samchain/econo-pairs-v1 huggingface dataset:
Our aim is to maintain a resilient insurance sector which does not pass risks back to policyholders when they crystallise. Solvency II: a stocktake  For the uninitiated, Solvency II is a new regulatory regime for insurance companies across the EU, introduced on 1 January 2016 after years of wrangling. There is now a lively debate about how the new regime is working out here in the UK. It seems that almost every day the specialist press contains new opinion pieces from industry insiders or consultants about how Solvency II is constraining their business or turning out not to be as bad as feared. There is also the important review by the Treasury Select Committee, at which I gave evidence recently. And very occasionally others outside the magic circle of insurance enthusiasts (of which I count myself one) take a passing interest. Inevitably, on a subject as complex as Solvency II, there will be a wide range of opinions. And I think that a degree of constructive tension between regulator and regulated firms is a sign of a healthy and properly functioning relationship. But in any debate it pays to consider both sides. So what does the insurance industry think about Solvency II? Unsurprisingly, there is a range of views. Lord Turnbull, former board member at Prudential, was unequivocal in his comment that Solvency II was “an absolutely dreadful piece of legislation”.

Insurance supervision at the PRA Speech given by Sam Woods, Deputy Governor, Prudential Regulation and Chief Executive Officer, Prudential Regulation Authority  London Business School 20 March 2017  I am grateful to Dan Curtis for his help in preparing this speech. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Good morning. The UK has a world-leading insurance sector which provides a wide range of vital services to the real economy and society. It promotes growth and employment, has proved its mettle in turbulent times and the country can be proud of it. A necessary precondition to such success is world-class insurance supervision. That is what we aim to deliver at the PRA. Like insurers, our job is to be forward-looking and prudent about risk. Where we differ from private firms is that we do this motivated solely by the public interest. The recent debate about insurance regulation – while timely and important – must seem to some like a cacophony of acronyms, statistics, models and assumptions. But strip this back and you’ll see there is an essential, irreducible human core to it all. Some of the oldest and most vulnerable in our society have invested their life savings into long-term annuity contracts. By pooling and transferring many kinds of risks – from cyber to marine – insurers provide cover which is essential for economic activity. And by protecting for critical illness or personal accident, insurers commit to being there when you need them most.
I am not saying that we should only focus on the Northern Province, even the Southern Province. We have a branch in Matara, but I think there is a lot of work to be done. I recently visited areas around Hambanthota, and I find that the potential there really, is still not exploited. There are a few factories here and there, few agricultural projects that we are funding, but we are nowhere near the sort of potential we can achieve particularly since so much infrastructure has been installed in that area and built in recent years. I think that infrastructure is not being used. We have the rather comic situation today where an airport is being used to store paddy because of a mismatch of the needs of that airport to be economical with the needs of the broader economy which has other pressing problems to be achieved. So this is a classic example how we have to put on our thinking caps and come up with solutions for the government. One big advantage that we have is that central bankers have through the decades, manned very important government institutions. Even when I look today, institutions as varied as the Ministry of Defense, the Ministry of Finance and such like have very senior central bankers working there in some form or another. And even in the legal sector, the Attorney General’s Department is working very closely with us.

Nor can it mean that we set interest rates simply by reference to those prevailing elsewhere. It is naïve to complain that our interest rates are twice those in Europe without recognising that we are operating closer to capacity than is the case in the Eurozone as a whole – or that unemployment there is running at twice the rate in this country even if – and I agree – much of that difference is to be explained by structural, supply-side, rigidities rather than simply cyclical divergence. No-one, Mr Chairman, is more conscious of the limits to what we can hope to achieve through monetary policy than I am. But operating within those limits, we have been able to achieve greater macro-economic stability, reflected in the rate of inflation, than we have seen for a generation. And that stability, together with the improved supply-side flexibility of the economy, has delivered a rate of unemployment in the economy as a whole that, despite the recent modest upturn, is still close to the lowest rate we have seen in almost 20 years. And what is true for the UK as a whole is true for most of the individual regions of the economy. That includes the West Midlands, where, on a claimant count basis, unemployment at 4.8% is actually only marginally above the national average and still just about the lowest it has been since 1980. Macro-economic stability cannot solve all our problems.
For example, Adrian and Shin (2008) demonstrate that the balance sheets of US broker/dealers expand when monetary policy is accommodative. 6 Similar evidence is provided for the US repo market by Gorton and Metrick (2009), who found that activity started to increase significantly from 2001 – that is, at a time when monetary policy in the US was relatively loose following the bursting of the dot-com bubble. 7 Acharya and Schnabl (2010) provide similar evidence related to the asset-backed commercial paper (ABCP) market. 8 In summary, if the process that has been set in motion under the aegis of the G20 has the potential to place a whole new segment of finance under regulatory scrutiny and oversight, the new collateral-based finance can give a central bank stronger influence over financial and macroeconomic conditions more broadly. 5. Monetary policy in a high-debt environment  I mentioned earlier that collateral is likely to play a growing role in the functioning of capital markets. Demand for collateral is thus likely to increase. But, given the collapse of securitisation activity during the crisis, we could imagine that the current decline in the creation of securitised assets might become a permanent feature of the new landscape. There will be fewer ABSs created out of bank books. Sovereign debt will certainly be widespread. It will probably replace ABSs in the collateralisation of secured lending. Unlike in the past, the risk characteristics of this type of debt instrument will be more graduated than was considered possible only few years ago.

Mario Draghi: Euro area economic outlook, the ECB’s monetary policy and current policy challenges Statement by Mr Mario Draghi, President of the European Central Bank, prepared for the Twenty-Eighth Meeting of the International Monetary and Financial Committee, Washington DC, 12 October 2013. *  *  *  I would like to focus on the euro area economic outlook, the ECB’s monetary policy and current policy challenges. Economic activity in the euro area bottomed out in the first half of the year and is expected to strengthen gradually in the period ahead. Recent economic indicators, which have been predominantly positive, support expectations of a modest and gradual recovery. Output is expected to recover at a slow pace, driven by a gradual improvement in domestic demand supported by the ECB’s accommodative monetary policy stance and a gradual strengthening of external demand. Furthermore, the improvements in financial markets seen since August 2012 appear to be gradually working their way through to the real economy, as should the progress made in fiscal consolidation. The risks surrounding the economic outlook for the euro area continue to be on the downside. Developments in global money and financial market conditions and related uncertainties may have the potential to negatively affect the economic outlook. Other downside risks include higher commodity prices in the context of renewed geopolitical tensions, weaker than expected global demand and slow or insufficient implementation of structural reforms in euro area countries.
The factors underlying this evaluation can be listed as follows: (i) Analyzing the supply-side sources of growth, continuance of productivity gains, which is a key element of non-inflationary growth, enables the reduction in unit labor costs, thus restricts the impact of the rises in other costs. (ii) The demand-side sources of growth points to an increasing share of investments in the GDP. The ongoing strong growth trend in investment expenditures limits inflationary pressures through its support for the increases in partial labor productivity via capital deepening. Accordingly, the composition of domestic demand secures the simultaneous achievement of rapid growth and disinflation. (iii) Although the strong position of the YTL against foreign currencies is a factor that supports domestic demand growth, it restricts the impact of rapid growth on prices not only by its direct effect on prices but also by stimulating investment demand, which in turn induces productivity gains. Graph 13. Output Gap (Percent) 6 4 2 0 -2 -4 -6 -8 06-I  05-III  05-I  04-III  04-I  03-III  03-I  02-III  02-I  01-III  01-I  00-III  00-I  -10  Source: CBRT. Despite the fact that the recent data provide signals for an ongoing strong course of domestic demand, within the framework of non-inflationary rapid growth analysis explained above, the output gap is expected to support the disinflation process in the first half of 2006 as well. Nevertheless, our view that the contribution of supply-demand conditions to the disinflation process has diminished is still valid.

For instance, the impacts of differentiation in productivity ratios in the tradable and non-tradable sectors compared to the Euro zone on relative prices and real exchange rate behavior in the process of convergence with the European Union are analyzed in one of the boxes. Moreover, in addition to the box in which international gold prices and the impacts of these on the CPI are analyzed, the Report also contains a box in which the targets and realizations relating to inflation and Net International Reserves are evaluated within the context of IMF conditionality. Distinguished Guests, After this general overview, I would like to summarize the evaluations and the inflation forecasts of the Central Bank in the latest Report, which will be published on our web site today. Inflation developments In the first quarter of 2006, the fall in inflation displayed a slowdown tendency in line with our predictions in the previous Inflation Report and the annual rate of increase in consumer prices was realized as 8.16 percent as of the end of March 2006. This slowdown stems from the base effect created by the price increases that have realized at historically very low levels due to the reduction in the Value Added Tax (VAT) rates of food, health and education items made in early 2005 (Graph 1). Graph 1.
Mr Heikensten discusses monetary policy aspects of Sweden’s position “inside EU, outside EMU”  Speech given by Mr Lars Heikensten, First Deputy Governor of the Sveriges Riksbank, at a seminar arranged by Handelsbanken Markets, Stockholm, on 10 September 1999. *  *  *  First a word of thanks to those who arranged this seminar for inviting me to take part. The agenda covers many important issues that all deserve a thorough discussion. Sweden’s relationship with the European monetary union is one of them. Today I shall be considering four matters: the feasible timetable in the event of full participation in EMU; Sweden’s performance as regards the criteria for joining the euro area; considerations concerning the rate for the krona’s conversion to euro; and, finally, something about how economic policy should be formulated in the meanwhile in the event that we do join the monetary union. When could we join? The timetable in the event of our participation in the monetary union is set both by decisions in Sweden and by negotiations with the existing euro countries. As regards the domestic process, in December 1997 the Riksdag (Sweden’s parliament) decided that Sweden would wait and see, but that the door to future participation is not to be closed. Players in the financial markets, along with other observers, are now trying to work out whether this door will be opened wide and, if so, when that is likely to happen.

This will be done on the basis of examinations of the Swedish economy by the EU Commission and the European Central Bank (ECB). Those assessments will be discussed by the finance ministers of the member states, who will then hear the opinions of the EU Parliament and the heads of state or of government before arriving at their decision. When that decision has been made, the member states must also agree on the time that Sweden should have for completing the necessary preparations. The countries that participated from the start have been given a transitional period of over three years from the euro’s introduction in January 1999 until it completely replaces the national currencies not later than June 2002. That a similar arrangement would apply for Sweden is, however, not certain. If we consider that our preparations can be completed more quickly, perhaps we could ask for a shorter interval. 1  BIS Review 96/1999  Do we meet the entry criteria? The Commission and the ECB will be examining the Swedish economy with reference to the criteria that were included in the Maastricht Treaty. Those criteria are for inflation, long-term interest rates, the exchange rate, the government budget balance and government debt. There are also specific requirements as regards central bank legislation. The principle of equal treatment will apply; that is, the basis for the assessments is to be the same as for the initial group of euro participants. That means that some conclusions can probably be drawn from the examinations in May 1998.
The second tool to mitigate the cross-sectional dimension of systemic risk is the so-called “systemic risk buffer” (SRB), intended to tackle those risks not covered by the other buffers. The SRB can be applied to the banking system as a whole, to a sub-set of credit institutions or to one or several sectors of economic activity. Its main characteristics are the extensive range of risks for which it can be used, and the discretionality and flexibility its use allows. 6  Moreover, some of the possible competitive advantage these institutions might have in the funding market can be corrected, an advantage stemming from the fact that investors purchasing their bonds might believe that, in the event of these institutions running into problems, they will be bailed out. Rather, the managers of these institutions might be induced to adopt more prudent risk-taking. 9  Macroprudential tools falling on borrowers  Secondly, macroprudential instruments consist of establishing restrictions on one or several of the characteristics of loans granted to debtors. For example, the percentage that a loan represents relative to the collateral backing it or to the borrower’s income can be limited, and the maturity of the loan can be time-limited. The evidence we have shows that lending standards have a very significant impact on the risk of ex-post default by borrowers, in the sense that looser standards (e.g. a higher percentage of the loan relative to the collateral backing it) increase that risk [see Galán and Lamas (2019)].

7 And, more recently, 9% of the UK banks’ pre-crisis stock of CRE lending was written off between 2008 and 2014 compared to 0.4% for mortgage lending. Over the past two years, commercial property prices have risen strongly by 18%. Up to the second half of last year, the market seemed to be “simmering” if not “bubbling”. Unlike in previous cycles, however, a much greater proportion of CRE activity has been financed by equity investors, in large part overseas investors, rather than by UK bank lending. The share of equity finance in UK CRE transactions in 2015 is estimated at around 55%, compared to around 30% in 2007 and a peak of around 80% in 2010. So the direct risks to major UK banks from this sector are not as high as one might assume. The fact that there is less UK leverage in the sector does not mean however that a sharp correction in CRE prices poses no financial stability risks. Property is an important source of collateral for UK corporates, SMEs in particular. A sharp drop in CRE values could constrain their access to credit. Recent research by Bank staff found that a one pound rise in the value of a company’s property is associated with around a five to ten pence rise in investment. 8 More broadly, Bank staff estimate that around a quarter of business investment is related to commercial property.
“Lender of last resort” assistance, even when it is extended by the central bank, involves the commitment of public money - ultimately taxpayers’ money - and it needs to be justified in terms of the damage that would otherwise result to the financial system and to the wider economy. For this reason the MOU, to which I referred earlier, BIS Review 18/1998  -8-  provides that the Bank should always seek the Chancellor of the Exchequer’s explicit prior approval wherever circumstances allowed, or at least his tacit prior approval in emergency situations and where the risks are manageable in relation to the size of our capital. These arrangements ensure that we have the capacity to act to limit systemic damage where that becomes necessary; but they rightly make such intervention subject to appropriate authorisation and accountability, by and to, both the Chancellor and Court. Conclusion Mr Chairman, we have come a long way in the Bank, even since I first joined it some 35 years ago. We tended at that time to explain our role as being the “Banker to the Government and Banker to the commercial and other central banks”. And the truth is that our responsibilities, and the extent of our authority, were never very clear. Today we remain a bank, as we always have been, at the heart of the financial system, as indeed we must in order to carry out our wider functions.

Rather we need effective supervision as well, something that is inevitably harder given the cross border nature of the activity and the potential both for gaps and for different priorities. That creates a need for close cooperation between both home and host supervisors to deliver effective global consolidated supervision of international banks. The changing approaches we’ve seen since the crisis There is a spectrum of approaches that supervisors can take to the supervision of international banks. In the absence of a single global consolidated supervisor, let me describe the two logical extremes. First one can have a model of pure home supervisor responsibility, based on branches of the parent group and where the host supervisor relies completely on the home supervisor. By allowing the most rapid allocation of capital around the globe, this model delivers the greatest benefits. But it simultaneously creates the greatest risks to financial stability in host countries because of the potential lack of clarity of remit, information, and responsibility and powers to deal with the risks international banking brings. Alternatively one can have a pure host-led approach. This would require operations overseas to be undertaken in subsidiaries, with those subsidiaries supervised in the same fashion as domestic banks, in effect treating the overseas entity as independent and standalone. This model reduces the risk of an abrupt cessation of financial services following events overseas and so, at first sight, does a better job of protecting financial stability. But it makes the cost of entry much higher.
It reflects the impact of the Job Support Scheme that shored up local employment; and the border control measures during the COVID-19 pandemic that made the employment of foreigners diﬀicult. Job growth in the financial sector has been consistently strong over the past 5 years A total of 21,000 net jobs were created during 2016-2020, with Singaporeans taking up about 16,000 or about 75% of these jobs. With more financial institutions setting up their regional and global hubs in Singapore today, 40% of financial sector jobs here are primarily international-facing. Half of these jobs are filled by Singaporeans. They include good jobs such as: application developers who develop digital products for overseas markets; private bankers who serve regional clients; and risk managers who monitor risk metrics for the regional or even global business. The employment outlook for the financial sector in 2021 remains positive. Late last year, MAS and the Institute of Banking and Finance (IBF) conducted a survey of financial institutions’ projected hiring from January to December 2021. Close to 800 financial institutions responded, representing about two-thirds of the financial services workforce. Financial institutions are oﬀering 6,500 newly created positions in 2021. These are new jobs created and do not take into account gross outflow of jobs. About 6,000 of the newly created positions are permanent jobs. Half of these jobs are in technology and consumer banking, with the remaining jobs spread across other business lines and functions.

These jobs require strong programming skills and in-depth business domain and system knowledge. There are not enough Singaporeans applying for these jobs in the first place, let alone qualifying for them. Technology will continue to lead hiring demand in 2021, with 1,700 hiring opportunities. So ware engineers account for about 30% of these jobs Business analysts and jobs in digital transformation account for another 25%. Technology jobs in the financial sector can be classified into three archetypes. Tech-Lite. These are mostly entry-level job roles for university - and increasingly polytechnic - graduates to gain hands-on experience in programming work and business domain experience. They make up about 10% of the tech workforce. Tech-Intermediate. These are roles which require good programming skills and understanding of business domains. About 75% of tech jobs in the financial sector are in this category. There is keen competition for these talents not only globally but also across diﬀerent sectors in Singapore. Tech-Advanced. These are senior leadership roles and in high-value tech functions, accounting for 15% of the tech workforce. Many global financial institutions have chosen Singapore as a hub for such high-value tech work. For example, 70% of Standard Chartered Bank’s global tech leadership and management sits in Singapore. The financial sector’s strong demand for technology talent will persist. MAS estimates that 2,500 to 3,500 tech jobs will be created in the financial sector each year, over the medium term. The competition for tech talent is economy-wide as more sectors embark on digitalisation.