samchain/econo-pairs-v1 huggingface dataset:
We can likely achieve the same risk distribution with substantially fewer securities. This will also reduce operational risk and bring down management costs in the long run. Petroleum revenue spending In the book “Over Evne”1 [Beyond our power] about the history of the Ministry of Finance, the historians Einar Lie and Christian Venneslan describe how the discovery of oil at the end of the 1960s brought bright prospects for the future and considerable eagerness to spend the revenues. Oil would give us a “qualitatively better society”2. But the oil nation stumbled at the start. The current account surplus at the end of the 1960s had been reversed to a deficit of 12 percent of GDP by 1977. The deficit was three times as large as that recorded by Italy and Spain last year. The International Monetary Fund came knocking at Norway’s door. Fiscal policy had to be tightened and many Norwegians experienced a decline in income. Norway was hit by oil price shocks in the following years and economic reforms were implemented in several areas. After a period it became clear that the central government budget would be in surplus and that transfers would be made to the Fund. Norway’s experience from its first 30 years as an oil-producing nation led to the introduction of the fiscal rule, which has been a key element of Norwegian economic policy for the past decade. Report no.

A more even distribution of the Fund’s ownership will provide us with the opportunity to take part in the value creation in regions with strong growth. This implies a reduction in the allocation to European equities and an increase in the allocation to the Americas and emerging economies. High economic growth in Asia can provide sound returns on investments in that region even though today’s equity prices already reflect expectations of higher growth in eastern than in western regions. A more even distribution will nonetheless improve the trade-off between risk and expected rewards. The currency composition of the bond portfolio should also be adjusted. According to the guidelines, the distribution in the bond portfolio should be based on the volume of sovereign debt issued by each country. This has resulted in rising loans to countries that have issued  BIS central bankers’ speeches  3  new debt. The risk linked to that strategy came into evidence in the wake of the financial crisis. A distribution of government bonds that is based on GDP will reduce this risk. Moreover, it has been proposed that government debt issued by emerging countries also be included in the portfolio. The consequence of this is the same as for the equity portfolio, that is to say a reduction in the Fund’s European holdings. The financial crisis showed that many securities move in tandem. The number of bonds in the portfolio has been more than halved over the past few years.
•  The PS(O)A also protects customer funds held in widely-accepted stored value facilities such as the Ez-Link and NETS FlashPay cards that commuters on public transportation use every day. •  Thanks to the PS(O)A, our key payment systems continue to operate safely and efficiently. But FinTech is changing the face of payments. •  Every month, MAS meets many FinTech firms that do not fit neatly into categories like remittance or stored value. 2  BIS central bankers’ speeches  •  Most internet-based stored value wallets today would be regulated under both the MCRBA and PS(O)A. •  It is not efficient for companies to be regulated under two pieces of legislation, which were not written with the FinTech solutions of today in mind. The nature of risk in the payments ecosystem is also changing. •  The current regulatory regime aims to ensure financial stability, protect stored values, and prevent money laundering and counter the financing of terrorism. •  But with the proliferation of innovative e-payment solutions and the rise of e-commerce, payment firms have become more enticing targets for cyber criminals. MAS will therefore update its regulatory framework. •  We will streamline the MCRBA and PS(O)A to create a single piece of legislation governing both traditional and innovative payment companies. •  We will enhance the provisions for consumer protection and strengthen cyber security requirements.

With this goal in sight, first we need to recognise that climate risk is a cross-cutting risk, for which risk management approaches and methodologies are largely still under-developed. Given this, there is much more to be discovered in terms of how it can be managed in an integrated manner with other financial risks. This suggests a need for an iterative process that will enable financial regulators and the industry to converge on supervisory expectations and a common framework for assessing physical and transition risks. As part of this process, we are examining the scope and specific approaches to incorporate climate-related financial risks within the Pillar 2 requirements. Secondly, the nature of climate-related risks calls for central banks and regulators to collaborate at the national level to support alignment of financial industry responses with national climate strategies and priorities. As I mentioned at the start of my remarks, central banks and financial regulators provide an important bridge between the financial sector and the Government to inform national policies, targets and strategies on the one hand, and financial sector responses to climate risk on the other hand. In Malaysia, JC3 serves as a focal point for engagements with the Malaysian Climate Change Action Council (MyCAC)1 on national climate policies. Third, effective coordination with the industry serves to maximise transition benefits and minimise downside risks. For developing and emerging economies in particular, an inclusive strategy is key to avoid macroeconomic and social dislocations as we transition to a low-carbon economy.
This is especially the case at board and senior management level, where leaders are often not fully on board with Regtech adoption because they do not fully understand its potential benefits. Regtech promotion 31. So those are some of the key challenges that we need to overcome. Before talking about the solutions, let me share our vision for Regtech in Hong Kong – what we call “Regtech 2025” – which is the underlying theme for the White Paper. 32. Regtech 2025 requires us to achieve 4 key goals by the year 2025. We can crystallise 3/6  BIS central bankers' speeches  these goals in four action-driven verbs : Lead, Adopt, Grow, and Nurture. In terms of “Lead”: Hong Kong aims to become one of the global leaders in Regtech by the year 2025 In terms of “Adopt”: we want to ensure that Regtech will be extensively adopted by the Hong Kong banking sector in the next few years As regards “Grow”: not only do we want wide adoption of Regtech among banks, we also want Hong Kong to become a breeding ground for growing Regtech solutions for financial institutions And finally on “Nurture”: we want to ensure that Hong Kong will emerge as a hub for nurturing Regtech talent 33. With these four key goals in mind, the White Paper sets out 16 recommendations across five core areas, all designed to accelerate Regtech adoption. 34. We can summarise the five core areas using the following framework: 35.

Lorenzo Bini Smaghi: Macro-prudential supervision Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central Bank, at the CEPR/ESI 13th Annual Conference on “Financial Supervision in an Uncertain World”, European Banking Center at Venice International University, Venice, 25-26 September 2009. *  *  *  Introduction 1 The recent financial crisis has produced a broad consensus on analysis and policy action in at least three areas, namely the need: i) to gain a better understanding of systemic risk; ii) to strengthen the macro-prudential aspects of financial supervision; and iii) to deepen central banks’ involvement in it. The establishment of a new body to conduct macro-prudential supervision at EU level – the European Systemic Risk Board (ESRB) – is one element in a comprehensive set of initiatives and responses in this field. My remarks today focus on the future work of this body and consist of four parts. I’ll first consider the origins, purpose and structure of the ESRB. In second place, I’ll discuss the concept of systemic risk, and how it can be monitored and assessed effectively. I’ll examine some analytical tools for systemic risk analysis in the EU and look at how these tasks could be organised in the context of the ESRB. In the third part, I’ll cover the ECB’s experience in conducting financial stability surveillance in the euro area and reflect on the vulnerabilities that we (and other authorities) identified before the crisis.
But at this stage, they do not support the view that we are or will be facing a large positive output gap. Overall, my reading of the available evidence so far is that we cannot say – with sufficiently high confidence – that we are facing a large and permanent loss of potential. Implications for monetary policy My primary objective today is to illustrate the difficulties and the risks policymakers must contend with when assessing supply and demand dynamics in real time, as well as the implications of these dynamics for the medium-term inflation outlook. I will nonetheless offer some reflections on how the previous analysis is influencing my thinking on monetary policy in an uncertain economic environment. There is a common argument today that monetary policy faces asymmetric risks. If policy overreacts to inflation, it can always undo the damage later. But if it underreacts, and inflation gets out of control, it will have to subject the economy to a harder and more costly tightening to rein inflation back in. There are limits to this argument. Monetary policy certainly needs to adjust – even if the output gap is negative – because the risk of second-round effects has become too great. However, I also believe that given the uncertainty we are facing, the calibration of our monetary policy stance must remain evidence-based and focused on the medium-term inflation outlook. [19] And after the progress we have already done in adjusting our policy stance, an aggressive tightening is not advisable, for two main reasons.

The analysis assumes a drop in globalisation equal to half of that observed during the global financial crisis and a permanent, large fall of European firms’ participation in global value chains. See Le Roux, J. (2022), “How persistent supply chain disruptions could affect euro area potential output”, Economic Bulletin, Issue 1, ECB. 16. The analysis assumes a permanent increase by 40% of oil prices. See Le Roux, J., Szörfi, B. and Weißler, M. (2022), “How higher oil prices could affect euro area potential output”, Economic Bulletin, Issue 5, ECB. 17. These effects on potential output are not additive. 18. ECB staff analyses find that while participation rates of older workers have not yet returned to their prepandemic trend, they are now comfortably above their pre-pandemic level. This stands in stark contrast with the United States, where the participation of older workers has not recovered and may remain permanently below pre-pandemic levels. See Faria-e-Castro, M. (2021), “The COVID Retirement Boom”, Economic Synopses, No 25, Federal Reserve Bank of St. Louis, 15 October and Domash, A. and Summers, L.H. (2022), “How tight are U.S. labor markets?”, NBER Working Paper, No 29739, National Bureau of Economic Research, February. 19. See Panetta, F. (2022), op.cit. 20. Aikman, D., Drehmann, M., Juselius M. and Xing, X. (2022), “The scarring effects of deep contractions”, BIS Working Papers, No 1043, 3 October. 21. See Panetta, F. (2022), op.cit. 22. Aikman, D, Drehmann, M., Juselius, M. and Xing, X. (2022), op. cit. 23. Moreover, lower future growth could dampen the natural interest rate, r*.
The activation of the macroprudential tools in order to create a buffer to be used in bad times incorporates a new dimension into the interactions with monetary policy. That is an issue which, in my view, should be analysed further. At a minimum, in these cases, monetary policy and macroprudential policy should take into account their respective decisions when calibrating the use of their instruments. As for fiscal policy, it is also important to emphasise that the creation of shockabsorption capacity through macroprudential decisions should not be used as an argument for relaxing fiscal policy. In other words, fiscal policy should also 7/11  create buffers in good times to be used in bad times, through automatic stabilisers or discretionary action, in particular in countries belonging to a monetary union. Another key issue related to this discussion is that the capital buffer built up in good times is expected to be released when the phase of the cycle changes. Significantly, this decision can be even more complex than those made in the activation phase. In this respect, and given the empirical evidence we have, there is a clear issue of timing. If it is released too early, it may even accentuate the expansion of the financial cycle. If it is released too late, it may entail a significant cost to the real economy. It is also necessary to assess whether the release has to be once-and-for-all or gradual. The release of the buffers may induce negative market reactions or generate conflicts with the microprudential supervisor.

In this setting, one of the main priorities for those responsible for ensuring the stability of the financial system with powers over macroprudential policy is, in my view, to develop a complete and coherent policy framework for the application and communication of that policy. And, in this task, the contribution of academia is of vital importance. In what follows, I would like to share some preliminary thoughts on some of the elements that, in my opinion, should be included in this framework. In particular, I would like to focus on two specific issues: first, the macroprudential policy objectives, which of course should be the basis for the activation of the instruments; and second, the choice among the different tools at the disposal of the macroprudential authority to best achieve these objectives in different circumstances. What should be the objective(s) of macroprudential policy? Allow me to focus now exclusively on banks and on one particular instrument, the Countercyclical Capital Buffer (CCyB), the Basel III macroprudential tool par excellence. According to the Basel Committee on Banking Supervision (BCBS) its first objective is rather narrow: The primary aim of the countercyclical capital buffer regime is to use a buffer of capital to achieve the broader macroprudential goal of protecting the banking sector from periods of excess aggregate credit growth that have often been associated with the build-up of system-wide risk.
In the rest of my time, I will describe the work that is being done on policy responses. First, I want to challenge the argument that the issue derives from the re-regulation of the capital and liquidity positions of banks that have in the past acted as market-makers, and  5  For more on this see the Bank of England Financial Stability Report, December 2014, “Box 4 – Drives of market liquidity” pages 54–56. BIS central bankers’ speeches  5  thus marginal investors. This argument has a number of strands: capital and funding costs for dealer inventories in banks and broker-dealers have increased; the cost of hedging with single name credit default swaps has risen, causing availability to drop; proprietary trading restrictions (e.g. the Volcker Rule in the US) limit market making (it is too hard to distinguish prop trading from market making); and increased trade transparency requirements restrict market liquidity. (Morgan Stanley/Oliver Wyman (2015)) If we look at the US as the prime example, the evidence indicates that the big run-up in inventories of fixed income securities held by the primary dealers occurred from around 2003-04 onwards, reached a peak in 2008, and has then settled back to around the 2002 level over the last two years, or so. Looked at in this light, the increase in inventory capacity in the dealer community was ephemeral, reflecting the underpricing of risk, a weak capital regime and the subsidy provided to the major banks by implicit government guarantees.

In turn, bid-ask spreads may widen, which could ultimately provide additional volatility and diminish liquidity further”. BIS central bankers’ speeches  have occurred in the correlations between various market participants’ trading activities, such as the use of passive investment strategies); and deepening our knowledge of the contributors to greater fragility of market liquidity. The FPC has asked for a full report on these issues when it meets in September and an interim report in June. Globally, the Financial Stability Board also has set priorities for its work, with which we are fully engaged. The intention is to understand and address vulnerabilities in capital market and asset management activities, focussing on both near-term risk channels and the options that currently exist to address them, the longer-term development of these markets and whether additional policy tools should be applied to asset managers according to the activities they undertake, with the aim of mitigating systemic risks. The PRA, as the UK’s prudential supervisor of major trading firms, will continue to develop its capacity to assess algorithmic or automated trading, including the governance and controls around the introduction and maintenance of trading algorithms, and the potential systemwide impact of crowded positions and market liquidity. We will assess the adequacy of existing risk measurement and management practices in capturing exposures from the large volume of intraday trading instigated by these algorithms.
We also remember the series of bold and decisive steps of the then policymakers towards macroeconomic stabilization, further supported by international financial institutions, especially through the first arrangements with the IMF and the World Bank back in 1993. The results were gradual inflation drop to single digits, enhanced foreign reserves, control of monetary aggregates, and consolidation of the fiscal sector. Crucially, in 1995, the monetary strategy of stable exchange rate of the denar was furnished - a strategy that is an anchor of stability of the Macedonian economy today. The same year, soon after the adoption of the bank regulation and supervision, the banking system was rehabilitated, and later on transformed on a market basis. Six years later, the payment system reform was introduced, along with the building of other central bank capacities, including in the field of statistics, financial market operations, treasury operations and, of course, research as a significant support for the monetary decision-making. All this created preconditions for the 25-year long monetary chapter of our story to be engraved with macroeconomic stability and compliance with international and European standards. For many years now, the European Commission, in its annual progress reports on monetary policy, has noted a high level of compliance with the European legislation. However, in recent years, besides the constant improvement, we have also confronted and responded to a series of challenges, both domestic and global.

Ardian Fullani: Recent economic developments in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the Joint Press Conference of the International Monetary Fund (IMF) mission, the Ministry of Finance and the Bank of Albania, Tirana, 9 March 2010. *  *  *  Honourable Mr. Minister of Finance, Honourable Mr. Bell, Honourable participants, During the last two weeks we have had an intensive dialogue with the IMF Mission, which visited Tirana in the framework of periodic consultations in terms of the observance of Article IV. During these discussions there is appraised the good performance of the Albanian economy during the past year and there is also emphasized the need for pursuing prudent economic policies, designed and implemented in the context of strengthening the macroeconomic and financial stability. Also, special attention has been paid to the need for ongoing structural reform that will support our long-term economic growth. The Albanian economy has recorded a positive economic growth during the past year and has successfully tackled the direct and indirect shudders of the global economic crisis. Moreover, the Albanian economy has passed the test, by maintaining the domestic economic and financial balances, which serve as a prerequisite for a sustainable and long-term growth. Thus, inflation rate fluctuated around 2 to 3 percent during 2009; the country’s external balances have shown correction signs, while the Albanian banking system remains robust and well-capitalized. However, the economic growth rate slowed down significantly during 2009.
This could also potentially reduce the cost of trade finance of which according to W TO, has surged by 30% on average over the past year as well as eliminate fraud and increase transparency. The Bank, in recognising the potential of digitalisation in advancing the delivery of meaningful access to consumers, provides an enabling environment for financial institutions to foster innovation through the fintech regulatory sandbox and facilitation of pilot projects. Such avenues enable us to identify potential adjustments or responses to the existing regulatory framework, commensurate with the risk and scale of activities. One such initiative is the development of proof-of-concept for double invoicing detection carried out by selected financial institutions, which is now being enhanced by PayNet for commercial use. In closing, I would like to share an excerpt from the book of (Musnad) of Ibn Hanbal – The Prophet (peace and blessings be upon him) was once asked about the best kind of earnings, of which he replied, “That for which a man works with his hand. And honest trading. "6 Trade is held in such high regard in Islam, and hence we should always strive towards betterment in its execution. Thank you. 1 Source: MATRADE article, 29 July 2021, “Double-digit growth in exports in major markets” 2 Source: World Bank Islamic Trade Finance Report 2021. 3 3/4  BIS central bankers' speeches  3 Source: World Economic Forum article, April 2021, “Economists support ‘immediate and drastic action’ against  climate change” 4  Source: Standard Chartered (June 2021).

More institutions are expected to participate later this year. In this space, there are continuing ample and growing opportunities for Islamic finance to tap on as we ramp up in high value-added sub-sectors such as halal pharmaceutical and cosmetics, as highlighted in HDC’s sectoral development roadmap. Islamic finance also is primed to support initiatives under the National Investment Aspiration (NIA). As the new national investment policy strategy, the NIAs aim to increase Malaysia’s capacity to produce more complex and high-value products and create more high-skilled jobs5. This, in turn, will result in Malaysia producing new lines of goods and services beyond the traditional and upstream products, which will require support including in trade financing in developing businesses across these new product supply chains and penetrating new markets. The different nature of these needs, however calls for more well designed solutions that extend beyond readily available products. Conclusion Before I end my remarks, I would like to touch on the importance of calibrating trade finance processes with digitalisation. The World Bank’s Islamic Trade Finance Report recognises this as a priority area and calls for enhancements to online Islamic trade finance supply chain financing, and the use of blockchain technology. Such technological advancements that leverage distributed ledger technology and API-enabled trade finance platform can address long-standing issues in trade finance operations that mainly arise from the voluminous and manual nature of trade finance processes.