samchain/econo-pairs-v1 huggingface dataset:
This year, we are advancing to a deep dive into the incentive systems of front offices in retail banks. 16. Based on what we have learned from the self-assessment exercise, we noted that banks’ culture effort in the area of incentive systems is still very much an area of “work-inprogress”. And having appropriate incentive system is such an important piece for inducing desirable behaviour that we have decided to intensify our efforts on this theme. 17. Up till now, we have not seen any guidance published on stylised approach to incentive systems, I guess because the design and implementation of such systems are very much dependent upon the characteristics of individual banks. But we have decided to take up this challenge by looking into the incentive systems of front offices in 20 retail banks, and aim to provide some useful guidance, or at least reference points, to the industry. 18. As you can imagine, the Focused Review on this subject is a very large-scale exercise. We are examining the front-office incentive systems, as well as analysing the perception and behaviour of front-line staff, in 20 retail banks in Hong Kong. So far, as a key component of this review, we have completed an industry-wide employee survey to gauge frontline employees’ views on their banks’ incentive systems and culture. We are encouraged to see the active participation of surveyed bank staff, with an overall response rate of around 70%.

But overall, we encourage banks to focus on three fundamental elements in their culture efforts: (a) A strong “tone from the top” supported by a sound governance framework; (b) An appropriate incentive system that induces desirable behaviours at all levels; and then (c) We also need an effective “echo from the bottom” on actual outcomes on the ground. 12. This is clearly not the occasion to elaborate on each pillar here, and we have already communicated a lot with the industry on that in the past. Instead, as a reminder that the 2/4  BIS central bankers' speeches  HKMA is not reducing our focus on this matter, let me give the audience a quick snapshot of our ongoing efforts in promoting bank culture reform. 13. Based on our bank culture supervision framework announced in 2018, we have spearheaded several initiatives in the past two years, including in particular selfassessments on banks’ culture, as well as culture dialogues with banks’ leadership. 14. Regarding self-assessments, in May 2020, the HKMA published a “Report on Review of Self-assessments on Bank Culture”. This report covers insights drawn from 30 banks, including quite a number of ASIFMA member institutions, in the self-assessment exercise. I am delighted to see that banks have subsequent to that taken actions and made reference to the range of good practices shared in the Report when further devising their culture enhancement measures. Focused Review on Incentive Systems 15.
But capital ratios have declined and leverage has risen. Immediately prior to the crisis, leverage in the banking system of the industrialised world had increased to astronomical levels. Simple leverage ratios of close to 50 or more could be found in the US, UK, and the continent of Europe, driven in part by the expansion of trading books (Brennan, Haldane and Madouros, 2010). And banks resorted to using more short-term, wholesale funding. The average maturity of wholesale funding issued by banks has declined by two thirds in the UK and by around three quarters in the US over the past thirty years – at the same time as reliance on wholesale funding has increased. As a result, they have run a higher degree of maturity mismatch between their long-dated assets and short-term funding. To cap it all, they held a lower proportion of liquid assets on their balance sheets, so they were more exposed if some of the short-term funding dried up. In less than fifty years, the share of highly liquid assets that UK banks hold has declined from around a third of their assets to less than 2% last year (Bank of England, 2009). Banks tested the limits of where the risk-return trade-off was located, in all parts of their operations. As John Kay wrote about his experience on the board of HBoS, the problems began “on the day it was decided that treasury should be a profit centre in its own right rather than an ancillary activity” (Kay, 2008).

First, the central banks’ objective of financial stability has emerged in the course of the historical evolution of their legal mandates and responsibilities. Second, the application of macroprudential tools to safeguard financial stability requires, as a pre-condition, knowledge of the financial cycle. Third, our conference programme is organized so as to discuss this critical topic in a conceptual sequencing: starting from the global view, elaborating on the euro area, and then turning to the financial cycle in non-euro area 2/3  BIS central bankers' speeches  Europe. I believe our speakers and discussants will provide both theoretical insights and first-hand policy experiences, from global and regional perspectives, for all of us to benefit from a frank exchange of ideas and relevant practices today. Thank you very much once again for joining us and participating in this conference, and I wish you a very pleasant and productive stay in Sofia. More information about the event you can find here. 1 See F Capie, C Goodhart and N Schnadt, “The development of central banking”, in F Capie, S Fischer, C  Goodhart and N Schnadt, (eds), The future of central banking: the tercentenary symposium of the Bank of England, Cambridge University Press, 1994, p 6. 3/3  BIS central bankers' speeches
Figure 6 Contribution to annual growth in real wage mass (*) (percentage points)  9  9  Wages  Real wage mass  6  6  3  3  0  0 Employment  -3  -3 09  10  11  12  13  14  15  16  (*) Moving quarterly average. Sources: Central Bank of Chile and National Statistics Institute (INE). BIS central bankers’ speeches  11  Figure 7 Net capital flows (1)  Nominal exchange rate (2)  (billions of dollars, moving month)  30  (accumulated change since May 2013 trough, percent)  30  Asia  20  20  10  10  0 Europe  0 -10  -20  -20  Latin America 13  14  15  Latin America (3) (6)  Comparable currencies (4) (6)  80 60  40  40 Chile  20  -30  -40  100  80 60  -10  -30  100  -40  Commodity currencies (5) (6)  0  16  05.13 May.13  05.14 May.14  05.15 May.16 05.16 May.15  20 0  (1) Latin America: Brazil, Chile, Colombia, Mexico and Peru; Asia: Korean Rep., Indonesia, Malaysia and Thailand; Europe: Czech Rep., Hungary, Poland, Russia and Turkey. (2) Dotted vertical line shows March 2016 Monetary Policy Report 2016. (3) Includes Brazil, Colombia, Mexico and Peru. (4) Includes Brazil, Colombia, Czech Rep., Korean Rep., Israel, Mexico, Philippines, Poland and Turkey.

BIS central bankers’ speeches  9  Figure 4 Real annual contribution to GFCF (*) (percentage points) 16 16  1616  Mining  12 12  1212  88  88  Other  44  Non-mining 4 4  00  00  -4-4  -4-4  Housing  -8-8  -8-8  -12 -12  -12 -12  -16 -16  -16 -16  09 09  10 10  1111  1212  13 13  14 14  15 16 (f) 15 (e) (e) 16 (f)  17 17(f)(f)  (*) 2015 mining investment is etimated using information from listed companies (FECU). Housing investment uses data from the Chilean Chamber of Construction and National Accounts by institutional sector. Other investment calculated residually. For 2016, forecasting models of the Central Bank and other sectoral sources are used, such as the Capital Goods Corporation's surveys and investment plans. (e) Estimate. (f) Forecast. Source: Central Bank of Chile.
Lesson 7: Banks’ profits were the problem – but are now the solution The shock to global banks’ profitability from the crisis has been sharp and severe (Charts 11). Judging by the response of banks’ equity prices, it may also be prolonged. Despite the recent recovery, the market capitalisation of global banks has fallen by $ trillion since the crisis began. In part, this is a reflection of banks’ business models having been reassessed. But it also reflects fears of future intervention to curtail banks’ risk-taking and profit-seeking. As unfashionable as it may sound, it is important that banks’ profitability picks up, sharply and durably, in the period ahead. From a systemic perspective, this is in the interests of both the financial system and the real economy. In the short term, lending by banks is a necessary condition for recovery in the real economy. And a recovery in lending is best achieved if banks believe new loans will be profitable. Some of the pre-conditions for profitable lending are already in place. For example, margins on new lending have widened fairly sharply, as new lending terms have been re-priced (Chart 12). In other industries, this would serve as the price signal inducing existing banks to begin lending and for new banks to enter the lending market seeking market share. Over the medium-term, global banks have a hefty repayment schedule to governments and central banks. Encouragingly, the flow of repayment has already commenced for some banks.

It will also contribute to the prompt detection of errors and deviations from targets, allowing banks to implement corrective measures and develop buffers as appropriate at an early stage. Banks should be encouraged to develop systems that allow managers to identify and understand the risks they are facing, consider the risks that may arise in the future, and respond promptly and actively to both. This will maximise the likelihood that they can continue to operate, even in the most difficult of conditions. Continued outreach and dialogue A second lesson I have learned through the development of Basel II is that communication with interested parties is absolutely essential. One reason we were able to incorporate leading practices into Basel II is because of the open and transparent process by which the Framework was developed. There has been a steady dialogue with the industry since the Committee began discussing revisions to the capital Accord back in 1999. Many of the firms represented here today contributed extensive and valuable feedback to the Committee on its proposals over the years. The Committee has tried to explain to the industry as clearly as possible its objectives and methods during this process, and in turn firms and industry associations have shown a willingness to engage in a serious dialogue to find practical, prudent solutions. This has helped supervisors to better understand the state of industry practice. Where we have found these practices to be reasonable and appropriate we have tried to incorporate them into the revised Framework in a sound manner.
Michel Camdessus Central Banking Lecture – Washington, 14 September 2022 Ethics of currency: a possible guide for central bankers? Speech by François Villeroy de Galhau, Governor of the Banque de France  Press contact: Mark Deen (mark.deen@banque-france.fr), Déborah Guedj (deborah.guedj@banquefrance.fr)  Page 1 sur 10 Ladies and Gentlemen, It is my great pleasure to be in Washington with you today, and to deliver this speech in honour of Michel Camdessus. I would like to take this opportunity to pay a special tribute to him, and express my personal gratitude. Michel is not only one of my predecessors as a Governor of the Banque de France, but also a friend of mine and – yes – a master. My speech was prepared with his precious help, so today you can almost enjoy a “Camdessus Lecture by Michel Camdessus himself”. The theme we chose together, the “ethics of currency”, has guided him throughout his career. In the murky waters that we central bankers are navigating, it should more than ever serve as a golden thread. I will briefly discuss the reasons why I dare to talk about the ethics of currency (I), then elaborate on the golden triangle of trust today (II) and finally raise the question as to whether the international dimension of trust can still inspire us (III). I. Why I dare to talk about the ethics of currency Before going any further, we must find a common definition of “ethics”. Is it possible to take this word as a synonym for “morality”?

12  BIS Review 159/2010  Overall, the impact of the upward revision in the food price assumption is offset by lower-thanexpected non-food inflation, leading to an unchanged inflation forecast at 7.5 percent for end2010. Similarly, the impacts of factors affecting the medium-term inflation outlook have balanced each other out, and consequently there has not been a significant revision in the forecasts. I think comparison of the forecasts by the ones in the previous Report period would help us to better understand the changes in forecasts. As I have mentioned earlier, considering a relatively stronger recovery in the domestic demand outlook and the second quarter GDP data, our output gap estimates have been revised upwards as of the second quarter of 2010 (Figure 29). The impact of the upward revision in the output gap was largely offset by the downward revision in the underlying inflation trend. Consequently, there has not been a significant change in medium-term inflation forecasts and the monetary policy outlook compared to the previous Report (Figure 30). In sum, assuming that policy rates would stay constant for sometime and remain at low levels for a long period, our revised forecasts suggest that aggregate demand conditions would continue to support disinflation for a while. Under current conditions, inflation is expected to follow a marked downward trend over the next two quarters and decline to levels consistent with medium-term targets as of mid-2011, as the adverse impact of the temporary price movements taper off.
Ladies and Gentlemen, in view of the potential benefits that can accrue to a society, the business community in Zambia, and Mufulira in particular, are hereby challenged to make Corporate Social Responsibility an integral part of every business decision and action.. Companies should demonstrate corporate citizenship in what they are as a company, how they conduct business, how they take care of their employees, as well as in how they interact with the public at large. Distinguished Ladies and Gentlemen, without being exhaustive, allow me to suggest some avenues through which good corporate citizenship can be encouraged among the Zambian business community. •  As a first step for pursuing Corporate Social Responsibility, companies can focus on defining the normative directions that would be appropriate and acceptable to them. These directions can be converted into a formal statement of business values and practices. Such statements can be presented in the form of principles, guidelines, or codes of conduct. For instance, a code of conduct can aim at regulating activities of an industry within the principles of responsible business by requiring the signatories to uphold fundamental human rights, to respect the culture and customs of their employees and local communities affected by their actions. In effect, these become a commitment vehicle for the business to declare its perspective and way of doing business with respect to the challenges relating to Corporate Social Responsibility.

At the micro-prudential level, the good progress regulators have made through climate-focused fora such as the NGFS and Sustainable Insurance Forum (SIF) has catalysed work across international standard setting bodies and other authorities including the Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB). On that note, I welcome the FSB taking a more strategic and central role on climate-related financial risks across the wider financial system. In the UK, the Prudential Regulation Authority (PRA) set out supervisory expectations for banks and insurers on the management of the financial risks from climate change in April 2019.4 We have provided further guidance for firms on these expectations and have set a deadline for firms ambitiously to embed them by the end of this year.5  Of all the building blocks required to manage effectively climate-related risks, climate disclosure is among the most essential - not only for transparency and for risk management purposes, but to facilitate the flow of capital towards investments that are consistent with an orderly economy-wide transition to net-zero. Consequently, it is also integral to the UK’s legislative commitment to reach net-zero emissions by 2050. For these reasons, the Bank has long supported the FSB’s Task Force on Climate-related Financial Disclosures (TCFD) 6 and has worked with the UK Government and regulators to progress further and implement mandatory disclosures requirements across the UK economy by 2025.7  Yet climate change is a global issue, which no nation can solve alone.
As such, from the start, the Maastricht convergence criteria went beyond inflation to also include targets in terms of fiscal discipline.12 The Spanish experience in the effort to comply with these criteria illustrates and reinforces the critical importance of other policies, such as fiscal consolidation or liberalisation reforms. This is an important lesson not to be forgotten: central bank credibility is an essential element for the effectiveness of monetary policy, but monetary policy is more efficient when 11  The CRD IV/CRR regulatory package makes available a set of macroprudential instruments that national competent authorities can resort to with a view to preventing the emergence of cyclical systemic risks or mitigating structural systemic risks, such as: a) the capital conservation buffer; b) the countercyclical capital buffer; c) the buffer for other systemically important institutions; d) the systemic risk buffer. Regulating capital buffers aimed to (i) ensure a level playing field between EU Member States, as an essential pre-requisite for the functioning of the internal market, (ii) prevent regulatory arbitrage, (iii) ensure maximum harmonisation, and (iv) enhance transparency and predictability in the macroprudential field. See articles 130, 131,133, 134,135-140 of CRD IV. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013L0036&from=EN https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0575&from=EN 12  See Hernández de Cos: El reto de la unión fiscal europea (2014): In response to the euro area sovereign debt crisis, there has been a deep reform of fiscal governance in the European Union.

22.11.2019  Reflections on the Past and Future of Central Bank Independence Seminar on The Relevance of Central Bank Independence: Challenges and Outlook/Banco de México Pablo Hernández de Cos Governor  Good morning. It is my pleasure to participate in this conference on the occasion of the 25th anniversary of the autonomy of the Banco de México. I take the opportunity to congratulate you on this landmark. Events such as this contribute to highlighting the relevance of the independence of monetary authorities, and my words today will be along these lines. In my address I shall first briefly refer to the independence of the Banco de España, both as a national central bank in itself but also as a member of the European System of Central Banks. Then, I would like to share with you some more general thoughts about current challenges to central banking from the perspective of their independence. The independence of the Banco de España The Banco de España was granted institutional independence in July 1994. So this year, as is also the case for the Banco de México, marks the 25th anniversary of our Law of Autonomy. The independence of the Banco de España came about as part of the European economic integration process. Following the requirements laid down in the Maastricht Treaty, central banks in the European Union were meant to pursue the primary objective of price stability and be vested with a large degree of independence, both political and operational.
1 See Faust, J. and Leeper, E.M. (2015), “The Myth of Normal: The Bumpy Story of Inflation and Monetary Policy,”  in Inflation Dynamics and Monetary Policy, Federal Reserve Bank of Kansas City, Jackson Hole, pp. 263-358. 2 See Bernanke, B. (2020), “The New Tools of Monetary Policy”, American Economic Review, Vol. 110, No 4, pp. 943-983; Rostagno, M., Altavilla, C., Carboni, G., Lemke, W., Motto, R. and Saint Guilhem, A. (2021), “Combining negative rates, forward guidance and asset purchases: identification and impacts of the ECB’s unconventional policies”, Working Paper Series, No 2564, ECB; and Altavilla, C., Lemke, W., Linzert, T., Tapking, J., von Landesberger, J. (2021), “Assessing the efficacy, efficiency and potential side effects of the ECB’s monetary policy instruments since 2014”, Occasional Paper Series, No 278, ECB. 2/2  BIS central bankers' speeches

In line with this assessment, we are taking steps to increase our understanding of the impact of climate change from a financial perspective and to ensure that banks fully incorporate these risks into their processes and practices. I will now go through the recent and ongoing climate-related initiatives related to our supervisory work. The ECB Guide and climate-related disclosures  2/5  BIS central bankers' speeches  In November last year we published the ECB Guide on climate-related and environmental risks.6 It builds on the Guide for Supervisors7 of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), and communicates the ECB’s understanding of a prudent approach to managing such risks to banks, markets and the wider public, with the aim of raising banks’ awareness and preparedness for managing them. In our Guide, we outline our supervisory expectations for how climate and environmental risks should be embedded in all relevant bank processes, from banks’ risk management frameworks to their governance structures, risk appetite, business model and strategy, and, importantly, their reporting and disclosures. Our ultimate goal is to cause banks to make sure their business strategies fully reflect the Paris Agreement – and there is one thing that will be key in getting us there: data. When it comes to tackling climate risk as a financial risk, data are what we are missing the most.