samchain/econo-pairs-v1 huggingface dataset:
This situation, combined with pre-existing challenges, such as the climate change and the new protectionism trend, requires a new approach in Monetary Policy and constitutes a major test for policymakers in the euro area and around the world. In Cyprus, the consequences of the adverse geopolitical events to the economy and the banking sector are so far contained, but the second round effects have not yet materialised and uncertainty in an environment with high inflation and weakened growth prospects might lead to unpredictable new challenges. Therefore, close monitoring is of utmost importance for a timely and decisive reaction. Thank you for your attention. 6/6  BIS - Central bankers' speeches

While there is a case for Asian regulators to perhaps concentrate their Basel II implementation efforts initially on the Standardised Approach, they would eventually like to see their banks, those large ones in particular, adopt the IRB Approach over time as adopting the IRB Approach can substantially enhance the quality of risk management of banks. Moreover, Asian regulators including the HKMA find ourselves in the position of playing host to many large and internationally active banking groups that propose to adopt the IRB Approach globally, including their operations in our jurisdictions. In consequence, we need to develop plans for the adoption of the IRB Approach in our domestic banking  BIS Review 120/2007  1  environment. In doing so, we need to balance the readiness of the industry and other supervisory priorities versus the desirability of implementation of the IRB Approach. On readiness of the industry, we believe that there are three key challenges facing banks in Hong Kong and probably other jurisdictions in Asia. First, the adoption of the IRB Approach by banks does not merely involve the use of sophisticated quantitative tools, but also corresponding advances in banks’ risk management practices, culture, internal control and corporate governance. This is essentially the underlying and overarching principle of the IRB and other advanced approaches provided under the Basel II framework.
And we face a number of important challenges in making sure our system is as strong as it can to be. But the substantial competition from a diverse set of financial institutions, including a strong presence by foreign financial institutions, is an integral part of what makes our financial system work well. Our system would not be as efficient or as innovative, and our financial institutions would not be as strong, if we were less open or less committed to giving all institutions similar national treatment and equality of opportunity. I thought I would give you a brief overview of the some of the key challenges we face as supervisors and those that confront the risk management community. The fundamentals of the present U.S. expansion seem relatively strong, with confidence in its sustainability increasing. As the balance of risks to the outlook have evolved, and the financial markets have built in expectations of a move to less accommodative financial conditions, this is a good time to assess how well the U.S. financial system is positioned to deal with this transition, and to withstand the effects of future stress, if that were to materialize. From our perspective, the U.S. financial system is in reasonably strong shape. Risk adjusted capital ratios are strong, and earnings have been robust. Non-performing loan ratios are very low - at about one percent on average across the banking industry. The financial markets are pricing risk in exposure to financial institutions at what are still relatively low levels.

The necessary reforms will call for short-term sacrifices from all walks of life, such as the relinquishment of protection and privileges. However, the long-term gains in wealth for the country at large will more than compensate for these short-term difficulties. BIS Review 42/2005  1
Consequently, a major communication drive is needed to explain the changes agreed, the assets and liabilities of the new financial statements (which are still pro-forma) and the pending concentration programme. This is because suspicions arise in the markets from time to time that these changes, rather than amounting to wholesale reform of the organisations concerned, are merely window-dressing. And this task of educating people must be performed before the wholesale markets re-open in about three weeks’ time. When that happens, the new treasury teams resulting from the concentration and merger of savings banks will have to use that detailed information as the basis for their demands for financial resources from euro area creditors. Without fluid communication, matters will be very complicated indeed. It is now that the true extent of the value added by good management comes into its own. You must take decisions, at times disagreeable ones, to protect profit margins, to reduce operating costs and overheads, to promote business activity, to control risks and liquidity, and to complete the integration of operations. In short, you will have to convince the euro financial markets to commit money to your projects, in the form of loans and capital, and all this must be done very rapidly and in an adverse environment.

This is because, if so approved by the general meetings convened for next week, the extent of pooling will reach 100%. This solidarity arrangement contributes to providing firm foundations for a common project and giving it substance, since objectives are unified, more efficient management arrangements are set in place and the markets and all intervening agents can more readily perceive the project’s cohesiveness and viability. From the standpoint of banking regulation, by using this design IPSs become consolidatable groups of credit institutions dominated by a central body. Actually, however, they are more than a group; they are de facto mergers (“cold mergers” as they have been called) since, for economic – not legal – purposes, each participant has forgone the individuality proper to a separate legal person. Full mutual liability between the parties to the agreement has been achieved, going beyond what the law governing corporate groups provides for in Spain. Hence, in practice, the participating savings banks become, from a merely economic and managerial standpoint, what are veritable retail banking “regional heads” of the IPS regarding their operational capacity and the way in which they contribute solvency, liquidity and results to the group; yet, from the legal standpoint, they retain their personality and their sovereignty in the agreed distribution of welfare fund assets. I also pointed out how, like any new product, IPSs must pass muster in respect of the third and most important step of the evaluation process, namely the “use test”, i.e. proof of their adaptation to reality.
Indeed, real convergence is essential to create economic cohesion within EMU and promote integration between Members States, thereby helping to minimise the risk and the effects of asymetric shocks. The Eurosystem, and notably the Banque de France, is following the enlargement process with a great deal of attention. Let me stress a few points of particular relevance for the Eurosystem and for accession countries themselves, on the road towards catching up with the EU and achieving convergence. -  Firstly, nominal convergence with the EU constitutes a medium-term objective. The strict compliance with Maastricht criteria will be key for joining the euro area, but should not be seen as an immediate requirement to join the EU. Indeed, the EU Treaty calls, as a prerequisite for adopting the euro, for a high degree of sustainable convergence, which presumes that sufficient preliminary progress has been made towards real and structural convergence. Therefore, nominal and real convergence should be pursued in parallel, and are not conflicting. -  Secondly, I noted that many accession countries have already expressed their intention to join ERM II as soon as possible after EU entry. This intention is to be welcomed, although it should be clear that ERM II membership needs neither to happen immediately after EU accession in all cases, nor to be limited to only two years, which is the minimum for adoption of the euro. It would be misleading to consider ERM II as a mere “waiting room” before joining the euro.

Consequently, there is a wide variety of institutional solutions and regulatory arrangements across countries and sectors. I nevertheless consider that such a decentralised approach should be considered as an opportunity, rather than a disadvantage. It encourages "cross fertilisation" of best practices through increased co-ordination of Member States’ structural policies. My second remark concerns the changeover to the euro. This event is a major structural reform in itself, a powerful drive towards restructuring the European economy. It constitutes a strong lever to facilitate the comparison of prices, taxes and incomes. An important objective consists in raising the potential output growth of the European economy If France and Europe want to secure sustainable growth at levels that are as high as possible, the key variable is potential output growth. There are three ways of raising the level of potential output growth: First, boost investment: business leaders are completely free to invest wherever they want in France, Europe or elsewhere in the world. It is thus important that we create economic, legal and fiscal conditions that are as favourable as possible to investment in Europe. The investment appeal of Europe is crucial in this respect: the more we invest, the fewer inflationary pressures we will have, and the stronger potential output growth will be. The second way of raising potential output growth is to increase the quantity of available labour: The European Council of Lisbon fixed as a central objective increasing the employment rate of our populations from 60 to 70 % in 10 years.
Page 1  Rowing in unison to enhance cross-border payments − speech by Victoria Cleland Given at the Central Bank Payments Conference 2022  Page 2  Published on 29 June 2022  Victoria Cleland talks about the progress of a plan to make cross-border payments cheaper, faster and more transparent. This plan is set out in a roadmap created by the G20 group of countries. Victoria says for this work to succeed, central banks, industry and public authorities around the world must work together. Speech The importance of cross-border payments I am delighted to be speaking once again at the Central Bank Payments Conference. I have previously highlighted the establishment of the roadmap and targets to enhance cross-border payments. Today, I want to update you on some of the tangible progress already made in this area. And to stress the important role that you can play in working collaboratively across the public and private sectors to deliver real improvements to the cost, speed, transparency and accessibility of cross-border payments. Cross-border payments are essential to the global economy. It is estimated that this year the global cross-border payment market will settle $ trillion. [1] And it is not just the wholesale markets that are impacted: cross-border payments are crucial to businesses, consumers and remittances. In Greece alone remittances reached an all-time high of 338 EUR million in January 2022. [2] And the importance of cross-border payments is due to grow further.

The second area of reflection that I would urge this meeting to consider is that of building appropriate financing models that have been shown to work in Africa or other developing countries so that we all benefit from the best practices available. In South Africa, for instance, franchising which allows the use of brand names and building capacity have been an  2  BIS central bankers’ speeches  important driver of SME financing since it reduces the perceived risk of business failure. Warehouse receipt financing which guarantee loans with agricultural stock are extensively used elsewhere but not as much in Africa. In some countries in Asia, the use of the SME cluster model has helped to increase SME financing by building greater confidence between lenders and SMEs. The cluster model is based on members of an SME entity seeking financing together and providing collective guarantees to financial institutions. The cluster also ensures credit compliance by members while facilitating constant interaction with financial institutions. Naturally, one must guard against the temptation to adopt other experiences without serious reflection – but, what appears desirable is the need to build financing models that are appropriate and therefore can deliver sustainable financing. We do not always require to re-invent the wheel in this process. The third and last area of reflection for me is that we must understand that the constraints that limit the flow of finance to SMEs is sometimes beyond the scope of what financial institutions can do or outside the inherent adverse characteristics of SMEs.
Before the onset of the crisis, all the banks fulfilled or surpassed the 8 per cent Basle requirement for capital. So, although nonperforming and other impaired loans amounted to 15 per cent of GDP in Sweden (a figure that is rather similar to recent estimates for Korea), the original cost to the government of rescuing the banking system amounted to only some 4 per cent of GDP; since then, moreover, most of this has in fact been recovered. •  Sweden applied restrictive rules to central bank involvement in the banks. Only liquidity support was provided, inter alia in the form of foreign currency deposits to stem the outflow from the banks and to reduce the risk of a credit crunch. This did not involve the Riksbank in any risks because the State guarantee for banks’ repayments also applied to us as a lender. 3. Triggers Now, let me turn to the actual crisis. It is well known that the event (or events) triggering a crisis is often different from the crisis’ underlying causes. In the absence of a triggering factor, countries with substantial underlying problems from time to time have also been able to avoid an acute crisis. The event triggering a crisis is sometimes rather dramatic, such as the assassination of a politician - as in the Mexican case - or a sudden loss of confidence, e.g. due to the presentation of a disappointingly weak fiscal budget.

The Committee set out a necessary condition for Bank Rate to rise (that unemployment fall below 7%). It also added various “knock-outs” that, if breached, would automatically bring the guidance to an end. One of those involved financial stability: the guidance would become obsolete if, amongst other things, “the Financial Policy Committee judge[d] that the stance of monetary policy poses a significant threat to financial stability that cannot be contained by the substantial range of mitigating [macro-prudential] policy actions available…”  So there’s already been an episode where one policy committee accepted the possibility, however remote, that it might be asked to take into account the other’s objective. I can see no reason why, if the circumstances warrant it, this shouldn’t happen again. III: The positive case for separation All I’ve done so far is to make the case that the separation of monetary and macro-prudential policies has limited costs on average, and that if and when they were ever material, there are other ways, short of full integration, to deal with those. Whether or not those are persuasive, that doesn’t mean there’s no conceivable cost. In the co-ordination literature, in its various guises, there’s always some price to pay for a separation of powers: it’s inevitable, given the way things are modelled, that the “first-best” answer is that policy tools should be set jointly, taking into account all the collective objectives at once. The only question is how large the costs of decentralised decision-making are and what might be done to mitigate them.
As I mentioned before, experience has shown, that in the long run, it is very difficult to maintain soft exchange rate pegs with the free movement of capital across borders. Iceland shares this experience with many other countries during the post-liberalisation face. The response to this has been the observed tendency to adopt hard pegs in the form of monetary unions or currency boards or to go in the direction of floating. As so many other countries, Iceland adopted the second route. This was done in March 2001 by a joint declaration by the government and the Central Bank. The principal objective as stated in the declaration, is to keep inflation as close as possible to 2½ per cent. Should inflation deviate from this target by more than 1½ percentage points in either direction, the Bank is to provide the government with a written public account explaining what caused this deviation, how the Bank intends to respond and how long it expects that it will take for inflation to return to within the targeted inflation limits. In the wake of this declaration, the Icelandic Parliament adopted a new legislation on the Central Bank, giving it one overriding goal, i.e. price stability, and full independence to use its instruments to achieve it. The new framework was immediately subjected to a baptism of fire. Overheating in the economy and the fall of the króna had rekindled inflation.

In economic terms these new  2  BIS Review 21/2003  investments will amount to over 30 per cent of one year’s GDP and increase Iceland’s annual production capacity of aluminium from 270 to 740 thousand tons. The economy appears to have already begun adapting to the coming projects as reflected in exchange rate movements. As can be seen in chart 2. the króna was quite stable from the spring of 2002 until late in the year. It then began to appreciate and continued to do so steadily until early February 2003. It seems that the recent rice of the exchange rate is primarily due to the effect of the proposed construction projects on expectations. The current assessment indicates that economic growth could easily end up in the range 2-2½ per cent this year and well over 3 per cent next year. The outlook is for inflation to remain close to the inflation target during 2003 but it could rise in 2004. As these are the most extensive construction projects in Icelandic history, sound economic management will be required to prevent overheating in the economy, inflation and instability. Although their scope will be considerable, the Central Bank’s analysis of the prospective development indicates that, given appropriate economic policy and some strengthening of the króna, significant part of which might already have taken place, economic stability could be maintained and inflation kept under control. While monetary policy will probably play the major role, fiscal policy will have to assist.
Progress has clearly been made in the management of market and operational risks, but the advances made in the area of credit risk are, I think, particularly illustrative. Loan officers and risk managers now have at their disposal an everexpanding array of software, databases, models, and risk rating systems intended to provide empirical insight into a risk once not readily quantified. Our examiners have noted growing sophistication in banks’ internal risk rating processes, portfolio management methodologies, and the use of stress testing. As you know, all of these new tools and processes were developed and refined to promote a bank’s competitiveness and to protect it against loss - and not just to respond to a regulatory mandate. The resulting benefits to the stability of the financial sector can be seen objectively in the much lower number of problem banks, and the lower level of problem loans, in the recession that began early last year, compared to the previous one. For bank supervisors, the industry’s own growing emphasis on enhancing risk management practices has allowed us to shift our approach from evaluating financial results to understanding and assessing the quality of internal processes. By looking at the strength of internal controls and the quality of analysis and judgement that management applies, we are better able to understand how well a bank will weather potential future challenges or business downturns. In this context, one area that has come under increased scrutiny is how firms manage their compliance activities across the organization.

Notably, this includes the formation of a dedicated platform with the Securities Commission and other stakeholders to streamline measures for development of the national alternative finance ecosystem. Additionally, initiatives such as the deployment of Dana Penjana under Penjana Kapital, a 1-to-1 matching program for funds raised by venture capitals, are important public private partnerships utilising alternative finance to spur early-stage innovation. The investee companies here today, involved in a variety of innovative fields across finance, are testament to this. Beyond regulator or government-led efforts, capital market intermediaries – such as asset managers and large institutional investors – can also play a critical role in mobilising capital more actively to firms, especially SMEs and start-ups. For now, a large proportion of venture capitalbacked deals in Malaysia remains facilitated by the public sector entities. There is considerable room to increase private sector involvement here. Another potential avenue for unlocking investor funds could be through greater Corporate Venture Capital (CVC) participation in VC funding activities. By investing in the VC firm, as opposed to the start-up itself, the technical know-how in start-up investing could be built up over time, without the instance of crowding-out VCs through direct competition in deal flow. Closing Let me conclude. The Digital Era is already upon us. In the next few years we will see more advancements and some of this, are unknown to us today. Some of you as industry entrepreneurs have a better vision on this.