samchain/econo-pairs-v1 huggingface dataset:
Within this new regulatory framework, the minimum tier one capital adequacy ratio is set at 9.5 percent, exceeding the minimum ratio recommended by the Basle Committee, and the adequacy ratio, based on regulatory equity, is set at 12 percent. An assessment of financial soundness indicators at end 2015 shows that the Algerian banking sector soundness is relatively well preserved despite the boom phase of the credit cycle in the context of the ongoing external shock. Capital adequacy ratios remained comfortable in 2015, standing at 14.5 percent in relation to tier one capital and 17 percent in relation to regulatory equity. The quality of banks’ capital, essentially comprising tier one capital, and the substantial increase in the required minimum  2  BIS central bankers’ speeches  capital for banks and financial institutions, implemented in December 2009, significantly contributed to maintaining financial soundness indicators at a comfortable level. By end 2015, the banking system remained well capitalised and profitable. Return on equity and on assets strengthened to 24.6 percent and 2.2 percent respectively, in a situation of still comfortable liquidity. However, the acuity of the impact of the external shock in terms of banking liquidity contraction, following its relative stability in 2014, is such that some banks no longer met the requirements in terms of short term liquidity ratio in 2015.

This is reflected in the diversity of banking services and products offered in the Kingdom and their highly advanced level. Currently, 15 banks are operating in the Kingdom with a network of 1,251 branches at the end of the first quarter of 2006, including the branches of Gulf and foreign banks such as the Gulf International Bank, the Emirates Bank, BNP Paribas and Deutsche Bank which was opened last week. In addition, licenses were granted to several Gulf and foreign banks to open branches in the Kingdom. Also, the establishment of a Saudi bank with a paid-up capital of Rls 15 billion has been approved. Preparations are currently underway on finalizing the procedures of its establishment under the name of “Bank AlEnma”. On this occasion, I congratulate the NBK on the commencement of its operation in the Kingdom, and I wish the Bank and its staff good luck and success. BIS Review 70/2006  1
The broader concept of the “home market” should be developed further. One of the challenges will be to ensure strong competition in retail markets so that the benefits of integration could be felt by consumers across the region. Fostering sustainable growth in the region requires us to take a systemic view when designing harmonized regulation for the financial sector, and this is where the quality and proactivity of macro-prudential supervision becomes so important. The Nordic-Baltic dimension adds two nuances to the design of macro-prudential policies. First, our own experience of the past decade was a stark reminder of the particular challenges of managing capital flows in highly integrated economies and financial sectors. Second, most of the large Nordic banking groups have been considered as too big to fail in almost all countries in the region. BIS central bankers’ speeches  1  Diversity in the financial sector structures is a challenge for cross-border cooperation As I said earlier, the economies and financial sectors of the Nordic-Baltic region are diverse as well as closely integrated. Different countries in the region have opted for different policy frameworks; the structure of the financial sector also differs by country. It turns out that in a region of only eight countries, some of which are very small, one needs to tackle very much the same array of problems that make the coordination of financial sector policy and supervision so challenging in Europe. There are home and host countries; there are non-EU member states, EU member states, and euro area member states.

Taking care of the large Nordic-Baltic “home market” First of all, we should keep in mind that the Nordic-Baltic region is characterized by considerable diversity: diversity in monetary policy frameworks, models of economic development and financial structures. The second key word of the Nordic-Baltic region is integration – the region is characterized by tight trade and financial ties within the region as well as with Europe and global markets. Therefore, the region’s competitiveness and growth potential are important to each country in the region. The bank groups that finance growth in the region are largely the same in every country. All these groups are currently highly rated and well capitalized in comparison to others in Europe. As a result of mergers and natural growth, the total assets of the larger banks have risen to a high level compared to regional GDP, not to mention their very high level as a ratio to the GDP of their home countries. The combination of common economic interests and financial sector integration has fostered the emergence of a unique feature of the Nordic banking groups: they have extended the concept of the “home market” well beyond their home country’s borders. For example, Nordic parent banks continued to provide liquidity to their Baltic affiliates even during the years of the deepest crisis in the Baltic economies. In today’s slow growth environment, it remains important for competitiveness and growth that there should be an appropriate level of financing in the whole region.
More recent efforts have focused on strengthening regional financial integration which is aimed at promoting the more efficient intermediation of funds in Asia. The strengthening of domestic demand and the greater regional financial and economic connectivity within Asia has also enhanced the resilience of the region. BIS central bankers’ speeches  1  Islamic finance in the evolving new frontier in Asia Given that Islamic finance is a form of financial intermediation that is closely linked to the real economy arising from its requirement that financial transactions needs to have an underlying economic transaction, its accelerated growth and dynamic expansion across the financial landscape in Asia brings with it the tremendous potential to reinforce the transformative trend that is characterizing the region. With greater liberalization, Islamic finance is increasingly supporting regional and international trade and investment flows, intermediating significant cross border financial flows. With its internationalisation, Islamic finance has become an increasingly more important channel for the efficient allocation of Asia’s surplus funds towards productive investments in the region. This trend is also contributing towards the strengthening of global financial and economic linkages, particularly between Asia and the Middle East. The vast population in Asia and the growing middle-income group, combined with high savings rates in the region have substantially heightened the demand for a wider spectrum of financial products and services. These trends have increased the opportunities in retail and investment banking, takaful, and fund and wealth management businesses in the region.

Cross-border liquidity risk management in the Islamic financial system still remains a significant challenge, with the lack of short-term Shariah compliant instruments in international currencies. The global efforts to strengthen the liquidity arrangements for the international Islamic financial system will be an important breakthrough in facilitating more efficient cross-border liquidity management by Islamic financial institutions, thereby meeting the challenges of the trend of greater internationalisation. Conclusion Let me now conclude. The growing role of the emerging economies as an anchor to global growth in particular, in Asia, represents a major shift in the global economic landscape. In this environment, Islamic finance is well-positioned to assume a much larger role as a competitive form of financial intermediation for supporting economic activity, and as a channel for enhancing greater global connectivity. Efforts to strengthen the foundations for Islamic finance to ensure its continued resilience amid the more challenging environment must remain a priority going forward into the future. Indeed, our commitment to act guided by this foresight will strengthen the prospect for Islamic finance to realize its potential in the region and beyond. 4  BIS central bankers’ speeches
Over the past several years, during both recession and recovery, these sectors have added about 1,000 jobs each year to the local economy. The leisure and hospitality sector,  4  For more thoughts on the monetary policy outlook, I refer you to the speech made earlier this week: Reflections on the Economic Outlook and the Implications for Monetary Policy. 4  BIS central bankers’ speeches  as well as the retail sector, has also been a solid source of job growth for the area. However, as you probably well know, job losses in the region’s manufacturing industry have weighed against these gains. About 9,000 manufacturing jobs have been lost since the start of the Great Recession. And, while a slow jobs recovery began in the nation’s manufacturing sector in 2010, Syracuse has continued to lose these jobs in recent years – a painful process for the area to continue to endure to be sure. Nonetheless, these trends have resulted in a more diversified economy. In fact, the share of workers employed in the metro area’s manufacturing sector is now just 8 percent, just below the nation’s 9 percent share. The private education and health sectors have emerged as the largest industries, and now employ one in five workers. So, the face of the local economy has changed dramatically through a somewhat painful restructuring process. But I believe this process is reaching its conclusion, and the resulting more diversified local economy is providing a strong foundation on which Syracuse can build going forward.

The private sector of the economy should continue to heal, while the amount of fiscal drag should subside. I also expect that, despite the near-term concerns, growth prospects among our major trading partners will improve next year. And this combination of events is likely to create an environment in which business investment spending will strengthen. However, the notion that the economy will grow more swiftly remains a forecast rather than a reality at this point. Turning to the inflation outlook, total inflation, as measured by the personal consumption expenditures (PCE) deflator, has fluctuated recently with short-term movements in energy prices, but it continues to run below the FOMC’s expressed goal of 2 percent. Core inflation, that is, excluding food and energy, slowed in late 2012 and early 2013 to well below 2 percent, although it has shown signs of stabilizing in the last couple of months. A decomposition of core inflation reveals that the most recent slowing of inflation has been largely confined to core goods, whereas the rate of increase of core services has been relatively steady. Such was not the case in 2010 – the previous instance of a significant slowing of inflation. In addition, inflation expectations so far have remained relatively stable at levels somewhat above the current inflation rate. This should help prevent an undesirable further drop in inflation relative to our 2 percent objective. Thus, I anticipate that inflation will firm further in the months ahead and move toward the FOMC’s longer-run objective.
2001 20  Government financial balance 15  Current account  10  5  0  -5 Iceland  US  Denmark  Sweden  Finland  Norway  Source: OECD SG 240802  Another prominent feature is that, except for Iceland, the Nordic countries have a twin surplus in the public sector and on the current account. This implies a net outflow of capital from the region. The facts I have mentioned may lead outsiders to regard the Nordic region as one group, made up of similar economies. However, there are also some striking differences. Nordic countries – institutional differences EU-membership  Monetary policy regime  Sweden  Yes  Inflation target of 2 per cent (+/- 1 percentage points)  Denmark  Yes  ERM II  Finland  Yes  Member of EMU  Iceland  No (EEA-agreement)  Inflation target of 2½ per cent  Norway  No (EEA-agreement)  Inflation target of 2½ per cent  SG 240802  2  BIS Review 70/2002  We differ in our relations to the EU and with respect to monetary policy regimes. Sweden, Denmark and Finland are members of the EU. Finland is also a member of EMU. The Danish krone is linked to the euro through a fixed exchange rate, while Sweden, Iceland and Norway have inflation targets and a floating exchange rate. Our financial markets differ in size and structure. Bonds outstanding, March 2002.

1990=100 140  140  Norway  130  130  120  120  US  110  100  100  90 1990  110  1992  1994  1996  1998  2000  90 2002  1)Business sector 2)Mainland Norway excl public sector Source: Bureau of Labor Statistics and Norges Bank SG 240802  Business productivity growth has been high throughout the 1990s. The chart shows development of productivity per working hour in Norway and the US. Unfortunately, I don’t have comparable figures for the other Nordic countries. I do, however, believe that they all, with the possible exception of Iceland, have had stronger productivity growth than the US over the period. BIS Review 70/2002  1  Government employment and revenues. Per cent of total employment and GDP 2001  Government employment  40  Denmark  30  Norway Sweden  Finland  20  Iceland US  10  0 0  10  20  30  40  50  60  70  Current tax and non-tax receipts Source: OECD SG 240802  Most Nordic countries have large public sectors, reflecting the fact that many services such as health and education are produced within the public sector. This is especially the case in Denmark, Norway and Sweden. General government financial balance and current account balance. Per cent of GDP.
Nevertheless, the issue of diversification continues to strike a chord among regional central banks and major institutional investors, driven by the accelerated pace of reserves accumulation in the past decade, low-yield environment in the G7 economies and changing trends in trade pattern and currency regimes. This necessitates a rethinking on how reserves should be invested. The fast pace of reserves accumulation and low yields on G7 assets remained the most compelling reasons for diversification in the quest to seek better risk-adjusted returns in alternative asset classes, such as emerging market debt, commodities and equities. BIS Review 162/2010  3  Intra-regional trade in Asia has surged from 32% of total exports in 1995 to an average of 50% in 2008, while the use of regional currencies for trade settlement has started. Furthermore, most Asian economies have gradually shifted from a US dollar focus to a more flexible exchange regime against broad basket of currencies, a trend which underlies the rationale of diversifying away from US dollar. In tandem with the rising savings and reserves accumulation by regional central banks, these reinforce the argument for more intra-regional investments which will contribute to the goals envisioned by the Asian Bond Fund (ABF) initiatives. The ABF was a fund launched by EMEAP, comprising foreign reserves held by regional central banks for investments in regional bonds with the aim of contributing to the development of regional bond markets.

Safety nets have also been developed and enhanced, such as in the form of liquidity support to member countries via the ASEAN+3 Chiang Mai Multilateral Swap initiative which consists of a USD120 billion currency swap facility, aimed to support countries with short-term liquidity needs and to supplement existing international financial arrangements. These various developments certainly have significantly enhanced the region’s capability to holistically manage the inflows and to safeguard against the risk of sudden capital flow reversal and the instability that it would bring. Malaysian market developments Let me turn to some recent key developments in the Malaysian financial sector. The domestic financial landscape is undergoing transformation due to our continuous efforts in financial deregulation and liberalisation. Pursuant to financial liberalisation measures announced by Prime Minister Dato’ Sri Najib Tun Razak, the central bank has granted 5 commercial banking licences to foreign banks in June this year, with mega Islamic banking licences to follow suit. Foreign equity limits in investment banks, Islamic banks and insurers have been raised while more operational flexibilities have been granted. In addition, the government has announced plans to increase foreign investment limits for the government linked investment companies such as the Employee Provident Fund. Importantly, these  2  BIS Review 162/2010  liberalisation measures will further strengthen our inter-linkages with financial markets in other parts of the world.
There is still much to be done: I’ll discuss as examples our efforts to reduce the complexity of the rules; to ensure that they are sufficiently risk-sensitive without being overly conservative; and to maintain a level playing field. Finally, I’ll conclude with thoughts on some longer-term and future efforts that the Committee may undertake to continue to align the system of supervision with the best practices of leading institutions and practitioners worldwide. A Look Back As we resolve the final questions and complete the text of the New Accord, it’s important to remember why all of us put our best into its success. The existing Accord was already considered a milestone achievement in banking, as it offered the first internationally accepted “yardstick” for capital adequacy and a simple measure of risk. It had received praise for reversing a downward trend in bank capital levels and for serving as a benchmark measure of a bank’s financial health around the world. But the 1988 Accord was a blunt instrument that quickly fell behind the times. Innovations in technology, in banking products, and in risk management techniques changed the way that leading banks measure and manage their risks. By the mid-1990’s, bankers and supervisors agreed that the  BIS Review 46/2003  1  original Accord no longer provided a meaningful measure of risk for the largest and most sophisticated organisations.

Jaime Caruana: Contemporary issues in credit risk Keynote address by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, to the Credit Risk Summit USA 2003, sponsored by Risk Magazine, New York, 27 October 2003. *  *  *  Introduction I would like to thank Risk Magazine for inviting me to participate in this summit on contemporary issues in credit risk. Looking at the agenda, it is clear that, while credit may constitute the oldest risk in banking, it remains the most important and is still one where we have much to learn. There is a Latin proverb that says ‘Danger can never be overcome without taking risks’. As a supervisor, I would tend to rephrase that by saying that managing risks properly is the best way to overcome danger. I think this idea is at the core of any modern, innovative and dynamic economy. The next two days will no doubt offer a sense of the rich abundance of research under way to identify risks, to improve our measures for them, and to find better ways to address them. On this front, a risk manager and a bank supervisor share similar interests. A risk manager seeks the best risk measures and management techniques to protect a bank against losses, to hone its competitiveness, and to enhance its profitability and long-term growth. Supervisors advocate sound risk management practices to ensure the adequate capitalisation and prudent management of all banks.
If countries with large deficits fail to manage their sovereign debt problems in a credible way there is a risk that they will find it difficult to borrow on the capital markets. They may then be forced to make faster and more extensive cuts than is economically desirable in the short term. However, the consolidation of public finances is necessary and may lay the foundations for better economic development in the longer term. Normally, fiscal policy tightening leads to a slowdown in economic activity. In some cases tightening measures may actually stimulate activity if they lead the households to become more optimistic about the development of their net incomes.6 However, this does not seem to be the case normally. According to an IMF study, fiscal policy tightening (in the form of a combination of reduced public expenditure and higher taxes) equivalent to 1 per cent of GDP leads GDP to fall by 0.5 per cent two years ahead, and unemployment to increase by 0.3 percentage points.7 The budget consolidation programme carried out in Sweden in the 1990s could be regarded as an example of stimulating fiscal policy tightening as the Swedish  6  According to the theory of Ricardian equivalence, or the theory of the stimulating effects of fiscal policy tightening, it is assumed that people understand that a budget deficit must sooner or later be funded by higher taxes or lower public expenditure. They are thus expected to react to increased budget deficits by increasing their own savings.

In November, they described the turnaround as a “heart attack”. Government authorities worldwide have taken comprehensive measures designed to improve banks’ liquidity and solidity, boost demand for goods and services and restore the smooth functioning of credit markets. In several countries, central bank benchmark rates have been set at close to zero. In Norway, a series of measures have also been implemented to mitigate the impact of the financial crisis. Norges Bank has supplied more liquidity to banks and eased the collateral requirements for loans. We have provided liquidity at longer maturities, introduced foreign exchange swaps involving both the US dollar and the euro in order to supply Norwegian krone liquidity, and loaned US dollars to Norwegian banks, which we ourselves procured from the Federal Reserve. Norges Bank’s key policy rate has been reduced by 4.25 percentage points to 1.5 per cent since 15 October 2008. To facilitate banks’ access to funding, the government has provided banks with access to liquid government securities in exchange for covered bonds issued by mortgage companies. Moreover, the government has increased loans and guarantees for Norwegian exports and raised state bank lending quotas. At the same time, Folketrygdfondet has increased its bond purchases. In order to bolster banks’ solidity, the government plans to supply risk capital to Norwegian banks through the Norwegian State Finance Fund. To restrain the decline in activity in the Norwegian economy, central government expenditure will be increased by 10 per cent this year.