samchain/econo-pairs-v1 huggingface dataset:
It may be of interest to this audience to know that trade finance has been a particular problem area and has attracted higher than average bad debt provisions. On the face of it, this seems strange since trade finance is normally seen as being short-term, self-liquidating and secured on the underlying goods. In practice, companies found it possible to obtain trade lines from a multiplicity of banks in excess of their underlying needs. In this situation, trade finance becomes in effect part of the general working capital of the company and can be siphoned off into the kind of speculative activities I have already described. In many cases, short-term trade finance financed long-term property developments in China. What lessons can be drawn from this? Banks should obviously have a thorough knowledge of their customers’ business and of their real funding needs. Banks should know what their lending is being used for and try to ascertain the borrowers’ facilities from other banks. 3  BIS Review 53/1999  However, in situations where banks are too anxious to lend, it is all too easy for the borrower to deny information to the banks and to play the banks off against one another. In granting credit, banks thus need to undertake proper financial review of their customers based on reliable information. Particular attention needs to be paid to cash flow and the ability to service debt in stress situations as well as normal conditions.

For takaful operators, staying competitive in a digital world will require far more than just direct sales channel or automated processes. It requires a rethinking of the fundamentals and principles of takaful, for which digital technology can be a catalyst. Takaful operators must rethink their sources of revenue, operational efficiency and talent strategy to reap the opportunities of digital disruptions. It is also important to rethink the business model and the role that takaful operators can play in a digital ecosystem that has transcended geographical boundaries. Digital disruptors such as virtual or peer-to-peer takaful provider that is tech-enabled might be able to overcome many pain points experienced by the industry in more efficient ways. The buzz right now in the financial industry is around digital banks. Nonetheless, this can swiftly turn to digital insurers or takaful operators. Such development could be the next phase that could further enhance the 3/5  BIS central bankers' speeches  quality and pricing of services delivered, while also penetrating new areas for the industry to achieve our protection goals. This development could provide the impetus for exponential growth in insurance and takaful penetration in the country. Thirdly, the industry must take greater responsibility to educate consumers and inculcate understanding about the importance of financial protection. Almost half of respondents in the 2018 Financial Capability and Inclusion Demand Side Survey cited lack of product understanding to be the key reason for not purchasing life insurance and family takaful.
This is unfortunate as macroprudential policy is an important policy area and it is vital that a longterm, sustainable structure is created for it, so that macroprudential analysis is not given lower priority when other tasks require resources, and experiences from the crisis are forgotten. The Stability Council has so far played an insignificant role in practice. Sweden deviates from international and European standards Sweden thus deviates – in several respects – from European standards as regards how its macroprudential policy framework is designed. We have also organised the responsibility for macroprudential policy differently to most of the other countries in Europe. In 13 EU Member States, the responsibility has been given to the central bank, a similar number have given it to a separate council and two countries (Sweden and Finland) have given it to the supervisory authority. 18 In addition, it is worth mentioning that the European Central Bank, the ECB, has received a mandate that basically means that it shares the macroprudential policy responsibility with the national macroprudential authorities in those countries that  15  See ESRB (2011). 16  See ESRB (2011). 17  See ESRB (2011). 18  See ESRB (2014). 8  BIS central bankers’ speeches  participate in the Single Supervisory Mechanism. The ECB has the responsibility for a socalled “top-up” of some of the macroprudential policy measures decided at national level – i.e. to tighten the measures further if the bank feels it is necessary.

The use of the CPI as the target variable has, however, led to some difficulties and we have therefore analysed other inflation indices as well in our interest rate decisions, more recently the CPIF (the CPI with a fixed rate of interest). It may, however, be difficult to evaluate monetary policy if there are major differences between the development of the variable that guides the Riksbank, more recently the CPIF, and the formal target variable, the CPI. Another problem is that both domestic and overseas forecasters relatively seldom take into account the fact that the Swedish CPI is calculated the way it is when they describe the situation in Sweden. This can lead to misleading international comparisons. In recent years, for example, eye-catching headlines have appeared at regular intervals in the media saying that Sweden is in deflation, despite this being largely due to the fact that housing costs in the CPI have gone down when the Riksbank has cut the repo rate. This can give the impression that the situation in Sweden is worse and the inflation is much lower than in other countries, despite the difference being because the Swedish CPI is particularly sensitive to changes in the policy rate. It may therefore be time to open up a discussion on the target variable. In their evaluation, Goodfriend and King suggest that the target be expressed in terms of the CPIF. An  22  See Flodén (2015). 23  See for example Williams (2009), Blanchard, et al.
Christian Noyer: Interview in Le Point Interview with Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, in Le Point, 9 August 2012. *  *  *  Markets were hoping that Mario Draghi and the ECB Governing Council would take strong action to give Spain and Italy a little breathing space ... The ECB has chosen to do nothing! Why? Are you saving your ammunition for later? We haven’t heard the same thing! The Governing Council recently announced its intention to intervene on the bond market to allow a smooth transmission of monetary policy. The objective is to counter the emergence of excessive risk premiums on certain sovereign debts. Naturally, this only makes sense if governments themselves decide to act and to activate the solidarity and support mechanisms of fiscal consolidation they have established. Our operations will be on a sufficient scale to have a strong impact on the markets. We should be prepared to respond very rapidly, by focusing on short-term bonds. Have no doubts about the Governing Council’s determination and its ability to act within its mandate. One gets the impression in this crisis that everyone is watching the boat sink without doing anything. To start with the ECB ... That is incorrect! And unfair! It is the markets that are reacting in this way. European authorities have been responding to countless issues since the start of the crisis.

They knew that it would require stronger European governance and the implementation of euro-area fiscal discipline … But governments chose to side-step their responsibilities in this respect. 2  BIS central bankers’ speeches  In 2003, France and Germany, the two most powerful States in the euro area, breached the famous Maastricht criteria… Are they not partly responsible for the subsequent crisis? Each Member States carries a share of the blame. The ECB however is not to blame. There were strict fiscal rules. If governments had respected these rules we would not have had this chain reaction leading to the current crisis. In 2007, 2008 and 2009, we had to prevent the financial crisis from deepening and limit the consequences for the real economy. The ECB and States did what was expected of them by supporting the banking systems. However, after 2009, the markets started looking at the accounting situations of each Member State and started doubting the capacity of certain States to honour their financial liabilities. The markets also remembered that behind the governments’ bank rescue plans there were States and with no single or common signature and that the banking system was not sufficiently uniform at the European level. Each State therefore found itself with its own financial credibility and its own specific debt financing conditions, depending on its individual fiscal situation. And in this respect, what is your opinion of the policy orientations adopted by François Hollande, his government and the new majority?
World growth projections for the period 2010–2011 have been revised upward and commodity prices will remain near current levels (table 3). The above projections include the assumption that monetary policy will remain very expansive in the following quarters. Towards the end of the projection horizon, the monetary policy rate will converge to a level similar to the one indicated by March’s Economic Expectations Survey. However, its pace of normalization will be somewhat faster than what was considered in that survey. It is important to consider that, until the last week of February, market expectations for the MPR indicated that its upward phase would begin in the second quarter and that the rate would stand between 2.5 and 3.0 percent by the end of the year. After the earthquake and tsunami, the expectations of analysts and survey respondents about the level of the MPR and its velocity of increase fell. In particular, the expected level for the MPR for the end of 2010 stands in the 2.0–2.5 percent range (figure 8). As usual, the scenario outlined here is subject to several risks. Compared with December forecasts, the recovery process and development prospects for the Chilean economy have not been hindered by the earthquake and tsunami; however, in the short run, the risk scenarios are dominated by the catastrophe. Particularly relevant is the medium term effect of the aggregate demand impulse originating in the reconstruction works that will be carried out.

This sets out baseline standards for financial institutions, and addresses key fundamentals of technology resilience including governance, cybersecurity risk management as well as capacity-building. Conclusion These are exciting times, where rapid technological innovations, evolving business models and shifting customer preferences, present new opportunities and challenges to the status quo. Such opportunities can bring about a positive and transformational impact to our society and economy. We should be bold to capitalize on these emerging trends, while remaining steadfast in managing the associated risks. Times are changing, and change is good. It takes us out of our comfort zones, and helps us reach new heights. Before I close, I would like to congratulate all the winners of today’s ceremony and I wish you all a pleasant evening ahead. 4/4  BIS central bankers' speeches
Then, in September 2011, the FOMC announced that repayments from these securities would instead be reinvested in agency MBS to help support conditions in mortgage markets.29 The FOMC then maintained reinvestments, including Treasury rollovers, until commencing balance sheet normalization last month.30 Keeping the Fed’s holdings of longer-term securities at sizable levels helped to maintain accommodative financial conditions as economic conditions strengthened. This is because, in addition to the acquisition of securities through asset purchases, the period over which the central bank intends to hold its securities helps to shape market participants’ expectations about the size and duration of assets available to the public. Extending the holding period through reinvestments prolongs this so-called stock effect. The 2010 episode when the Fed was not reinvesting agency-related principal payments demonstrated both term premium effects that might have been expected to be associated with a reduction in the Fed’s securities holdings and the risks associated with an unexpected increase in the publicly-held stock of agency MBS. As we normalize the size of the balance sheet, maintaining redemption caps throughout the process (and continuing to reinvest any principal payments received in excess of those caps) provides an insurance mechanism that limits the amount of variation in the pace at which securities, particularly mortgages, will flow back into private hands. Lesson 5: Credible communications influence the effectiveness of asset purchase programs As a general matter, monetary policy transmits more smoothly when market participants are able to understand and anticipate central bank actions.

Try the following: •  key elements of model design;  •  significant assumptions and expert judgements;  •  key sensitivities; and  •  significant limitations and uncertainty in the model. To restate, the challenge is to reduce complexity to simplicity, so that Board members feel that they understand: •  where is the model expected to work well;  •  in what circumstances is it likely to break down;  •  is the overall model output credible;  •  what “moves the dial” in terms of key assumptions or judgements; and  •  are those assumptions and judgements reasonable? Non-Executives should be put in a position to possess a general understanding of the model and meet these expectations without detailed technical knowledge. That’s the job of the Executive, to explain complexity, provide good Management Information (to serve up the needle, to continue the saying) and enable challenge and thus accountability. If NonExecutives do not feel that they can meet these expectations, they should demand the time and support to enable them to do so, rather than head off for the haystack. I want to conclude by putting this into a broader context of governance. I am sympathetic to the view that the demands on Non-Executives have risen to the point where it is time to stand back and take stock and find ways to improve the approach.
From the formal standpoint, the draft bill will consolidate in a kind of “Bank Code” all the regulatory provisions on the creation, activity and control of credit institutions, thus putting an end to the dispersion of legislation which has characterised the credit sector for various decades. Furthermore, the aforementioned consolidation aims to write into Spanish law the changes introduced in June 2013 by the so-called CRD-IV package, i.e. the Directive and the Regulation which incorporate the Basel III Accord into European legislation. As you know, that transposition has been partly handled by the promulgation of Royal Decree-Law 14/2013, which includes those matters considered essential for incorporation before 1 January 2014. Under the draft bill, and without prejudice to the framework resulting from the entry into force of the Single Supervisory Mechanism, the Banco de España will retain its current power to authorise the exercise of banking activities. Moreover, it will receive additional powers, such as that to revoke banking licences. Regarding the regime governing the purchase of qualifying holdings in credit institutions, the Banco de España will continue to be the authority responsible for assessing the proposals of potential purchasers, although now there are plans to give it powers of supervisory intervention, senior officer replacement, suspension of voting rights or, in extreme situations, licence revocation. As bank supervisor, the Banco de España will continue overseeing compliance with organisational and disciplinary regulations.

Three matters concern us: the elements of the new Basel III capital accord that have not yet been fully finalised; the Financial Stability Board’s work on the regulatory framework for the treatment of systemically important institutions; and the new powers of the Banco de España under the draft bill on the supervision of credit institutions, which will foreseeably be approved in the first quarter of next year. I shall begin with Basel III. The new capital accord improves the comparability and, thereby, the credibility of capital ratios. Basel III increases capital requirements with better-quality instruments, and it seeks consistency and a uniform application across banks and countries. It also adds two new prudential tools: one in the area of liquidity, and the other in that of leverage. First, the inclusion of the leverage ratio, the relationship between Tier 1 capital and exposure both on and off the balance sheet, i.e. the total banking book, without taking into account risk weights. Calculations are made at the consolidated level and, in principle, the level is set at a minimum of 3%. It is scheduled to come into force in 2018, although an earlier date will probably be set for the required disclosure of this figure. This new tool has been designed as a straightforward measure that complements and acts as a floor to the minimum risk-based capital ratio. It aims to provide additional protection against what is known as “model risk”, i.e.
Distinguished Ladies and Gentlemen, with regard to the financial sector, the overall financial condition and performance of the banking sector continues to be satisfactory. On aggregate, the banking sector remains adequately capitalised, while the asset quality, earnings performance and liquidity position remain satisfactory. Further, the financial performance and condition of the non-bank financial institutions continues to be rated fair; while leasing finance companies, microfinance institutions and bureaux de change have had adequate regulatory capital, fair asset quality and liquidity position. Distinguished Friends, apart from the growing number of financial institutions, we have seen a number of innovations and product developments in the banking system. These include a modern and advanced electronic payment and clearing system as well as various financial products such as different types of accounts, loans, financial services and payment methods. These include ATMs whose number increased from 133 in 2006 to 724 at endDecember 2013. Further, a number of mobile phone and internet banking services have been introduced and continue to be introduced in line with the growing global trends. These developments have not only increased competitiveness in the financial sector, but also improved financial access and inclusion across the country. You may also wish to note that the Bank of Zambia, as the financial sector licensing authority, continues to receive numerous applications from institutions seeking to establish themselves in Zambia. Ladies and Gentlemen, Zambia’s economic prospects for 2014 remain strong with a projected growth of over 7 percent. This growth is expected to be mainly driven by agriculture, manufacturing, construction and mining.

Percentage of 21-34 year olds living with their parents  1996 1999 2002 2005 2008 2011 2014  15  Sources: ONS and Bank calculations. BIS central bankers’ speeches  Chart 30 – Share of people living in absolute poverty after housing costs*  Chart 31 – Share of people living in relative poverty after housing costs* Per cent of age group  60  60  Under 16  55  16-65  50  50  45  45  40  40  Over 65  Under 16  16-65  Over 65  35  35  30  30  25  25  20  20  15  15  10  94/95 97/98 00/01 03/04 06/07 09/10 12/13  Sources: ONS and Bank calculations. * A household is defined as living in absolute poverty where their income is less than 60% of 2010/11 median income held constant in real terms. 55  94/95 97/98 00/01 03/04 06/07 09/10 12/13  10  Sources: ONS and Bank calculations. * A household is defined as living in relative poverty where their income is less than 60% of median income. Chart 32 – Financial market measures of inflation expectations Per cent  3.5  23/06/2016  06/07/2016  3.0  2  3  4  5  6  7  8  9  10  2.5  Years  Source: Bloomberg and Bank calculations. * Instantaneous RPI inflation implied from swaps. BIS central bankers’ speeches  23
4  BIS central bankers’ speeches  Concluding remarks So, as I prepare to hand back to Mark (Johnson) for the panel discussion, I would just like to underline my points by summing them up very succinctly:   First, I would say that, given the scale and the pace of change I mentioned earlier, we are now at the start of a new era. An era in which we will see a much greater use of RMB, driven by both policy and market forces.   Second, we are only in the early days. The RMB started circulating outside Mainland China only in recent years, but is already starting to play a significant role in global trade and finance. It has the potential to go much further.   Third, as the RMB develops a more central role and acquires more features associated with an international currency, Hong Kong is very well equipped to service the RMB needs of businesses around the world. Let me just finally say that today’s forum is a most welcome opportunity to help prepare for the future. As at any time of historic transition, if none of us have all the answers, then at least each of us has a piece of the answers; and if we don’t have that, then perhaps we can contribute a better question. I look forward to hearing your ideas and to working closely with you in our common effort to develop the offshore RMB market in the future. BIS central bankers’ speeches  5

The banks are caught in a vicious circle. On the one hand they want to boost or at least maintain their liquidity. But if they do this by paying over HIBOR for deposits that they then place in the overnight interbank market at HIBOR, this is clearly costing them money. Banks do have the option of not paying the going market rate for deposits. But if they do this their customers may go elsewhere. The deposit base is therefore less stable than it was. The banks’ desire to stay liquid also means that they are more cautious about lending. Generally speaking, they will want to lend only if they can raise the deposits to do so, and deposits are growing more slowly. This caution also reflects their perception that credit risks have increased in the current economic environment. Of course, the demand for borrowing has also declined as the economy has slowed and the property and stock markets have weakened. But the supply of loanable funds has probably fallen even more, partly because of the decision of some foreign banks to cut back their lending in Hong Kong. This does not represent a loss of confidence by these banks in Hong Kong. Rather, it reflects the need of some banks to downsize their balance sheets and to concentrate more in the future on profitability rather than volume growth and market share.