samchain/econo-pairs-v1 huggingface dataset:
The missions were initiated after the Commission's General Secretariat had received the findings of the institutions' "internal validations". The purpose was to make sure that institutions were in compliance with the minimum regulatory requirements and, more generally, to check the quality of their information systems and the conditions in which these mechanisms are used and controlled. These inspections revealed that institutions had indeed already made extensive achievements, but also showed that some of them needed to make further progress on Pillar 1 of Basel II, especially with regard to: -  the collection and estimation of the Basel parameters, particularly probabilities of default (PD) and loss given default (LGD): on this point, it is important that banks should steadily upgrade again their historical data so as to cover full business cycles;  -  permanent control and validation of information systems and/or models: implementing thorough benchmarking and back-testing processes is crucial in this context. With regard to Pillar 2, the Commission Bancaire urges banks to make certain that their Internal Capital Adequacy Assessment Processes capture risks which are covered incompletely or not at all by Pillar 1, especially concentration risk, liquidity risk and overall interest rate risk. In the months ahead, priority must be given to developing stress tests that are more comprehensive, i.e. that encompass the various risks (credit, market, etc.) and that aim for exhaustive coverage of risk exposure. Banks must also meet their transparency requirements under Pillar 3 (market discipline), for both the content and the frequency of their disclosures.

In the field of transparency, the key elements of the new partnership are, first, a commitment by emerging market economies to implement transparency about transparency by publishing ROSCs, and, on the part of the international community, new opportunities for emerging markets to engage in the process of constructing and developing codes and standards. There is encouraging evidence of greater collaboration and consultation between developed and developing countries in the design and implementation of the core standards – for example, on banking, securities and insurance regulation, data, payment systems, insolvency and transparency of monetary, fiscal and financial policies. That is all to the good and there is further to go. It is crucial that we find new ways of involving emerging market countries in the process of designing and implementing standards and codes. In this area, ownership is all. Transparency cannot and should not be imposed on any country. Countries themselves benefit most from being transparent and releasing the reports of assessments by the IMF about their financial systems. And the enthusiastic embracing of transparency by a number of emerging markets has paid off in terms of better relations with creditors. Ultimately, the most successful route to enhance the influence of emerging markets on the development of standards and codes is to strengthen the role of the IMF and the World Bank, the twin institutions that can claim legitimacy through the membership of 183 countries.
R Jayamaha: Basel II and operational risk Keynote address by Dr R Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the 10th SEACEN-FSI Regional Seminar for Bank Supervisors and Regulators, Colombo, 12 December 2005. *  *  *  It is indeed an honour to have been invited to deliver the keynote address at this SEACEN - FSI Regional Seminar for Bank Supervisors and Regulators on the implementation of Basel II and Operational Risk. I would like to take this opportunity to share some thoughts on this important subject, which is currently engaging the attention of the Bank regulators, not just in our region, but worldwide. I will first deal with why Basel II requires a separate capital allocation for operational risk and what it intends to accomplish. Next, I will discuss how Basel II deals with operational risks and how it contributes to financial system stability. Finally, I wish to mention a few steps regulators can take in preparation for adopting Basel II and mitigating operational risk. 2. Deregulation and globalization of financial services, together with the growing sophistication of financial technology are making the activities of banks and their risk profiles more complex. In this context, not only well known credit, interest rate and market risks, but also other risks can be substantial and threaten the stability of a financial system. A growing number of high-profile operational losses worldwide have led banks and supervisors to increasingly view operational risk as an integral part of risk management policy.

So if anyone asks why the banks are special, I could reply in the same way as John Dillinger, designated by the FBI in the 1930s as public enemy number one, when asked why he robbed banks: “Because that’s where the money is.” At the same time, problems that arise in one bank can easily spread to other banks. This spread can occur in different ways. Firstly, there can be a direct spread, through the exposures the banks have to one another in the payment systems and in connection with foreign exchange and securities trading. Severe chain effects can arise if the customers of a bank suffering problems have their means of payment tied up in the bank. This makes it difficult to make payments to other households and companies. It can lead to liquidity problems that can in turn give rise to loan losses and payment problems for these customers’ banks. Secondly, the banks are often exposed to the same sorts of risk. This increases the probability that, for instance, a macroeconomic shock may affect more than one bank. The spread of problems between banks can thus also arise as an indirect effect, through expectations that other banks may suffer similar problems to the one first affects, or via more well-founded suspicions of the banks' exposures to one another. The contagion risks mean that problems in one bank can easily lead to problems for the entire bank system. The costs to society of a crisis affecting the entire bank system can be substantial.
In 1857 the Swedish National Debt Office ventured out onto the international capital market. The first railway loan was issued in Germany and comprised the start of an era with extensive capital imports to Sweden lasting more than 50 years. This provided Sweden with access to capital for productive investments on a scale that would scarcely have been possible otherwise. The central government borrowing paved the way abroad for other borrowers, such as municipalities, mortgage institutions and industrial companies. The large Swedish banks were to a large extent given the task of acting as intermediary in bond loans and thus had the opportunity to develop contacts with foreign banks. The integration of the financial markets increased. For Sweden, this meant that our manufacturing companies could make use of the greater access to capital and lower interest rates in industrially-developed Europe. Gothenburg, with its proximity to the British goods and capital markets, played an important role here. For instance, the Skandinaviska Kreditaktiebolaget, which was the country's leading bank during the latter part of the 19th century, had its registered office here. The internationalisation of the financial markets was facilitated by the fact that Sweden joined the monetary co-operation of the time, the gold standard, while the national integration of the markets was strengthened by the fact that the Riksbank was granted a monopoly on issuing banknotes at the end of the century. This also helped to lay the foundation for a more modern monetary policy.

Therefore, in order to promote solution innovation, we would organise Regtech competitions and challenges so that we can bring together investors, financial institutions and technology firms to innovate together. These can be showcases for solutions or approaches that address common pain points in the industry. Such events also have the potential to create lasting partnerships between banks and Regtech firms. 43. Next, “Regulators Matter” – so far, I think it is fair to say that the industry welcomes those circulars and guidelines on Regtech and underlying technologies that the HKMA has issued so far. No doubt, we have to provide further guidance to the industry going forward, in order to help the industry understands our policy stance. This would also reaffirm the HKMA’s commitment in this area. 4/6  BIS central bankers' speeches  44. But we note that a large proportion of banks operating in Hong Kong have their headquarters in other jurisdictions. And therefore differences in approaches to Regtech across jurisdictions can create significant challenges for those banks. We all know that complete alignment or harmonisation on such matters may not be possible. But we reckon that such challenges can at least be reduced if regulators from different jurisdictions engage in more active and ongoing dialogue and information sharing. In that process, of course the HKMA needs to also stay up to speed with international best practices. 45. The fourth area in our framework is “Talent Matters”.
And I trust the Germans as well as the Italians, the French, the Spanish, the Dutch and all other fellow citizens were all aware of this aspect when they joined EMU. By the way Germany demonstrated how attached it is to the single currency when it argued in favour of the Stability and Growth Pact, which is precisely based on peer responsibility and peer pressure and is a vivid illustration of how our destinies are interconnected. Therefore, yes, I believe that Germany is fully aware of the fact that we are sharing a common destiny. Remember in the run up to the Maastricht treaty: both Helmut Schmidt and Helmut Kohl were at the forefront of European integration with their peers, following in the footsteps, in particular, of Robert Schuman and Alcide De Gasperi. Il Sole 24 Ore: Regarding Germany, the French finance minister did criticize its economic model based on exports rather than internal demand, pointing out that its partners cannot count sufficiently on German imports. Are you in agreement with Christine Lagarde? Trichet: No, and for a number of reasons. Firstly, had Germany not increase its competitiveness in the first 11 years of EMU by keeping its costs and inflation under control, the euro area as a whole would have had the threat of higher inflation and therefore a tougher monetary policy. Secondly, Germany, with a large current account surplus, is financing the current account deficit of other countries members of the euro area.

Sweden’s price stability norm in the 1930s lasted only a few years and was followed by a return to a fixed exchange rate regime. During those years, however, it performed the central function of stabilising expectations as well as prices. This was important not least because to some extent it helped shield Sweden from the global economy’s depressive impulses and thereby contributed to the recovery being speedier than in most other countries. Here I should perhaps add that although this Swedish price stability “experiment” attracted a good deal of attention at the time, it certainly did not leave any deep or lasting mark on the modern approach to inflation targeting. In the aftermath of the depression and the second world war, Keynesianism gained ground. The introduction of inflation targeting in Sweden in the 1930s was therefore not as pioneering as when this kind of regime was introduced in the early 1990s, first by New Zealand and later by others. 1  BIS Review 50/2000  A great advantage with a regime that explicitly targets inflation, is that the central bank adjusts the interest rate continuously in the light of inflation prospects. Compared with a fixed exchange rate regime, imbalances can then be prevented from building up to the same extent. A slight upward adjustment of the interest rate at an early stage, to reduce the risk of inflation picking up, is something quite different from having to hike the short-term interest rate in order to defend a fixed exchange rate.
The problem we face is that unemployment’s critical level cannot be identified for certain and we do not know when shortages and rapid wage increases will actually arise. Estimating these matters is difficult and the results cannot be taken for granted. It is therefore hard to tell how much scope there is for a temporary phase of economic growth above the long-term trend. The ability to look ahead and formulate monetary policy cautiously is particularly important when an economy is moving further and further along an upward phase. Otherwise there is a risk of price and wage increases accelerating so that the brakes have to be applied more abruptly later on, leading to a situation that is worse than would otherwise have been the case. Thus it is in this phase of rising activity that we can be said to influence the depth of the next slowdown. It was the overheating in the late-1960s, the mid-1970s and the end of the 1980s that set the stage for the subsequent deep troughs. And each recession was worse than its predecessor. Looking back, it is easy to see that economic policy ought to have been tightened much earlier than was the case on those occasions. At the same time, it has tended to be difficult, not least in fiscal policy, to take such measures sufficiently early, particularly as that needs to be done before the problems are clear to everyone.

During the period when the objective of monetary policy was a stable exchange rate against the euro, the difference between Norwegian and German long-term interest rates was about ½ percentage point less than it is today. The difference between Norwegian and Germany 10-year forward rates widened by about ½ percentage point after the introduction of the inflation target. This indicates that the market previously assumed that in the long term price inflation in Norway would be on a par with that in the euro area, i.e. around the ECB’s objective of less than 2 per cent rate of increase in prices. The members of Norges Bank’s Executive Board are collectively responsible for the Bank’s decisions. The Executive Board meets every three weeks. At every second meeting, the Executive Board discusses monetary policy in depth. Decisions regarding changes in the interest rate will normally be made at these monetary policy meetings. The Executive Board discusses the economic outlook at a separate meeting three weeks before the Inflation Report is presented. On the basis of preliminary projections for the report, the Executive Board assesses the outlook for inflation two years ahead and the uncertainty surrounding these projections. The following day, the Executive Board summarises its discussions and assesses the consequences for monetary policy for the next four months. This assessment constitutes an important internal reference when the Executive Board later makes a decision regarding the interest rate. It will also provide the basis for our external communication through speeches and the media.
Ranee Jayamaha: The financial performance of the Credit Information Bureau in Sri Lanka during 2005 Speech by Dr Ranee Jayamaha, Deputy Governor of the Central Bank of Sri Lanka, at the Annual General Meeting of the Credit Information Bureau, Colombo, 23 June 2006. *  *  *  Members of the Head Table, the Board of Directors, the Shareholders of the CRIB, Chief Executives and Officials of Banks and Financial Institutions, Ladies and Gentlemen. I am pleased to present to you this evening the Chairperson’s report of the CRIB which summarizes the significant growth in business operations and the financial performances of the CRIB during 2005. Sri Lanka’s CRIB is one of the pioneer credit information bureaux in the South Asia region since its establishment in 1990. The year 2006 is a landmark in its history as the CRIB will begin to re-engineer its core business processes with enhancements and upgrades to the technological infrastructure. As indicated in the Annual Report, during 2005, the CRIB has recorded a remarkable growth in its businesses and achieved its primary objective of collecting, collating and dissemination of aggregate credit information for the use of stakeholder institutions. Reporting of credit information to, and complying with the Bureau’s requirements are mandatory and the CRIB has made a conscious effort to educate the member institutions of the reciprocal benefits of providing reliable credit information. Throughout the year, the CRIB has continued follow up work in refreshing and updating the existing credit database.

This Centre was established to act as a centralised point of contact to facilitate a rapid and effective response for members of the public and small and medium enterprises (SMEs) in matters related to their requirements. Also a Credit Counselling and Debt Management Agency will be launched early next year. The Credit Counselling and Debt Management Agency is being established to undertake credit counselling and loan restructuring for individuals. This institutional arrangement will help consumers who encounter difficulties in meeting their financial commitments. Apart from being a source of information and advice on financial management, the arrangement would represent a more cost effective and prompt means of debt settlement through outof-court procedures. All these measures to enhance financial literacy involve all the parties concerned - the consumers, the financial service providers, the regulators and relevant Government ministries, the corporate and the NGOs. This collective approach reflects the importance of shared responsibility in helping consumers manage their financial risks more effectively. In this regard, the financial institutions who are the first line of contact with consumers, and who bear a major part of the financial risk in the event consumers suffer financial stress, need to play a greater role in helping create more informed participation in the financial system. The dividends in terms of lower non-performing loans and increased profitability makes this a win-win proposition.
During the financial crisis, the Fund’s ownership share in global production doubled. Such a countercyclical investment strategy – also known as rebalancing – can be implemented more effectively if Norges Bank is given wider responsibility for balancing the Fund’s overall risk and return. A simplified, publicly available regulation for rebalancing the Fund would be an advantage. The value of the Fund – in krone terms – is continuously updated on our website and is now close to NOK 3.5 trillion. This is almost twice as high as mainland annual GDP. The size of the Fund allows us to take advantage of investment opportunities worldwide. The Fund has recently started investing in real assets. In the first round 5 percent will be allocated to real estate. (Chart 6: Growth in GDP) The world’s economic geography is changing. While growth in advanced economies has been weak and slowing, growth is robust in Latin America and Asia. Several countries in Africa are now catching up. (Chart 7: Growth in GDP and real return on Government Pension Fund Global) In line with the guidelines, the Fund has considerable ownership interests in Europe. Its holding in an average European company is around three times as high as in the Americas and Asia. The chosen regional distribution is related to Norway’s import pattern and can be viewed as a form of currency hedging. But the result has been that a large proportion of the Fund is invested in a region that has experienced weak growth over the past decade.

During the financial crisis, extensive government bank bailouts were necessary in many countries in order to sustain economic activity. When the bridge is unsteady, the authorities need to stabilise it. But when taxpayers foot the bill, banks take on excessive risk. Not until owners have to bear losses will banks’ balance sheets fully reflect risk. To achieve this, there is an international effort to improve tools for dealing with crises. It should be possible to wind up banks without causing major economic shocks and without governments assuming banks’ losses. Those who take risks must also bear them. BIS central bankers’ speeches  7  There are high ambitions behind the new financial regulations. However, it would be unrealistic to believe that we can eliminate all sources of financial turmoil. Unlike the sergeant, we cannot give the “route step march” command to break the cadence when bridges are to be crossed. Our ambition is not to control every step on the bridge. But we can make considerable headway by reinforcing the foundations of the financial system and cushion the load from marching in step. Conclusion I began by quoting Nicolai Rygg’s annual address from 1932. Near the end of his speech, he turns his gaze towards the future: “Unfortunately, not much can be said about the outlook for the coming year. It appears to be shrouded in darkness.” Rygg was referring to the international credit crunch and what he called “intricate political questions”.
Other complementary policy actions in housing, fiscal policy and structural adjustment or rebalancing of the economy will be essential if we are to achieve the best available recovery. Regional economic conditions Turning now to the regional economy, growth slowed in late 2011 in New York City and New York State, whereas New Jersey has seen a modest pickup. As attendees at previous regional press briefings may recall, the New York Fed produces economic activity indexes to help monitor the performance of the regional economy.2 Based on these measures, economic activity has leveled off in both New York State and New York City since the summer, following above-average growth in the first half of 2011. In contrast, New Jersey’s economy, which was sluggish throughout 2010 and into the first half of 2011, has picked up noticeably in recent months. We monitor Puerto Rico using an index produced by the Government Development Bank for Puerto Rico. This index suggests that the island’s recession, which started back in 2005, may finally be ending. After bottoming out last August, activity has risen fairly sharply – reaching a one-year high in November. Still, Puerto Rico’s recovery has had a number of “false starts” before and this measure is noisy. Thus, the recent improvements will need to be sustained for longer before we can confidently declare that the island’s recession is over. Turning to the employment situation, our region finished 2011 on a mixed note.

I am pleased to say that January’s report points to some firming in manufacturing and a pickup in hiring – a big improvement from late last year, when this survey consistently signaled little or no growth. Nonetheless, ongoing weakness in the housing market, coupled with a sluggish jobs recovery has increased financial pressures on families. Attendees at previous press briefings may recall that at the New York Fed we have a special consumer credit panel that allows us to track these trends closely.3 Since the beginning of 2008, many regional households have been reducing their per-person debt for mortgages, credit cards and auto loans quite consistently. However, the last three to four quarters show signs that households may have reached the end of this deleveraging process. Debt levels have been flat to slightly increasing in both New York and New Jersey – as they have also been for the United States as a whole. Only in Puerto Rico have debt levels continued to decline, suggesting that households on the island may not be finished with their deleveraging. The picture for debt delinquencies is similar. Although still quite high by historical standards, as of the third quarter of 2011, delinquencies were subsiding in New York and New Jersey, as they were for the nation as a whole. Unfortunately, Puerto Rican households stand out as now having a higher delinquency rate than the mainland, New York and New Jersey – and one that is continuing to rise.