samchain/econo-pairs-v1 huggingface dataset:
Page 10  Annex Chart 1: Bulk Purchase Annuities (BPAs) and longevity swap transactions £ billion) since 2010  Source: Lane Clark & Peacock  Page 11  Chart 2: Projected bulk annuity demand  Source: Hymans Robertson – Risk Transfer Report 2022 Demand is expected to ramp up as the majority of over £ trillion of Defined Benefit liabilities looks to find a home in the insurance market over the next 20 or so years. Projected demand averages c. £ per annum over the next 10 years, compared to a record £ in 2019. Page 12  Chart 3: Assets held in insurance firms’ Matching Adjustment (MA) portfolios at year-end 2020 £ billion)  Source: PRA analysis of Matching Adjustment (MA) Asset & Liability Data submissions by firms as at year-end 2020. Page 13  Chart 4: Matching Adjustment (MA) benefit by asset class at year-end 2020 (basis points)  Source: PRA analysis of Matching Adjustment (MA) Asset & Liability Data submissions by firms as at year-end 2020. Ranked by spread in basis points (lowest to highest) and does not show asset classes where there are limited holdings across the industry. Page 14  Chart 5: Matching Adjustment (MA) versus Market Value  Source: PRA analysis of Matching Adjustment (MA) Asset & Liability Data submissions by firms as at year-end 2020. Note: Assets shown are those in Component A of insurance firms’ Matching Adjustment (MA) portfolios only. See Paragraph 4.5 of Supervisory Statement 7/18 for further details. 1. Solvency II 2.

The PRA is therefore keen to continue to work with Boards to consider important questions around: Which of the incentives for management encourage the sustainable performance of the business over the long term; and which may favour shorter term? What could happen in the future and how resilient is the business to these risks? How easily could the business transfer from open to closed status if this became necessary? On what terms could the liabilities be transferred to a third party in a range of different market conditions? We have observed over the relatively short time Solvency II has been in force, that investment strategies for annuity business have been influenced by the up-front MA benefit that certain assets attract. The Prudent Person Principle[2] is part of our rules around investment and we expect Boards to challenge, approve and control the continuing appropriateness of the investment strategy. Risk management Moving from the challenges that Boards face in respect of BPA business to risk management challenges associated with investing for the long-term. Here success is about achieving a sustainable balance between investing safely for the long-term whilst also taking opportunities to diversify asset holdings, including into assets that have wider benefits for the economy as a whole. The PRA recognises that the increasingly diverse range of features associated with MA assets may have a significant bearing on the level of risk and uncertainty around the future long-term business plan.
Finally, the time has come to answer the question in the title of this presentation “Is there an optimal way to structure supervision”. My answer is “No”. The different supervisory structures reflect the specific situation of their countries, which may change over time, and there is no globally agreed best practice. As former Chinese Chairman Deng Xaioping once said: “The colour of the cat does not matter as long as it catches the mice”. 5  Ferguson, R (2000) Alternative Approaches to Financial Supervision and Regulation, Journal of Financial Services Research, 17(1), 297-303  6  BIS Review 49/2007

Zeti Akhtar Aziz: ASEAN – towards a more integrated market Keynote speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the 19th ASEAN Banking Conference 2012 “ASEAN – towards a more integrated market”, Kuala Lumpur, 7 November 2012. *  *  *  As we enter a new phase of globalisation, Asia’s role in the world economy is being significantly transformed both in terms of its significance and influence. ASEAN economies are very much a part of this process. This trend has become more pronounced following the global financial crisis. Five years into the crisis, the world economy continues to be challenged to hold a sustained recovery. The financial sector restructuring and reforms, and the structural adjustments being undertaken by the crisis-affected economies will not only take time to produce results, but in the more immediate term, these efforts will involve costs to the economy. While emerging markets such as those in the ASEAN region are not insulated from these developments, the region has displayed remarkable resilience during this period. The region has benefitted from the decade of restructuring and financial reforms following the Asian financial crisis. In addition, structural adjustments undertaken during this period and have resulted in more diversified economies, in which domestic sources have become increasingly important in sustaining growth performance. The region’s more favourable growth prospects are also underpinned by the relatively sound fundamentals that include strong external and fiscal positions, stable macroeconomic conditions, low unemployment and resilient financial systems.
It is well understood among all the members of the FOMC that allowing inflation to gain a foothold is a losing game with large costs and few, if any, benefits. In this regard, some have argued that Fed officials might be reluctant to raise short-term rates because such increases would squeeze the net interest margin on the Fed’s System Open Market Account (SOMA) portfolio. Although it is true that a rise in short-term interest rates would reduce the Fed’s net income from the extraordinary high levels seen in 2009 and 2010, 4 this will not play a significant role in the Fed’s monetary policy deliberations. Fed policy is driven by the objectives set out in the dual mandate, and the net income earned by the Fed is the consequence of the policy choices that advance those objectives. The Federal Reserve’s net income statement does not drive or constrain our policy actions. In short, we act as a central bank, not an investment manager. It is also worth pointing out in passing that a failure to raise short-term interest rates at the appropriate moment based on our dual mandate objectives would also be a losing strategy with respect to net income. Inflation would climb, bond yields would rise and the Fed would ultimately be forced to raise short-term rates more aggressively, or to sell more assets at lower prices to regain control of inflation. This would almost certainly result in larger reductions in net income than a timelier exit from the current stance of monetary policy.

On the basis of current assumptions for the development of external conditions this year and in 2004, prices of marine products are now expected to fall by 4% this year and to remain unchanged between 2003 and 2004. Exports of marine products are expected to grow by 3% this year due to increased quotas for the fishing year [beginning September 1] and a larger blue whiting harvest this summer. The assumed increase in catch volume for 2004 is 5%. Aluminium prices are expected to rise by 4% this year, based on futures prices and the pricing assumptions of the two aluminium companies, Norðurál and Alcan Iceland. Import prices in foreign currency are expected to decrease by ½%. Fuel prices are based on futures. These have been on an upward trend in recent weeks and are now expected to rise by 9% this year but fall by 14% in 2004. The terms of trade for goods and services are expected to deteriorate by 1½ percentage points this year. In 2004 they are expected to improve by three-quarters of a percentage point. Assumptions for short-term foreign interest rates are 3% this year and 3½% next year. BIS Review 45/2003  3  According to the Central Bank’s macroeconomic forecast, output growth will be 2¾% this year and 3½% in 2004. This forecast assumes that the Norðurál aluminium smelter expansion will go ahead; if not, the respective growth figures would be 2¼% and 2¾%. Private consumption growth is forecast at 2% this year and 3% next year.
1  https://www.globalfxc.org/global_index.htm  3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  Table 1: Statements of Commitment to the FX Global Code by the 30 largest sell-side institutions  Firm  Assets $  SoC on public register, or have otherwise informed the Bank of England  1  Industrial and Commercial Bank of China Limited  4,211    2  China Construction Bank Corporation  3,632    3  Agricultural Bank of China  3,439    4  Bank of China  3,204    5  MUFG Bank  2,774    6  HSBC  2,652    7  JP Morgan Chase  2,610    8  BNP Paribas  2,354    9  Bank of America NA  2,329    10  Citigroup  1,922    11  Wells Fargo  1,915    12  Crédit Agricole  1,862    13  Mizuho Bank  1,850    14  Sumitomo Mitsui  1,848    15  Deutsche Bank  1,817    16  Santander S.A  1,769    17  Barclays  1,533    18  Societe Generale  1,531    19  Bank of Communications  1,473    20  Postal Savings Bank Of China  1,467    21  Lloyds Bank  1,099    22  RBC Capital Markets  1,040    23  Royal Bank of Scotland  1,036    24  TD Securities  1,028    25  Industrial Bank  1,023    26  ING Bank  1,016    27  UniCredit  1,005    28  China Merchants Bank  994    29  Shanghai Pudong Development Bank  975    30  Goldman Sachs  974    Source: Firm asset rankings from ‘Forbes Global 2000’ list for 2018, https://www.forbes.com/global2000/list/.

The number of ‘Statements of Commitment’ (SoCs) – which record organisations’ recognition of, and commitment to adopt, the Code – has risen sixfold, from 100 in April 2018 to 605 in November, as recorded on the GFXC’s global index. That index, available on the GFXC website,1 allows market participants to see who signed up, and when. It includes statements from banks, asset managers, corporate treasurers, infrastructures, non-bank liquidity providers – and 41 central banks, including the Bank of England, who have committed to following the principles in the Code in their official operations and investment activities, except where doing so would inhibit the discharge of their legal duties or policy functions. Adoption of the Code is now widespread amongst banks and other sell-side firms. Table 1 shows that all of the largest 30 firms by asset size have signed up to the Code. Progress on the buy-side has been slower, though still quite encouraging: 11 of the largest 30 asset managers, accounting for over $ trillion of assets under management, have so far committed to the Code (Table 2). That number will rise over time, as firms currently working towards adoption reach the end of their internal processes. Nonetheless, it is clear that more remains to be done to secure the same degree of signup to the Code as there has been on the sell-side. What are the remaining obstacles, and how can we address them?
One source of concern for both the United States and the world as a whole is the large deficits in the US economy. In the third quarter last year the current account deficit totalled USD 165 billion, or around 6 per cent of GDP. Data for November show that the deficit has continued to grow, reaching a new record high of just over USD 60 billion. This may result in changes in interest rates and exchange rates that could have considerable consequences for world trade. A large share, or about 40 per cent, of Sweden’s exports go to the euro area, and as a result economic developments there are especially important for us. The recovery in the euro area economy is going slowly. Growth in the third quarter was lower than expected. Available indicators for the fourth quarter provide a mixed picture. Germany, which is an important market for Swedish products, is showing some signs of an improvement. After several years of extensive cutbacks there should be a pent-up need among firms to invest. At the same time exports are being dampened by the euro’s rise against mainly the dollar. BIS Review 10/2005  1  The economic situation in Sweden As regards Sweden the Riksbank has been positive in the past year in its outlook on economic developments. International demand has increased faster than anticipated, with above all exports of services proving unexpectedly robust. Economic policy is also contributing to the relatively bright growth prospects.

Incidentally, as oil prices moved higher in recent weeks, the inflation risk premia also rose amid an increasing willingness on the part of investors to hedge against inflation in an environment of strongly declining deflation probabilities. This is also consistent with survey-based evidence. For example, a recent survey of 62 fund managers by Bank of America Merrill Lynch revealed that a rise in inflation is thought to be the most underestimated tail risk for global financial markets in 2018. One fund manager in two considers a rise in inflation as a risk to current market prices. Now, whether or not this risk is real, or how much we should worry about it, is an entirely different question. I will pass no judgment on the US. In the euro area, however, we see no such inflation tail risks at the current juncture. Inflation is expected to converge only very gradually to levels closer to 2%. For this reason, an ample degree of monetary stimulus remains necessary for underlying inflation pressures to continue to build up, and we expect the ECB’s key interest rates to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. At the same time, we currently see no reason to believe that the distribution of future inflation risks has moved permanently lower. 13 It is true that it is taking longer than usual for inflationary pressure to emerge.
This may suggest that saving in the US is somewhat lower and investment somewhat higher, but the impact is now considerably greater than implied by demographic factors alone. The imbalances may persist for a period. International capital markets are deep and liquid with an ample supply of credit for US borrowers. If creditors begin to fear a fall in prices and withdraw from the market, substantial corrections may nevertheless be triggered. This may lead to higher interest rates and perhaps also a fall in US equity markets that spills over to other countries’ financial markets. In that case, the dollar will also depreciate. The household debt burden in the US may be another source of instability if households abruptly reduce both housing demand and consumption. We assume that growth will moderate somewhat in the US in the period ahead. A more pronounced downturn in the US cannot be ruled out, however. An abrupt and pronounced downturn in the US will lead quite rapidly to falling growth rates in the entire OECD area. The US is not the only source of trade imbalances. They also reflect very low growth in continental Europe and the largely export-based growth in Asian countries. Countries other than the US must therefore also contribute in order to prevent growth in the global economy from faltering. With limited domestic growth capacity and high unemployment, many industrial countries are poorly equipped to cope with a weaker dollar and lower US demand. The challenges are perhaps particularly demanding in Japan and some large European countries.

Service industries and the construction sector expect that continued low interest rates and strong growth in household demand will contribute to further increasing activity in the near term. As estimated here, capacity utilisation in the Norwegian economy is now close to a normal level. In manufacturing, capacity utilisation has been close to its historical average. According to Norges Bank’s regional network, about 40 per cent of enterprises will have some or considerable difficulty if production must be increased. The situation in the labour market does not indicate a build-up of substantial pressures in the Norwegian economy as a whole, even though growth has been high for a fairly long period. So far, the rise in the number of employed has been fairly moderate in relation to output growth. This may be due to lagged effects of the sharp fall in sickness absence through 2004. Many companies have probably not fully utilised the large increase in available person-hours. A considerable share of production growth so far this year may be the result of an improved utilisation of the existing workforce. In  addition, productivity, measured in terms of value added per person-hour, increased at a fairly brisk pace in the last couple of years. In addition to high productivity growth and a reduction in sickness absence, it appears that the use of foreign labour has increased recently. The level is relatively moderate, but appears nonetheless to have reduced bottleneck tendencies in some industries where demand has increased sharply.
2 These remarks are focused on the mechanics of policy implementation; see Williams, “‘Normal’ Monetary Policy in Words and Deeds,” September 28, 2018, for a discussion of the evolution of Federal Reserve policy actions and communications amid the exit from the extraordinary policy accommodation, and his perspective on what “normal” means. 3 Also see Potter, “Confidence in the Implementation of U.S. Monetary Policy Normalization,” August 4, 2018, for a thorough discussion about the implementation of monetary policy normalization. 4 Statement Regarding Reinvestment in Treasury Securities and Agency Mortgage-Backed Securities, September 20, 2017. 5 The effective federal funds rate (EFFR) is calculated as a volume-weighted median of overnight federal funds transactions reported by banks on the FR 2420 Report of Selected Money Market Rates. The New York Fed publishes the EFFR for the prior business day, along with volumes and rate percentiles, on its website daily at approximately 9:00 a.m. Eastern Time. The EFFR is used as a measure of the typical federal funds transaction and is the way the New York Fed’s Open Market Trading Desk (the Desk) measures its success in meeting the directive on interest rate control from the FOMC. 1  As always, the views I will express today are mine alone and do not necessarily reflect those of the New York Fed or the Federal Reserve System. Let’s begin by reviewing where we are in the normalization process.

In annual terms, they grew approximately 1 percent, due to positive growth rate of consumer goods import, whereas import of intermediate goods and capital has declined. Monetary indicators of September presented a slower performance of the banking system’s intermediating activity. In annual terms, broad money recorded a nominal growth of 2.8 percent in September, against 4.5 percent in August. Foreign currency credit contraction and intermediation of the public sector credit by nonbanking agents have influenced the slowdown of monetary indicators growth rate. In September, loan portfolio of economy grew at lower rates than in the previous months. Annual credit growth rate decreased to 13.2 percent. The credit slowdown is totally a consequence of foreign currency credit tightening, while the ALL credit increased by 31 percent in annual terms. The major part of the new credit, around 85 percent of it, was absorbed by businesses and was used mainly for meeting the needs for liquidity, whereas credit for long-term investments decreased. Also, household loan portfolio growth decreased, chiefly due to consumer credit contraction. Housing loan to households continues to maintain positive growth rates, remaining at 5 percent in annual terms. 2  BIS Review 153/2009  Domestic credit intermediation in ALL has raised the need for Bank of Albania’s presence by injecting liquidity. The banking system needs for liquidity have been met through open market operations of the Bank of Albania, preserving an appropriate time structure of this injection.
BIS central bankers’ speeches  underpinned by a clear separation between board oversight and management. While this may appear to be a rudimentary feature of any governance arrangement, it may be challenging in organisations that are large and have complex or opaque reporting lines, resulting in boards and senior management that are too far removed from the issues on the ground. “Too big to manage” is a real concern. In their reflection of banking practices leading up to the crisis, the United Kingdom’s Parliamentary Commission on Banking Standards found that an “unclear, complex and confusing allocation of responsibilities” among senior management had posed challenges in identifying individuals who were responsible for poor decisions and more importantly, in holding them to account 7. This is an important lesson to keep in mind for Asia, as our financial institutions continue to significantly expand their operations across sectors and geographical boundaries. In ensuring the effectiveness of governance structures, none is more important than having competent and committed individuals at the helm of financial institutions. The members of the board of directors must have a sound understanding of the business, the risk profile of the financial institution, and the operating environment. The board must also be ready to challenge executive management and hold it to account. This demands a combination of experience, confidence and character – elements which were found lacking among financial institutions in the recent crisis.

For example, large institutional investors, including sovereign wealth funds, have started to channel more funds to firms with sustainability commitments. Admittedly, the progress made on this front has been rather modest thus far, but it does have the potential to enable a wider range of stakeholders to determine the sustainability of finance and its role in facilitating sustainable economic growth. Conclusion I have not actually finished my story on the Challenger shuttle disaster at the beginning of my speech. After the harrowing accident, President Reagan formed the Rogers Commission to investigate the incident, and it was found that the accident could have been avoided entirely. The special commission reported that NASA’s organisational culture and decision-making processes were key contributing factors to the catastrophic event. NASA managers had been aware of the potentially fatal flaw in the O-rings since 1977, but did not respond appropriately. And on that fateful morning, warnings from engineers about the risks of launching in the low temperatures were met with contempt, and the superiors were not adequately notified of these technical concerns. Therein lies the importance of governance structures and how decisions are made. Governance influences decisions, and decisions shape outcomes. It is no different for financial governance. Be it financial decisions at the international or national level, public or private, corporates or financial institutions, households or individuals, sound financial governance is the bedrock of stable and robust economies.