samchain/econo-pairs-v1 huggingface dataset:
Transparency into counterparty risk should be greatly improved via disclosure requirements and the ability to aggregate trade information in trade repositories, and end user trading positions should be much better protected by segregation and portability requirements and a more robust financial market infrastructure. Although there is still much to do as part of this process, I’m optimistic that we are on the right road. We just need to continue to push ahead and not forget the lessons learned from the financial crisis. Thank you for your kind attention. I would be happy to take a few questions. BIS central bankers’ speeches  7

The high interest rates offered by these markets kept the efficiency of monetary policy in steering the interest rate pending. In addition, other issues, such as the high concentration of deposits and loans in three state-owned banks, their operational losses as a result of the increase in non-performing loans’ portfolio, the undeveloped and incoherent regulatory framework in supervision had become an impediment to the expansion of reforms in the banking sector. Following this period, the banking system consolidation process began to progress. This period is characterized by the reduction in the share of state-owned banks, their gradual privatization and the considerable increase in the number of private banks from 4 operating in 1997 to 17 banks in 2006. In this context, the central bank has been extremely prudent in selecting and licensing the private banks, where only three of them licensed the recent years are of entirely Albanian capital. Despite the increase in the number of domestic commercial banks, the expansion of the banking activity until 2003 was a prudent one, being in line with the country’s economic development. During 1998-2003, the banking system’s total assets grew by an average of 13 per cent a year, consistent with the nominal GDP growth during this period. Nonetheless, there has been a swift growth in banking assets by 67 per cent in the last three years, which is 2-3 times higher than the cumulative growth of nominal GDP.
And so, in May 2000, the Finance Ministers of ASEAN+3 gathered in the idyllic city of Chiang Mai in the highlands of northern Thailand, to discuss the establishment of a network of bilateral swap agreements. Thus was born the Chiang Mai Initiative. By October 2003, thirteen bilateral swap agreements had been successfully concluded, with a combined total size of roughly $ billion. 5. In May 2007, ASEAN+3 Finance Ministers agreed to transform these bilateral agreements into a multilateral agreement that would also provide a platform for mutual surveillance and dialogue. The Chiang Mai Initiative Multilateralisation, or CMIM, thus came into being in March 2010, with a war chest of $ billion. The CMIM operates as a common US dollar liquidity pool. A member state facing balance-of-payments or external liquidity problems can swap its local currency for US dollars from this pool. The size of the swap can be up to a fixed multiple of its contribution. 6. Today marks another important milestone in that journey – the opening of the ASEAN+3 Macroeconomic Research Office, or AMRO. AMRO is not just any research outfit. It is a critical component of the emerging regional architecture, based on mutual co-operation, surveillance and solidarity. Singapore is delighted and honoured to host AMRO. 7. But before I say more about AMRO, I want to touch briefly on the role of regional safety nets, and how they complement global safety nets. BIS central bankers’ speeches  1  Why regional financial safety nets matter 8.

Ravi Menon: Regional safety nets to complement global safety nets Welcome remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the opening ceremony of the ASEAN+3 Macroeconomic Research Office (AMRO), Monetary Authority of Singapore, Singapore, 31 January 2012. *  *  *  Director, AMRO, Wei Benhua, Counselor, AMRO, Yoichi Nemoto, Head, Civil Service and Permanent Secretary (Finance) Peter Ong, Distinguished guests, ladies and gentlemen. Good morning. Genesis of the Chiang Mai Initiative 1. Twelve years ago, we took the first steps in a momentous journey that has led us here today. 2. It was the aftermath of the Asian Financial Crisis. The Crisis had ravaged several economies in the region and was a wake-up call to all of us. Rapid economic growth was not enough. To sustain growth and foster stability, sound macroeconomics and strong financial supervision mattered. Asian economies had to get their domestic acts together. And they did, with painstaking reforms over the last 15 years. So, when the Global Financial Crisis hit Asia in 2008/2009, Asian economies were shaken, but did not keel over. 3. The Crisis taught us another lesson: had the region better harnessed the resources it had available, it might have been in a stronger position to deal with the crisis. It was this conviction that provided the impetus for the first proposals for a regional financing arrangement. 4.
Therefore, data collection and  BIS Review 38/2000  2  processing need to be highly efficient so that accurate risk results are available in time and within the necessary level of confidentiality. At the Central Bank of Turkey, we established a risk management division about two years ago. The need for such a division came as a result of multiple factors. These factors can be grouped into two as external and internal. The external ones as I have just mentioned in the first part of my speech are rising volatilities in financial markets, rapid developments in information technology, huge increase in trading activity and development of new financial instruments along with the globalization of financial markets. The internal factors are accumulation of net reserves starting from 1997 and the increased responsibility of our bank in terms of its leading role in the Turkish financial markets. As our work on risk management has progressed during the establishment process, we have seen that our reserve management needed to be restructured to have an efficient risk management. Within this context, although we did not change our primary objectives of having enough liquidity and preserving safety, we decided to consider the return factor also. Therefore, we separated our reserves into different tranches serving different purposes, one for operational, one for liquidity and one for investment as in the case of most central banks changing their approach to reserve management. Within this framework, we developed a performance benchmark for our reserves to evaluate our performance on a risk-adjusted basis.

It is very important that the reform should be accompanied by measures that improve the competitive environment in which companies take decisions, promoting the liberalisation of activities where there are still obstacles to competition. But let me move on to the main part of my testimony: the examination of Spanish budgetary policy. I said at the outset that Spain is the centre of attention for the international economic community. This is because we face a particularly complex situation, where there is an overlap between various adjustment processes and imbalances, generated following a long upturn. Possibly, Spanish fiscal policy was not the source of the current difficulties. But clearly, overcoming these problems will require us to swiftly move public finances towards a path of stability, as this is crucial for restoring agents’ confidence and reducing uncertainty about the economic outlook. As you know, following the recent revision, the budget deficit ended 2011 at 8.9% of GDP, a long way off the 6% target set in the previous Stability Programme. The public debt/GDP ratio stood at end-2011 at 68.5%, more than 30 pp above the 2007 figure. The deficit targets have been set at 5.3% of GDP for 2012 and at 3% for 2013. If these targets are met, the public debt/GDP ratio would stabilise in 2014, albeit at a level somewhat higher than 80%. The consolidation involved in meeting these fiscal targets will be tremendously hard to achieve. Events in 2011 show the difficulties of reducing the budget deficit at times of economic weakness.
It is in that con text the topic “Working Towards a SAARC Regional Payments Group” was chosen as the theme for this conference. 8. Conclusion  We need not wait till the SAARC region’s trade and investment flows rise significantly to modernize our payment systems. The SAARC member central banks need to decide early to establish a regional payments initiative to reap the benefits of expanding trade and investment flows within the region. The deliberations of this conference during the rest of the day will focus on this topic and I hope that the central banks represented here will bring this conference to a logical conclusion of moving towards reaching consensus on the formation of the SAARC Region’s Payments Initiative. Thank you. 6  BIS Review 79/2007

In this environment, product innovation needs to be escalated accordingly in particular, to respond to the growing need for managing risks to realign the risk-return profile of assets and liabilities for financial institutions and investors in reaction to fast changing economic variables. This is made more pronounced by the fact that increasingly, with the unprecedented economic integration, financial markets across the globe are not immune to financial volatilities. Therefore, it is crucial that market participants have the necessary tools to manage financial risks prudently and this is where derivatives can be applied. Application of derivatives will yield benefits to the general public as spread of risk among economic agents will mitigate risk of financial shocks to the financial markets at the macro level and individual institutions at the micro level. As a result, the financial system becomes more robust, stable and resilient to extreme volatilities in the financial markets. The introduction of derivatives in the Islamic finance with adequate legal, regulatory and corporate governance framework will enhance the development of the functioning of the Islamic financial system. Developing the relevant indicators The pricing mechanism for the Islamic financial instruments has so far been based on the prevailing interest rate framework. There appears to be no real difference in both the conventional and Islamic instrument. In order for the Islamic financial instrument to be efficiently priced, it needs to have its own indicator.
So it might not have taken us much further forward in terms of clear guidance or greater legal certainty. I’m sure you will be revisiting these issues tomorrow afternoon, in your session covering legal systems. So, I won’t labour my point much further. But there is a vulnerability here which I think we would do well to try to understand better. We’ve got to enhance confidence that contracts straddling the two sectors can be relied upon to produce expected outcomes in a timely way and even in adverse conditions. Risk transfer My second observation relates to risk transfer more specifically. Alan Greenspan made the observation that the successes of the banking system in diversifying risk have increased its ability to withstand significant shocks in recent years, including the Asia crisis, Russia, LTCM, 9/11 to say nothing of Enron, the IT boom and bust, and the telecom write offs. A lot of people agree with him. So the development of markets for the transfer of credit risk is of real value. It allows institutions that are best placed to originate a loan to do so, without necessarily requiring them to continue to bear the risk. Having a market to transfer risk allows institutions to diversify their exposures across different sectors and regions. And of course it generates price information that would not otherwise be available. That means credit exposures can be marked to market in a way that had not previously been possible. But it raises other questions.

In 2015 the ESRB issued a recommendation which provides guidance for a systematic assessment of the cross-border effects of macroprudential policy, and a coordinated policy response in terms of voluntary reciprocity for macroprudential policy measures when needed. The recommendation provides the basis for implementing voluntary reciprocity in the EU and sets guidelines for the analysis, notifications and requests to be carried out. The reciprocity framework is still relatively new but it is a very important part of a macroprudential approach for the reasons just mentioned. I think the ESRB’s follow-up assessment of the recommendation in this area will provide important insights on how we might develop this framework further in the future. The EU needs a strong ESRB as we move ahead So what about the future role of the ESRB? The financial crisis brought with it new rules of the game for financial markets from a systemic risk perspective. We have a new regulatory landscape and framework for financial supervision, and the ESRB is a pillar in that framework. Not only is the ESRB central in identifying and warning against risks to the EU financial system, and recommending measures to mitigate such risk if needed. It has played a key role by providing a benchmark when the new macroprudential policy frameworks were implemented across the EU. The ESRB continues to be vital in developing that framework further, and with that I mean for both banks and for non-bank financial institutions.
But a system-wide shock with a broader impact on market liquidity conditions could quickly change the situation. Liquidity at fund level may be squeezed if many investors wish to liquidate their unit shares at the same time. The resulting first-mover advantages and selling pressure could amplify stress in financial markets, especially if conditions are already fragile. One reason why the Federal Reserve Bank of New York decided to facilitate the private-sector bail-out of LTCM was precisely because it was concerned about market dislocations should the company fail on some of its obligations. Letting LTCM go into disorderly fire-sale liquidation was seen as risking a severe drying-up of market liquidity, which could have damaged financial markets and the wider U.S. economy.4 Considering the current global and domestic uncertainties affecting financial market developments, I am seriously concerned about declining market liquidity and the role that investment funds might play in a possible stress scenario. Liquidity mismatches and leverage are structural in nature and often build up slowly over time. In the euro area, we observe that investment funds have been taking on higher credit and duration risk in the current market environment. And we have strong indications that liquidity risks are building up in the fund sector. The share of less-liquid assets in that sector has been growing constantly since the global crisis, while liquidity and cash buffers have been declining.

In particular, the fund specific regulation coupled with regulation covering certain activities, such as derivatives and securities financing transactions, have addressed investor protection issues and risks from a microprudential perspective.2 At the same time, the growing fund sector is creating emerging vulnerabilities from a systemwide perspective.3 The asset management sector is highly connected with other parts of the financial system 2/7  BIS central bankers' speeches  through ownership links, common asset exposures and the provision of wholesale funding to banks. Investment funds are not only important depositors in banks; they also provide longerterm funding through the purchase of bank-issued debt securities. Euro area investment funds hold about EUR 400 billion or approximately 10% in outstanding debt securities issued by euro area banks. Banks, on the other hand, lend to funds mainly through repo transactions. So any potential shock to the investment fund sector may quickly spill over to other parts of the financial system. When identifying possible weak spots in the financial system, it is sometimes useful to look back to past crisis events. I recall some 20 years ago, when Long-Term Capital Management (LTCM), a large and highly interconnected hedge fund, collapsed, in the wake of turbulence from the 1998 Russian crisis. The rapidly changing market environment effectively turned LTCM’s business model into a key amplifier. LTCM was betting on longer-term developments in fixed-income markets using exceptionally high leverage. When the fund collapsed, fire-sale spillovers and counterparty exposures threatened to erode the stability of the financial system.
Failure in this task will additionally give rise to substantial operational and reputation risk, particularly for the banks that have only recently become eligible under CEPA to set up branches on the Mainland. So far, the medium-sized banks seeking to benefit under CEPA are doing so primarily to follow their customers into Mainland China. This simple business model should not pose too much risk for the banks concerned. But banks that are contemplating more aggressive expansion plans, such as tapping the local consumer market, will need at least to be aware of the risks involved and be in a position to manage them prudently. There is a more general and important aspect about this process of growing banking relationship between the Mainland and Hong Kong. This process is likely to be characterised by policy shifts that are more frequent than any other banking environment that we are familiar with. These policy shifts mostly in the Mainland rather than in Hong Kong, and in monetary as well as regulatory policies - are an inevitable feature of a monetary and financial system that is going through reform and liberalisation. And in the absence of deep and sophisticated financial markets in the Mainland to provide the signals and instruments, the task of risk identification and management associated with the more frequent than normal policy shifts is, to put it mildly, a difficult one. An ability to understand, closely monitor and anticipate monetary and financial market developments in the Mainland is therefore crucial, for banks and for us as supervisor.

4  BIS Review 37/2004  Conclusion I have drawn attention to five processes that are likely to have an impact on the banking industry in the future, if they are not already having an impact. Each of these will, of course, have a different degree of impact depending on the nature of the operations of each bank - though I think it is fair to say that no bank can ignore them. To be sure, facing up to them has important implications for the limited resources that banks have. In formulating business strategies for the coming five years, it is essential for bank management to take into account these processes in planning their affairs. This goes for the HKMA as well, since there are important implications for the manner in which we could perform our supervisory functions effectively. As I mentioned earlier, we are currently carrying out an internal review on this subject. As a result of this internal review, there may be a need for us to make adjustments to our supervisory policies; but there will be, as usual and as necessary, full consultation with the industry before we proceed. BIS Review 37/2004  5
Restoring confidence in U.S. fiscal management would be important and necessary independent of the broader context of the global economy today, but it is more important given the size of our external imbalance, now running at the unprecedented level of 7 percent of GDP a year. The trade balance in real terms has been broadly stable over the past two years, but our net income payments have shifted to deficit, and the size of that component of the current account deficit seems likely to continue to expand. These large global imbalances, our current account deficit and the surpluses that are the counterpart to our deficit, will have to come down over time. How that process unfolds will depend on a complex mix of factors around the world. Confidence that the U.S. political system will act to generate a sustainable fiscal trajectory is important to raising the probability that this process of adjustment unfolds with less risk. A successful conclusion of the Doha round of trade negotiations would provide some insurance against the risk that the process of economic integration will be interrupted or reversed. Despite the relatively favorable average income gains of the past few years, a common feature of the political context in economies around the world is the fragility or weakness of public support for openness and economic integration. 2  BIS Review 2/2007  The political challenge of sustaining support for the process of integration may be the most important economic challenge of our time.

Howard Lee: Hong Kong as a platform for structured credit Keynote address by Mr Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority, at the 2021 Asian Structured Credit Virtual Summit, 16 March 2021. * * * Susie (Cheung, Co-Convenor of APSA), Jade (Friedensohn, Managing Director of IMN), distinguished guests, ladies and gentlemen, 1. Good morning everyone. My great thanks to IMN for inviting me to speak at this year’s Asian Structured Credit Virtual Summit. It is a great forum to connect global structured credit issuers and investors. 2. As we all know, structured credit has been a very important source of financing for many years, especially in places like the US and Europe. While the Mainland of China is a relative late-comer, it is catching up fast and has become a very big market in its own right. However, depending on the structure of their financial markets, not all jurisdictions rely on structured credit to the same extent. For example, in Hong Kong, the banking sector, together with the bond and equities markets, remain the primary sources of corporate financing. 3. Indeed banks in Hong Kong are very liquid. With an average Liquidity Coverage Ratio standing at 155%, there is not a strong desire among banks to sell or securitise their loan portfolios to obtain extra liquidity.