samchain/econo-pairs-v1 huggingface dataset:
Given this scenario, the enhancement of the income from services by promoting the services sector would definitely help the country to have a stable balance of payments position. What should the country do to attain the goal of having a vibrant and efficient services sector? First of all, it should invest heavily in infrastructure so as to facilitate the production of services. In this connection, the proposed international airport and the port in Hambantota and the attendant roadnetwork would make a significant contribution to facilitate the promotion of global services. But the country should not stop there. As a top-most priority, the road network should be improved to be on par with global standards. Roads would create access to markets and reduce transaction costs. Since the services, like the visibles, should be produced at the cheapest costs to attract global customers, the maintenance of efficiency at all levels of the economy is a must. For this purpose, the country need be wired electronically covered by a reliable road network. The most important requirement for a sustainable services sector is the continuation of the development and supply of the needed human resources. The plan made by Singapore at the turn of the new millennium in this regard is a guidance for other countries. The Singaporean Ministry of Education is reported to have instructed, in 1999, all the tertiary educational institutions and universities to concentrate on courses on genetic engineering, ICT, nano-technology and entertainment so as to provide the skilled human resources needed for the future.

The first day of our seminar is dedicated to this topic. The second day of the seminar targets mainly the corporate sector. The Small and Medium Enterprises’ access to finance is also important for financial stability. Small and Medium Enterprises constitute the overwhelming majority (99 percent) of businesses at European level, with important contributions both in terms of value added generated by non-financial corporations (57 percent) and employment (67 percent). Increasing access to finance in this sector is among the EU priorities. It is also 3  true that this portfolio accounted for the highest post-crisis NPL ratio in the European Union. At its peak, the average NPL ratio for Small and Medium Enterprises reached around 20 percent at European Union level. In Romania, the ratio was 35 percent, while the NPL ratio for microenterprises accounted for 53 percent. Therefore, the same lesson learnt from the household sector also applies here: the Small and Medium Enterpises’ financial inclusion should unfold in a sustainable way. On the other hand, the experience with macroprudential instruments for companies is extremely limited at the European level. For example, France has recently implemented a measure focusing on highly indebted firms, but it applies only to large companies. Therefore, I think that deepening this area of research is very useful for macroprudential policymakers. In Romania we have also tried to come up with solutions that might improve Small and Medium Enterprises’ financial inclusion.
For example, the industry had previously criticised the differences in the treatment of banks that originate and hold rated securitisation tranches versus banks that invest in the same exposures. The Committee will eliminate this difference. Instead, it will treat all rated exposures to securitisation structures in the same manner, regardless of whether they are held by an investing or an originating bank. This will furthermore streamline the proposals. Likewise, the Committee is introducing an internal-assessment approach for determining capital charges against exposures to certain low-risk unrated securitisation positions. Under the new treatment, banks will be allowed to derive the risk weights for unrated exposures to asset-backed commercial paper conduits (mainly liquidity facilities) by mapping their internal risk assessments to external credit ratings. This simplifies the rules by allowing qualifying banks to rely on existing processes and, at the same time, incorporates best practices into the securitisation framework. Other simplifications and improvements include the introduction of greater flexibility in calculating the capital charges on certain pools of assets that may underlie a securitisation transaction and the review of the calibration of the securitisation RBA risk weights to ensure a closer alignment with the level of risk inherent in the positions. Based on the positive initial reactions that we and our member agencies have received from the industry to date, the Committee is confident that the revisions will help to clarify and simplify the treatment of securitisation exposures.

The essence of Basel II is not just the set of rules and formulas to calculate regulatory capital, these are necessary and very important but, in my view, the heart of  6  BIS Review 12/2004  Basel II is the incentives for banks and risk management professionals to advance risk management and the recognition of this progress. Studying and understanding the drivers of credit, market, and operational risk, and probing the relationships between them, will help all of us to get a better sense of the risks and rewards we face today, and how well we are prepared to navigate changes in the landscape of opportunity and challenge tomorrow. Improving our understanding of risk, and strengthening our ability to manage it, offers the promise not just of better administered banks, but more importantly the promise of a more stable financial system one that is better able to serve as a source of credit and sustainable growth for businesses and consumers alike. Thank you again for welcoming me to this conference, and I offer my best wishes for an enjoyable and educational event. BIS Review 12/2004  7
Earlier this month we published a Supervisory Statement and Policy Statement3 that together set out our expectations for banks and insurers regarding their governance, risk management, strategic resilience and disclosure of climate-related financial risks. To support the capacity building and the development of best practice, the PRA has just established the Climate Financial Risk Forum to work with firms from across the financial system. The Bank of England is also working with central bank and supervisory colleagues from around the world in the Network for Greening the Financial System (NGFS) to improve climate risk management in the core of the global financial system. Our priorities include the development of a small number of high-level climate scenarios that can be used in future system-wide stress tests.4 Next month, the PRA will require insurers, as part of market-wide stress tests, to consider how their businesses would be affected in different climate risk scenarios. By adapting our soft infrastructure in these ways, the Bank will help ensure that the financial system is not only resilient to climate-related risks but also can take full advantage of the enormous opportunities in a new low carbon economy. Applying New Technologies to Increase Resilience My final example of how the Bank is building a platform for FinTech innovation, considers how general purpose technologies, including advanced analytics such as AI, can increase the resilience of the financial system. As much of life moves online, a trail of data is created.

Overall, in the years following the COVID-19 crisis, the average CET1 ratio has been slightly more than 1 pp above the average ratio of the period between the end of the global financial crisis and the start of the pandemic. In any event, Spanish banks’ CET1 ratio is at the lower end of the distribution for European banks of different sizes and business models. But it is well ahead of the average requirements and offers good aggregate loss-absorbing capacity. Final assessment Over a broader timescale, it is clear that the solvency and liquidity of both the Spanish and the European banking sector have improved substantially over the last decade. This has been driven, in part, by the internationally agreed regulatory reform, which in the European Union applies to all banks, irrespective of size. Indeed, the strengthening of the banking sector and the regulatory reform have proved vital to enable the sector to successfully overcome the extraordinary stress episodes of recent years. In Spain, the fact that business models are strongly oriented towards the retail segment bolsters their capacity to absorb adverse shocks to wholesale market financing conditions and has enabled them to record a favourable financial performance of late, both in terms of higher profitability and improved balance sheet quality. However, confidence in our banking system must not allow us to overlook the existing risks, which remain significant in both the short and the long run.
Unfortunately, access to financing for SMEs, especially those in new growth areas, remains severely constrained in many emerging markets. SMEs form the backbone of the Malaysian economy – being more than 95% of business establishments in Malaysia4; and being an important driver of employment and growth – 1/4  BIS central bankers' speeches  responsible for an estimated 36% of the country’s GDP; 65% of the country’s employment; and nearly 18% of Malaysia’s exports5. If we were to look at the financing side, in Malaysia, about 60% of total financing disbursed by Islamic banks in 2016 is channelled to household. Only about 14% are to SMEs6. Meanwhile, for conventional banks, SME financing forms a larger portion of their business, accounting for 21% of total loans. Clearly – this represents an untapped market segment for Islamic banks to capitalise. I see value-based intermediation or (VBI) as one of the drivers for Islamic banks to assist SMEs and those seeking to start and grow business. VBI promotes greater involvement by Islamic banks in facilitating entrepreneurial activities through holistic offerings which include financing and proactive support. This forms part of VBI’s objectives – that is for Islamic financial institutions to conduct a more responsible way of doing business – where growth is to be driven by clear sense of purpose to create positive impact to society; environment; and the broader economy. Under VBI – business models of Islamic banks are expected to become more customer-driven, with greater understanding on customer’s specific needs and circumstances.

From the start of 1999, lending to the private sector grew at an annual trend rate of about 10% in connection with the pick-up in activity, but probably also the significant rise in the prices of property and financial assets, which were very responsive in certain sectors and economies of the area, as well as the rising number of mergers and acquisitions, many of which reflected direct investment outside the euro area. In France, twelve-month growth in total domestic debt stood at 8.1% in December 1999, compared with 4.5% in 1998. Among the elements forming the second pillar, the exchange rate of the euro is an important monetary policy indicator. The depreciation of the euro seen in 1999 is a matter of concern because it causes production costs and the general price level to rise. In addition, this depreciation of the European currency simultaneously reflected and boosted the negative financial flows, in the form of both direct and portfolio investment, that affected the entire euro area in 1999. The French economy, like the euro area’s, is enjoying favourable monetary and financial conditions and high competitiveness. These factors are facilitating a durable, non-inflationary upturn in activity. However, while a sound monetary policy is a necessary condition for economic success, it is not sufficient in itself to guarantee growth and job creation.
This scheme comes in two parts; the first relates to concessional financing support while the second concerns the State’s guarantee of the financing. Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  -7-  Part One: support to cost of financing This program was designed to support cost of financing (return/interest) granted to SMEs and cost of financing given to companies. In line with the nature of SMEs and their unique needs, the scheme subsidizes cost of financing at a maximum of KD 250,000 per customer. This support covers part of the financing where the State shoulders the full cost of the financing for the first two years, 90% of the cost for the third year, and 80% for the fourth. The scheme specifies the purpose of the financing as meeting periodic contractual dues and expenditures, such as payroll and lease payments, with a term of up to four years. It meanwhile keeps cost of financing at a low level (discount rate as specified by the CBK + 1%), which currently comes to 2.5%. As for eligibility for financing, the program covers SMEs affected by the COVID19 pandemic that had been performing well and enjoyed a good position prior and excludes entities whose parent companies have alternative sources of financing. The scheme also requires the entity to retain current national staff and meet the Kuwaitis employment quotas to be met by end of 2021 for the relevant sector in which it operates.

During the following week, the focus of the Workshop will be exactly on the operational, back office activities, in the process of reserve management. No transaction can take place without the back office. It provides a vital service to the front office by ensuring that all funds flow in a timely and correct manner and all the necessary documentation is completed. Inaccurate or untimely trade capture can have implications for the P&L and risk management process. If the central bank does not capture the correct transaction, then position and reported credit exposure might be incorrect. Having in mind the importance of the back office service to the reserve management process, one of the goals of the workshop will be to provide best practices in the area of settlements, then different services provided by the  2  BIS central bankers’ speeches  custodians, and the importance of appropriate IT tools to perform secured and efficient settlements. All the aspects cover over this week will enable to improve and make more efficient and controlled environment for the conduct of the reserve management transactions. In this regard, although back office activities should be separated from front and middle office activities, it does not mean that operations should be considered as separate from the business. On the contrary, the closer operations management is the pulse of the business, and the better communication channels between all the areas in reserve management function, the more responsive operations to changes in the business.
Any other policy is anti-social, destructive of confidence and incompatible with the working of the economic system”. 8 In the US, these sentiments were echoed in the immediate post-war era by Benjamin Graham, the original “value investor” and yesteryear investment guru to today’s investment guru, Warren Buffett: “A serious investor is not likely to believe that the day-to-day or even month-to-month fluctuations of the stock market make him richer or poorer”.9 And, famously, “in the short run, the market is a voting machine but in the long run, it is a weighing machine”. Whether an untutored savage, defective telescope or anti-social voting machine, something sounded amiss. Thus far, however, this evidence was largely anecdotal. It was not until the 1960s that the short-termism hypothesis was first tested empirically. This drew on survey evidence from investing firms. It found that investors typically expected full pay-back on an investment within 3 to 5 years. At the time, the average life of plant and equipment was often 10 times that.10 Firms played short even when they desired long. The first quantitative evidence that discount rates might be high began to appear in the early 1970s. For example, King (1972) examined investment in plant and machinery in the UK. Empirical estimates suggested the internal discount rate implied by firms’ corporate investment decisions may be up to 25%.11 This literature failed to catch fire. Starting in the  5  Jevons (1871). 6  Marshall (1890). 7  Pigou (1920). 8  Keynes (1938). 9  Graham (1949).

These projects would fail to receive financing. Investment and, ultimately, growth would be lower  4  BIS central bankers’ speeches  than optimal. In fact, the potential capital misallocation problem is greater still. To see that, consider the three projects summarised in Table 1. Table 1 Short-termism and capital planning Project  A  B  C  Cash-flows (CF)  $ pa in years 6–10  $ pa every year  $ pa in years 1–5  Cumulative CF  $  $  $  NPV (rational)  $  $  $  1  2  3  $  $  $  3  2  1  Ranking (rational) NPV (myopia) Ranking (myopia)  In the absence of short-termism, project A is selected. Its payouts are back-loaded but significant; it generates a net excess return of 22%.17 Short-termism hits such long duration projects hardest. The impatient investor chooses project C. This project delivers lower cashflows but these are front-loaded. In NPV terms, the project selected is the worst on offer, whereas the rationally optimal project ranks last. Capital allocation is not just sub-optimally low; it is also skewed towards sub-optimally short-duration projects. (b)  Asset pricing  Consider now a formal model of multi-period equity price determination. Finance theory typically assumes that investors care about both the level and uncertainty of their wealth and are risk averse. In this world, agents require a premium to invest in a company.
It’s an argument which seems to say, we can’t value the firm, we can’t supervise it, and we can’t resolve it, so therefore let’s ensure it has a very large amount of equity financing, what I call the “Big Equity” argument. Honestly, it’s a nonsense. Large amounts of equity financing will not be available for such firms, so the best we can say is that this is a route to a radically different financial system, but in that world the risk goes somewhere else, and we shall still be worried. But this is not an argument against having non-risk based tools like the leverage ratio in the supervisors’ toolbox. They are very important, because to understand risks well, we need more than one view of the firm. And the leverage ratio is an important other view. But I want to emphasise that understanding risk is at the heart of supervision. BIS central bankers’ speeches  1  But this, of course, begs a very important question. Why did supervision go wrong in the period before the financial crisis, and what do we learn from that bad experience? Let me offer a number of thoughts on that. First, supervision was never given sufficient prominence and attention. It’s a very real skill. In my experience it demands not just high levels of technical skill but also interpersonal skills – to get very strong egos to change their thinking and actions – do things that they had not intended – to recognise the public interest.

Andrew Bailey: Defining the objectives and goals of supervision Speech by Mr Andrew Bailey, Deputy Governor of Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority at the Bank of England, at the New York Fed conference “Defining the objectives and goals of supervision”, Federal Reserve Bank of New York, New York City, 18 March 2016. *  *  *  First of all, many thanks to the New York Fed for organising a conference on supervision of banks. This sounds a strange thing to say in one sense – not in another because the gratitude is genuine – but strange in the sense that surely supervision is such an important part of what we do that we shouldn’t be particularly surprised at the idea of having a conference on it. But in my experience, it is surprising how little time we spend being more reflective about supervision. I want to start with some important definitions. Frequently, and mistakenly, “supervision” and “regulation” as terms are used interchangeably. That’s wrong. Regulation is to do with the framework of rules and guidance that put the structure around the objectives that as authorities we are usually given in statute. In the UK, the PRA has a primary objective in terms of the safety and soundness of firms we authorise to do business, and safety and soundness are expressed in terms of the stability of the financial system. There is then a rulebook that tells us what safety and soundness means. That’s the framework of regulations.
Domestic banks report the activity of all offshore branches with more than $ billion in assets, while FBOs report activity of offshore branches that are managed and controlled by offices based in the United States. Additionally, both domestic banks and FBOs report the activity of their IBFs. Prior to the revisions, only domestic banks reported Eurodollar transactions, and there was no reporting by IBFs. 33  In addition to enhancing the Eurodollar collection, the revised reporting instructions, effective October 20, 2015, modified and clarified the definition of federal funds transactions and expanded the number of reporting entities. The effect of these changes was an increase in the amount of reported federal funds activity. 34  The data file for this speech, available on the New York Fed’s website, includes a historical calculation of the OBFR based on data provided by federal funds and Eurodollar brokers until October 19, 2015 and based on FR 2420 data, from October 20th, 2015 until February 17th, 2016. 35  See “Responses to Survey of Primary Dealers,” December 2015, and “Responses to Survey of Market Participants,” December 2015. 36  One such exceptional period was in mid-October 2015, amid some market concern about the debt ceiling that eventually abated. 37  The Treasury has recently begun to ramp up its issuance of Treasury bills in part to support the maintenance of a larger cash balance, which it keeps in its “checking account” at the Federal Reserve.

Treasury bill yields rose a bit less than other rates on instruments of comparable term and now trade at yields somewhat below the ON RRP rate. Treasury bills have some attractive qualities in comparison to ON RRP, such as round-the-clock liquidity. In addition, there seems to be strong demand for bills from investors who don’t have direct access to the ON RRP or IOR, and it appears that most Treasury bills are owned by such investors. Also, bills have typically traded below other money market rates during tightening cycles, as they do now; periods where bills trade at or above other rates have been the exception and not the rule.36 Thus, the smaller increase in bill yields than in rates on other term instruments is not surprising, and I do not read it as undermining the general conclusion that the policy rate increase was effective in firming money market conditions.37 December 31 Now, I mentioned earlier that fed funds traded within the target range on all but one day. Let’s talk about that day, which was December 31. 6  BIS central bankers’ speeches  On that day, the effective federal funds rate, calculated as a mean from the FR 2420 data, printed at 20 basis points, 15 basis points below its prior-day value and 5 basis points below the FOMC’s target range. The median dropped a bit more, by 20 basis points to a level of 15 basis points.