samchain/econo-pairs-v1 huggingface dataset:
I will then explore some of the regulatory gaps that need to be closed with a view to both strengthening the resilience of the financial sector and mitigating the risk of financial dominance. The expansion of the non-bank sector The financial sector landscape in the euro area has changed significantly over the past decade. Today, non-bank credit accounts for around a third of firms’ total external debt financing, twice the share in 2008 (see left chart slide 2). And the share of marketable debt securities in external financing has also doubled in the euro area since the global financial crisis (see right chart slide 2). These developments are to be welcomed. There are significant advantages of having broad and diversified funding sources. If properly regulated, a diverse financial system has the capacity to distribute risk more efficiently, foster economic resilience and allocate funds more effectively towards their most productive uses. [1] This is why the ECB has repeatedly called upon legislators to accelerate progress towards a true capital markets union in Europe. [2] A more balanced funding mix is also important as a shock absorber, or as “spare tyre” as Alan Greenspan famously put it. [3] When the global financial crisis and the sovereign debt crisis hit the euro area, the disproportionate reliance on the banking sector as a source of external finance threatened to destabilise not only the economy but also cohesion in the single currency area.

[15] To meet redemptions or margin calls, funds sold large amounts of US Treasuries beyond the capacity of dealers to accommodate the demand for liquidity, contributing to the highly unusual decline in Treasury prices in this period of stress. Similar developments may have played a role in euro area sovereign bond markets. The crisis also exposed the strong interconnections between banks and non-banks through direct exposures and overlapping portfolios, and demonstrated how these can increase the risk of contagion. [16] For example, MMFs play a particularly important role in the short-term funding of banks. They hold around 10% of outstanding debt securities issued by euro area banks. During the crisis, many of these funds, in particular low-volatility net asset value (LVNAV) funds, which account for almost half of the euro area MMF sector in terms of total assets, came under severe liquidation pressure as investors redeemed large amounts of shares (see left chart slide 10). [17] Large outflows, in turn, led to a freeze in the demand for commercial paper and a measurable rise in their issuance rate for both banks and non-financial corporates, draining liquidity from the system at a time when it was most needed (see right chart slide 10). [18] While some investment funds and MMFs took exceptional measures to cope with their liquidity stress, these were not sufficient to prevent systemic stress. Some investment funds used quantity-based measures, such as the suspension of redemptions and redemption gates to address liquidity issues.
*** Dear representatives of the banking sector, We should not limit ourselves to seeing only the consequences from a natural disaster; we should see an opportunity for recovery and development. The Government has announced the areas designated for reconstruction after the earthquake and in addition to the allocated funds for this purpose funds are expected to be collected from the Conference of Donors. Amid this situation with financing opportunities from the Government, donors, and a high interest from households to invest in re-building their properties and making them safer, banks should be active, to intensify their intermediary role and enhance their lending to another dimension. Let me now address some key issues, which should be addressed attentively to ensure sustainable pillars for banking activity to continue to build on as a whole, particularly with regard to sound and competitive lending, which ensures sustainable income. First, the reduction of the non-performing loans portfolio does not guarantee they do not arise again if we do not look behind and address the problems and errors made when they were originally provided. Addressing them starts with improving governance, building-up and strengthening audit lines, attracting and training sufficient and qualified staff, above all, establishing an effective supervision by senior management bodies to maintain the adequate balance between risk appetite and the objectives of the business. These are only a few of the steps to be implemented in this regard.

For a relatively 2/3  BIS central bankers' speeches  small market, such as Albania, it is proved that the costs of non-performing clients are borne by the whole system, and individual strategies have no effective results. To provide an effective restructuring for clients in distress, it is indispensable to have an honest collaboration between banks, which ensures not only a more fair assessment of the client’s repayment capacity, but also optimises the time and cost of assessment for both the bank and the client. The Bank of Albania remains committed in supporting energetically such collaborative projects, by guaranteeing impartiality; meanwhile banks should show a good will in this regard. Last, in these days of daily technology advancement, banking business would not be able to survive without investing in technology, in the right time. All banks are fully aware of this, but the pace of development in each of them has been different. Thanks to the strong relations and exchanges with our European neighbours, and the firm aspiration to be part of the EU, a postponing of the necessary investments in this regard would be at the cost of competitiveness. But, investments in technology only, without the support of internal human resources, may expose banks to high operational risks and irreparable consequences.
Combined with low growth abroad and increased trade with low-cost countries such as China, this has led to a fall in import prices. The relatively high price increases of Norwegian products reflect high wage growth and a tight labour market. The krone exchange rate, measured against the trade-weighted index, has appreciated around 13 per cent in the last two years. However, the krone was exceptionally weak in mid-2000. The krone is 4-5 per cent stronger today than in the early 1990s, and about as strong as the previous high in early 1997. Thus, the recent strong showing of the krone is not without precedent. Changes in the oil price have time and again been an important factor behind exchange rate movements. Empirical evidence shows that the exchange rate is affected mainly by large fluctuations in the oil price. The krone tends to depreciate if the oil price is very low, as happened during the Russian crisis in 1998. On the other hand, the krone did not appreciate accordingly when the oil price surged from 1999 onwards. Hence, the relationship between the oil price and the exchange rate has not been evident for the last two years. Since late 2001, however, our currency may have been used as a hedge against the upside risk to the oil price, and this may have contributed to its appreciation. Another factor behind the appreciation of the krone is the current low risk premium in global currency markets (measured by a global risk index, GRI).

State-of-the-art NK-DSGE approaches introduced rigour and strong microeconomic foundations into macroeconomic thinking. They became an important tool for simulating the effects of monetary policy and other macroeconomic shocks. But nothing is for free. The positive features of this framework came at the cost of what is described as a high degree of model stylisation. Put simply, these models, especially at their beginnings, were very narrow in terms of the specification of the economy and its behaviour, and omitted a number of important linkages and processes. Despite much progress in the academic literature over the last 10 years, the variants used by central banks remain suitable mainly for analysing small deviations of macroeconomic variables from their long-term trends. They represent a highly imperfect description of the economy and are not able to cope with shocks or structural changes that deflect it from these trends for lengthy periods. The macroeconomic instability we have seen over the last 20 years is essentially inconceivable in these models. Despite these limitations, NK-DSGE models have for quite some time been strongly dominant in academic macroeconomics and been the main tool used for analysis and forecasting in some central banks. In a scientific discipline in which scholars have always held different views and argued heatedly among themselves, such a situation was by definition strange. It is good that after the GFC, the fundamental debate on different approaches to macroeconomic modelling was revived and the seemingly irreconcilable camps were able to reach some common conclusions.
We have the recent case against BNPP for its conduct in evading U.S. sanctions related to Iran, Sudan and Cuba. The case is noteworthy because the disposition involved pleas to Federal and state criminal violations, and a record fine of nearly $ billion. The BNPP case is not the only case against a financial institution for economic sanctions violations. There have been a series of others. Every one of this series of cases concerns a foreign bank. Observers ask, “why are all of these economic sanctions cases against foreign banks?” Before offering my answer, let me start with some “not’s”. In my view, it is not that U.S. financial institutions are so much more compliant than foreign institutions. I will avoid an ugly name-and-shame ritual, where I would identify the U.S. financial institutions that violated U.S. law. It is not that U.S. prosecutors are xenophobic individuals who are bound and determined to target only foreign institutions. I know from personal knowledge that prosecutors have followed the evidence and it has led them to the doors of foreign banks only. What explains this phenomenon? Some foreign institutions, unlike their American counterparts, did not see the values that motivate and support U.S. economic sanctions rules. At most U.S. financial institutions, and I may be myopic in seeing too much nobility in them, there is a widely accepted understanding that our U.S. sanctions are tailored to accomplish a laudable public purpose. The Sudanese sanctions are designed to coerce a regime to cease certain horrific practices, like genocide.

I am of the “old school” – the duties of the management and the board are owed to the company and to the shareholders. I do believe that the best among chief legal officers will see the job as more than just dispensing legal advice, and, as being the “guardian of the corporation’s integrity”. 1 But being the guardian of the corporation’s integrity cannot mean that integrity is defined by the chief legal officer’s personal value system and not the organization’s value system. We are not priests or rabbis. In a world where the consequence of rule breaking can lead to fines in the multiple of billions of dollars, lawyers and compliance officers can accurately claim that, in guarding the corporation’s integrity, they are enhancing shareholder value. When the BNPP case was announced, FBI Director James Comey said: “Until shareholders demand from their boards that those boards choose leaders who understand what it means to create a healthy culture of compliance, the money will keep walking out the door . . . .” 2 My remarks today have focused on the organizational value system as distinct from its rule set. Organizations should adopt and nurture organizational value systems because they are healthy for the company and its shareholders. The personnel in the organization will feel better about the work that they do, and they will do better work and more of it. It is good business to refuse to finance a jurisdiction that is sponsoring genocide.
As some banks may be too big to fail, as regulators we should also discuss the possibilities of creating debt instruments which automatically convert to equity when losses mount above certain trigger points. Building trust to enhance cross-border crisis management A financial crisis is costly to resolve. The potential costs are so large that only the nation state, through its power to tax, can shoulder the costs. This makes the state the only ultimate and credible guarantor of financial stability. Today, we have a mismatch between the geographical reach of the only party that can guarantee financial stability – the state – and the international financial system. The logical solutions to this geographical mismatch are either to shrink the financial system back to within national borders or to create an international institution with a right to tax or a system of burden-sharing, so that confidence in an ultimate guarantor can be established on an international level. The first solution would be too costly. Basically, it would imply rolling back decades of globalisation and financial integration. Consider, for example, the costs of dismantling a large cross-border bank. It would also mean a serious blow to the European single market. In a way, I find it puzzling that we are discussing the possibility of a single market for all kinds of goods and services except for the commodity most suited for free trade: money.

A concrete example of the merits of financial integration is how the arrival of foreign banks resulted in a rapid development of the banking systems in the Eastern and Central European countries. The citizens and corporations of these countries benefitted substantially from early access to advanced financial services. The second solution – to create an international institution with taxation rights or a system of ex ante burden sharing – is simply not realistic for the foreseeable future. 4  BIS Review 118/2009  Consequently, we are stuck with the geographical mismatch and, as a consequence, crossborder banks pose a real challenge to crisis management. To accommodate this mismatch, national authorities must cooperate more effectively. This is the only feasible option. In order to achieve efficient cooperation, it is vital to build trust between authorities, which explains my third ingredient. In the EU, we have the home country principle as a fix for the geographical mismatch. We have also signed a European Memorandum of Understanding (MoU) aimed at improving cross-border cooperation. However, the home country principle does not solve the dilemma of international banks and national authorities. Tension arises because the home country is responsible for the supervision of branches but the host country is responsible for the financial stability of the country. This tension also persists if the foreign bank operates through subsidiaries. Many cross-border banks centralise different parts of management. There are good economic reasons for such centralisation.
Zeti Akhtar Aziz: The transformation of Labuan as an International Business and Financial Centre Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the launch of Labuan International Business and Financial Centre, Kuala Lumpur, 28 January 2008. *  *  *  Distinguished Guests, Ladies and Gentlemen, It is with great pleasure that I welcome you to the launch of Labuan International Business and Financial Centre. This decade has seen the Labuan Offshore Financial Centre demonstrate its ability to adjust and reinvent itself in a rapidly changing international and regional environment. This decade has also witnessed the robustness and resilience of the Labuan Offshore Financial Centre as evidenced by its ability to continue to expand and mature even during the most challenging of periods. The global and regional market place however, continues to transform, bringing with it new opportunities and challenges. To have the flexibility to benefit from the new opportunities and to have the capacity to rise to the new emerging demands and challenges, continued reassessments need to take place to rediscover new directions, build new strengths, new comparative advantages and to define our new role in this ever changing and more competitive market place. Today we are defining a new beginning for the Labuan Offshore Financial Centre as it positions itself for a much larger role. Your presence here today to share in this auspicious occasion is indeed appreciated.

In this context, the CBRT will continue to monitor global economic developments closely and will take the required measures promptly to maintain stability in domestic financial markets. While formulating the monetary policy, we will continue to monitor fiscal policy developments closely as well. In this respect, our forecasts presented in the baseline scenario take the Medium Term Program as given and thus assume that fiscal discipline will be maintained. A revision in the monetary policy stance may be considered, should the fiscal stance deviate significantly from this framework and consequently have an adverse effect on the mediumterm inflation outlook. In the period ahead, monetary policy will continue to focus on price stability while preserving financial stability as a supporting objective. To this end, the impact of the macroprudential measures taken by the CBRT and other institutions on the inflation outlook will be carefully assessed. Strengthening the commitment to fiscal discipline and the structural reform agenda in the medium term would support the relative improvement of Turkey’s sovereign risk and thus, facilitate macroeconomic and price stability. Sustaining the fiscal discipline will  10  BIS central bankers’ speeches  also provide more flexibility for monetary policy and support social prosperity by keeping long-term interest rates permanently at low levels. In this respect, I would like to conclude my remarks by underlining that timely implementation of the structural reforms envisaged by the new Medium Term Program remains to be of the utmost importance. Thank you for your participation. BIS central bankers’ speeches  11
Ong Chong Tee: Life insurance industry - riding the technology wave Address by Mr Ong Chong Tee, Deputy Managing Director (Financial Supervision) of the Monetary Authority of Singapore, at the LIA Annual Luncheon, Singapore, 7 March 2018. * * * Mr Patrick Teow, President of LIA Singapore Distinguished Guests Ladies and gentlemen Thank you for inviting me to join the 2018 LIA Annual Luncheon. Allow me to first congratulate the new LIA Management Committee. I last spoke at this event in 2015 on a theme of confidence and resilience of the industry. Last year, my Assistant Managing Director Lee Boon Ngiap spoke on the importance of strong culture and ethics as key drivers of good conduct. Today, I like to build on these themes with the backdrop of the technological wave sweeping our shores. For those of you who have visited London and taken its underground trains, you will be familiar with the rather famous broadcast in the Tube stations repeatedly telling commuters to “mind the gap”. In an analogous way, as technology innovation and business model disruptions impact various economic areas including the insurance sector, it is worthwhile to remind ourselves to “mind the gap” as we ride the technology wave. Let me elaborate. My remarks will cover three aspects: (a) Bridging the protection gap; (b) Leveraging FinTech (or more specifically, InsurTech); and (c) Doing more to eliminate ‘conduct gaps’. Protection gap Many studies have found sizeable insurance protection gaps across countries.

After client on-boarding, the ongoing contact between the insurer and the insured is limited to premium payment and processing of claims. Many people do not see a need to meet their insurance agents regularly to review their coverage. Some, I am told, even shun calls from their agents. New insurance apps can transform the insurer-policyholder relationship into a broader partnership. The insured person can benefit from various lifestyle information, healthy living tips and other information, emerging trends, advisories on new products and various service options. These can include transactional services such as the option to buy additional insurance based on new needs – all done digitally. Claims can also be an automated self-service process, with expedited settlement based on digital submissions of proofs. The use of Chatbots can also support a customer by providing on-demand standard reports or for other procedural or contract information. I read that in some countries, new InsurTech players now offer universal all-in-one “plug and use” insurance cover. They use AI-enabled insurance platforms that allow a person to key in his details – like his health statistics, occupation, business and personal travels, his car, family, home and home possessions, pets and so on – and get all the insurance that he needs under one policy that can be flexibly adjusted across the difference risk coverage over his life cycle. What this does is to make the customer experience more pleasant and fuss-free.
For example, most of the measures taken by the Federal Reserve have aimed to make it easier for households and companies to get access to credit and to reduce risk spreads. The strategy has therefore been called credit easing. The Federal Reserve has thus focused on the asset side and has, for instance, bought different types of domestic, private financial assets. In this context, what happens to the monetary base on the liability side of the balance sheet has not been the central issue, although of course everything that happens on the asset side of a balance sheet is directly reflected on the liability side and vice versa. Technically speaking, the monetary base has increased in Sweden too because the Riksbank has increased its lending to the banks. This has not, however, been the main aim  BIS Review 41/2009  11  of the lending and is not something that, in the present circumstances, can be expected to automatically lead to an increase in lending to borrowers outside the banking system. The Riksbank's lending has, on the other hand, eased trading on the interbank market. However, increasing the monetary base may sometimes be a deliberate strategy. In such a case we usually talk about quantitative easing.

5  See also Siven, C-H. (1998) "Penningteori utan pengar – hundra år med Knut Wicksell", Ekonomisk Debatt 1998, year 26, no. 6. 6  Wicksell, 1898 [1936], p. 189. 7  See also Orphanides, A. (2207), "Taylor Rules", Board of Governors of the Federal Reserve System, January 2007. 16  BIS Review 41/2009  lending. In the same way as the policy rate can be expressed as a Taylor rule, it should be possible to express the banks’ capital adequacy requirement as a function of, for instance, the lending gap, or growth in lending in the economy and the output gap. Image 10: A ”Taylor rule” for capital adequacy  (  )  (  c t = c + α L Lt − L* + α Y Yt − Y  )  Here the capital adequacy requirement the banks are subject to depends on the development of total lending in relation to a long-term trend and economic activity. The idea is that the capital adequacy requirement will increase when lending increases too substantially, and will decrease when lending declines. In this way the banking system will be forced to build up capital reserves in good time, which can in turn be used to cover losses when times are hard. One creates a model that evens out cycles rather than reinforcing them. The current capital adequacy rules are sometimes accused of being procyclical.