samchain/econo-pairs-v1 huggingface dataset:
1 These models help to explain when and why investors may face un-diversifiable risks when holding specific types of securities, such that they become imperfect substitutes for otherwise similar assets. In Brunnermeier and Pedersen (2009), for example, marketmakers face uncertainty over the  1  2  In addition see Duffie, Gârleanu and Pedersen, (2007). BIS Review 29/2010  timing of customers’ trades. They are unable to hedge perfectly this liquidity risk because of borrowing constraints, so that less liquid securities are imperfect substitutes for more liquid ones. This liquidity risk leads asset prices to diverge from “fundamentals” determined by underlying cash flows. Researchers are also beginning to make a number of important contributions that introduce various forms of financial frictions into otherwise standard macro models. For example, in Kiyotaki and Moore (2008), firms face a “liquidity constraint” in financing their investment which arises from a combination of borrowing constraints and a difficulty in selling their illiquid assets. This need for liquidity gives rise to an endogenous demand for money. An important feature of this model is that the central bank can offset the effects of liquidity shocks by purchasing illiquid assets with central bank money. 2 Building on Kiyotaki and Moore’s resalability constraint, Gertler and Kiyotaki (2009) introduce a funding friction for banks, whereby banks need to hold capital in order for depositors to be willing to deposit funds. Such a funding friction affords a role for the authorities to lend directly to firms when capital constraints bite on banks.

The changes happening in the technologies around money will have an impact on the business model of the retail banking system that has deposit accounts at its core and that has hitherto dominated the payment and settlement machinery. It is certainly not our job to protect or preserve any particular business model for the provision of financial services. But the banking system, operating within the framework of the Bank of England monetary policy to govern the unit of account and under the regulation and supervision of the Bank and the FCA, is at the centre of the creation and of the use of the majority of our money as a means of payment and as a store of value. 16  Over 90% of customers described themselves as satisfied with their bank according to a survey by GfK NOP commissioned by the Competition and Markets Authority for its investigation into the personal current account sector. 17 The unit is a joint initiative by the PRA and FCA to provide information and support for those thinking of setting up a new bank in the UK: https://www.bankofengland.co.uk/prudential-regulation/new-bank-start-up-unit 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  Given this role of the banking system in our economy, we have to ensure that the banks and the system as a whole are robust and have the resilience to withstand very severe risks. Our framework of regulation and our annual stress test of the banking system is designed to give this assurance.
In the case of Chile, the supervisory landmark is made up of three superintendencies (including banks). In this setting, coordination for systemic stability is achieved at two levels. One the one hand, the Central Bank is involved in several aspects of financial regulation directly by dictating regulation, or by participating in consultations with other agencies. On the other hand, the Central Bank participates in two coordination instances with the superintendents and finance ministry. The experience during the last years has shown that during periods of financial turmoil, mainly as result of external shocks, the Central Bank, the Finance Ministry, and the financial regulation agencies have indeed worked in close coordination, and, as the global financial crisis testifies, results have been positive. Moreover, in Chile, as banking supervision takes place outside the Central Bank it is key that it is not out of touch with the broader macro environment, so that financial system stance visà-vis the risks perceived in the macro-outlook is the natural first step in the supervisory process. Recently, these instances have been formalized with the creation of a Financial Stability Council, headed by the Finance Minister. This council will, amongst other things, identify systemic risks and mitigation policies, and discuss the systemic impact of regulation. Summing up, monetary and prudential policies are closely connected, first because macroeconomic and financial stability are closely interlinked, and second because instruments designed to achieve stability in each front have cross effects. This interconnection suggests the need for coordination of both types of policy.

3  See for example this comment which appeared in the July 2005 edition of The Economist: “ […] The pursuit of price stability is a means to an end (to achieve maximum sustainable growth), not an end in itself. While the ECB's prime task is price stability, it is also legally charged with supporting growth. Last year it could have cut interest rates to offset the impact of the rising euro; today it should stand ready to ease monetary policy to cushion the impact of structural reform and fiscal discipline.”  4  See, for example, O. Blanchard e F. Giavazzi (2005), “Credibility does not require dogmatism - only clarity of purpose”, at www.voxru.org. 5  S. Cecchetti, H. Genberg and S. Wadhwani (2002), “Asset Prices in a Flexible Inflation Targeting Framework,” NBER Working Paper No. 8970, June, and N. Roubini (2006), “Why Central Banks Should Burst Bubbles”, International Finance 9, No 1. 2  BIS Review 66/2009  harder to interpret financial asset prices and to derive from them indicators regarding the risks of instability. And it is even more difficult to adjust the course of interest rates on the basis of these indicators. For this reason, the proposition of leaning against the wind remains an abstract concept for now. It would be important to develop economic models which give a more precise idea of the quantitative dimension of these phenomena, in particular of the correlation between monetary policy variables and financial asset prices.
Zeti Akhtar Aziz: Enhancing financial literacy for sustained economic prosperity Dinner address by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the CitigroupINSEAD Financial Education Summit 2005: A Forum Promoting Financial Education in Asia Pacific, Kuala Lumpur, 12 December 2005. *  *  *  It is my great pleasure to be here tonight at this second Citigroup-INSEAD Financial Education Summit. Malaysia is particularly pleased to host this year's Summit here in Kuala Lumpur given that enhancing the levels of financial literacy is being accorded a high priority on our agenda. Effective participation in the economy essentially needs to be an informed participation. This is more so now than ever before. We are now living in an environment of rapid change. The advances in technology, product innovation, the removal of regulatory restrictions, deregulation and greater competition have dramatically transformed the financial system and the economy. The environment is marked by increased access to financial services, broader range of products and services, a far more competitive financial services industry and more complex financial transactions. It is the demands of this new environment that has created a greater need for financial literacy to not only ensure the efficient functioning of the financial system but also enhance the potential for the economy to prosper and thrive. This evening, I would like to focus on financial literacy from the perspective of the Central Bank, given that the function of the Central Bank has widespread implications on financial markets, businesses and the public as large.

Islamic securities has also maintained its dominance in the Malaysian bond market, accounting for 58% of total bond market. And almost two thirds of the equity market comprises Shariah compliant securities. Growth has also been experienced in the takaful sector in which the funds asset has registered an increase by 8.2%. This recent decade has also seen the increase in number of Islamic financial institutions including full-fledged Islamic banks, development financial institutions that engage in Islamic banking, takaful, re-takaful and capital market intermediaries. Several of these players have strategic partnerships with foreign players. In April this year, as part of the liberalization initiatives announced, new mega Islamic banking licenses and up to two family takaful licenses will be issued this year. On the global front, Islamic financial assets are projected to grow to USD1.6 trillion by 2012 while the global sukuk outstanding valued to date at approximately USD152.8 billion. In the third series of this seminar in 2007, the vital role of a strong legal and Shariah framework in the sustainable development of Islamic finance was extensively discussed. It is key to providing certainty and predictability to financial transactions. The current international financial crisis has demonstrated the importance of recognizing that the rapid transformation of the functioning of the international financial system had to be accompanied by the need to ensure that regulatory and legal framework was aligned with these developments.
The constantly increasing employment of digital strategies by banks which has been boosted further by the pandemic and the banks' increasing dependence on IT infrastructures raises the need and the requirement to constantly enhance their protection against cyber threats. According to the Bank of International Settlements as well as the International Monetary Fund the financial sector ranks high in frequency of cyber security events when compared to other sectors and these events have tripled over the last decade. The interconnectedness of the financial system means that a successful attack on a major  2/5  BIS - Central bankers' speeches  financial institution may spread rapidly through the financial system with potential adverse effects on the stability of economies. In addition to the risks mentioned above, banks are also facing increasing competition emanating from new entrants in the market. For example in Cyprus, there are currently 15 authorised electronic money institutions and 10 authorised payment institutions. But that number is likely to change dramatically. There are currently at the Central Bank of Cyprus 44 pending licencing applications (33 EMIs and 11 PIs), which is twice the figure compared to the applications pending only a year ago. Notably, this number is significantly higher than the 11 local and foreign authorised banks and subsidiaries in our country. In the last few years, payments services regulation has allowed a number of payment institutions to make use of the banking industry's interfaces for accessing payment service users' accounts online.

Since the beginning of 2013, Spain has experienced a decrease in its unemployment rate of some 6 percentage points and Spanish growth is nowadays one of the main drivers of the European recovery. Contrary to preconceptions, France has also demonstrated in the past its capacity to meet the challenge of economic and social reform. In the 1990s, to prepare for the introduction of the euro, France pursued a competitive disinflation policy that proved highly effective. Remember that in the late 1990s, France experienced the highest GDP growth and the weakest inflation rate among European countries, along with a significant fall in its unemployment rate. Today, French reforms are heading in the right direction, [Slide 5] in particular the tax credit for competitiveness and investment (CICE) and the Responsibility and Solidarity Pact (RSP) that enhance the competitive strength of the French economy. A policy of administrative simplification, the so-called ‘simplification shock’, and a new law to sustain economic growth and entrepreneurship (‘loi Macron’), are also being conducted in order to rebuild business confidence. However, we are not there yet and a number of reforms need to be complemented. In particular, in the labour market: hopefully renewed progress will be made with the draft law under discussion in Parliament. Finally, in the euro area, fiscal policy is now more balanced since significant adjustment has already been achieved. Structural efforts and a growth recovery have led to a reduction in deficits and to a stabilisation in the ratio of debt to GDP.
This standard describes advanced methods of evaluating interest rate risk in banking books in detail, such as sensitivity testing of the net present value (NPV) and of the economic value of equity (EVE) in terms of interest rate risk. Moreover, the BCBS standard devotes special attention to the assessment of non-standard instruments vulnerable to interest rate risk, that is, instruments without a defined maturity date (in particular, demand deposits), and instruments with built-in optionality (in particular, loans with an early repayment option). In order to evaluate to what extent the methods of interest rate risk assessment and management used in Russian banks are consistent with international best practice, the Bank of Russia conducted a survey of 27 of the largest banks about how their systems of interest rate risk management and assessment are currently organised. In general, there is pronounced variation in the methods used by surveyed banks to assess interest rate risk. Among the respondents we can find both banks applying advanced methods close to BCBS standards, as well as banks using the Bank of Russia’s regulatory methodology. This is a natural consequence of the differences in banks’ sizes, their business models and the structure of their assets and liabilities, and does not represent a disadvantage. At the same time, it can be expected that the BCBS standards of interest rate risk assessment will be reflected in Russian banks’ regulation practice in the near future.

With that, I wish everyone a successful forum and hope you continue to have engaging conversations ahead. Thank you. 4/4  BIS - Central bankers' speeches
The use of  BIS central bankers’ speeches  3  variable remuneration also allows for deferral and the recouping of rewards in ways which better align remuneration with the longer term interests of a bank”. The second area where incentives are important is governance of firms. For banks, Parliament has legislated to introduce the Senior Managers regime which implements an important recommendation of the Parliamentary Commission on Banking Standards, and the PRA and FCA are consulting on our proposals for implementation. For insurers, we will consult on implementing the fit and proper requirements of Solvency II, and as the Governor has made clear it is our view that we should align the regimes where that is possible. I have read with considerable interest some of the press reporting of the new regime, which has been at times at odds with the facts. The regime has been portrayed as all about proving criminality under a reverse burden of proof. That is the wrong interpretation. The key principle is a simple one: there should be a presumption of senior management responsibility. To support that principle, we will set out the meaning of the statutory requirement that senior managers will need to show that they have taken the steps that a person in their position could reasonably be expected to take to prevent breaches of our requirements. We are very clear on the presumption of responsibility, as Mark Carney has said, but I would assert that the test is no different from other areas of corporate responsibility.

As one of four non-G7 financial centres represented on the Forum, we play a useful role in providing insights and perspectives from the region on financial market developments. We participated in the FSF’s work on Offshore Financial Centres. We also hosted a meeting of the FSF earlier this year during which the three FSF reports were adopted. Singapore also participates actively in IMF initiatives to enhance transparency as a means to minimising risks to the global financial system. In particular, we are in general compliance with SDDS (Special Data Dissemination Standards), including the new requirements for more detailed breakdown of data on official foreign reserves of member countries. We also release regularly the IMF’s assessment of our Singapore economy and policies; the latest report was based on the annual consultation that ended in June of this year. MAS annual accounts Assets & liabilities On MAS’ annual accounts, total assets increased by $ billion to $ billion as at 31 March 2000, of which $ billion was in the form of foreign assets and $ billion in our holdings of Singapore Government Securities (SGS). The increase in SGS holdings reflects a conscious effort to build up our portfolio of SGS to engage in more repo transactions for our money market operations, thereby broadening the range of money market instruments that we use. On the liabilities side, there was a reduction in deposits of banks by about $ billion, reflecting the repayment of deposits previously placed by POSB with MAS prior to its merger with DBS.
BIS central bankers’ speeches  7  Chart 8  Accordingly, the European banking industry is facing important challenges arising from the new macroeconomic environment, which is not conducive to income generation, and from regulatory reform which, in order to protect financial stability, is introducing new rules and safeguards that restrict the risk transformation business. As a result, there is a need for banks to adapt their business models and corporate strategies, and this will undoubtedly affect the structure of the sector. The role of the supervisor is not, generally, to impose specific strategic action, which should be determined by the banks themselves. Rather it is a matter of facilitating the process maintaining the required supervisory standards and, thereby, offering incentives so that the right decisions are made at the right time and in an orderly fashion, always for the benefit of the shareholders, which almost always contributes to the sector’s stability. Allow me to conclude by briefly mentioning the banking union. 4. The Single Supervisory Mechanism  The supervisory framework in Europe has been significantly strengthened by the setting up of the Single Supervisory Mechanism (SSM). Barely a year and a half after it started to function, it has succeeded in putting into operation a supervisory model consistent with the most demanding standards.

The presence of some distinguished officials from the World Bank at this inauguration is an encouragement. 8.5 The SAARC member central banks should be happy to have been able to get the SAARC Payments Initiative off the ground within such a short period of time. Given the enthusiasm and commitment by all of us, I hope that we, as a regional group, will make a substantial contribution to trade, investment and economic activity of each of our countries and also the region, as a whole. Thank you. 4  BIS Review 35/2008
In the first Inflation Report of 2006, it was foreseen that though the falling inflation process would enter a stagnation period in the first quarter of the year, it would follow a downward tendency as of the second quarter of the year, unless an unfavorable exogenous development happened. While the  16  BIS Review 67/2006  reduction of VAT in the textile, ready-made clothing and leather sectors to 8 percent from 18 percent in March was a development that reinforced the forecast that inflation would re-enter a downward tendency in the second quarter of the year, rapid increases in oil prices in the recent period forewarned that the said forecast should be handled cautiously. While producing forecasts, this information was also added in the framework of the short-term outlook. Besides, the price dynamics in services sector, mainly the rent sub-item, continue to play a critical role with respect to achieving the year-end inflation target. Though the contribution of the rises in the rent sub-item to 2006 inflation is forecasted to be about one point, a scenario, in which this periodic pressure on CPI inflation will decreasingly persist throughout 2007, is considered. Forecasts relating to fundamental macro variables of the Euro zone, such as interest rates, inflation and growth, analyses concerning international commodity prices and the likely course of global liquidity conditions comprise our assumptions of the external world that constitute the basis for our forecasts.

With this report, the Central Bank, has, at the same time, shared with the public how it interprets the economic outlook with respect to inflation and monetary policy. In this context, the second issue of the Inflation Report evaluates general macroeconomic developments so as to shed light on the likely tendency of inflation in the medium-term and, compare and contrast the updated assumptions on macroeconomic variables with those of the previous Inflation Report. The forecasts produced on the basis of the said assumptions are also shared with the public. In addition to all of this, the likely risks that may lead to an apparent downward or upward deviation in inflation forecasts are also explicated in the Report. Content of the Inflation Report Distinguished Guests, The Inflation Report consists of six chapters. In the first chapter, macroeconomic developments are summarized in the light of data released in the first quarter of 2006. The outlook for the supply-demand balance, productivity developments, international liquidity conditions and the risk premium, which are the determinants of the tendency of inflation in the medium-term and the inflation forecasts produced in compliance with this outlook also appear in the first chapter. Since it is considered that the control horizon of monetary policy involves a timeframe of one and a half years as in the previous Inflation Report, forecasts are presented so as to cover the remaining three quarters of 2006 and the first three quarters of 2007.