samchain/econo-pairs-v1 huggingface dataset:
There should also be adequate rules for accounting and auditing; a well developed infrastructure for the payment system and a financial safety net. Only under such an overarching set of good preconditions will the banks develop favourably. Macro economic volatility is harmful to banks. Periods of rapid credit growth may be followed by problems for many companies. Bankruptcies could then increase leading to high credit losses in banks. High inflation will disguise the underlying profitability of a loan project and could lead to an erroneous credit decision being taken by a bank. Also, bank loans extended in foreign currencies could lead to losses if the local currency depreciates when the borrower who earns his money in the local currency runs into difficulties repaying his loan. In order to ensure credit discipline, there must be clear legislation as well as court proceedings that are predictable and reasonably fast. If a bank cannot rely on seizing the collateral given for a nonperforming loan it will be reluctant to provide loans against such collateral. Of course, the laws and the courts should also protect the depositors and borrowers from any abuse from the banks such as unfair contract terms. In countries where the accounting and auditing rules are weak, or where the accounting and auditing firms are inadequate, various financial problems may occur. Banks will not be able to rely on the financial statements when assessing their borrowers’ creditworthiness. Nor can the depositors and other creditors to banks rely on the banks’ own financial statements.

José De Gregorio: Chile’s latest Monetary Policy Report Presentation by Mr José De Gregorio, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Finance Commission of the Honorable Senate of the Republic, Santiago de Chile, 4 April 2011. The Monetary Policy Report of March 2011 can be found at http://www.bcentral.cl. *  *  *  Introduction Mr. President of the Senate’s Finance Commission, senator Eduardo Frei, senators. I am grateful for the Commission’s invitation to the Board of the Central Bank of Chile to share with you our vision of recent macroeconomic developments, their prospects and implications on monetary policy, as detailed in our Monetary Policy Report of March 2011. The data at hand on the last few months show that our country continues to walk a path of sustained economic recovery. The year 2010 closed with a y-o-y growth rate of 5.2 percent, with very strong consumption and investment. To a large extent, the devastation inflicted on our economy by the world recession of 2008–2009 and the earthquake and tsunami of 27 February 2010 has been left behind. Employment is growing strongly and trend inflation has returned to above zero annual variation rates. The strong impulse of macroeconomic policies has been at the center of these results, and the recovery of the Chilean economy attests to the efficacy of our economic policy framework. However, although the challenges posed by the aforesaid events have been largely overcome, today we face new ones.
So, most of the risk management that occurs in an organization will be done by people who don't have the word "risk" in their job title. And third, risk management could be misinterpreted as an attempt to create a contingency plan for every possible thing that could go wrong. It is important to prepare by scanning the horizon, exploring the range of possible futures, and understanding how those futures could help or impair desired outcomes. We do want to invest in effective responses to key scenarios. However, no organization has the resources to prepare for all possibilities. And, no matter how creative we are, we still can't imagine every one of them anyway. As it is said, "Things that have never happened before happen all the time. "3 So, effective risk management is more than planning. It is creating the capacity to adapt to and recover from unexpected shocks, which is what we often mean when we talk about resilience.4 To me, successful risk management is as much about culture as it is about structure. My version of the saying "culture eats strategy for breakfast" is: "culture eats structure for breakfast. "5 Practically speaking, we have policies, procedures, and rules to help us make decisions. But, much of the time, decisions aren't clear, and it is organizational culture that shapes the tradeoffs that we make and the actions we take.

Because of our experiences during the Global Financial Crisis, we knew that facilities themselves and their risks had a lifecycle from design, to standup, to steady state operation, and finally to wind down and closure. So, this helped us better anticipate and manage the risks of the pandemic crisis facilities. Vendor risk was a key area of focus for us, because vendors had critical roles in the operation of the crisis facilities including investment management and securities settlement. We had to create a fast and rigorous vendor onboarding and monitoring process, while at the same time recognizing new risks the vendors themselves faced across continuity, people, process, and technology. We made significant changes to our vendor management approach, many of which are serving us well today. During the pandemic, we've adapted to a fast-changing, uncertain environment. We've seen how risk management has helped us respond effectively, used lessons learned to improve our approaches, and identified areas where we want to further develop our capabilities. Building and Strengthening Organizational Resilience Since then, we have continued to focus on how risk management can help us strengthen operational resilience, which "is the ability to deliver operations, including critical operations and core business lines, through a disruption from any hazard. It is the outcome of effective operational risk management combined with sufficient financial and operational resources to prepare, adapt, withstand, and recover from disruptions." 14 A foundational component of resilience is that an organization can operate as a coordinated system in order to successfully adapt to changes in the environment.
I will begin with a broad overview of the current international approach to overall economic management, then say something about the present disturbances in Asia, and finally about their implications for the prospects for the rest of the world. Let me begin with just a few words about the process of international economic and monetary management. I have just returned as it happens from the annual Spring Meeting of the IMF in Washington, where the Finance Ministers and Central Bank Governors from all around the world gather to discuss current international developments. We all meet again every autumn. Last week, we debated much the same agenda in a variety of meetings - in the Group of 7 major industrial countries; in the Group of 10 - actually eleven - a somewhat wider range of industrial countries; in the Interim Committee in which all IMF member countries are represented, in constituencies; and this time in a new ad hoc Group of 22 or 23 countries including a broad cross-section of industrial, emerging and transition countries. Invariably the journalists, who also gather in Washington, quite reasonably ask, “What exactly did you decide in all those meetings?” And almost invariably, we have to respond that “We did not actually decide on anything - we agreed we should do some further work and meet again for further discussions!” You could be forgiven for thinking that the whole process of reaching international agreement on anything moves at a snail’s pace!

CPI inflation is judged in turn to be 1.1% after twelve months and 2.0% in twenty-four months’ time. Thus, CPI inflation will be moving closer to underlying inflation. One reason for this is that the downward effect on inflation from house mortgage interest expenditure is diminishing. In other words, just as the previous marked fall in interest rates held back CPI inflation so that it was well below the underlying trend, so house mortgage interest expenditure is now tending to bring them closer together. As I have pointed out before to this Committee, monetary policy ought to disregard these direct effects of interest rates because repo rate adjustments mean that they are accentuated. It is also for this reason that the Riksbank is currently focusing monetary policy on inflation’s underlying rate, measured as UNDIX. Transitory factors – changes in indirect taxes, subsidies and house mortgage interest expenditure – are judged to have a downward CPI effect of 0.5 percentage points in one year’s time. The contribution from interest expenditure is still negative because the process whereby house mortgage loans at high rates are renewed at the present lower level is still in progress. As the earlier house mortgage loans had a long duration, this process takes time. In two years’ time, however, the CPI contribution from transitory factors is judged to be an upward effect of 0.1 percentage point.
Muhammad bin Ibrahim: Insurance supervision - looking beyond Keynote address by Mr Muhammad bin Ibrahim, Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the 24th International Association of Insurance Supervisors (IAIS) Annual Conference 2017 "Insurance Supervision: Looking Beyond", Kuala Lumpur, 2 November 2017. * * * Welcome to Kuala Lumpur. We are delighted to host the 24th IAIS Annual Conference. The last time this conference was held in Southeast Asia was 14 years ago. Bank Negara Malaysia has a very long and productive association with the IAIS. Not long after the IAIS was established in 1994, a new insurance legislation was enacted in Malaysia. This was a watershed event, changing the course for development of the industry. A deep and comprehensive reform was instituted and the course was set to modernise the insurance sector in Malaysia. I recall how useful the Insurance Core Principles and other IAIS standards were in helping to shape our regulatory approach and supervisory practices. As a market with a long history of global insurers operating within our borders, we also benefited from arrangements that enabled us to better supervise cross-border activities. These arrangements have continued to strengthen over time, culminating most recently, in the IAIS Multilateral Memorandum of Understanding. We are therefore delighted to host this event in Southeast Asia, where the deepening of insurance markets remains key to support economic risk management and broader development goals for this region. Looking beyond… This brings me to the theme of this conference, “Looking beyond”.

This could lead to unintended consequences that can make the financial system less, rather than more stable. In a dynamic world, regulation and supervision should be agile, pragmatic and dynamic and able to respond to changing conditions in a timely manner. A bit of uncertainty ought to be tolerated. But at the same time, we should not hesitate to reverse course should a particular rule prove to be ineffective. Rules are never meant to remain relevant in perpetuity. It never does. It always run its course. It is from this perspective that regulators must have the courage to change course. In addition, from another perspective, the importance of proportionate regulation and supervision cannot be overstated. This is an area where I think we must continue to work in developing and refining the approaches to proportionality and support more inclusive insurance markets. In the larger scheme of things, as regulators we cannot ignore the broader objectives of supporting economic growth and improving the overall welfare of society. Equally important, with environmental, social and governance considerations, becoming an important criterion and increasingly adopted by investors, the ethics and sustainability of insurers’ activities will be important factors in creating shareholder value. Consumer welfare and wider social impacts alongside profits will constitute key metrics by which performance is measured. This is only appropriate, as maintaining public’s trust and confidence is a good business strategy.
I think that there are two characteristics of these kinds of systems which merit particular attention. First, the ability to take swift measures and to write down claims quickly. It is important to restore access to the liquidity held in the bank accounts as quickly as possible not only for the insured depositors, but also more generally. Second, the system is constructed such that the principle that owners take the first loss, and after this the creditors in any order of priority that might exist, cannot be circumvented. The swift intervention means that there is no point in running to the bank to “get first in line”. The fact that the possibility of a profit reflects a risk of a loss is fundamental in a market economy, and the system thus ensures that this principle is maintained. …with robust financing of the deposit guarantee A related issue refers to the need to set up a deposit guarantee scheme in such a way that the responsibility for the small depositors is fully internalised by the banking sector not only on paper but also in practice. In addition to the need for a quick pay-out to depositors to avoid the risk of a run, it is also important that the financing of the scheme is robust.

When Paul Volker brought down US inflation from 13 % to 3 % in three years, he did it by setting a cap on Central Bank money growth. And symmetrically, when the Japanese authorities had to fight deflation, they resorted to a "quantitative easing" policy, which basically meant they were targeting a specific amount of Central Bank money. There has been considerable debate over the theoretical underpinnings of those policies: namely whether a specific channel of transmission of monetary policy, independent of interest rates, could be identified. In any case, those experiments show, in my view, that setting a path for money growth (or its level) can prove very effective in controlling expectations - or pin down the price level - in an extreme environment. •  In more normal circumstances, however, the relationship between money and prices is more subtle and uncertain. In modern market economies, the demand for money exhibits - at least in the short and medium run - some chronic instability, if not unpredictability, a point to which I shall come back later. This has led to the demise of monetary aggregates as targets of monetary policy, and, in some countries, they have been abandoned as indicators as well. But we still think, in the euro area, that Friedman is right in the very long run. Our research has established that low frequency movements in money growth and inflation are closely correlated, retaining fluctuations with a period of 8 to 10 years.
If this market is closed, then the refinancing of maturing mortgages will be exceedingly difficult and this will exacerbate the drop in commercial real estate prices, loan defaults and the pressure on bank capital. Finally, I want to consider briefly whether TALF will turn out to be a band-aid – providing temporary support to otherwise defunct securitization markets – or a bridge to an ultimately revived and vital securitization market. I think it is too soon to reach a firm conclusion one way or the other. I suspect that we will discover that some parts of the securitization market will return and prove viable even without government support. But other parts of these markets were fundamentally flawed, and they will not survive, nor should they. On a positive note, the fact that there has been an increase in investor demand for consumer ABS that does not use TALF financing is an encouraging sign. This indicates that more traditional investor classes, such as pension funds and insurance companies that don’t usually use leverage, are starting to stick a toe in the water. However, it is hard to believe that there will not be significant changes to the structure of this asset class in the wake of the recent crisis. So what are some of the changes that I foresee or otherwise feel are required? First, there needs to be a better alignment of incentives between the lenders and securities dealers that originate and securitize the loans and the investors that purchase these securities.

William C Dudley: A preliminary assessment of the TALF Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Securities Industry and Financial Markets Association and Pension Real Estate Association's Public-Private Investment Program Summit, New York, 4 June 2009. *  *  *  I thank you for this opportunity to speak to you today about what we at the Federal Reserve have been doing to improve market function and credit market access. Since August of 2007, the Fed has introduced a wide range of special facilities designed to improve market functioning, increase the availability of credit and bring down borrowing costs for households and businesses. Today, I am going to focus my comments on the Term Asset-Backed Securities Loan Facility (TALF), which in my view is one of our most innovative programs. This facility is a complement to the Public-Private Investment Program efforts being undertaken by the Federal Deposit Insurance Corporation and the Treasury, which are the primary focus of today’s conference. In what follows, I would remind you that my comments reflect my own views and opinions and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. I will discuss how the securitization markets broke down last fall creating the need for TALF, how the TALF works and what it already has accomplished, where we see it evolving going forward, and finally, some preliminary thoughts on the future of securitization markets.
Also ‘clipping’, that is, shaving off part of the material, was fairly widespread. This led to a phenomenon that many years later became known as Gresham’s law. It says that in commerce ‘bad coins’ drive out ‘good coins’ as the latter are kept for saving purposes. Mistrust in the coin system, or even its entire breakdown, was often the unhappy consequence. Another issue was the plethora of mints that continued to grow in number as technology spread. Fast forward, and at the mid-medieval period it had become fashionable for every European kingdom and principality to issue its own coins. With production costs lower than the coins’ value, this was a useful source of income to finance the frequent wars at the time. But with multiple coins drifting around and uncertainty about their true value, it was essentially a mess. However, where there is chaos innovative minds see opportunities. During the 12th century, in the northern part of Italy, a new type of institution emerged. These specialised in exchanging foreign coins for local ones, not unlike present day foreign exchange dealers. This reduced the problem with the many coins causing much confusion. Even more advanced, some of the new institutions started to swap coins for bills of exchange that could be used in local trade. 3 [15]  The medieval coin-exchange providers brought banking to Europe, it is often said. Initially, they only handled deposits, as charging interest was viewed as usury by the powerful church.

5 The Riksbank’s exclusive right to issue banknotes entered into force in 1904. 5 [15]  could meet for lunch at the Five Bells to exchange cheques – and the ‘modern’ clearing house was born.6 Over time, procedures improved markedly. While settlement of banks’ obligations had for many years taken place in coins, the Bank of England’s notes now allowed for a safer and more efficient process. Later, the Bank of England started to offer account settlement, for many years on physical ledgers and later in digital form. Moving from pub clearing and settlement in coins to highly advanced electronic systems may not have entirely eliminated risks. Yet, few – if anyone – would deny that the efficiency gains have been enormous. Central banks around the world followed suit and set up similar arrangements to clear and settle payments. In the United States, the Federal Reserve System in 1918 established the first version of Fedwire, its system for transfers of funds between banks. What was special about Fedwire is that it used the telegraph lines which now connected the entire country. This technological innovation made it possible to settle payments within a short time, even between banks that held accounts in different regional banks in the Fed system. In Sweden, the establishment of Postgirot was an important step. Postgirot was, in essence, a public bank within the Swedish postal service.
The news over the past several months has proved this forecast wrong. Gains in employment have slowed markedly, and the unemployment rate has edged back up over 9%. The earlier improvements in labor markets now appear to have reflected the lagged influence of previous output growth and not – as we had hoped – the start of a virtuous circle of hiring and spending. Furthermore, revised data now indicate that real GDP began to decelerate in late 2010 and then barely edged up in the first half of this year. Consumer spending was particularly sluggish. Importantly, the weakness in growth began before the bulk of the effects of higher energy prices hit the economy and before the disaster in Japan. This timing, and the continued softness of most economic indicators into the early summer, indicates that the headwinds facing consumers and businesses are even stronger than we thought. What are these headwinds? First, even though credit conditions overall have been improving, many households and small businesses still seem to be having trouble getting credit. In addition, the repair process in residential real estate markets is painstakingly slow, and households are still in the process of paring debt and adapting to the huge losses in real estate and financial wealth that they experienced during the recession. Of course, these forces are not new – indeed, they are important reasons why in this cycle forecasters never predicted rapid gains in output such as those that followed the deep recessions in the 1970s and 1980s.

The trigger policy I noted above and level-targeting policies may result in inflation running at rates that would make us uncomfortable during normal times. But we should not be afraid of such temporarily higher inflation results today. As I noted earlier, Ken Rogoff (1985) has written that in normal times, we may want conservative central bankers as institutional offsets to what would otherwise be inflationary biases in the monetary policy process. But these are not usual times – we are in the aftermath of a financial crisis with stubborn debt overhangs that are weighing on activity. And as Rogoff himself wrote in a recent piece in the Financial Times, higher inflation could aid the deleveraging process.11 To quote him: “Any inflation above 2 percent may seem anathema to those who still remember the anti-inflation wars of the 1970s and 1980s, but a once-in-75-year crisis calls for outside-the-box measures.” Conclusion Last year about this time economic conditions deteriorated to the point that we undertook discussions on how to provide further monetary accommodation – and we ended up with our second round of large scale asset purchases. Now, one year later, we again find ourselves with a weakened economic outlook and again trying to decide what further accommodation to provide. I’m sure everyone will agree that we seriously don’t want to be in this position again at this time next year. I believe that means we need to take strong action now. Thanks. 11  8  Rogoff, Kenneth S. 2011.