samchain/econo-pairs-v1 huggingface dataset:
That will help all of us to consider the work ahead and make us even better prepared for the implementation of the New Accord by the end of 2006. Indeed, those of you in the audience from institutions that anticipate adopting the most advanced approaches available when the New Accord is implemented have already begun to collect and process the necessary data. You know, as well as anyone, that the required commitment is substantial, and that supervisors’ expectations are high. Reading the results of the global Basel II survey conducted by GARP during the month of January, presented in your monthly newsletter, I was encouraged to see that “Most financial institutions (77%) across the globe are confident that they will achieve full compliance with the Basel II risk-capital accord in time for the 2006 implementation deadline.” Perhaps even more important is the conclusion that “these institutions are confident that their internal risk management will be at least somewhat improved (86% somewhat or greatly improved) following the rollout of Basel II”. This is why I think that what you will discuss at this conference mean much more than simply complying with new regulations and calculating capital requirements appropriately. We want banks to manage risks, not to manage Basel II.

It needs to break out of the shadows of insurance by evolving new business and operating models. Concepts in takaful with rich potential, such as mutual takaful remain largely untested. The mutual model has a long history. It is also enjoying a resurgence with the rise of new online, peer-to-peer insurers in other countries. This is just one model. There might be others. Boards and senior management should lead the way in exploring these developments and charting new territory. This will require more active engagement of shareholders to develop a clear vision for the company and enlist support for bold strategies that will change the status quo for the better. 4/6  BIS central bankers' speeches  Various programmes such as FIDE and FIDE Forum already include content to help prepare directors in future proofing their institutions. The focus will be even stronger going forward. We are also pleased to announce that a specialised executive Islamic finance education programme tailored for directors of Islamic banks and takaful operators will be launched in the first half of this year. It will equip directors with an appreciation and knowledge of Islamic finance by incorporating practical business perspectives. With this, directors are better able to contribute towards growth and innovation, beyond their roles in ensuring that their institutions operate within sound Shariah and risk management parameters. At the level of employees, the reality is that good talent is in short supply. And so, the industry must take a longer view in its human capital strategies.
Accordingly, the defining of effective information and analysis co-operation and exchange procedures between the Supervisory and Resolution Boards is crucial for preventing dysfunctions, overlaps and frictions that hamper the proper functioning of the Banking Union. A Memorandum of Understanding between both agencies is currently being drawn up and will, I hope, contribute to achieving the necessary coordination. Lastly, we should sustain our efforts in order to achieve the degree of cohesion between the various components of the SSM that effective supervision requires. The SSM directly supervises 122 European banking groups, encompassing some 1,200 institutions. This is done with supervisory teams that draw on staff from various institutions, with highly diverse skill sets, seniority, experience and working conditions. Evidently, we must strive to fully develop a sense of mission to which all the component parts must contribute, under the leadership of the ECB and its Supervisory Board, without exclusions or unnecessary subordination. That is vital for maintaining the motivation and commitment of all SSM supervisory staff, irrespective of the authority to which they are attached. Indeed, they have to date shown exceptional professionalism. Final remarks In concluding, I will say that the past year has seen major headway in setting the Banking Union in place, but we still have some way to go. We must move ahead in a setting that will be complex for the European banking industry. Specifically, economic activity remains relatively sluggish, price stability is subject to significant risks and, as a result of this, interest rates are holding at very low levels.

I trust that this agreement, once it is finally approved by the ECB, may be implemented in the opening months of 2016 and that, in any event, future revisions of European legislation will envisage less room for discretion on the part of the Member States, so that the singleness of the relevant legal framework for banking activity throughout the EU may become firmly anchored. To wrap up this first part of my speech, allow me to highlight certain relevant decisions taken by the Supervisory Board during this first year. Among the most important are those relating to the Supervisory Review and Evaluation Process (SREP), which has for the first time been carried out with a common methodology for all SSM banks. This process, which includes both quantitative and qualitative aspects, determines the risk profile of each significant institution, the sufficiency of its liquidity and solvency in terms of this profile and, finally, it sets the minimum capital levels to be maintained. The decisions on capital, the adoption of which for 2016 will be shortly formalised, will, for all the SSM’s significant institutions, entail average capital requirements somewhat higher than those of the previous year: around 30 basis points (bp), rising to 50 bp if the impact of the phasing-in of the capital buffers envisaged in European legislation is taken into account.
A dedicated High Court judge has also been assigned to preside over cases relating to Islamic banking and finance, complementing the mediation, arbitration and other dispute resolution mechanism already in existence for the Islamic financial system. 14. Great emphasis has also been given to enhance the Shariah framework in Malaysia. The Shariah Advisory Council in Bank Negara Malaysia is recognised as a sole authority on all Shariah matters pertaining to Islamic banking and finance. At the company level, it is a legal requirement for Islamic banking and takaful operators to establish their own Shariah Committees as part of internal governance in order to ensure compliance with the Shariah. The second focus area is that there must be efforts to have structured human talent development in the area of Islamic finance. 15. The essence of a takaful system lies in the relationship between the participants and the mudharib or wakeel, that is the person responsible for managing the takaful fund. The key success factor lies in takaful operators having high level of expertise in all relevant areas in the management of takaful business including technical, actuarial, distribution, underwriting, investment as well as strong leadership at the helm of a takaful operator. In this regard, there is a need for a structured development of human talent at all levels which include the leaders, technical personnel as well as the regulators.

At the strategic leadership level, Malaysia has established the International Centre for Leadership in Finance or ICLIF as part of an effort to spearhead the development of a new generation of world class leaders in Islamic banking and finance who can steer the financial services sector including the Islamic finance towards high performance and excellence. An endowment fund of RM500 million has been allocated for this institution. 18. In the development of technical expertise, the Islamic Banking and Finance Institute Malaysia (IBFIM) and the Securities Industry Development Centre (SIDC), which are the industries' training arms, have played an active role in producing well-trained, high caliber individuals and management teams with the required expertise in the Islamic finance. IBFIM and the SIDC work closely with the industries to ensure that their training and education programmes are tailored to meet the evolving needs of the industry. In the case of IBFIM, the programmes on offer include the fundamental aspects of Shariah, Islamic banking and takaful and risk management in Islamic financing. Bank Negara Malaysia has provided a benevolent loan to IBFIM to complement industry contributions. 19. Recognising the need to simultaneously equip the regulators with the necessary skills in Islamic finance, we have in the pipeline for introduction shortly, a special programme for regulators called the Central Banking Course in Islamic Finance. This programme will be tailor-made to provide international regulators with knowledge on conceptual and practical aspects of Islamic finance as well as the update on the regulation and supervision of Islamic financial institutions. 20.
This maturity mismatch between assets and liabilities is an essential part of the banking business model and large unexpected shocks can leave even well-run banks short of liquidity. And the degree of spill-over to the system as a whole is particularly elevated in the banking system. 1  See Fisher (2010), “Managing Liquidity in the System: The Bank’s Liquidity http://www.bankofengland.co.uk/publications/Documents/speeches/2010/speech450.pdf. 2  In this speech, references to commercial banks should be taken to include building societies. BIS central bankers’ speeches  Insurance  Operations”,  1  By way of contrast, if a car manufacturer fails, people will buy other cars. If a bank fails, it can cause a loss of confidence and hence a run on other banks. Commercial banks can self-insure against liquidity risk by holding buffers of liquid assets which they can readily exchange for cash in the money markets. It is obvious in hindsight that the banks’ collective holdings of liquid assets prior to 2007 were insufficient to cope with the ensuing crisis and that they should hold more – although precisely how much more is still being debated in international regulatory circles. Nonetheless, liquid asset buffers can only go so far – one can always conceive some event which renders a bank’s self insurance buffer insufficient. Such scenarios could range from short-term IT malfunctions which prevent payments being received, through to full-blown global financial crises. That is why the central bank needs to stand ready as lender of last resort.

The pre-positioning drive has gathered pace in the last year or so – there is now over £ of collateral pre-positioned for use in the DWF. After applying appropriate haircuts to each piece of collateral pre-positioned, this means the Bank could, subject to solvency and viability assessments and repayment plans, lend around £ in the DWF without the complications of further detailed collateral checks. 11 Although not a substitute for firms  9  Further details on how central banks can use their money market operations to implement monetary policy and provide liquidity support to banks are set out in Clews, Salmon and Weeken (2010), “The Bank’s money market framework”, available in the Bank’s Winter 2010 Quarterly Bulletin. 10  Further details are available at http://www.bankofengland.co.uk/markets/marketnotice100719.pdf. 11  That is around 10% of annual nominal UK GDP in 2011 – slightly higher than that in the United States, where the lendable value of collateral pledged by all depository institutions in the Discount Window (around $ in January 2012) is equivalent to around 8.5% of nominal US GDP in 2011. BIS central bankers’ speeches  5  building up their own holdings of high quality liquid assets to a more satisfactory level, that represents a very substantial “war chest” of potential liquidity in the event of significant adverse shocks. There is limited cost to the counterparty of pre-positioning, as collateral can be withdrawn on demand for use in other operations or market transactions.
It is of course impossible to know how the payment market will look in 5-10 years’ time, but a qualified guess is that instant payments will become increasingly important. New payment products that are introduced can be settled immediately if the client so desires, for instance, through online banks, “point of sale” or e-commerce platforms. Many payments that are now cleared by batch clearing will probably move to instant settlement. For instance, since 2018 it has been possible to make payments by Swish to the Swedish Tax Agency. It is also conceivable that a mixture of batch-based and instant settlement may arise, where payments are settled individually but at predetermined points in time. In the long run, it is not improbable that some of the payments now made separately in RIX will move to other platforms that enable instant payments. It is clear at any rate that the taxonomy used for payments (large-value/retail, instant settlement/batch settlement and time-critical/not time-critical) will become more blurred. The Riksbank is standing at a crossroads here. Should the Riksbank continue to supply solely an infrastructure equivalent to RIX that is primarily suitable for largevalue, time-critical payments during office hours on weekdays and leave the other settlement of payments between financial institutions to the private sector? Or should the Riksbank also supply an infrastructure that enables settlement in central bank money in seconds 24/365? Or to put it a different way: Should the Riksbank's payment system be open all the time? Do we need a settlement service 24/365?

Ladies and Gentlemen, the financial turmoil facing the world today has affected all of us and we as regulators are trying to ensure stability in the financial markets. In this regard, the Bank of Zambia has put in place measures to moderate the impact of the global meltdown on the Zambian financial system. The Government also remains resolved to continue with prudent fiscal policies and economic management, which have seen a buoyant financial sector in Zambia, thereby resulting in the mushrooming of branches in different locations of the country, such as the one we are inaugurating today. In spite of the uncertainties in the global economy, Distinguished Guests, we remain confident that the financial sector in Zambia will rise above the challenge and continue to provide services to the communities where they operate. Ladies and Gentlemen, I have stated at various fora that it is important for banks in Zambia to take actions which support the development of our economy: •  Banks need to open more outlets such as this one, to increase our people’s access to banking services, thereby empowering our citizens  •  Banks should provide more loans to the productive sector, such as Agriculture and SMEs. In striving to meet these demands, banks must always comply with the regulations as stipulated in the Banking and Financial Services Act to ensure the safety of customers’ deposits. I am proud of the stability that has been exhibited by our economy.
This means that we have to look for ways to cooperate more closely with other supervisors across the functional lines of supervision in our system in such as way as to impact the incentives of a broader range of market participants. Fourth, we need to find ways to accelerate the pace at which the regulatory framework evolves to meet new challenges. The increase in the pace of change in financial innovation and in market structure requires greater agility among supervisors and regulators. Without this agility we risk lagging too far behind changes in the frontier of risk. This does not mean that each innovation needs to be met  2  BIS Review 54/2006  with a regulatory response. That would be an unfortunate and surely counterproductive impulse to encourage in regulation. But when a problem in the existing framework has significant implications for financial stability or efficiency, we need the flexibility and expertise required to act more quickly than we have been able to in some areas in the past. Fifth, we need to be creative in identifying areas where market-led initiatives, rather than new laws, regulations or formal supervisory guidance, are likely to be successful and possibly more efficient in achieving certain policy objectives. Where collective action problems limit the incentive or the ability of individual institutions to make the necessary investments in infrastructure, the official sector can facilitate or motivate cooperative effort among market participants to solve the problem.

The reports issued by the Counterparty Risk Management Policy Groups I and II both make the important observation that the financial system is likely to be more resilient under conditions of stress when counterparties set initial margins at levels that are likely to be sustainable in less benign conditions. When margin levels are set more conservatively, firms are likely to have more flexibility in responding to stress and are less likely to take action that might amplify the market shock and exacerbate the reduction in liquidity. When competitive pressure drives margins down, markets may be less resilient. Third, we believe the major financial institutions need to continue to improve their capacity to measure their exposure to risk in a less benign market and economic environment than we have experienced in recent years. The discipline of stress testing and scenario analysis that is designed to measure tail risk is at the frontier of this challenge. Senior management and the boards of directors need to understand the limitations of the tools we use to assess these risks, to try to better understand the potential scale of losses the firm may face, and to carefully examine how well risk exposures reflect the overall risk appetite of the firm, and the size of the capital and liquidity cushion maintained in relation to those exposures. BIS Review 54/2006  3  I want to conclude with the observation that the requirements of effective risk management and control regimes are likely to become more rather than less demanding over time.
In part, this likely reflects the fact that productivity growth has been sluggish compared to historical experience. Relative income differences are likely to get more attention when economic growth is weak and people do not see significant improvement in their absolute income levels. With that in mind, as we consider how to address the issues of income inequality and mobility, we should also consider how to improve flagging productivity growth, because that would help raise the level of household income. Wage Inequality Today’s briefing will focus on labor market inequality, including wage inequality in our region. 1/4  BIS central bankers' speeches  Currently, we see comparatively high levels of inequality in the labor market in terms of differences in the wages workers earn. This situation has been in the making for several decades. Since the early 1980s, wages have increased more rapidly for workers toward the top of the income distribution than for the median worker, and much more rapidly than for workers toward the bottom of the distribution. Further, this increase in inequality can be seen throughout the entire distribution of wages. In my view, two main factors are responsible for this pattern of differential wage growth and the resulting increase in wage inequality. First, advances in technology have dramatically changed the nature of work, increasing the skill requirements for many jobs while displacing others. Second, the pace of globalization has accelerated in recent decades, with increased crossborder trade, investment, immigration, and the emergence of global supply chains.

William C Dudley: "Remarks at the Economic Press Briefing on the Regional Economy" Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on the Regional Economy, Federal Reserve Bank of New York, New York City, 10 August 2017. * * * Good morning, and welcome to the New York Fed’s Regional Economic Press Briefing. Today, we will provide an update on economic conditions in the region, and then discuss the issue of regional wage inequality. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1  Current Economic Conditions The Federal Reserve has pursued an accommodative monetary policy since the Great Recession to facilitate achieving our dual mandate of maximum sustainable employment and price stability. This policy stance has provided support to the economy and helped lower the unemployment rate from 10 percent at the depths of the Great Recession to 4.3 percent currently. Measures of underemployment have also improved considerably and are near precrisis levels. Stronger labor market conditions are perhaps the best means to improve the economic wellbeing of most Americans, particularly those who have been struggling and are most vulnerable to economic downturns. Improved job opportunities have helped to support household income growth, consumption, and saving, as well as the housing market.
1/6  BIS - Central bankers' speeches  What I have just described relates to the use of our central bank assets to deliver monetary policy goals. The liability side of our balance sheet is key to monetary policy setting too, through the setting of interest rates. But our liabilities also play a key Financial Stability role, since the level of reserve account balances held by banks at the central bank is a crucial part of their holdings of liquidity. Before the financial crisis, the level of liquid assets, including reserves, was much too low, and this contributed to the scale of the financial crisis. Let me now draw the next set of conclusions and propositions. Both sides of the central bank balance sheet matter for our dual objectives of monetary and financial stability. What is less often said is that post financial crisis, irrespective of QE, a larger central bank balance sheet would have been needed to restore the safe stock of reserves and liquidity buffers. It follows, therefore, that we will not shrink central bank balance sheets to what they were pre-crisis. But at the moment we don't know with any precision where that level of reserves will be, or what the composition of the assets backing those reserves will be. One factor bearing on the equilibrium reserve level question depends on the future mix of banks' liquidity protections, as measured by the Liquidity Coverage Ratio. Take the major UK banks as an example.

Moreover, we have seen a common theme running through incidents that have occurred – the dash for cash in 2020, the Archegos Collapse, the LDI pension fund issue, the nickel metals case – namely that for firms to understand and respond to the  4/6  BIS - Central bankers' speeches  full risk implications they would have had to observe and respond to a much larger picture of risks than they did observe, and from that came potentially larger risks. There is a challenge of breadth and depth in the NBFI world. It is a very large and disparate landscape with many activities and entities. As a result, we have to survey a lot of ground to look out for risks. But in order to understand these risks, we need to get into the detail, hence the depth issue. LDI was a good case study of this. The LDI fund world comprised 85% of the larger so-called segregated funds, and 15% of the smaller pooled funds. Our stress testing work focussed on the 85%, but the problem arose in the 15%. In some ways the issues around NBFI bear a striking resemblance to ages old challenges in finance, such as leverage, and inter connectivity with other parts of the financial system, creating the scope for spill-overs and systemic consequences. But the heterogeneity of the landscape means that there is no single magic number for leverage as we have with banks, and the inter connectivity can be hard to map, reflecting the recent incidents.