samchain/econo-pairs-v1 huggingface dataset:
This is a valuable approach which should be extended to all facets of MAS’ dealings with industry. Industry feedback will help us refine our policy and avoid mistakes and unintended consequences. Our contacts with industry need not be confined to Singapore. More often than not, business decisions that affect Singapore are made in the head offices. Where possible, we should extend our presence and reach by linking up with institutions and organisations worldwide. Deepen talent pool Third, we need to deepen the talent pool in the financial sector. The vibrancy of Singapore’s financial centre is dependent on this. Without the trained talent, it will be very hard to persuade financial institutions to site new activities in Singapore. MAS must continue its efforts to build up and upgrade this talent pool. While MAS is already co-funding financial skills training, we also need to extend our efforts into improving the quality and quantity of financial training and research conducted in Singapore. One possibility is to set up specialised financial service institutes in Singapore to teach both the art and science of finance, for example in wealth management. At the same time, the local talent pool must also be supplemented by infusions of fresh blood from abroad. Singapore must continue with its open door policy to attract talented professionals to work here. Another means of deepening the overall talent pool is through greater circulation of talent between the public and private sectors. MAS has actively hired from industry in order to build up its expertise.

The concern six months ago was that a soft patch – amid an environment with little room for conventional monetary policy – could be particularly risky. However, growth picked up in the third quarter to an estimated 2.6 percent, and as 2010 came to an end, economists were revising upward their growth forecast for 2011. The risk that the economy will enter a double-dip recession now seems quite low. The increased optimism reflects in part the compromise on the extension of the Bush tax rates, the Federal Open Market Committee’s decision to purchase up to $ billion in Treasury securities, and stronger retail sales during the holiday season. While there are many factors that will affect the shape of the recovery in 2011, a key factor will be the degree of improvement in the labor market. From its peak in December of 2007, employment is down by 7.4 million jobs and remains below its level in January 2000. That is, the “Great Recession” eliminated an entire decade’s worth of job growth (Chart 2). Improved job growth is essential to generating the increase in disposable income that will support continued consumption growth which is so important for overall economic growth. Leading indicators for the labor market are pointing to a likely pickup in the pace of employment gains over the course of this year. Many new hires are preceded by firms posting job openings. According to the Labor Department, at the end of October, there were 3.4 million job openings, up from 2.3 million a year earlier.
Similarly, in other markets, London’s dominance in foreign exchange trading, OTC derivatives, fund management and bond origination means that London is the financial centre for euro wholesale financial services. Even in the area of payment systems the UK accounts for a significant proportion of the euro payments flowing through TARGET, even though for us the euro is a foreign currency. But these are just the immediate, first round effects of the euro. The more substantial challenges are posed by the more uncertain outlook as to just how the euro markets will develop in the medium term. So I want now just to say a little about how the euro markets may develop over the next ten to fifteen years. One thing to keep in mind here is that some of what may happen, though driven by events in the EU, will reflect factors beside the single currency. I think we may well see more privatisation, greater reliance on private provision of pensions, and other structural reforms. If we do, it will significantly affect European, and hence, euro financial markets. But such trends have their roots in the more general process of creating a single market, rather than EMU itself. Considerable progress towards a single EU market for financial services had been made long before the euro. A considerable number of directives are already in place, perhaps most significantly the Investment Services Directive, which was implemented in 1996 and gave regulated firms and exchanges from one Member State a ‘passport’ to do business in another Member State.

Those are absolute prerequisites for stability in banking. Active, and sometimes intrusive, supervision of banks, and particularly of global banks, has to be at the foundation for stable banking and finance. I don’t think any reconfiguration of the structure of banking and finance is going to get us to an intrinsically safer system, taken as a whole. And we have to remember that this last global crisis, which is still with us in many ways, started not with large universal banks or large global banks, but with narrow or specialised players. Countrywide (the mortgage provider) in the US, Northern Rock in the UK, investment banks like Bear Stearns and Lehman Brothers. It was accentuated through AIG’s Financial Products division, which played a prominent role on the derivative markets. But it was not global banks that sparked off the crisis, although they helped propagate it globally. It bears reminding ourselves of that. BIS central bankers’ speeches  1  No matter how we restructure the system, no matter how we cut down or dice the pieces, banking will involve risk. And without the right culture – whether it’s about an investment bank or commercial bank or a mono-line player – and without the active and intelligent supervision, we’d have the same problems over and over again. The problems that underpinned this global crisis were old-fashioned problems – property booms that were misjudged by banks, regulators and borrowers; and the problem of banks relying too heavily on borrowing short term to invest long-term.
Myanmar and Malaysia has built a strong friendship based on mutual trust. In this regard, Malaysia was glad to have extended a helping hand to Myanmar when financial assistance was needed in the past. In return, Myanmar has reinforced this trust with good faith. A substantial amount of the assistance has been repaid in a timely manner commensurate with Myanmar’s steadily strengthening international financial standing. At the central banking level, Bank Negara Malaysia (BNM) and Central Bank of Myanmar (CBM) collaborate very closely. I am glad to say that the results of this collaboration have yielded tangible results. For instance, in October 2013, CBM and BNM signed an enhanced Memorandum of Understanding (MoU). 2  BIS central bankers’ speeches  The MoU affirmed commitments from the two sides to provide capacity building support in areas including financial and monetary stability and financial inclusion. I am pleased to say that since 2012, almost 200 officials from the government of Myanmar have attended and benefited more than 30 programmes and study visits organised by BNM. In the long run, these programs could contribute towards raising the internal capacity of CBM so that as a group, we can better enjoy the benefits and meet the opportunities and challenges of regional financial integration. As a member of the central bank fraternity, BNM alongside institutions such as the World Bank (WB) and International Monetary Fund (IMF), has facilitated the implementation of Myanmar’s Financial Sector Development Strategy.

The new TLAC framework  The agreement on total-loss-absorbing-capacity, which was published on 9th November and endorsed by the G20 leaders, is an example of cooperation at global level towards ending the too-big-to-fail problem. 2  BIS central bankers’ speeches  This new TLAC standard guarantees that global-systemically-important-banks (GSIBs) will have a sufficient (and well distributed) amount of loss absorbing capacity to ensure the continuity of their critical functions at the point of resolution, avoiding the use of public funds. As such, it will contribute to the credibility of bail-in as an effective resolution tool. The TLAC requirement establishes that a banking group will have to issue (and maintain) a minimum amount of capital and debt liabilities to absorb losses first in case of resolution. The minimum external TLAC requirement would be placed at each “resolution entity” within the group (that is, the legal entity where resolution actions would take place). G-SIBs must comply with the TLAC minimum standard from 1st January 2019, subject to a phase-in. This minimum requirement will be calculated as the higher of 16 % of the risk weighted assets associated to the consolidated balance sheet of the resolution group and 6% of the denominator of the Basel III leverage ratio. As of 1st January 2022, these minimum requirements will rise up to 18 % and 6.75 % respectively. The TLAC will be required alongside minimum Basel III capital requirements, and the extra capital buffers (systemic, conservation and countercyclical) will sit on top of the TLAC risk-weighted metric.
Let me now turn to the policy options going forward, particularly from the perspective of BOT. Ladies and Gentlemen, As the global environment remains uncertain and without global economic leadership, it is even more important than before that the BOT policy strikes the right balance between accommodating the domestic recovery while ensuring stability in the long-term. Currently, monetary policy has shifted toward addressing domestic and global challenges to growth. The combination of domestic and external events has contributed to the MPC’s decision to lower the policy rate. On the domestic front, the key factor was the flood—its economic impact proved to be larger than expected. At the same time, domestic inflationary risks look to moderate. On the external front, risks to global economic growth increased due to the fragile US recovery and the lingering euro debt problem. While the policy rate has come down due to risks to growth, the MPC also has its eye firmly fixed on long-term macroeconomic stability. As such, the MPC views current interest rates as supportive of long-term economic stability. I would also like to say that in response to the challenging global landscape BOT will undertake policy actions that will serve to anchor long-term macroeconomic stability, enhance Thailand’s competitiveness, and augment economic adaptability. Here I want to stress that the BOT has consistently adhered to the principle of conducting policy that ensures long-term sustainable growth.

But that was one year ago. And one year can be a long time. Therefore, the need to focus on ensuring macroeconomic stability can never be taken for granted. This year Thailand faces challenges from both within and without. On the internal front, the main challenge is the flood – more specifically, how to ensure domestic recovery and restoration after the flood. The extent of the damage inflicted by the flood in the last quarter of 2011 was larger than expected and disrupted agricultural and manufacturing supply-chains in the flooded areas. As a result, the economy grew by 0.1 percent in 2011. The economy is projected to rebound in 2012, growing by 4.9 percent, boosted by private and public spending for post-flood restoration. In 2013, economic growth is projected to gather momentum, expanding by 5.6 percent. The Bank of Thailand is confident that the economy continues to be supported by strong fundamentals. Let me give you a few examples. Inflation expectations remain anchored. Healthy corporate balance sheet from past savings and profits will allow firms to rebuild and re-invest. Corporate lending remains high despite some headwinds to the banking sector. These headwinds include the effect of the flood and global uncertainty on the macroeconomic outlook and on loan quality, as we have seen some pressure on the delinquency rate. The new FIDF fee will also have some effect on banks’ bottom line.
6  BIS central bankers’ speeches  With domestic demand growing at around 3% in 2014, the fastest for ten years, all these factors will underpin the momentum needed to bring domestic cost growth back to up to a rate consistent with the inflation target. The fall in inflation we’ve experienced is in large part down to falling energy prices. It is not generalised “deflation” proper. The proportion of prices that are falling is consistent with the average over the past decade. The Bank will be vigilant in monitoring inflation expectations. Declining headline inflation seems likely to have cooled households’ inflation expectations as the prices of the goods they buy frequently – like fuel and food – have declined markedly. On balance, however, inflation expectations remain broadly consistent with the 2% inflation target. As the MPC noted in our February Inflation Report, we retain considerable policy options in the event that downside risks materialise. 6. Conclusion  The Bank of England’s inflation target is symmetric. We care as much about inflation below target as above. With inflation below target and unemployment above its long-run sustainable rate, we are aiming to return inflation to target as quickly as possible. In our most recent forecast, The Bank expects to return inflation to target within two years and to make limited and gradual increases in Bank Rate over the next three years in order to achieve that in a sustainable manner.

Beyond the theoretical considerations, it is important that financial regulation, in all its forms, should contribute to maintaining financial system diversity. Thus, attempting to measure all assets and liabilities at fair value has some drawbacks – and even entails risks – that need to be taken into account if lessons are to be drawn from the financial crisis for accounting rules. To conclude, I would like to stress an important point regarding the new financial regulatory framework. It would be unrealistic to believe that financial regulation is the answer, and, above all, that it is capable of protecting us from the risk of financial instability. Indeed, the crisis can largely be attributed to financial institutions’ inadequate risk management, which stems from an irrational trust in quantitative tools. Financial regulation should be an incentive for financial system participants to develop a sound and efficient management framework. It is no substitute. 2  BIS Review 161/2008
Although to date most of the Interim FPC’s deliberations have concerned bank capital adequacy, I expect the FPC’s longer-term focus to be as much on the capital markets and, thus, the policies of the FCA. In a world where banks have been re-regulated, some risk taking will migrate to other parts of the system. It is, therefore, hugely welcome that the Bill currently before Parliament gives the FCA a statutory objective of helping to preserve stability. 9 That is going to be important, for example, to contain any systemic risks stemming from shadow banking, such as money market funds, or from fault lines in the trading infrastructure or disclosure regimes. 10 Sometimes a permanent fix will be needed. The FPC will be able to make recommendations to HMT to move the perimeter of microregulation, and to PRA or FCA to change their rules and policies. But sometimes it will be more a matter of choking off a transient burst of exuberance. Even where market participants become aware of the potential risks, a collective action problem can impede their taking their foot off the accelerator. A telling experience in the run up to the crisis was of Chief Risk Officers on Wall Street talking openly about a dilemma between what they called financial risk and business risk. On the one hand, the Street was taking a lot of financial risk, which could end in tears.

The practical question is how far systemic surcharges take us in tackling the systemic risk externality. In other words, at current levels by how much have systemic surcharges reduced  BIS central bankers’ speeches  3  expected losses for the financial system? That is an empirical question. To assess it, consider the impact of capital surcharges on the expected losses facing the 29 institutions identified by the FSB. Using each of these banks’ balance sheets, we generate a measure of default probability using the Merton (1974) contingent claims model. We assume that the base level of equity for these banks is 7% (the new Basel III minimum) and that, in the event of default, they suffer losses on their assets of around 30%.4 To keep things simple, banks’ assets are assumed to be (log-)normally distributed, in line with Merton (1974), and default occurs only when a bank’s capital is fully exhausted. Assume initially that default risks across banks are independent. This is a highly conservative assumption, as in practice bank default probabilities are highly correlated at times of stress. Indeed, bank correlation coefficients in crisis often head towards one. For that reason, this thought-experiment provides a lower bound on expected losses across the financial system. Chart 5 shows expected losses across the 29 banks at different levels of the systemic surcharge. In the absence of any surcharge, expected losses across the system are just less than $ billion per year.
One reason for greater circumspection today in monetary policy is that the trade-off between growth and inflation may have changed. During the 1990s the paths of inflation and real economic activity in many countries, Sweden included, have not followed the pattern that their earlier relationship suggests. This has started a discussion, in the United States and elsewhere, of whether macroeconomic structures have changed so that higher growth is now feasible without inflationary tendencies. It is BIS Review 106/1999  2  sometimes argued, for example, that one of the forces behind today’s improved economic performance in the United States is the rapid advances in computer technology and telecommunications; this has led to more efficient processes for production and distribution and thereby paved the way for higher productivity growth. Productivity in the United States does appear to have been rising more strongly. Some observers consider that the potential annual growth rate may have moved up from 2% to up to 3%, perhaps even more. In Sweden, too, there are many indications that the growth of labour productivity in the 1990s has been higher than in the 1980s. The upward shift may perhaps amount to half of a percentage point. It is this that has prompted the common, but not entirely certain, estimate that the Swedish economy can now sustain an annual growth rate between 2 and 2.5%. But Swedish statistics do not yet confirm that productivity and thereby potential growth have increased fairly appreciably, as has been the case in the United States.

Cambodia is considered a small open economy, one which realized average GDP growth of about 10% from 2005 to 2008 and gradually increased the level of international reserves to a level which can ensure 3.8 months of imports. The financial system in Cambodia, which is dominated by the banking sector, is considered strong. This is reflected in figures from the end of 2007 which show that total banking assets increased by 53.6%, bank deposits rose by 59.4%, and loans to the private sector went up by 52%. However, with the global financial crisis that has affected most of the continents, Cambodia’s total banking assets declined a bit in the last quarter of 2008 and the economy is expected to have very little growth in 2009. The National Bank of Cambodia still manages its reserves in a conservative manner, with principle strategies prioritized by: first, safety; second, liquidity; and third, returns. This conservative strategy is appropriate in light of the current financial turmoil. But with gradual increases of reserves, one’s portfolio should be well diversified and reserve managers should have a solid risk management and analytical skills. Therefore, capacity building needs to be continuously strengthened. BIS is the best counterpart in capacity building for central banks, especially for the National Bank of Cambodia. Every year BIS provides on-site training to our reserve managers and I hope the BIS continue providing this kind of training and cooperation in the future.
Adopting an integrated GRC framework is a challenge  4.1 Understanding the demands of the organization’s stakeholders is the key in terms of performance and conformance, and aligning the organization to deliver against these objectives. Considering the risk appetite and risk tolerance of the organization, the processes and technology should be designed and deployed so that the achievement of objectives is measured, risks are assessed and continuous improvement is realized in support of effective GRC. Integrating GRC has become a challenge for virtually every financial institution looking to establish an integrated and consistent approach to controlling exposures, managing risks and creating value. 4.2 The major challenge in adopting an integrated GRC approach is the aligning of the GRC framework and processes to standalone and isolated solutions that are already in place. The difficulty is to integrate these isolated solutions through a flexible and add-on basis to embrace new requirements. Changing core business solutions without overhauling business requirements is considered to be a nightmare by many financial institutions. If it is  4  BIS Review 15/2008  properly planned and designed, it would not be that bad and those who have taken the bold decision to do so will be the winners in the future. 4.3 Another important challenge would be to adopt a GRC framework, which is consistent with international standards. To enable this, new policies and procedures have to be written with links to automated systems.

Considering the fiduciary responsibility of the Boards towards their stakeholders, and in the interest of wider financial system stability, the Central Bank issued directions on corporate governance in December 2007, requiring the banks to streamline their governance practices commencing from 2008. 3.2 The implementation of the Basel II framework from January 2008 is another enhancement to the regulatory structure, which requires the financial industry to have a better risk management framework. Most of the leading banks have set up independent risk management and compliance divisions to monitor bank-wide risks. These institutions should now focus in moving forward to implement advanced approaches under Basel II framework by setting up data warehouses and sophisticated IT systems in order to have better risk management and compliance. Similarly, the adoption of International Accounting Standards such as IAS 32 & 39 and IFRS 7, which deal with disclosures, presentation, recognition and measurement of financial instruments, also highlight the need for an integrated risk management, disclosures and compliance. There is, however, reluctance by banks to build robust IT infrastructure and advanced IT frameworks due to the high cost of investment and the time it would take to reap the benefits. It is important that banks and financial institutions change this mindset to pave the way for a GRC management and also to avoid operational losses due to product failures and frauds. Risks arising in these areas could spread beyond the financial institution concerned and have the potential to affect the entire industry. 4.