samchain/econo-pairs-v1 huggingface dataset:
In particular, infrastructure financing is likely to be a major driver of demand for investments. The Asian Development Bank estimated that $ trillion worth of infrastructure spending is needed in the 10 years leading up to 2020 to support Asia’s growth. The demand for capital investments driven by the growth in Asia’s real economy will support the development of the region’s capital markets. As investors continue to invest in Asia, the depth, accessibility and efficiency of Asia’s capital markets will continue to improve. BIS central bankers’ speeches  1  With proper balance, the continuing inflows of funds, improvements in capital markets and growth in the real economy will create a self-reinforcing virtuous circle. 7. Along with the rise of Asia, Singapore will continue to enhance our position as a Global-Asia financial and business hub. As a well-connected international financial centre, Singapore can be the base for global players to tap into opportunities offered by a rising Asia. To do that, we will build on our strengths in areas such as trading, asset management and infrastructure financing. We will also continue to emphasise the importance of strengthening risk management, enhancing transparency, as well as build depth and diversity in the offering of financial products and services. Let me cover these areas in turn. 8. First, in the area of strengthening risk management. In the context of the capital markets, we have been building the necessary infrastructure to help market participants better manage their risks. There has been greater concern over counterparty risks since the financial crisis.

I have to say that this is not an undisputed statement, because I told this story at a general business event and someone took me to task that every member of an insurance board should be fluent in the theory of a Copula. To be clear, we do not expect Copula fluency for all. But the moral of the story is that there is not a strong consensus on how to set the expectations of Boards so that they can perform their role. We may at times have gone too far in the direction of individual technical knowledge, and by the way it was the Copula story and others that convinced me to stop interviewing people taking up standard NED positions. The PRA has close contact with many Boards, so as supervisors what do we expect of Boards? Three things stand out for me:1.  we expect Boards to exercise good judgment in overseeing the running of the firm and to do so on a forward-looking basis;  2.  that judgement is improved by good constructive challenge from Non-Executives. A firm’s culture should promote discussion, debate and honest challenge.
By setting up the Fund – with investment abroad – it became possible for Norway to establish a path for the production of oil and gas that is independent of the profile for petroleum revenue spending. The alternative to a fund would have been to regulate the extraction path by putting a conservative upper limit on annual extraction. The Fund serves as a buffer between wide swings in petroleum revenues and domestic spending. The decisions on annual revenue spending can be made independently of the size of the revenues. As a result, swings in petroleum revenues do not have an automatic impact on the Norwegian economy. The existence of the Fund contributes to stabilising the NOK exchange rate, and countercyclical economic policies are more effective for a country with net foreign assets. The virtues of the fund structure are many. The authorities have established a transparent system for managing government petroleum income as all oil revenues are transferred directly into the Fund. The Norwegian parliament must adopt a resolution on any use of the return or the capital of the Fund. Oil revenues are not earmarked. There is no hidden use of revenues, or any use for special purposes. The Fund is strictly and effectively "out of bounds" to special interests. It is important that this remains a feature in the future. We now have close to fifteen years of a rapidly expanding Fund behind us, and it is becoming more likely that the fund will be a very long-term savings plan.

1 Among other important tasks in coming years and decades, the government would need return from financial assets to provide for future pensioners. We can probably expect that productivity and real wages will continue to grow in parallel, and future pensioners would most likely want to take part in that welfare gain. This may imply that government expenditures will increase more than the overall growth in the economy, as the number of pensioners is growing fast and the demand for healthcare also will be higher. Although real wages increase, it will not be easy to raise the tax level. Thus, the government will need return from financial assets to finance the increased expenditure for pensioners. International capital markets have played a crucial role in allowing us to follow the strategy for extraction of petroleum. We drew heavily on borrowing opportunities abroad when the petroleum industry was being built up. We did the same in order to expand welfare schemes and to finance the countercyclical policy of the mid-1970s and the early 1990s. Over the last decade and a half, international capital markets have enabled us to convert national oil and gas resources into equities and bonds abroad in the Fund. The implementation of our investment strategy is dependent on free capital movements. I would like to remind the audience that only some twenty five to thirty years ago we had very rigorous capital restrictions ourselves.
Meanwhile, the Asian region has shown strong growth performance amidst robust intra-regional trade. This will be mutually reinforcing for the region in expanding the cumulative domestic market of the region and thus contributing to the overall growth prospects of the region. While growth remains strong, there are risks on the horizon. The recent moves to raise interest rates have however aimed to adjust the economic expansion to converge to more sustainable levels. Policies in a number of the major economies have now shifted from addressing a deflationary environment to a more neutral position that is aimed at removing the inflationary bias. This is in contrast to an anti-inflationary stance which would require aggressive tightening. On the domestic front, Malaysia continues to be highly integrated with the world economy in which economic and financial developments in our major trading partners will have implications on our economy. The strengthening of our economic structure, our financial system and our macroeconomic fundamentals, particularly since the Asian crisis in 1997-1998, has raised our tolerance level for absorbing volatility, enhanced our resilience to shocks, improved the agility to adjust to change and increased our policy flexibility to mitigate any adverse external developments on our domestic economy. Going forward, the strong growth in manufacturing and services sectors will continue to sustain growth. The prospects for higher consumption spending is also positive.

For instance, leverage levels in the financial sector remain very high. The current low interest rate environment is encouraging risky high-yield strategies; activity on these high-yield markets is sustained; innovations on the ETF market are raising questions and the commodity market is being financialised. The active management of these new complex instruments is thus likely to reach its limits, as happened with CDOs. The current challenge for central banks is two-fold: we need to improve our ability to monitor risks at a system-wide level; we also need to re-establish the moral hazard that the management of the crisis suspended. On their side, banks and market participants need to ensure that they improve their risk management autonomously in order to reduce this  4  BIS central bankers’ speeches  hazard, in the interests of their shareholders and depositors, but also of economic development as a whole. Thank you for your attention. BIS central bankers’ speeches  5
Additionally, in that period there was a strong contraction in the bank credit portfolios, which resulted from the sharp correction of the excessive debt built up by Spanish households and firms in the pre-crisis years and from banks’ loss of market share in the total financing of the economy. During those years, banks cushioned the balance sheet effect of this fall in their credit portfolios by increasing their exposure to other assets, especially through government debt purchases. As these debt securities provide lower returns than lending to households and firms, in the long run this portfolio rebalancing resulted in a fall in the average return on assets. However, when the sovereign debt crisis came to an end, the increase in value of these debt securities provided a positive, albeit short-lived, boost to profitability. This effect fades gradually once interest rates stop falling and, furthermore, in recent years banks have substantially reduced their holdings of these securities in the available-for-sale portfolio, which, since it is measured at market prices, is where these gains are recorded. On our estimates, the overall effect of these changes in asset composition – associated with the increase in non-performing loans and the decrease in the relative share of credit on balance sheets – would explain some 70% of the decline in net interest margin in the Spanish banking system between 2007 and 2018.

In addition, low interest rates and, in general, more accommodative financial conditions naturally have a positive impact on economic activity and employment and help stimulate the flow of credit, thus also driving up banks’ profitability. Indeed, this is the key rationale behind an expansionary monetary policy such as that implemented in the euro area in recent years. As an illustration of these effects, according to various ECB  12/29  studies2 and the Banco de España’s own estimates, the set of monetary policy measures adopted since mid-2014 will have an overall impact on real GDP growth in the euro area of around 2 pp in cumulative terms between 2016 and 2020. Moreover, these estimates do not include the measures agreed in September which, according to the Banco de España’s estimates, could add up to 0.4 pp in cumulative terms to euro area GDP growth by 2021. In any event, it is fair to say that there is evidence that, since the ECB’s deposit facility rate fell below zero, negative surprises in short-term interest rates have been accompanied by falls in European banks’ stock market valuations. Given the endogenous nature of the monetary policy response to projected economic developments, this response by bank share prices to monetary surprises may reflect, on the one hand, the negative impact of less favourable projections for the future macroeconomic setting and, on the other, the market view on the direct negative effect of further interest rate cuts on banks’ future profitability against a backdrop of a prolonged period of negative rates.
–  The public finances should be managed with an eye to the nature and extent of risk exposures elsewhere in the economy. –  It is the precise pattern of capital flows, and the resulting composition of the resulting balance sheets, that matter to the stability of the financial system. All macro policymakers – monetary, macroprudential and fiscal – should, therefore, pay attention to the national balance sheet; and to the pattern of gross as well as net capital flows. –  But, in doing so, we and our peers must avoid financial protectionism just as a previous generation learned to oppose trade protectionism. And we must not leave anyone thinking that we can eradicate economic problems. 26  The IMF’s most recent spillover report on the UK can be found at http://www.imf.org/ external/pubs/ft/scr/2011/cr11225.pdf. That report concluded: “the size and interconnectedness of the UK financial sector make it a powerful originator, transmitter, and potential dampener of global shocks. The stability and efficiency of the UK financial sector is, therefore, a global public good requiring the highest quality supervision and regulation”. 10  BIS central bankers’ speeches  Conclusion Around the Western world, excess indebtedness became legion during the opening years of the last decade. US subprime mortgages, perhaps the most egregious although by no means the largest example, became the straw that shattered the camel’s back. In this metaphor, both the “straw” and the “camel” are balance sheets.

Its behavior has been atypical compared to previous episodes following a recession. This fall was especially marked in the euro area, from 2.7% in 2011 to 0.8% in December 2013. Recently, developments in the euro area have started to diverge downward from some other advanced economies such as United States and Canada. The sources and reasons for such a low inflation are complex and multiple. There are many uncertainties. Temporary and global factors may be at play in the euro area with import prices going down. I also think there are more permanent and deep forces pushing inflation down both at the euro area and global level. Besides there is still an important unused capacity – commonly labeled as “slack” -in most advanced economies, as demand has not yet caught up with its pre-recession levels and firms, as a consequence, have not recovered their pricing power. Commodity price inflation has been trending down recently. This is true both for energy and food prices. Commodity prices have a global impact and react very amply to small changes in supply and demand equilibrium. They act as amplifiers and transmitters of disinflationary pressures. Powerful headwinds – and disinflationary forces- are coming from the deleveraging process especially in the euro area, due to the importance of the banking sector and the amplitude of its balance sheet adjustment. We are working very hard to repair the bank-lending channel in the euro area.
With some exceptions, the principle of personal independence is not applicable to the members of the Supervisory Board. Is the principle of independence under Article 130 of the Treaty applicable to the ECB in its role in EFSF/ESM financial assistance programmes for a number of euro area Member States? Another question to examine is whether the principle of independence under the Treaty is applicable to the ECB in respect of its role in ESM/EFSF financial assistance programmes for certain Member States. With the financial and sovereign debt crisis, the Commission, on behalf of the ESM and the EFSF, and in liaison with the ECB, was given a number of specific tasks relating to the assessment of risks to the financial stability of the euro area as a whole or of its Member States, the assessment of whether a Member State’s debt is sustainable, the assessment of the financing needs of the Member State concerned, the  http://www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html[03.04.2017 15:53:14]  Central bank independence revisited  negotiation of a memorandum of understanding (MoU) detailing the conditionality attached to financial assistance facilities of the ESM/EFSF for that Member State, and monitoring compliance with such conditionality. Where possible and appropriate, the Commission – in liaison with the ECB – was mandated to conduct these ESM/EFSF activities together with the International Monetary Fund.

In fact, these bouts of extreme instability have disrupted the potential growth trends, which in some cases have taken years to recover. On the whole, these episodes may be associated with too much financial liberalization too soon. The unique global backdrop, as well as the economic outcomes in terms of growth and volatility that I have just shared with you, presents a real dilemma and at times tension in emerging Asia. And nowhere is this tension more palpable than it is in the realm of exchange rate and capital account regimes. While benefits from trade integration are appreciated and shared by billions the world over, net benefits from international financial integration have not been so apparent in Asia and emerging economies in general. This is consistent with an observation that Asian emerging markets rely increasingly more on trade integration because it is judged to be a safer mode of risk-sharing with the world. As a result, while the pace of financial integration has far outstripped trade integration in advanced economies, it has only managed to keep pace with trade integration in emerging markets. 3 Ladies and Gentlemen, Asian economies and policymakers have come a long way in their attitude toward macroeconomic risk management since 1997. Countries have taken unilateral actions to promote economic and financial resiliency. Having appreciated the evidence that macroeconomic stability provides an environment that is conducive for sustained growth, Asian emerging markets have continued to pursue fiscal discipline and more flexible exchange rates on the whole.
As Islamic finance transitions to its next stage of development with greater international integration, the immense benefits that will be unleashed need to be accompanied by a higher level of resilience to be well positioned to manage the new challenges that the future will bring. Our collective efforts to mobilise a higher level of global cooperation in promoting this outcome will also enhance the prospects of Islamic finance to contribute towards securing global financial stability and a greater shared economic prosperity. 4  BIS Review 70/2010

Similar to IOER for banks, ON RRPs provide a risk-free overnight investment directly to a broad range of bank and non-bank counterparties. By reaching financial institutions that are ineligible to earn IOER, an ON RRP facility widens the universe of counterparties that should generally be unwilling to lend at rates below those available from the Fed. Such a facility could also enhance competition in money markets by offering an alternative safe investment and thus  6  Moreover, competition may be imperfect in some money markets currently, allowing spreads to persist longer than they would if markets were more competitive. For example, much money market activity is over-thecounter, potentially leading to search frictions and bargaining. Anecdotal evidence suggests that lenders typically interact directly with a relatively small number of counterparties, perhaps because a portion of the activity is derived from costly relationship lending. Finally, to limit counterparty credit risk, lenders sometimes seek to diversify their lending and apply concentration limits, which are often binding. 7  As I’ll explain, high-frequency variation in balance sheet costs could induce high-frequency changes in the pull of IOER and, in turn, the spread between the IOER and money market rates. We see this transitory dynamic around financial statement reporting dates. On these dates, balance sheet costs for some banks increase, and the fed funds rate and other money market rates fall relative to the IOER rate.
Nevertheless, whether or not these reserves prove sufficient will depend on the weather conditions this coming winter, and on Europe’s ability to replace them as and when they are consumed. In short, the inflation pressures we had been experiencing due to the reopening of economies after the pandemic, the supply-side bottlenecks and the higher commodity prices have been exacerbated by the conflict with Russia, leading to extraordinary and persistently high rates. According to Eurostat,2 euro area annual inflation is expected to rise to 10% in September. This means that average inflation during the third quarter stood at 9.3%, a figure somewhat higher than anticipated in the ECB's last forecast exercise (9.1%).3 More importantly, euro area inflation is expected to remain above 9% during the fourth quarter. The rise in energy and food prices is the main factor behind the high levels of inflation in the region. The depreciation of the euro has also contributed to upward price pressures, particularly by increasing the price of commodity imports. Specifically, according to the flash estimate, the price increases over the past year in the energy and food components of the consumer price index stood at 37% and 11%, respectively, in September. These two components account for almost 70% of the increase in consumer prices in the euro area over the past year. Nonetheless, inflationary pressures are also spreading to the less volatile components of the consumer basket. Underlying inflation, which excludes food and energy consumer prices, is expected to hit 4.8% in September.

Any firm making large-scale use of reinsurance needs to consider their capacity to recapture that risk in the event of the failure of one of their counterparties. We note that some firms are reliant on an action to re-cede offshored risk to another reinsurer, should the original reinsurer default. This would only be possible if the reinsurance market can operate continually and without interruption. There could be myriad drivers of reinsurer counterparty default, but some of these could point to market issues, and potentially temporary market tightening or even closure. Firms should consider this risk in their counterparty assessments, and we will look to protect UK policyholders, who are ultimately dependent on the reinsurance payments being made[10]. Process improvements The three main areas of process improvements that I want to highlight, all noted in the Government’s April Consultation Document, are: The internal model application process;  Page 7  Reporting; and The matching adjustment (MA) application process. On internal models, we are seeking ways to improve and streamline the application process as well as achieving a more flexible approach to the modelling of complex and emerging risks. This may allow models that are adequate but suffer from some non-fatal shortcomings to nonetheless be used whilst those shortcomings are addressed over a realistic timetable. Potentially, this approach could also make use of safeguards where appropriate. We will not allow the best, in modelling, to become the enemy of good enough.