samchain/econo-pairs-v1 huggingface dataset:
Going forward, insurers are expected to leverage more extensively on direct channels to distribute their products and communicate with customers. With digitisation and other new technologies, not just in insurance but across all other financial and non-financial services, the costs of distribution and managing customer relationships can be greatly reduced with expanded reach. Digitisation is also expected to give rise to new entrants into the insurance value-chain such as product aggregators, which will allow consumers to easily compare product features, providers, coverage and price. These developments will drive the increasing adoption of multi-channel distribution strategies. The implications for agents will be a greater need to specialise and to be able to do so while seamlessly integrating with different and more diverse contact points with consumers. This will require innovative business models as parts of the distribution chain become commoditised. For example, agents may specialise in more complex product offerings, provide more tailored advice, improve the customer experience by deploying new technologies and reaching out to untapped consumer segments. As greater efficiencies drive 2  BIS central bankers’ speeches  down costs, fees and commissions will increasingly be tied to the breadth and depth of services provided by agents. This in turn will contribute towards lifting productivity and the value of jobs in the industry, including that of the agency force. Third, insurance agents will need to embrace a broader role in the education of consumers.

During this period, the insurance landscape is expected to change in ways that will have a direct and profound impact on the experience that consumers and businesses have with insurance. As major intermediaries between insurance providers and consumers of insurance products and services, how insurance agents think about their business and interact with their customers can make an important difference in helping millions of individuals, families and businesses across the country who remain ill-prepared for losses arising from unforeseen events. Addressing this protection gap is ultimately the goal that we must all aspire to, to promote a resilient economy and the well-being of our society. 4  BIS central bankers’ speeches
I believe, particularly in the case of physical collateral, that banks using the internal ratings-based approach must obtain a timely, third-party view of the collateral’s value. One test, for example, is that should the need arise, the bank must be able to dispose of it with relative ease. As a former commercial banker, I cannot see how any responsible banker would be able to sleep at night if these conditions are not met. On the other hand, it seems clear to me that if these conditions are satisfied, then the collateral does offer a bank protection against loss and banks will need to hold less capital against those loans. Let me try to anticipate an immediate question you may have. What do we expect will be the net effect of the changes I have discussed? I believe that the impact of more risk-sensitive proposals will be very positive for small and medium-sized businesses in many countries. I understand that Jochen Sanio, the very capable President of the BAKred and, as of the first of May, President of the newly established FSA, expressed a similar view at a recent parliamentary hearing. He pointed out that based on our current proposals, on average, German banks’ exposures to small and medium companies would require less than the 8% capital currently needed under the 1988 Accord. But the issue is not simply a question of impact. The principal motivation behind the Basel Committee’s efforts has been for bank capital requirements to take appropriate account of risk.

Consequently, the new rules are being designed to recognize the underlying risk while not discouraging or penalizing banks that wish to remain involved in venture capital and equity investing. Our goal is to create a capital approach to equity exposures that builds upon sound internal bank practice and remains flexible enough to apply in any country. Our challenge is to develop a treatment that makes sense today and that will be responsive to the evolution of banks’ practices in equity funding. An equally important consideration is implementation, given significant differences in the nature of banks’ equity holdings across countries and in the ways in which capital markets have evolved over time in each country. The Committee wants to avoid disrupting equity holdings that have developed under existing capital regulations --- whether these are long-term holdings, such as in Germany, or those associated with small business investment corporations in the United States. To this end, only new equity investments would be captured under the internal ratings-based approach for the first ten years after the date that the new Accord is implemented. This is an area where the Committee has tried to navigate differences between national practices. We see the best way forward as offering two approaches to calculating regulatory capital for banks’ equity exposures, one based on measures of market risk and a second based on the treatment of corporate loans. In either case, we intend for both methods to result in comparable capital requirements, which we will seek to confirm through our next impact study.
1/5  BIS central bankers' speeches  Take the case of a vendor that provides critical services and is on the brink of bankruptcy. Are credit risk analysts, operational risk and business continuity professionals, and the business affected working together to share information, insights, and potential responses? Or, are silos preventing information from getting to the right people at the right time to prepare and act? Risk silos can result in siloed decisions, and looking at risks one by one is incoherent. We could drive operational risk to zero by having no operations (I guess we can all go home early), but then strategic risk rises to infinity. Since most meaningful decisions involve balancing risks, to get to the right decision, we need a risk picture that covers all relevant risk types and engages all relevant risk experts. Similarly, real world vulnerabilities do not have to conform themselves to a particular risk type. Think about weaknesses in identity and access management. This is a driver for risks ranging from cyber, to compliance, to operations, and more. This is also a type of risk that can’t be mitigated solely through technical controls put in place by information security experts; that is, a siloed risk response is insufficient. So, stronger collaboration and coordination across risk disciplines is one solution to the negative effects of risk silos. Another specific pain point created by risk silos is the flourishing, and perhaps overgrowth, of risk assessments. Most organizations have many risk reviews: often a different review for each type of risk.

Solvency II sets out how to estimate the premium needed to compensate for the risk that the borrower defaults or is downgraded, known as the Fundamental Spread. As an approximation, in equation form:  Matching Adjustment = Yield minus risk-free rate minus Fundamental Spread  The most important determinant of the Fundamental Spread is the credit rating of the asset. Broadly speaking, the higher the yield on an asset for a given credit rating, the bigger the Matching Adjustment. Earlier I showed that insurers were diversifying into illiquid assets because they offered wider spreads than bonds. Chart 7 is the same picture but with the split between the Matching Adjustment and Fundamental Spread added. Not only are the yields on illiquid assets wider but the majority of the additional spread is  being captured in the Matching Adjustment. UK insurers estimate the underlying credit quality of these  assets, reflected in the Fundamental Spread, to be similar or better than their corporate bond portfolios. So the shift into illiquid assets is giving insurers a double benefit: first wider spreads and second a bigger Matching Adjustment. This helps to explain their eagerness to increase their asset allocation towards illiquid assets. But why is the Matching Adjustment on illiquid assets larger than on corporate bonds? One possibility is that that the wider spreads are compensating other investors for the risk that they might need to sell into secondary markets that are less liquid than the corporate bond market.
The third cluster encompasses so-called utility tokens, which act as electronic coupons that can be exchanged for future services, products or benefits marketed through the issuer’s own platform. The very capital raised from the sale of these tokens will then be used to fund the development of the forthcoming products or services. In principle, provided their amount remains limited, these will be subject to regulations on consumer protection, online trading, data protection and business operations, but not financial ones. Another classification criteria of the crypto-asset ecosystem has to do with the primary nature of each token. Tokens are understood to be a specific unit of digital value, as assembled by an issuing organization, which further enables interactions between those agents that operate in the virtual space.6 In some cases these are dubbed native tokens since they are created from scratch with no underlying asset. They are further linked to a specific ledger. This is the case of bitcoin and its blockchain network. Given their singularities, the value of these tokens stems essentially from their users’ expectations as to how they may be used in future transactions, rather than, for example, as result of a potential cash flow or their issuer’s fundamentals. In other cases, these tokens are connected to actual real-world assets, be they financial or of another kind. This, for instance, allows real estate assets to be broken down into  3  According to information available at Coinmarketcap.com. 4  Bitcoin is the most notable example.

The history plays also a significant role in the formation and development of institutions. The declaration of independence introduced a new era for Albanian state institutions, paving the way for the establishment of a central bank, a unified Albanian monetary system, and the administration of economic life through the monetary policy. Despite its short life, the National Bank established in 1913 is a cornerstone in the history of the Albanian state. The then Prime Minister, Ismail Bej Vlora said about it: “I say the affair of the Bank is praiseworthy; for Albania, it is a second victory, after freedom, from both the economic and political perspective.” The events that followed the declaration of independence, in the national and international aspect, have played a crucial role concerning the nature and character of these institutions and, at the same time, determined the nature of the monetary policy. Economic and political partnerships, and the charisma of the Albanian statesmen to build a modern society, led to the establishment of the first functional national bank in 1925, with the characteristic and distinctive profile embodied in the building that was constructed in the centre of Tirana. Historic developments in early 1990s became once again determinant factors for the financial system and the central bank. Introduction of modern economics concepts led to the creation of the Bank of Albania as a bank with all the attributes of a modern central bank. Its institutional evolution led to the development and modernisation of monetary and financial policies.
Graph: Demand from the oil and gas sector and government spending of oil/gas revenues It has been estimated that one in nine jobs in the Norwegian economy was related to oil sector demand in 2014.5 The step-wise development of oil and gas reserves in the North Sea has helped to create a supply industry that has become world leading in special areas. The downturn following the oil price decline in 2014 has highlighted the oil-dependence of the Norwegian economy. As oil-sector demand plummeted, the blow to the economy was cushioned by a substantial increase in government spending. This room for manoeuvre in fiscal policy was provided by the significant savings in preceding years. Without it, the recent downturn could have become much more painful. Intergenerational concerns Graph: Old-age dependency ratio Allow me to move on to another argument for relatively high saving: the intergenerational challenges facing the Norwegian economy. Like many other countries, we must cope with the challenges associated with an ageing population. As we have developed a more extensive welfare state than many other countries, the impact on public finances is significant. The pension system is basically pay-as-you-go and health care is also funded by the government. An ageing population will therefore weigh quite heavily on public finances. In the 1990s and 2000s the demographic trend was different. During those years, the share of the population 67 years or older actually declined, mirroring low birth rates between the two world wars.

The ability to run current account surpluses and deficits at different times facilitates a globally efficient capital allocation. In addition, it may help absorb country-specific shocks. Deficits allow countries to finance productive investments. Surpluses can generate higher returns than those available on domestic investments. And the possibility to smooth consumption is generally a benefit. Graph: Current account balance for Norway Norway is a prime example. Our oil history started with the country running significant deficits, enabling large investments without the need to cut consumption correspondingly. Deficits peaked at close to 12 percent of GDP in the 1970s, when the first investments in the oil industry were made. Since then, we have mainly run surpluses, but our net international investment position turned positive as late as in the mid-1990s, a quarter of a century after production began on the Norwegian continental shelf. Graph: Current account balances Global current account imbalances have increased since the late 1990s, as can be seen in this graph. If deficits persist over time, the financing of the debt can be challenging. High capital mobility increases the vulnerability of high-debt countries. Unbalanced developments can undermine support for open trade and flexible markets, in turn also hurting surplus countries. In addition, both high deficits and significant surpluses may reflect policy and structural distortions that could hamper growth. A current account deficit or surplus can thus from both an individual-country and global perspective be either desirable or excessive, driven by distorted policies.
However, there is a concern that this approach is judgemental and lacks a coherent framework; i.e., how can we control both the price of credit through monetary policy and the quantity of credit through macroprudential measures. Another unsettling issue is whether monetary policy should lean against the wind of asset price boom and credit expansion at a cost of somewhat weaker growth and lower inflation. On this, I think our default position should be that we should because the cost of getting it wrong by not doing enough can be very costly. Finally, information on money and credit aggregates can be made more useful in the formulation of monetary policy. Up to now, a widely shared so-called “best practice” in monetary policy did not pay enough attention to monetary aggregates partly because of the belief that there exists no stable relationship between quantity of money and economic activity. As a result, prior to the crisis there was no attempt to counteract the rapid credit  2  BIS Review 8/2010  growth even though, in most if not all cases, asset price bubble was a direct result of sustained excessive credit expansion. This issue in my view is most relevant for emerging markets where the financial sector is typically bank-based, with credit being the major source of funding for businesses, and credit risk being the most important risk to banks. Such factors make the credit channel an important transmission mechanism of monetary policy in emerging markets.

This reassessment, therefore, is important and will provide a useful starting point for a better deliberation of monetary policy going forward. For this morning, I want to focus my remarks on three issues: first the lessons we can learn from the crisis; second how to move forward to strengthen monetary policy framework in light of the crisis to ensure long-term price and financial stability; and third the relevance of inflation-targeting as a monetary policy framework in the post-crisis era. From the crisis, there are a number of important lessons that can be drawn. The first is that monetary policy remains the right instrument to maintain a low inflation environment which is crucial for sustainable growth. But the most important lesson from the crisis is that low and stable inflation alone is not sufficient for ensuring financial stability. This is because the risk to financial stability can come from many sources other than domestic inflation. In the current crisis, it was the housing bubble and excessive risk-taking by the financial institutions that precipitated the crisis in the environment of stable prices. Therefore, to maintain economic and financial stability, in addition to price stability, attention must be paid to all the key sources of risk and imbalance that can have systemic implications for the economy’s growth and stability. This is the first lesson. The second lesson is the inadequacy of the current approach in monetary policy analysis that focuses over-extensively on macroeconomic analysis and models.
And, on the other hand, Bernanke B. and M. Gertler, 2001, ‘Should central banks respond to movements in asset prices’, American Economic Review, vol 91, no.2; Issing, O. ,2004, ‘Financial integration, asset prices and monetary policy’; Kohn, D., 2006, ‘Monetary policy and asset prices’, Remarks at ‘Monetary Policy: A Journey from Theory to Practice”, a ECB colloquium held in honour of O. Issing; and Posen, A., 2006, ‘Why central banks should not burst bubbles’, Institute of International Economics Working Paper 01/2006. For example, the MPC Minutes February 2002, December 2002 and February 2003. 29  10  For example, Borio, C. and P. Lowe, 2002, ‘Asset price, financial and monetary stability: exploring the nexus’, BIS Working Papers number 114. BIS Review 46/2006  Summary It is next to certain that my views on many of the issues covered in these remarks will continue to develop as the MPC confronts new challenges. It would be hard to be serious about policymaking without learning. But for the time being, two key threads run through what I have said. The first is the absolutely vital task of anchoring medium-to-long term inflation expectations in line with a clear target. That just cannot be taken for granted. The second is the importance of clear and clean communications about objectives. On that front, we should not kid ourselves that households and firms are studying our every utterance or examining in detail the economy in which they live and work.

I thank you. 2  BIS Review 15/2009
For its part, the BNB is ready, as it has been thus far, to implement the full range of measures, within its mandate, to mitigate and neutralise the manifestation of risks in relation to banks. The overarching objective of these measures is to preserve and further strengthen the capital reserves and the high loss-absorbing capacity of banks against potential deterioration in their loan portfolios and to ensure that the stability of the system is maintained, including in the event of less favourable than expected exogenous economic and financial developments. 2/3  BIS central bankers' speeches  In 2021, the BNB twice increased the level of the countercyclical capital buffer to reach 1.5% and confirmed the level of the systemic risk buffer at 3%. The BNB will continue to require banks to maintain adequate capital buffers against potential losses arising from the realisation of cyclical systemic risk. This risk currently arises mainly from active residential lending to households, as well as lending secured by commercial real estate. At this stage, the focus will continue to be on the implementation of macroprudential measures targeting banks’ capital, but the BNB stands ready to implement additional measures, if necessary, including borrower-based. More strategically, the BNB has already mobilised serious efforts in the project for the adoption of the euro in Bulgaria. The tasks on the way to achieving this goal go beyond the banking sector, but will also strongly involve the banks.

We expect that the rate at which the prices in Bulgaria will be rising in 2022 will reach its peak, on an annual basis, within the first half of the year, and at the end of the year, again on an annual basis, it will fall below that reported as of December 2021. The concrete nominal levels of the general price index will depend on the combined effect of the antiinflationary and pro-inflationary factors, including on the dynamics of the energy prices in the international market and the prices of foodstuffs. We believe that the coming discussions on the adoption of the 2022 budget will give additional indications of the development of the macroeconomic processes in Bulgaria. In this regard, the topics important for the banking sector are: the annual and medium-term macroeconomic framework; the level and management of the debt; the incomes policy; and the level and management of the so-called ‘contingent liabilities’ in the energy, transport and social security sectors. In the context of the ongoing global and local macroeconomic processes and the still open issues, in 2022 the banking sector will have to find a balance between the possibilities of expanding the lending, as a result of the anticipated improvement in the economic environment, and the areas of economic uncertainty coming mainly from the evolution of inflation and the still unresolved risks caused by the pandemic. A major criterion for reaching an optimum balance for each bank will be the preservation of, and even improvement in, the quality of assets.