samchain/econo-pairs-v1 huggingface dataset:
As a result of exaggerated euphoria, a basis for risks that may lead to future instability can be created even before the threat of inflation becomes more visible. In the event of rapidly rising asset prices, with the associated risk of financial instability, a central bank should therefore keep a watchful eye on credit expansion in the economy. Under such circumstances the central bank may need to intervene in the interests of financial stability. In my opinion, interest rate adjustments should certainly not be ruled out if they are judged to be effective. In other contexts I have mentioned the desirability of such a “flexible inflation targeting policy” and believe that support for action of this type is to be found in current legislation. The recent share price bubble was not accompanied by any undue expansion of credit. This was no doubt partly because the Swedish bank crisis is still so fresh in people’s minds and banks here have made the process of providing credit much more rigorous. The IT and telecom bubble in the 1990s So much for financial bubbles in general and what general economic policy can do. There is, however, more to learn from WorldCom, Enron and the whole of the IT and telecom bubble. American studies suggest that the new technology which enabled people to do their own share trading on the Internet attracted many people who were unfamiliar with saving in shares.

Perhaps a society has to undergo a learning process on a broad front so that earlier mistakes yield new insights. Economic policy decision-makers like myself are, of course, no exception here. But as financial turbulence does not inevitably lead to a serious crisis in the real economy, we need to ask why it is that in certain cases output and employment do suffer severe setbacks and the attendant deflation. Much will have been gained if we can learn to tell whether or not an extensive share price fall, for example, besides being troublesome enough for many people, is likely to result in a situation with general deflation, rapidly falling output and rising unemployment. An answer to that question was suggested in the summer of 1999 by the Federal Reserve chairman, Alan Greenspan: While bubbles that burst are scarcely benign, the consequences need not be catastrophic for the economy. The bursting of the Japanese bubble a decade ago did not lead immediately to sharp contractions in output or a significant rise in unemployment. Arguably, it was the subsequent failure to address the damage to the financial system in a timely manner that caused Japan’s current economic problems. Likewise, while the stock market crash of 1929 was destabilising, most analysts attribute the Great Depression to the ensuing failures of Policy. Most things indicate that when banks run into trouble on account of financial turbulence, the supply of credit may dry up and the payment system cease to function.
As we have seen in the pandemic, a common shock can have asymmetric impacts on countries which have a high concentration of certain sectors, such as tourism. Perhaps more importantly from a financial integration perspective, interconnectedness through supply chains matters. Take manufacturing, which accounts for around 20% of banks’ loan portfolios. While the reported direct emissions of these companies are comparatively lower, indirect exposures through the supply chain are more substantial. The physical risks of climate change have a clearer geographic angle and differ in their regional impact. These risks are also expected to increase in the coming decades, with some likely to be concentrated in particular geographical areas. Floods are the most significant hazard in central and northern Europe, for example, while heatwaves, droughts and wildfires represent the greatest risks in southern Europe. Taken together, around 30% of the credit exposures of euro area banks are to businesses with high or increasing exposure to at least one source of physical risk. Ultimately, the impact of climate change on financial stability depends on the degree of concentration of exposures, and what mitigation measures are in place. Both fronts give cause for concern. Over 70% of identified physical risk exposures in the euro area are held by just 25 banks. There is also a notable concentration by country (Chart 2, left panel), suggesting that physical risk could become a prominent source of asymmetric shocks. Moreover, the physical collateral backing loans may itself be damaged by the event, exacerbating the risk to banks.

Speeches 07 Jun 2022  Opening remarks at the Alliance for Green Commercial Banks Cornerstone Members Memorandum of Understanding Signing Ceremony Eddie Yue, Chief Executive, Hong Kong Monetary Authority Distinguished guests and friends, 1. Good afternoon. It is my great pleasure to join you to celebrate another milestone of the Alliance for Green Commercial Banks. Today we are going to witness the signing of a memorandum of understanding that brings in five Cornerstone Members to the Alliance, welcome the on-boarding of four Global Partners and a Knowledge Partner, and publish the Alliance’s first thought leadership paper. 2. My special thanks to the IFC advisory team and the HKMA market outreach team for their hard work and close collaboration that brings out the biggest common denominator among various stakeholders. I would also like to personally thank the Cornerstone Members and Partners for their strong support and contribution throughout the engagement process. What we have achieved today is the product of collective efforts. 3. We at the HKMA feel privileged to have partnered with the IFC in launching the Asia chapter of the Alliance for Green Commercial Banks. This is an important joint commitment and undertaking to support financial institutions in Asia on their journey to become leading green institutions 4. Indeed Asia has the largest need for climate finance among the geographical regions. It is estimated that 66 trillion USD of climate investment is required for the region in the coming three decades.
11  Central Bank of Chile 29 June, 2017  Slide 15  Potential for financial development ▪ DLT may contribute for the development of emerging countries in several aspects: i. ii. iii. iv. v.  Universal access to financial services by consumers and small-medium enterprises Enhanced security of remittances and transactions among vulnerable sectors Higher competition and less concentration of the financial sector Reduced costs for participation in the formal economy Easier access to public services based on improved government databases  Potential for financial development [SLIDE 15] DLT may contribute for the development of emerging countries in several aspects: (i) universal access to financial services by consumers and small-medium enterprises; (ii) enhanced security of remittances and transactions among vulnerable sectors (the poor, migrants, rural areas); (iii) higher competition and less concentration of the financial sector, and (iv) reduced costs for participation in the formal economy and easier access to public services based on improved government databases. Recent experiences with M-Pesa in Africa and with Unique ID in India are good examples of such development trends. However, some obstacles and risks still deserve attention. An efficient use of financial services may require larger investments in education and financial literacy. Recent experience shows that even in developed countries people often misuse financial instruments. Consumers often suffer from large debt burdens and complex contracts that they do not understand. Also, some of the new financial instruments—such as digital currencies—may facilitate tax evasion, fraud and illegal transactions.

14  Central Bank of Chile 29 June, 2017  FinTech in Chile [SLIDES 17 and 18] According to the CCAF 2017 The Americas Alternative Finance Industry Report Hitting Stride, Chile is the country with the largest development in FinTech services. This is due to a large extent to the fast development of crowdfunding platforms in Chile5, which appear to have flourished from their connection to factoring services. Slide 17  FinTech in Latin America: size Volumes by Alternative Finance Model (in million of dollars) Total  400  80  250  60  200  114.2  97.8  100  300  64.4  11.2  12.6  2015  2016  Mexico  Chile  0  Brazil  0  50 2014  9.9  Argentina  20  56.1  Colombia  110.6  Peru  40  150 100  By country, 2016  120 342.1  350  Source: Ziegler, T. et al. (2017), “Hitting Stride - The 2nd Americas Alternative Finance Industry Report,” Cambridge Centre for Alternative Finance, June 2017. Slide 18  FinTech in Chile: size Chile: Volumes by Alternative Finance Model 2014-2016 (in million of dollars) Equity-based Crowdfunding  0 0 1.4  Marketplace / P2P Consumer Lending  0.47 0 0  Reward-based Crowdfunding  0.9 1.1 3.5  2014  36.9  Marketplace / P2P Business Lending  46.5  2015  2016  92.9  Source: Ziegler, T. et al.
In order to avoid having crisis management being held up by conflicts of interests more than necessary, I am personally inclined to believe that a general key that is fixed once and for all is the preferred choice. Possible ways forward The title of this speech is a question: “Are we ready to deal with a cross-border banking crisis in Europe?” Regrettably, the answer is no! Before we can say we are anywhere near “ready”, we must deal with some serious challenges. In particular, we need to solve the problem of how to organise supervision, crisis management and crisis resolution for cross-border banks. Given the great complexity of the issue, achieving a practical solution will not be an easy task, and there is no altogether ideal solution. The amount of work that has already been set up for us on the European regulatory agenda is already quite staggering, which suggests that everything may not be achieved in the next few years. But we must not use this as an excuse for not starting to deal with these important issues. We can at least start the analytical process, take stock of the problems and examine the pros and cons of different solutions. The longer we wait to get this process started, the greater the risk that we’ll end up in a very serious mess. I, for one, certainly hope that we manage to have some solution in place before the next major financial disaster in Europe occurs.

Tukiya Kankasa-Mabula: Technological developments in Zambia and the surrounding region Official opening speech by Dr Tukiya Kankasa-Mabula, Deputy Governor – Administration, Bank of Zambia, at the SADC Central Banks IT Forum 2008 Annual Conference, Livingstone, 3-7 March 2008. *  *  *  Protocol • The Chairman of the SADC ICT Forum, Mr Paulo Maculuve • The ICT Directors from the SADC Central Banks • Mrs. Esselina Macome (Dr), General Manager and Board Member, Banco de Moçambique • The ICT members of staff from SADC Central Banks represented here • Other members of staff from SADC Central Bank represented here • Representatives of Hardware and Software Suppliers • Members of the Press • Distinguished Ladies and Gentlemen On behalf of the Bank of Zambia Governor, I would like to extend a very warm welcome to you all to the “SADC Central Banks IT forum 2008 Annual conference”. To our colleagues from outside Zambia, I wish to extend a special welcome to you to Zambia, and in particular to Livingstone, our tourist capital especially at this time of the year. Like the rest of Zambia, Livingstone is a city of tranquility with an easy-going African charm. Apart from the famous Victoria Falls, other tourist spots include the Mukuni Cultural Village a well stocked curio market, among the many other attractions. I therefore urge you to find time or indeed stay an extra day or more to sample this special menu that Livingstone can offer.
In August, to operate within a more symmetric interest rate corridor, we lowered the overnight lending rate from 12 to 11.25 percent, and the rate on borrowing facilities for primary dealers via repo transactions from 11.5 to 10.75 percent (Chart 3). In this period, we provided the CBRT funding primarily from one-week repo auctions (Chart 4). Thus, the average funding rate came close to the one-week repo rate. Yet, taking into account the geopolitical tensions and the financial market volatility, we have fortified our tight monetary stance with a tight liquidity policy since September. Accordingly, the BIST overnight repo rates, that neared the one-week repo auction rate in July and August, has lately followed a course close to the upper end of the interest rate corridor. While we had measured rate cuts, we have maintained a tight monetary policy stance by keeping the yield curve nearly flat in this quarter as well. The spread between 5-year market rates and the BIST Interbank Overnight Repo rates has been at negative levels as of October (Chart 5). In addition, as we have tightened our liquidity policy recently, short-term rates have risen substantially. Thus, we are able to keep the yield curve on a nearly flat course. On the other hand, the spread between long and short-term rates continues to hover below its historical levels (Chart 6).

One advantage is that monetary policy can be more easily evaluated. This is particularly important given the Riksbank’s independent position and the requirements made of us from a democratic perspective. A second advantage is that it becomes easier to explain monetary policy and it then has the prerequisites to become more efficient. This is because monetary policy largely acts through the expectations of future interest rates which it gives rise to, rather than through the current repo rate. Good explanations give an increased understanding and thereby a better opportunity for us to steer expectations. Let me explain this further. Easier to evaluate and compare Firstly to the question of evaluating our forecasts and comparing them with those made by others. Are our forecasts for inflation and the real economy accurate? How do our forecasts differ from those of other analysts? While our forecasts were based on the assumption of an unchanged repo rate (up to the end of June 2005) it was in principle impossible to answer such questions. The purpose of the forecasts then was to analyse how economic developments and inflation would look if we did not change the repo rate. It was a simple way of explaining whether or not the repo rate needed to be changed. But at the same time it meant that the forecasts could not be expected to be particularly accurate. The assumption of an unchanged repo rate was in most cases unrealistic and also made it difficult to produce consistent forecasts.
This is mainly because households’ interest expenditure will stop falling and then rise as the repo rate is raised. BIS Review 25/2010  9  Figure 9 Inflation measured as the CPI and the CPIF Annual percentage change  Source: Statistics Sweden  From crisis interest rate to monetary policy in an economic downturn The Executive Board of the Riksbank decided at the latest monetary policy meeting to hold the repo rate unchanged at 0.25 per cent to attain the inflation target of 2 per cent and to give sufficient support to the economic recovery. We are expecting to begin raising the repo rate again in the summer or in early autumn 2010 (Figure 10). This is slightly earlier than in our last forecast, which is because of the two components I mentioned. The financial markets have become increasingly stable and statistics on economic activity – such as slightly higher growth abroad, stronger employment and higher inflation – have gradually confirmed the picture of the recovery being on firmer ground. Figure 10 From crisis interest rate to monetary policy in a recession Per cent  Source: The Riksbank  10  BIS Review 25/2010  At the same time, we are now assuming that the increases in the repo rate can be made more gradually. This means that the forecast for the repo rate in the longer term is marginally lower than before, just under 4 per cent at the beginning of 2013. But, of course, forecasts so far ahead are very uncertain.

The TED spreads have gradually fallen and for some time have been at around the same levels as in summer 2007, before the financial crisis became acute. Although measures such as the central banks’ loans to the banks have probably played a role here, the low TED spreads indicate increased confidence and a more stable situation in the interbank market. 2  BIS Review 25/2010  Figure 2 More stable situation in the financial markets The difference between interbank rates and government bond rates (TED spread), basis points  Sources: Reuters EcoWin and the Riksbank  Another healthy sign is that individual problems have not spread exaggerated unease in the financial markets around the world. I refer here to Dubai World, for instance, which defaulted on its payments earlier in the winter and has since suffered new problems, and to Greece, which is struggling with very poor public finances. A further example is the economic problems in the Baltic countries. While these events are reminders in themselves that we still have some way to go before we can declare this crisis completely over, if the same things had happened in autumn 2008 the waves of turbulence would probably have been much higher and affected markets far from the eye of the storm. We are now on firmer ground – or on safer ice, if you prefer. A further positive sign is that activity in the financial markets has increased after being very low in some cases, particularly during the most intensive phase of the crisis.
This gives us a good evidence base to look at whether firms which benefited from a CCyB release lent more than firms not benefitting from such release, after controlling for other firm- and country-specific factors. The short answer, as the Basel Committee’s work found, is that they did. A regression analysis found a positive and statistically significant coefficient between buffer release and loan growth.13 The effect of the countercyclical buffer release in the UK: using pass-through rates What about the UK evidence? In the UK, the FPC cut the UK CCyB rate to zero in March 2020. It had been increased from 1 percent to 2 percent in December 2019 with firms having one year to implement the increase.14 All firms in the UK got some relief in capital requirements – but the amount of relief varies across firms, driven by their relative exposure to UK credit risk-weighted assets (RWAs).15 By exploiting this cross-sectional variation across firms, colleagues in the Bank16 have examined whether firms that got more benefit from the release maintained lower capital ratios and lent more following the cut to the CCyB, as compared to their peers. The findings, reported in Table 1, support this hypothesis. Firms with higher exposure to the UK CCyB ratecut increased CET1 ratios by less during the pandemic as compared to their peers, and this result is statistically significant.

Due to the use of regulatory data, the effective CET1 surplus takes into account CET1 resources (calculated from the public requirements) used, where applicable, to meet leverage ratio requirements, MREL requirements and lower quality capital requirements (i.e. where AT1 and Tier 2 instruments are allowed but not utilised). 20 We exclude corporate lending supported by government-provided relief schemes during the pandemic given the zero risk-weights attributable to that lending during Covid-19. 11  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  11  Is it stigma or is it uncertainty? One possible challenge to these findings is that they may reflect firms’ concerns about breaching regulatory minimum requirements during the pandemic, and/or about their ability to rebuild depleted buffers going forward; and may have nothing to do with the stigma of breaching regulatory buffers. The arguments go as follows: a firm entering the crisis with lower headroom would naturally be more cautious than a firm with higher headroom and hence, when the uncertainty about the economic environment is large, it would naturally increase its capital ratios by more to prevent it breaching minima. Alternatively or in addition, banks may have entered the crisis with low headroom because they faced profitability challenges, restricting their capacity to grow capital organically. If so, then they may be averse to capital ratios declining, fearful that if conditions subsequently swung around quickly, they could languish inside regulatory buffers for longer than their competitors if their profitability challenges were to persist.
This means the median observation for the white group occurs a lot earlier than for the ethnic minority group. As a result, when we run a pooled Oaxaca-Blinder decomposition, more weight is placed on later observations, where the ethnic minority population is larger leading to a negative ethnicity pay gap. This is at odds with time-series results which take into account the relative shares of the two groups in each year. To ensure that the results are comparable with the gender pay gap, we aggregated the results from the time series regressions using the share of the two groups in each year as weights. 24  All speeches are available online at www.bankofengland.co.uk/speeches  24  ethnic minority workers tend to be employed in regions where wages are higher (40% of ethnic minorities work in London) and tend to have higher qualifications than their white counterparts. Once these compositional effects are accounted for, the unexplained (“pay bias”) ethnicity pay gap is as large as for females. It averages just under 10 percentage points over the sample. This demonstrates one of the perils of interpreting raw, unconditional, pay gap data too literally. Replicating this analysis for people born in the UK reduces by half the size of the pay bias. Conversely, for people born outside the UK from ethnic minority backgrounds we estimate a significantly larger pay bias, at around 12 percentage points.

In other words, their use has been driven by purely economic and commercial motives. 17. The growing concerns over SWFs and various proposals to restrict either the mode of their investments or areas in which they might invest are signs of a worrying trend of rising investment protectionism, and pose a risk to international financial stability. We are  4  BIS Review 51/2008  sympathetic to concerns in recipient countries and acknowledge that these worries, if left unaddressed, would only increase protectionist sentiments. In our last meeting, the IMFC called on the IMF to play a role in identifying best practices for SWFs. We share the view that as a multilateral platform, the Fund could play a useful role in this area, by allowing issues to be discussed in an open and neutral manner. We welcome the inclusive, collaborative, and voluntary approach taken by the Fund. The principles should focus on governance, institutional arrangement, and transparency and be co-written by the SWFs and for the SWFs, hence would help increase ownership of the best practices, which is critical to its successful adoption. We also welcome the parallel work undertaken by the OECD in drawing up a similar set of guidelines for recipient countries to forestall the risk of protectionism. It is highly important that in drafting such guidelines, the standards for SWFs should not be more onerous than for other large institutional investors. Conclusion 18.