK AL-MAGHRIB (MOROCCAN CENTRAL BANK) NOVEMBER 14, 2021  EXPO 2020 DUBAI WOMEN ON BOARDS KEY ISSUES AND CHALLENGES IN THE MENA REGION  SPEECH OF MR. ABDELLATIF JOUAHRI GOVERNOR OF BANK AL-MAGHRIB (MOROCCAN CENTRAL BANK)  YOUR EXCELLENCY, MRS. SHAMSA SALEH, CEO OF DUBAI WOMEN ESTABLISHMENT (DWE) AND SECRETARY-GENERAL OF THE UAE GENDER BALANCE COUNCIL; MRS. NADIA FETTAH, MINISTER OF ECONOMY AND FINANCE AND COMMISSIONER GENERAL OF MOROCCO PAVILION AT “EXPO 2020 DUBAI”; Honorable audience, It is a great pleasure for me to take part with you today in this important meeting at “Expo 2020 Dubai”. I really wished to be there with you in this country where I always feel at home. Unfortunately, multiple constraints have made it impossible for me. However, I would like to compliment the Emirati authorities for the exceptional organization of this event. The everyday echoes of the Expo tell a story of a tremendous success. I am also delighted as the topic chosen for this meeting is particularly close to my heart and I congratulate the organizers for such relevant choice. I would like to particularly thank Mrs. AMINA FIGUIGUI and Mrs. NADIA FETTAH, respectively President and Vice President of The Club of Women Business Administrators (CFA Morocco), for inviting me to this meeting.

Ladies and Gentlemen, The topic of this meeting centered on the place of women in governing bodies refers inevitably to the challenges of women contribution to economic activity and more broadly to the issue of gender inequality. In this respect, I think there is no need to argue nor to justify the importance of this issue. It is discussed and debated every now and then in public debates within national and international bodies, not to mention the regular or specific reports devoted to it. This increasingly highlights the stakes involved and, fortunately, the greater awareness about it. It is not only a problem of social exclusion but, as we all know, a considerable economic loss. The available data on the different dimensions of this issue unfortunately show that our region MENA appears to have among the highest levels of gender inequality, if not the highest, in the world. However, I believe that there is a growing awareness about the situation. We have seen in recent years the adoption of policies and initiatives in the region to empower women and strengthen their economic, social and political status. I would like, if I may, to illustrate further on this referring to my home country and the institution I have the honor to lead. Ladies and Gentlemen, Since many years now, Morocco engaged in a process of improving the situation of women, ratifying several international conventions and complying with UN instruments on human rights in general and women rights in particular.
These modern-day Vikings try their fortune in distant places in the hope of quick gain and handsome returns, which they can no longer find closer to home. What will happen when these bold hunters of yields and expectations suddenly lose their nerve? Or their appetite? Regardless of whether this is caused by events that have occurred somewhere else and under completely different conditions from here, or due to persistent rumours, speculation and theories about the situation in Iceland and risks that have little or no foundation at that time. Will they load everything aboard and sail off, like the  Vikings in the past, with what they have managed to gather up, and look for shelter with their bounty against real or imaginary threats? If this happens, might the high-yield countries suffer a shock? And if so, will that shock be felt the most by the smallest countries, where investors naturally have the least knowledge and confidence? Then the question will arise about the impact that all this will have on the effectiveness of the Central Bank’s policies for controlling inflation developments, and whether we might be better off locked away inside one of the super-currencies, obeying the laws that apply there and at the mercy of the decisions of others. All these considerations and many others can stoke the fires of debate at this conference in Iceland. Some people maintain that the incredible gains that Iceland has made over a very few years could only have been achieved because the country had its own currency.

Davíð Oddsson: The challenges of globalisation for small open economies with independent currencies Opening address by Mr Davíð Oddsson, Chairman of the Board of Governors of the Central Bank of Iceland, at a conference on The Challenges of Globalisation for Small Open Economies with Independent Currencies, Reykjavík, 1 June 2007. *  *  *  On behalf of the Board of Governors of the Central Bank of Iceland I welcome the cooperation between the Bank and the International Monetary Fund on organising the conference that is now commencing. In fact I consider the theme of this conference very apt and take the liberty of stating that a better location for such discussion could hardly be found. This claim is not only based on the fact that Iceland is currently staging a kind of practical experiment in this field. While it can be argued that such experiments are taking place in many other countries, the advantage of Iceland’s experiment is that its economic developments happen to have been quite notable over the past few years. Certain aspects of recent events raise significant questions for this conference. There is no question that Iceland was a relative latecomer to the top league of active market economies: for a long time, Iceland’s rules and norms did not qualify it for inclusion. But Iceland’s economic framework has been completely transformed in the space of a relatively few years and its business world has undergone enormous upheavals at the same time.
In contrast, in the later downturn the previously accumulated provisions provided 5.5 percentage points of additional credit to non-financial firms and they also had a positive impact on employment and firms’ survival probabilities (see Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments (G. Jiménez, S. Ongena, J. L. Peydró and J. Saurina), Journal of Political Economy, 125 (6), 2126-2177, 2017). 3  Bank capital, lending booms, and busts. Evidence from Spain in the last 150 years. M. Bedayo, A. Estrada and J. Saurina. Banco de España Working Paper No. 1847. 6/11  the expansionary phase. In fact, the cyclically varying nature of the elasticities signals that the cost of tardy activation can be much higher than the cost of an excessive anticipation. Moreover, this evidence also shows that the capacity of the CCyB to control the expansion of credit could be low, reinforcing the view that its main objective should be, on the basis of this evidence, to create resilience for the downturn. As I mentioned earlier, the current regulation makes this possibility perfectly feasible. Moreover, although it grants a preponderant role to the credit-to-GDP gap (the so-called "Basel gap"), which would tend to capture the existence of excessive credit dynamics only, it also allows the use of other complementary indicators along with expert judgement. Indeed, in Spain we complement the Basel gap indicator with another four indicators. They have been selected on the basis of their ability to predict systemic banking crises.

Until now, the channels for cross-border flows are only open to current account items such as trade, and to direct investments under the capital account. Portfolio investments under the capital account into and out of China are mainly confined to designated channels and are subject to quotas, for example, the Qualified Foreign Institutional Investor (QFII) scheme with quotas totalling $ billion, and the Qualified Domestic Institutional Investor (QDII) scheme with quotas of $ billion. It can be reasonably expected that a further opening of the capital account would entail liberalisation of these channels and the addition of new avenues. These would result in an increase in cross-border capital flows. BIS central bankers’ speeches  1  7. Although it may not be easy to provide a precise estimate of the magnitude of the flows, given that China’s economy is the second largest in the world, and taking into account the size of both its domestic savings and its capital markets, one can probably say that the size of capital flows resulting from China’s capital account liberalisation would likely be felt in the global financial system. 8. From the perspective of Chinese savers, given their high level of savings and the fact that their investment options are mostly limited to domestic markets at present, there would be a desire on their part for investment diversification into international markets. The resulting investment flows, as they are liberalised, could be substantial for individual markets where these funds flow into. 9.
Why do so many economic agents take excessive risks at the same time? Thus, the correction of excesses on the credit market leads not just to economic downturns but also often to sustained loss of growth potential. For this reason, all economic agents should have a strong interest in avoiding any excesses which could end in a crisis. Nevertheless, historical evidence shows that periods of excessive risk-taking by individuals, banks, companies or governments occur with quite alarming regularity. Why do we learn so little from experience? Let me say from the outset, there is no one single reason for the repeated excesses on the credit market. A number of closely related factors all play a role. In the following, I will be looking in more detail at three of these factors (cf. slide 10). First, a favourable macroeconomic environment drives the supply and demand of loans. Second, the rational reaction of individual lenders and borrowers to the favourable environment can lead to a build-up of systemic risks. And, third, distorted expectations of economic agents also play a role. 12 To illustrate these factors, I will use the example of the Swiss housing boom of the 1980s. Interestingly, analogous developments can be found in the lead-up to virtually every debt crisis. 13 Economic upturn, low interest rates and rising asset prices  Initially then, the macroeconomic environment plays a major role. Increased lending is often associated with an economic upturn.

In OECD countries, population growth averaged over 1 percent back in the 1950s and 1960s, but it is now running at half a percent per year, and is expected to gradually fall before dipping into negative figures by 2070.1 Slowing birth rates mean fewer consumers and fewer workers. People planning on longer retirements will tend to save more. And while this is undoubtedly good news in many respects, an abundance in the supply of savings also has a big effect on the global economic picture. When it comes to productivity, there has also been a stark step-down in growth. Rapid changes in the kinds of technology we use in our daily lives—robotic vacuum cleaners, self-driving cars, and facial recognition technology in our phones—may make this seem counterintuitive or plain wrong.2 But the data are clear. In OECD economies, growth in labor productivity—the amount produced per worker hour—has averaged a little over 1 percent per year since 2005, about half the pace seen over the prior decade. Falling R-star So what does all this mean for the future? Two things: First, slower population and productivity growth translate directly into slower trend economic growth. Second, an abundance of savings, and a decline in demand for savings resulting from slower trend growth, together lead to lower interest rates. All of these factors combined have contributed to dramatic declines in the longer-term neutral rate of interest, or rstar. While a central bank like the Fed sets short-term interest rates, r-star is a result of longer-term economic factors.
More (and more highly specialised) workers, better and more broadly invested capital and a rapid exchange of knowledge – all this led to higher economic growth and greater prosperity worldwide. Globalisation also had a major impact on monetary policy. The most important change in this respect was the increasingly global production of goods, which reduced inflationary pressure. The latter also fell because the global economy was able to satisfy increases in demand in individual countries comparatively easily. In the less integrated economy of the Cold War era, higher demand quickly led to bottlenecks and rising prices. With inflationary pressure lower, central banks were able to react more strongly to adverse economic developments. And this was often appropriate, in retrospect. For the global integration of the financial markets did not just foster growth, it also made it easier for local crises to spread to other countries. In the past 15 years, there have been repeated instances where such global crises have prompted the major central banks to substantially ease their monetary policies to prevent severe economic declines and persistently negative inflation rates. This easing was initially achieved through interest rate reductions, but then increasingly by means of unconventional measures such as quantitative easing and, in the case of Switzerland, foreign exchange market interventions. The expansion in the range of monetary policy instruments also has to do with globalisation. The traditional way to ease monetary policy is by lowering the policy rate below its neutral level.

I will then discuss the other side of global economic integration, namely the interdependencies between countries and markets. At the end of my remarks, I will offer some thoughts on what is likely to change with regard to monetary policy if global economic integration were to decrease again as a result of the war. Monetary policy in an integrated global economy The world has become increasingly interconnected economically over the past decades. Until a short while ago, we thought these ties would continue to become closer. The US-China trade dispute of recent times had already cast some doubt on the durability of global integration. The coronavirus pandemic has restricted mobility and strained global supply chains. However, the geopolitical confrontation we see today has an entirely different dimension. Russia’s invasion of Ukraine has reopened old rifts in many respects. We therefore have to ask what the consequences would be if the economic fragmentation already caused by the war were to persist, or even increase further? To assess this, I would first like to look briefly at the process of globalisation over the past thirty years or so. At the beginning of the 1990s, the erstwhile closed-off states of the Eastern bloc gradually began to open up, and so too did China and other Asian countries. Since then, economic integration worldwide has been considerable. Today, the value of goods and services traded internationally is three and a half times higher than it was then. Average real per capita income worldwide has increased by two thirds.