samchain/econo-pairs-v1 huggingface dataset:
The global insurance industry was not spared the impact of the volatile financial markets. While the industry has generally been fairly resilient to date, business conditions this year are expected to be very challenging. Insurance companies not only have to manage their capital bases in this fluctuating market, they also need to cope with lower business volumes as a result of the recession. Forecasts are for very tempered growth in the industry this year. However, the long term potential of the insurance sector in Asia remains promising. As such, insurance companies should stay engaged and take this opportunity to strengthen your operational capabilities. This will help us ride the crisis and position for the upturn. In this respect, I would like to share two potential areas that insurance firms can focus on: (i)  Insurance industry to focus on core competencies  First, if there is one thing that this crisis has taught us, it is for us to go back to fundamentals. The financial crisis is a timely reminder for the insurance industry to stay focused on their core competencies and to continually improve and strengthen their risk management systems. MAS has long emphasised the importance of sound risk management to all financial institutions. In February 2006, MAS issued risk management guidelines to enhance financial institutions efforts in this area. This was further supplemented by additional guidelines issued for insurance businesses in November 2007, covering areas such as product development, pricing, underwriting and claims handling.

I would like to take this opportunity to acknowledge the role of the Asian Institute of Finance (AIF). The idea of FSPB culminated from engagements initiated by AIF with the industry which was followed by a process of developing the conceptual framework to reflect the shared aspirations of the industry and the Board of AIF that has supported the establishment of FSPB. I would also like to take this opportunity to highlight the participative role that the financial services industry would need to have in enabling FSPB to meet its objectives. The value of the establishment of FSPB lies in the role taken to develop professional and ethical standards that are relevant and practical, which could, subsequently, be accepted and adopted by the global financial services industry as a gold standard. With this, let me congratulate the Board of FSPB with this launch. In taking this important initiative forward it is necessary for FSPB to reflect the business needs of the financial services industry whilst balancing the interests of the community that the industry serves. Bank Negara Malaysia and the Securities Commission Malaysia will continue to be committed in supporting this important agenda of the financial services industry. 2  BIS central bankers’ speeches
The theme of the AFI Forum this year, “Driving Policies for Optimal Impact”, underlines the need for us to have a better understanding of the interactions between the objectives and effects of financial inclusion, financial stability and integrity, and consumer protection policies. This need has become more pronounced with the recent global developments. Global prudential standards have been significantly strengthened and are increasingly applied to financial institutions in developing countries. This has heightened the practical challenges faced in implementing these standards in a socio-economic setting where promoting inclusive opportunity is an important objective. The same is also true with stronger standards to combat money laundering to safeguard the integrity of the financial system. In building a  BIS central bankers’ speeches  1  financial system that is resilient against crises and abuse, we cannot neglect the socioeconomic impact of policies pursued. Our efforts to build a stronger and more stable financial system would also work to strengthen linkages between finance and development and not to weaken it. Consumer protection regulation is also being significantly strengthened in many countries following the global financial crisis. This has been driven in large part by the recognition that an effective consumer protection framework serves not only to protect individuals from excessive risk; it also has an important role in protecting the financial system from systemic risk.

BIS central bankers’ speeches  1  In this presentation I will try to explain why I think this is so. I will also speak about what is still lacking and the regulatory challenges we face ahead. Why we shouldn’t back-track on regulation There are several reasons why I don’t think the regulatory agenda has gone too far. First of all, my experience is that important regulatory and structural reforms are all too often hindered by myopia. People tend to focus on costs and pains in the short run, leaving aside the longer term gains that reforms aim to achieve. The perceived short-term costs are simply much easier to sell politically, compared to the abstract benefits of lowering the risk of crises. This is especially so, since the benefits may accrue only to future generations – a group that has difficulties making its voice heard in today’s policy debate. This time has been no exception: for years, people shied away from necessary actions to strengthen the financial system. When the crisis hit, perceptions changed, providing a window of opportunity for regulatory reforms that were long overdue. However, we mustn’t begin to close this window and lose sight of why we are undertaking these reforms. Let me start with a reminder of the regulatory framework before the crisis. Both Basel I and II included a risk-weighted capital adequacy framework. However, for the last 20 years banks’ balance sheets ballooned, while their equity failed to take off.
Technological enhancements bring new opportunities to businesses but the pace of innovation must be met by the pace of corresponding safeguards to deal with the risks. In particular, the risk of cyberattack is a great concern. The pace here is really changing very rapidly. As with the other risks, insurers are affected for both good and ill: with ever more frequent and increasingly sophisticated cyber-attacks on businesses and individuals, insurers are being relied upon more and more for protection. A new business opportunity for sure. But, unlike most other insured risks, insurance firms could themselves be significant victims. It is difficult to predict how cyber-crime – or even cyber accidents – will evolve, and it is very challenging to obtain data for losses that arise out of cyber-events. This makes it all the more difficult to quantify reserves, models and prices as well as develop operational safeguards internally. An Insurer wishing to expand into any new business area needs to demonstrate to the PRA that new risk exposures are well understood and that the required capital for an altered risk profile has been fully considered. As stated previously, business model analysis forms an important part of the PRA’s supervisory approach and a focus for its supervisory activity. Insurers will need to deal with the PRA in an open, co-operative and constructive manner to allow us to understand whether the business model is sustainable and to identify key vulnerabilities. This will ensure a more informed, focussed and proportionate supervisory approach.

This is because Solvency II caps the amount of transitional benefit a firm may derive. Bearing in mind this cap, and the benefits to be gained from a smooth transition, the take-up of transitional measures should be seen as a viable option for firms to take to assist with their capital planning, and are a feature that the UK authorities strongly supported during the development of Solvency II. They are there to be used where appropriate. As we shift to a Solvency II world, I think it is worth bearing in mind that, like a smartphone, regulation tends to get new “updates” and “apps” in response to changes in the external environment. Indeed, the path of the future is in global policy development, including the insurance capital standard (ICS) under the aegis of the International Association of Insurance Supervisors (IAIS) which will look to develop risk-based global standards. Insurance business is fast becoming globalised and interlinked. It naturally follows that so too should regulation. Introducing global capital standards would enhance global cooperation, ensure a level playing field and limit regulatory arbitrage. For this reason, the PRA supports the development of global capital standards and the establishment of a long term vision in order to achieve a single insurance capital standard predicated on a single valuation basis which is genuinely comparable across jurisdictions. Concluding remarks Insurance sits at frontline of innovation and, as seen with climate change and digitisation, insurers can be directly exposed to changes in regulation, public policy and other shifts in society.
This setting, which matters for determining the inflationary pressures that will be facing our economy and the future path of the policy rate, is similar to what is forecast for other economies. In this scenario, the current account of the balance of payments will post a surplus of 0.6% of GDP in 2010 (table 1). As for costs, imported inflationary pressures have remained well contained. Baseline projections for the average prices of oil and copper have been revised up from September. The nominal peso/dollar exchange rate, in contrast, has appreciated substantially during the fourth quarter. Although the exchange rate fluctuations along an extended period do not differ substantially from that of other emerging currencies, these have occurred at different times. First, at the beginning of the most difficult period in world financial markets, the peso depreciated faster than other currencies. The weakest level occurred between late October and early December 2008, while other economies saw it closer to the turn of 2009. Second, its recent period of appreciation began strongly in mid-October 2009, while other currencies had begun in July. All in all, at the statistical closing of this Monetary Policy Report, the magnitude of the peso appreciation with respect to its through is fairly similar to that of other emerging currencies (table 2). This difference in the peso performance, at least since July, can be explained by local factors.

At that time the Fed devoted a lot of studies on financial innovations and I remember my participation in a G X Central Bank study group chaired by Sam Y. CROSS on innovation in banking. Financial stability was already at the center of the stage. I would like to stress here how this long standing relationship and mutual trust with the Federal Reserve is of importance nowadays.   Allow me now to offer you a French and central banker point of view of the current situation. These last months brought important changes to the world economy. To name a few, growth perspectives in advanced economies have significantly worsened, markets are increasingly volatile, and confidence has shrunk. The downward revision of US growth has certainly played a role. But, most significantly, two other shocks have occurred. In the US, reaching an agreement to raise the debt ceiling has been difficult. And, in Europe, it has been recognized that Greece, a euro and OECD country, would not be able to fully honor its signature, without a voluntary private sector involvement. In the eyes of the market, this has had significant implications for other European sovereigns. A challenging question is now being asked: Over the last 50 years, financial markets have developed on the assumption that public debt was considered risk free. The certainty that debt would be paid in full strongly anchored market views. Now that this certainty is questioned, debt sustainability may rest on a more fragile and volatile basis.
Stable money, stable prices: these are the very foundations of a well-functioning market economy. There is a strong economic case for price stability, which today is - again - widely accepted. However, the case for price stability goes beyond the purely economic sphere. Price stability, the ability to rely on stable money, is the basis for trust in the interaction among economic agents, trust in property rights, trust in society and trust in the future more generally. Trust in stable money is also the basis for a free society, the ability of people to take decisions and plan their future for themselves. This is particularly evident with respect to life-time savings for retirement, which is a topical issue at the moment in the context of discussions over a greater role for private pension schemes. Private provision of retirement savings crucially requires the trust of savers in the long-run stability of money. Conversely, a loss of such confidence inevitably leads to calls on the state to step in and provide for the future collectively. Inflation undermines trust in money and in property rights more generally. This mechanism was apparently recognised by Lenin who allegedly remarked that the “most effective way to destroy civil society is to destroy its money”. 3  BIS Review 96/2000  There is a saying that “peace is not everything, but without peace everything else comes to nothing”. I am tempted to say the same thing for price stability.

Latest digital and printing technology has revolutionised the banknote production to the highest degree of speed, accuracy and consistency, using technologically enhanced high speed printing machines to print millions of banknotes every day. Despite the rapid innovation of technology, one fundamental and specific aspect of banknotes production has never changed. When it comes to banknotes design, no technology can replace the required dexterity and the innovative mind of a design artist. Banknotes design has always been made by hand and the work is inevitably involves a process that is time consuming and requires painstaking efforts. The artist has to meticulously draw in great detail every aspect of the banknotes. Indeed as you will see at the exhibition, all these micro lines of icons give a distinguishing character to the banknotes and contribute to their uniqueness. But all the details serve more BIS central bankers’ speeches  1  than an aesthetic purpose. They also serve as the first line of defence against counterfeiting. So far, no digital copier, despite having the best resolution of contemporary technology, is able to copy micro lines and lettering on the banknotes. So if any of you here have any doubt whether a banknote in your wallet is genuine or not, place the banknote under a magnifying glass and look for micro lines. You will be enthralled at how detailed the banknote design when you get to see the blown up version of banknotes on display here in this exhibition.
Fluctuations in output are also reflected in changes in the share of the working age population that are employed. This share of employment has shown a rising trend since the early 1970s, and has been above trend since 1996. This year, it appears that the share of employment will be at about trend level. The exchange rate fluctuates Fluctuations in the krone exchange rate have become more pronounced since 1996 and are now more on a par with fluctuations in the currencies of other small economies with a floating exchange rate. The krone has fluctuated between 9.24 and 7.22 kroner to the euro/ecu since 1997. Norges Bank has not set a specific target for the level of the exchange rate. However, changes in the krone exchange rate are, of course, important in interest rate setting because they affect inflation and developments in activity. The response to a change in the exchange rate will depend on its expected impact on inflation, output and employment. This requires an evaluation of the reasons for and the duration of the change. Very short-term fluctuations in the krone exchange rate tend to have very limited effects on economic developments, while more long-lasting changes can have an impact. However, it is difficult to determine whether exchange rate changes are permanent or temporary. Long-term relationship between exchange rate and prices In the 1980s, the rise in prices in Norway was considerably higher than among trading partners.

Mr. McDonough describes the role of the FRBNY in the events leading up to private-sector recapitalization of Long-Term Capital Management Testimony by the President of the Federal Reserve Bank of New York, Mr. William J. McDonough, before the Committee on Banking and Financial Services of the US House of Representatives on 1/10/98. Good morning Mr. Chairman and members of the Committee. I am pleased to appear before you today to describe the Federal Reserve Bank of New York’s role in the events leading up to the recent private-sector recapitalization of Long-Term Capital Management and its fund, Long-Term Capital Portfolio. I will cover four points. First, I will provide some background on Long-Term Capital’s financial problems. Second, I will explain our judgment that an abrupt and disorderly close-out of Long-Term Capital’s positions would have posed unacceptable risks to the American economy. Third, I will explain the limited role we played in facilitating the privatesector resolution to this private-sector problem. Fourth, I will identify some of the issues that should concern us as we begin to understand the lessons of this experience. Background Long-Term Capital is an investment partnership that was started in 1994. It has many of the characteristics of a “hedge fund” in that it borrows money to leverage its capital and is only available to wealthy investors. The strategy of Long-Term Capital was to use complex mathematical formulas to identify temporary price discrepancies between different interest rates.
An open exchange of views and information between individual policy actors - without any commitment or mandate to take and implement joint decisions - will strengthen economic governance if it manages to improve the common understanding of the objectives and responsibilities of the respective policy areas and does not dilute accountability. The central legal basis for economic policy co-ordination among Member States within monetary Union is specified in Article 99 (ex 103) of the Maastricht Treaty, which states that “Member States shall regard their economic policies as a matter of common concern and shall co-ordinate them within the Council.” On the basis of this principle, the framework for the definition of economic policy priorities is provided by the “Broad Economic Policy Guidelines” adopted by the Council each year. These channels for policy co-ordination among Member States do not involve the independent monetary policy of the ECB. Any form of exchange of views and information, however, should clearly be distinguished from an attempt to co-ordinate macro-economic policies ex ante, which would give rise to serious information, incentive and enforcement problems. Ex ante co-ordination among different policy actors would blur the fundamental responsibilities of the respective policy areas under the Treaty. This, in turn would reduce accountability of individual policy actors and ultimately increase uncertainty about the policy framework. Given the Eurosystem’s monetary policy strategy, there should be no ambiguity how the single monetary policy will respond to developments in fiscal policies and wage settlements to the extent that they will affect the maintenance of price stability.

As a result, national governments and wage setters alike should be able to design and implement the policies under their responsibility in a manner that allows for the interdependencies of these policies with the single monetary policy. Obviously, if they take the single monetary policy’s credible commitment to maintain price stability as given, this will help to align expectations and condition their behaviour in a favourable way. National governments and wage setters, in turn, are reassured that monetary policy will respond favourably to appropriate fiscal polices and wage settlements which allow to maintain price stability over the medium term. Sustained stability - be it maintenance of price stability or stability in a wider sense - needs a sound institutional framework. As regards monetary policy the independence and clear mandate of the ECB provides the best possible arrangement. At the same time it is obvious that a monetary union which is not a mature political union also requires a framework for fiscal policy. This framework must respect the sovereignty of national governments and parliaments on the one hand and the need to ensure sound fiscal policy across the euro area on the other hand. Both, sound monetary and fiscal institutional arrangements are indispensable for a consistent and sustainable stability framework. The success of EMU rests not only on the ECB and its monetary policy but also on a robust framework for national fiscal policies.
It is often difficult to distinguish between what is monetary policy and what is  8 [25]  financial stability policy, both in purely practical terms in the current situation, and on a more theoretical level. 8  Central banks supported market functioning The next group of problems is related to market functioning. Some markets for important securities can become so uncertain during a severe crisis that no private investor is prepared to buy these assets. Or else the uncertainty on the financial markets can lead to severe fluctuations in the compensation the financial agents require to invest in risky assets (risk premiums). This could in turn threaten the monetary policy transmission mechanism. This type of problem affected the very important US housing bonds during the financial crisis. To avoid a substantial credit crunch for US households, this market needed to keep functioning. During one period, therefore, the Federal Reserve purchased a very large share of the newly issued housing bonds, which had the desired effect – the market stabilised. Sometimes all it takes is for the central bank to make it clear that it will act if problems arise. The actual signal may then be enough to calm the market. Sometimes a facility will do the job. If the market is worried it will be difficult to temporarily convert an asset into liquidity on private markets (for instance through repos), the central bank’s facility may be sufficient to calm the situation.

Working with SNB over the last ten months to set up this branch has been a real delight for MAS. You are clear in your objectives, methodical in your approach, and always gracious and understanding in your dealings. Thomas, you will always have the full support of my colleagues and I at the MAS, as SNB grows its presence here. Once again, please accept my congratulations on the opening of your branch. Have an enjoyable evening ahead! 2  BIS central bankers’ speeches