samchain/econo-pairs-v1 huggingface dataset:
Our average ownership in listed European companies is almost three times our average holdings in Asia or the Americas. Slide 12: Changing regional allocation (starting point) At the start of this year, more than half of the Fund was invested in Europe. As the Fund has grown, we have come to realise that a more even distribution between regions will better enable the Fund to take part in global value creation. Slide 13: Changing regional allocation (target) Recently, a new principle for the regional allocation of the Fund’s assets has been approved. A consequence of this principle is that the relative allocation to Europe is reduced. The Fund’s relative holdings in the Americas, Asia and emerging economies will increase accordingly. For the Fund as a whole, a more even allocation across regions will improve the overall long-term trade-off between risk and expected return. In accordance with the new allocation of the Fund’s assets, new purchases will primarily be made outside of Europe, until the adjustment process is completed. As the Fund receives inflows of fresh capital on month-by-month basis, we are able to undertake the adjustment through new purchases. This will ensure a gradual process, and will not entail a large sell-off on our part. Instead, the effect will be merely a temporary drop in our purchases of European assets. Under the new principle, the Fund will still be overweight in European assets, compared to a market neutral position.

2/5  BIS central bankers' speeches  Some have called on us to go further and incentivise change through imposing lower capital requirements for ‘green’ exposures and higher capital requirements for ‘non-green’ or carbonintensive exposures. As the prudential regulator, any incorporation of climate change into regulatory capital requirements would need to be grounded in robust data and be designed to support safety and soundness while avoiding unintended consequences or compromising our other objectives. In my view, the case for this has yet to be clearly established and possibly may never be. But our work to improve climate disclosures, scenario analysis, and risk management, could help unlock such assessments. Macroeconomy Beyond the financial system, achieving economy-wide net-zero emissions will require greening the way we heat our buildings, manufacture industrial goods like steel and cement, generate electricity and produce food. This could prove to be an opportunity for the economy to regenerate ageing capital and raise productivity. Analysis done by the Network for Greening the Financial System (NGFS) and National Institute for Economic and Social Research by 2050 suggests that such an orderly transition could lead to some increase in global GDP, and lower unemployment relative to prior trends. These positive effects should be larger in countries like the UK that are net importers of energy. However, as I mentioned earlier, much of that rests on how the transition proceeds. The lesson from previous episodes of structural change is that they never involve a frictionless re-allocation of capital.
In particular, the speed with which the economy recovers depends largely on the flexibility of the labour market and on job mobility. When salaries develop in line with the regional economy and a potential for direct investment exists, regionally diverse shocks may be more easily absorbed despite a uniform monetary policy. The mobility of the workforce is also a helpful factor. If a workforce is mobile, there will be some who will leave a country suffering from a crisis and settle where job prospects are better. An illustration of how useful such flexibility can be was provided by the 1990-91 recession in the United States. Following substantial cuts in military expenditure, the economic downturn in particular affected regions with a high proportion of military bases and arms manufacturers. Notably in California, the unemployment rate rose much more markedly than in the rest of the country. Thereupon, between 1993 and 1994 more than 250,000 employees (in net terms) emigrated from California, while in the previous boom year 200,000 persons had been attracted to this region. Even if the adjustment process was painful for many people, the flexibility of the US labour market dampened the costs of this asymmetric shock. Coming back to the European currency union, it might be objected that monetary policy is not the sole economic policy instrument. Fiscal policy measures such as a tax reduction or an increase in public expenditure are also a means of boosting overall demand.

If this were the only correct interpretation, more favourable interest rates would not represent a genuine advantage for the Swiss economy, because the real interest rate advantage would be fully offset by a corresponding real appreciation of the Swiss franc. This has not been the case during the past decades. On the contrary, the real interest rate lead in our country has on average exceeded the trend in real appreciation. Therefore, the upward trend of the Swiss franc is only one of the reasons for the "interest rate island". More convincing explanations include the high savings rate in Switzerland, political stability, the efficiency of the financial sector, and a by and large investor-friendly legal framework. To the fore, however, are likely to be monetary arguments. In an international comparison, Switzerland has exhibited very low inflation rates and correspondingly low price fluctuations over a very long period of time. Beyond this, its higher-than-average gold and foreign exchange reserves create confidence. The relatively low Swiss franc interest rates may therefore be considered as a type of insurance premium paid by investors to hedge their portfolios against crisis situations. The more than three years of relatively calm co-existence with the euro have not significantly diminished the interest differential in favour of the Swiss franc. Currently, the difference between German and Swiss long term rates on government bonds still amounts to more than 1.5 percentage points.
But in recent months, the spotlight of the Treasury Select Committee (TSC) has swung onto this area, and we have all been enjoying the debate! Many hours have been spent highlighting the biblical scale of the reporting requirements, the wickedness of the risk margin calculations, the mystical nature of the Ultimate Forward Rate…I could extend this list tenfold. Then we have had a rather more pointed exchange about whether we at the PRA have been over-zealous in our implementation of Solvency II, perhaps damaging competition, or making life too difficult for insurance companies, or denying the nation of vital new infrastructure by being too cautious about insurers’ investment strategies, or all three! All of these are important topics, and in the course of the debate I am as guilty of focusing on them as anyone else. Indeed, I will double-down by talking about some of them again today. So for those of us inside the insurance beltway, this is a very useful and timely debate and I think it is a great thing that the TSC has taken an interest. Can we make our implementation of Solvency II work better? In my opinion, despite some inevitable differences of view, there is in fact a strong degree of agreement between us, the TSC and the industry about the answer to that question. Where is the policyholder? However, in all the blizzard of insurance and regulatory jargon, I think something has been missing from our discussions. Where is the policyholder?

6  Given the size of the benefit, we should all want to handle this part of the regime very carefully. We are applying particular scrutiny to two areas: first, the internal ratings and spreads on direct investments in illiquid assets, particularly the senior tranches of internal securitisations; and second, the use of financial restructuring to bring new assets within the MA. We have accepted internal securitisations as a means to achieve fixed cash flows. But that does not alter the requirement that the underlying assets must match the maturities of the annuity liabilities. We will of course take a careful and prudent approach to all such activity. We have made a series of proposals to give firms greater confidence about which assets can attract MA, and how we will deal with any breaches. But my message to the firms is: if we ended up in a position where the MA’s fundamental credibility was undermined for the sake of a few marginal items, we would all regret it immensely. Collectively, we need to remain on a sensible path. Conclusion  I began by making the claim, which might sound somewhat outlandish to the uninitiated, that insurance regulation is fun. It is! But it is also a deeply serious business, precisely because the insurance industry plays such a vital role in society.
There is also a strong catastrophe risk ecosystem to support ILS issuances, with the leading catastrophe modelling firms with ILS expertise present in Singapore, and research institutes such as the Earth Observatory of Singapore and the Institute of Catastrophe Risk Management, to support data and modelling needs. Singapore also aims to serve as the Asian knowledge centre for new and emerging risks. b. Singapore is well recognised as a premier asset management centre in Asia, with deep capabilities across both traditional and alternative asset classes. As the gateway to alternative capital providers such as pension funds, family offices, and hedge funds in Asia, ILS fund managers are increasingly assessing Asian investors through Singapore. c. Singapore has a deep debt capital market, with a broad range of bond offerings to provide collateral for and to support innovative ILS products and structures. SGX, a dynamic stock exchange, can facilitate bond trading. 13 Second, Singapore has ready corporate, regulatory and tax frameworks to facilitate ILS issuances: a. ILS instruments can be issued and regulated in Singapore via the Special Purpose Reinsurance Vehicle (“SPRV”) regulations, which allows sponsors to readily securitise insurance risks in Singapore. b. To provide tax neutrality for ILS vehicles, Singapore offers the Approved Special Purpose Vehicle (“ASPV”) scheme. 14 Third, MAS has taken steps nurture the growth of the ILS market in the region. a. MAS launched the ILS grant scheme in Jan this year, which will fund 100% upfront issuance costs of catastrophe bonds in Singapore, up to $ million.

In these countries, fund-based occupational pension schemes account for a large portion of the pension system, in the public as well as the private sector. If we include the Petroleum Fund and the National Insurance Fund at current market values, the picture changes, and funds in Norway are then higher than the OECD average. But even today, the level in Norway is below that of the Netherlands in 2003. Long-term investment strategy The Petroleum Fund employs a very careful investment strategy, with broad diversification. Large pension funds in other countries employ the same kind of strategy. Like the Petroleum Fund, these funds are intended to secure future payment flows. The consequences of large losses over time would be severe. For pure pension funds, this would mean they would not be able to honour their obligations to their members. For the Petroleum Fund, it would mean that the state would have to find other ways to finance the costs of the age wave that we know is approaching. Because of the prudence requirement, return requirements cannot be the same as for many private investors. It is important to remember that for every successful investor that achieves high returns, there are many other investors that have the same level of ambition and risk willingness, but a far  6/8  poorer track record and a history of insolvencies. The Petroleum Fund cannot run the risk of joining the worst group. Some large institutional investors have tried to copy successful private investors.
Before I do so, I would like to take a step back and focus on three key words, which I believe are imperative for formulating financial sector policy for Thailand and the region as a whole. These three key words are productivity, immunity, and inclusivity. First, an emphasis must be placed on productivity as uplifting productivity is a critical requirement for long term growth of an economy. For one, at current stage, many countries in our region are facing structural transformation of aging workforce. Shrinking workforce can dampen long term growth prospect. We must become more productive in order to increase output level and improve standard of living of our people. Productivity is also needed to boost competitiveness of businesses as expanding global trade network and emergence of large e-business platforms have introduced new competitors into our business landscape. Moreover, roles of banks could be challenged as sharing financial platforms gain prominence in the modern economy, and new fintech firms offer financial products unbundled from the long standing value chain of banking. Without meaningful adjustment—that is improving productivity, long term growth potential of an economy could deteriorate. Second, immunity becomes imperative in the current global economic landscape. We are living in the time of changes, where outcomes can be abrupt, unpredictable, and volatile. Amidst the fallout from the Global Financial Crisis of 2008, where unconventional monetary policies flushed global financial market with excess liquidity, we are now entering the cycle where major central banks have started normalizing their monetary policies.

All of these solutions lead to lower cost of financial services, greater financial access, and greater opportunity for the public. Ultimately, “fintech” can help unlock massive potential of our people and businesses and be a powerful tool for Thailand and developing countries to improve on productivity, immunity, and inclusivity of the financial system as well as for the whole economy. Ladies and gentlemen, The theme of our very first Bangkok FinTech Fair focuses on SMEs and consumers, because these two groups face various challenges and can benefit greatly from the adoption of fintech. For Thailand, SMEs represent the majority of firms and make up over 80 percent of total employment. Many SMEs struggle to gain access to finance and payment services, which, on one hand, can be attributed to poor financial health due to loss of competitiveness. On the other hand, many SMEs lack the financial management skills and collateral needed for funding, and their 5-7  cost of finance remains high. Meanwhile, the Thai public is facing big hurdles of low long-term savings and high household debts, with Thailand having household debt to GDP ratio amongst the highest in the region. Many households lack access to efficient and low-cost financial services, be it the deposit, payment, insurance or loan products. These people need to be better served by our financial system to be able to unlock their potential, improve standard of living, and ensure their financial security as they age.
This will be aided by the fact that the relationship established via the MPF is likely to be a sticky one, and companies are unlikely to shift to another scheme unless there are good reasons to do so. This does not mean, however, that MPF providers can afford to provide a bad service. If they do, they will destroy goodwill and make it more difficult to sell other products. The cross-selling opportunities provided by the MPF are not theoretical. There are already signs that it is making an impact on sales of other funds to individuals. As your Association recently announced, the fund penetration rate in Hong Kong has risen from 7.8% to 10% in a year. This is a creditable performance in view of the weakness in the stock market. One of the reasons for the increasing willingness to invest in funds is undoubtedly the low return now offered by bank deposits. However, it also appears that the marketing of the MPF over the last year has helped by focussing employees' attention on the attractions of funds for long-term savings purposes and on the need to plan for retirement. The role of the regulators I have talked so far about the involvement of the banks in MPF business. In practice, however, the role played by banks themselves is mainly to act as intermediaries, selling and advising on MPF schemes. The various MPF services – trustee, administrator, custodian and investment manager – are generally provided by other companies which may be related to the bank.

There is a case that we should take some notice of this in the way the regime operates, rather than just ignore it. In summary, our experience of operating the MA suggests to us that the broad mechanism works but that the EU design makes insufficient allowance for uncertainty, the difference in riskiness between assets, and signals from the market. As a result of this, we are concerned that it overestimates the portion of future returns which can confidently be assumed to be free of risk for insurance companies and therefore safely banked as capital up-front. Some might suggest that this is fine, because insurance capital requirements are set to cover a 1in-200 year stress. [6] But that mixes up capital requirements and capital resources. The risk of a weak MA is that capital resources could be over-stated, and strong capital requirements are no defence if the capital being used to meet those requirements is not sufficiently solid. [7] The system as currently set up provides a particularly strong incentive for insurers to hunt out assets which happen to have a high return relative to their credit rating. Here is an intuitive way to think about the risk in this if taken too far, which our team calls the “high-spread-for-rating assets” – or more colloquially the “too-good-to-be-true assets” – issue. Imagine you have two bonds. [8] Both mature at the same time, both are in sterling and both have the same credit rating.
These relate to the high levels of public and foreign debt and to the high dependence on foreign capital, which advise perseverance in maintaining macroeconomic stability and in furthering structural reforms, especially those aimed at strengthening the institutional framework and the respect for property rights One salient aspect, in my view, which arises from the examination of the international situation is the fact that the firming of the economic recovery did not contribute to correcting the external imbalances between the main regions. On the contrary, despite the marked depreciation of the dollar, both the US external deficit end the surplus of Japan and the rest of Asia increased, while the slight surplus in the euro area hardly changed. Possibly, the deprecation of the dollar may not yet have had a corrective effect on foreign trade flows since, as we know, this tends to come about with a considerable delay and, in the short term, the exchange rate deprecation may even lead the deficit to widen. But the scant impact of the dollar depreciation on the current-account balances of the main areas appears also to be related to the asymmetry in the reaction of the main currencies: while much of the nominal effective depreciation of the dollar in 2003 was bilaterally against the euro, the Asian economies and, to a lesser extent, Japan, checked the rising trend of their currencies by means of heavy intervention on the foreign-exchange markets which has contributed to increasing their already high levels of reserves even further.

However, these were not the only reasons why it proved difficult to gain acceptance for a low-inflation policy in Sweden and why the thought of entrusting monetary policy to an independent institution raised doubts. The Keynesian tradition has been extremely strong among Swedish economists and across party lines ever since the 1930s. Therefore, the idea that the state can continuously control or influence the economic situation has probably been more persistent here than elsewhere. Our strong parliamentary tradition, which is based on the idea that all power derives from Parliament, has also played a part. Countries where power is shared more evenly among the political institutions have found it easier to accept the delegation of monetary policy to an independent authority. Having said this, it is worthwhile recalling that there is in fact a completely different Swedish tradition. The policy shift of the early 1990s is in fact a return to a long tradition of price stability that was temporarily interrupted for a few decades. Between 1870 and 1970, the average rate of annual inflation was about 2%. 1  BIS Review 39/2000  Diagram 1.
BIS central bankers’ speeches  reduced state and federal subsidies, educational institutions raised tuition, leaving students and their parents paying a greater share of the cost of higher education, thereby leaving students less of the surplus and a lower net return on their investment. There are therefore reasons to be concerned about the viability of the current system (with various income-based repayment programs) as well as an alternative income-based repayment system. The high delinquency rate and very low repayment rates among recent cohorts have implications for the sustainability of higher education financing more generally. While there is considerable uncertainty about the ultimate amount, it appears likely that a significant portion of the outstanding federal student loans in income-based repayment-type programs will ultimately be charged off after 20 or 25 years. Another potential threat to the sustainability of the current system, especially visible in the current low interest rate environment, represents the entry of private lenders engaged in cream skimming, providing loans that slightly undercut the administratively set interest rate on federal loans for those enrolled in high-return and low-risk programs towards business, medical and law degrees at top ranked institutions. There is a risk given the rapid growth of this industry that this could have a considerable impact on the average quality of loans held by the federal government. A primary policy challenge in higher education financing is to increase access to higher education to more people through grants and loans but in such a way that the private and social net returns remain positive.

However, while the available data limits deeper analysis of this issue, it seems reasonable to suspect that high college dropout rates contributed to loan repayment problems. As is well known, approximately 40 percent of college students drop out of college before finishing their degree. Among low-income students two-thirds don’t complete their degree, with rates also varying across institutions and majors. While the average wage returns to college remain high, for the substantial share of student loan borrowers who drop out of college, the net returns are likely to be small or negative. Returns are also likely to be small for those who attended a set of for-profit institutions. Enrollment at those institutions surged during the recession. While our data don’t allow us to investigate the returns for these groups of students, their especially low loan repayment rates (as reported elsewhere) are consistent with low post-college employment and earnings, suggesting that eventual returns to these educational investments may be low. The increase in defaults and decline in repayment may also reflect a change in the composition of college entrants during the recession, where even those with relatively low, or even negative returns to college, enrolled in order to qualify for grants and loans as a source of income. The individual and macroeconomic implications of growing student debt go well beyond the high default rates and may not have been sufficiently anticipated and understood.