samchain/econo-pairs-v1 huggingface dataset:
Moreover, uncertainty over  1  See the Financial Stability Board (November 2020): The Implications of Climate Change for Financial Stability  1  these processes could undoubtedly have a profound impact on the financial sector in the medium to long run. In parallel with physical risks, the transition towards an environmentally sustainable economy entails a sweeping change in production technologies and a reallocation of activity across sectors and companies. Actually, such restructuring will mean that, in the short run, some sectors will increase their profits while others will incur losses, with obvious implications for the financial system and its stability. These changes in profits may come from the need to adapt towards greener ways of producing, owing to shifts in consumer and investor sentiment, from public regulation or taxation. In this case, for estimating transition risks, the most relevant factors are the carbon footprint and the environmental impact of the sectors and companies to which financial firms are exposed. The impact of climate change on inflation Beyond its effect on the financial sector, climate change could have a fairly direct impact on central banks’ ability to stabilise inflation. Policies aimed at promoting the transition towards a carbon-neutral economy – such as carbon taxes – are likely to affect the volatility of headline inflation, which includes energy prices. Most inflation-targeting central banks, including the ECB, target headline inflation, because it is more representative of the citizens' consumer basket than other notions of inflation.

More generally, economic distortions and loss of revenue caused by financial crimes can also threaten our growth prospects. While there are many issues that I could speak about on financial crimes today, I would like to focus on what has been at the top of many minds – cybercrimes. Indeed, cybercrimes are a global menace. McAfee reported that cybercrime cost the global economy more than 1 trillion dollars in 2020, or more than 1% of global GDP. Malaysia is not spared from this growing threat. As indicated in the National Risk Assessment 2020, fraud – which includes cybercrimes – is among the country’s top high-risk crimes, with a higher number of cases and losses suffered compared to the previous assessment conducted in 2017. More than 20,000 cybercrimes were reported in 2021 alone, involving losses of RM560 million. Between 2017 to July 2021, Malaysians suffered losses of about RM2.23 billion on account of cybercrimes. As more people switch to mobile phones for online transactions, we are also seeing an increase in online banking fraud incidents involving mobile malware. Although fraud losses remain low as a share of the total value of online banking transactions, they point to ever present and evolving threats as society adapts to new norms of living and doing business. Indeed, criminals are exploiting the rapid dispersion of technology in this recent period. This is not a trend that will reverse. Therefore, strengthening the financial system’s defence against emerging threats and vulnerabilities must remain a top priority.
BANK of ZAMBIA  KEYNOTE SPEECH LAUNCH OF THE 2019 WORLD SAVINGS DAY BY  DR DENNY H. KALYALYA, GOVERNOR, BANK OF ZAMBIA  InterContinental Hotel, Lusaka 31st October 2019, Lusaka, Zambia  KEYNOTE SPEECH BY DR DENNY KALYALYA, GOVERNOR, BANK OF ZAMBIA AT THE 2019 WORLD SAVINGS DAY EVENT ON 31ST OCTOBER 2019 AT THE INTERCONTINENTAL HOTEL, LUSAKA             The Chief Executive - Securities and Exchange Commission The Registrar and CEO – Pensions and Insurance Authority The Chairperson – Bankers Association of Zambia Senior Government Officials here present Members of the Diplomatic Corps Chief Executive Officers and Senior Private Sector Representatives Representatives from education institutions Members of the Media here present Pupils and students here present, and May I just say, Distinguished Ladies and Gentlemen  I am delighted to officiate at this official launch of the 2019 World Savings Day under the theme: ‘Be Money Smart: Savings Give Life a Lift!’. As you may be aware, the World Savings Day is a global event celebrated to promote awareness on the importance of savings. In line with the National Strategy on Financial Education of 2012, Zambia has observed the World Savings Day since 2014. Distinguished Ladies and Gentlemen, this year’s World Savings Day commemoration presents yet another opportunity for consumers to learn about financial products as well as how to select and assess appropriate financial products to maximise their usage for key life events.

Following the launch of the National Financial Inclusion Strategy in 2017, new informal financial service providers have emerged, such as, village banks and savings groups in both the rural and urban areas. As both formal and informal financial service providers are agents of financial inclusion it is important for us, the regulators, to seek effective ways of linking the two types of players with a view to reducing informality as we expand financial inclusion. Distinguished Guests, in recognition of the importance of formal financial inclusion in supporting economic growth, the Bank of Zambia is collaborating with SaveNet, to 1  KEYNOTE SPEECH BY DR DENNY KALYALYA, GOVERNOR, BANK OF ZAMBIA AT THE 2019 WORLD SAVINGS DAY EVENT ON 31ST OCTOBER 2019 AT THE INTERCONTINENTAL HOTEL, LUSAKA  develop channels to link informal savings groups to formal financial services providers. According to SaveNet data, at the end of 2018 there were 15,700 savings groups in Zambia, with cumulative savings amounting to K53.1 million. This points to a good opportunity for the formal financial service providers to mobilise deposits. In this regard, it has been observed that a number of regulated financial service providers and mobile money operators have already started designing products aimed at tapping into this market. It is hoped that this move will expedite the transition of informal groupings into the formal financial sector and enable more people gain access to a wider range of quality and affordable financial services.
William C Dudley: Principles for financial regulatory reform Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Princeton Club of New York, New York City, 7 April 2017. * * * It is a pleasure to have the opportunity to speak here today on the important topic of financial regulatory reform. As always, what I have to say reflects my views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 A robust financial system is central to our economic well-being. The financial crisis and the Great Recession wreaked havoc on millions of American households and businesses, and much of this damage was due to a flawed regulatory framework. In particular, many large banks and securities firms had inadequate capital and liquidity buffers, and the financial system had a number of important structural weaknesses that made it vulnerable to stress. In response, legislators and regulators made significant changes to strengthen our regulatory framework. Importantly, as we consider further changes, we must avoid throwing the baby out with the bathwater. As I see it, an effective regulatory regime for the financial system must do three things: Ensure that all financial institutions that are systemically important have enough capital and liquidity so that their risk of failure is very low, regardless of the economic environment.

It has served the UK well for two decades, and has led the way in many areas of innovation. But similar drivers to those behind the PSF mean it too now needs a thoroughgoing refresh to meet the next wave of challenge. Consultation on our vision recently concluded; and, although we are still processing the results of that exercise, it is already clear 3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  that our proposals to boost access, resilience, interoperability and user functionality have received strong support from old and new market participants alike. So it seems likely that, in the next few years, the UK will have a new payments infrastructure for retail and wholesale payments alike. To have got this far so fast is a real achievement. But in truth the real work for the PSF has only just begun. The challenge now is to translate the high level aspirations in this document into something much more concrete. That means delivering a retail payments design that is technically feasible, secure, and aligned with the Bank of England’s settlement models. It also means identifying who will build, and pay for, the new system: no small challenge at a time when the industry faces many competing demands on its resources. Though the Bank of England has not been a formal member of the PSF, we have been an active observer of proceedings throughout the past year. And we will remain closely involved with the next stage of the Forum’s work too.
5  See the Annex for brief explanations. BIS Review 44/2007  3  hold tranches of other CDOs, which hold LBO debt of all types as well as asset-backed securities bundling together household loans. (The diagram may, or may not, help!) What is going on here? One possible explanation is that capital might be being allocated to wherever its cost is cheapest for a particular desired risk profile. That optimisation involves comparing the capital charges applied by regulators to regulated institutions; and by rating agencies to various types of vehicle (SIVs, CPDCs, CDOs, monolines etc). The “smart money” seems to be assembling its own portfolio of vehicles, so that it can choose from a menu of where to book transactions. One of the drivers is commonly referred to by practitioners as “ratings arbitrage”. Another was of course Basel I, which triggered the securitisation of high-quality credits, and for quite a few years fuelled a ballooning of vehicles whose existence depended on commercial banks providing zero-capital-weighted “liquidity” lines. Basel II will change all of that. Indeed, if central banks are to understand how the global financial system fits together, we will need to fathom the reconfiguration that Basel II prompts, including the potential for risk transfers between banks adopting different steps on the ladder of Standard, Foundation, Advanced approaches that it makes available.

A distinction is typically drawn – including in the Bank’s Financial Stability Reports 2 – between a “fast fuse” risk, in which credit is abruptly repriced; and a “slow fuse” risk, in which cheap credit leads over time to overleveraged borrowers and so to vulnerability to a deterioration in the global economy. As time passes, attention has perhaps been shifting to the longer-fuse risk, given signs of a pick up in aggregate corporate sector leverage and gradual dilution of covenants in loan terms and conditions, most obviously recently in so-called “covenant-lite” transactions in the leveraged loan market. 3 But, in contrast to global imbalances, no one can say with complete conviction that a lower risk premia environment is definitely unsustainable, which may contribute to explaining why few market participants seem prepared to bet on the time or scale of any correction. In terms of the second dimension – the probability that any adjustment would be disorderly –market practitioners at least seem to regard “low risk premia” more seriously than “global imbalances”. Resolution of the problem of global imbalances could come in various ways, not all of which need involve an abrupt correction in asset prices or further movements in nominal exchange rates. For example, the US might obtain greater competitiveness through a depreciation in the dollar’s real value if inflation in China and elsewhere were to be relatively high for a period.
Sweden – a small, open economy The situation in Sweden in recent years reflects our great dependence on the outside world; exports make up approximately 50 per cent of our GDP.2 The global financial crisis of 2008–2009 thus had a dramatic impact on us and contributed to the largest fall in GDP in Sweden since World War II. When global economic activity recovered in 2010, growth was instead the highest for 40 years (see slide 2). But this is history now. Over the last 12 months in particular, the European debt crisis has had a considerable impact on economic development. And Sweden is a part of Europe – not just geographically but economically too. A majority of our goods exports go to Europe and over 35 per cent to the euro area (see slide 3). The weak development of the Swedish economy during the fourth quarter of last year also reflects a dramatic fall in exports. Let me therefore comment on the situation in Europe, as it has such a significant impact on the Swedish economy and, by extension, monetary policy. The debt crisis in Europe – a lot of work remains to be done but things are moving in the right direction One of the most important pieces of the puzzle with regard to economic development in the period ahead is how the debt problems in Europe are managed (see slide 4).

One of the issues that I pursued in my role as Managing Director of the Swedish Bankers’ Association was that Swedish banks should be competitive in a European context. So, how has my background shaped my view of my new job as a member of the Executive Board of the Riksbank? A marked change since I last worked at the Riksbank is Sweden’s increased dependence on developments abroad. One could also say that what I primarily “bring with me” from the different perspectives of my earlier working life – the supervisory  1  I was, for example, a member of the Basel Committee from 2003 to 2009 and chaired the Committee of European Banking Supervisors (CEBS) – which was the forerunner of the European Banking Authority (EBA) – in 2008–2009. BIS central bankers’ speeches  1  perspective, the international perspective and the banking-sector perspective – is this realisation of the increase in Sweden’s international dependence. Monetary policy – my view Sweden is what we usually call a small, open economy. This means that our economy cannot be seen in isolation as we are highly dependent on the world around us – a factor that it is important to take into account, not least in monetary policy.
In fact, its capital, Prague, lies more than 90 miles west of Vienna. In the words of a famous Londoner – the actor Michael Caine – “Not a lot of people know that”. What is more, the Czech economy is further west than you might think not just geographically, but also economically. This brings me to shocking fact number two. Despite tepid real growth averaging 3%, the Czech economy has grown by 10% on average in recent years thanks to appreciation of its exchange rate. Therefore, the Czech economy has multiplied in size more than 4.5 times since 1993 in nominal terms in euros. Consequently, it could have bought on average more than 7% p.a. of the core European countries’ real GDP over the last 18 years. And now for shocking fact number three. Despite, or maybe thanks to, our first-hand experience with financial crisis (bad loans exceeded 40% of GDP in the late 1990s), no bailout has been needed and no taxpayers’ money has been used to save any Czech financial firm in the latest turmoil. Finally, and a good deal less shockingly I’m pleased to say, the Czech National Bank has been not only the central bank, but also the integrated supervisor of the Czech financial industry since 2006. This set-up gives us many advantages in terms of dealing with the financial crisis and maintaining financial stability at national level, and it hopefully also enhances our understanding of the current events in the eurozone.

Various adjustments to this set-up might reduce some partial imbalances, but if the cause of the problem is not tackled head on, the effects of such adjustments will be short-lived and it will only be a matter of time before the whole system comes crashing down. Now let’s move forward in time some 20 years, to the split of the Czechoslovak currency following the dissolution of Czechoslovakia in 1993. For many years, fiscal transfers had masked the significantly inferior performance of Slovak economy relative to its Czech neighbour to the west. This performance gap was further widened by the closing-off of the Slovak armament industry from the federal centre at the beginning of the 1990s. After the country split in two, the stated goal of keeping a common currency came under market pressures as Czech and Slovak entities transferred their deposits to Czech banks and capital flowed out of both countries. As a result, this goal was abandoned in less than two months and an independent Czech crown – or koruna – was introduced. I should add that the CNB had its plan B and had been running preparations for the currency split since the second half of 1992. Consequently, after it had decided to act, it was able to act fast. So, what lessons can we learn from this event? The lack of political will to preserve the federal Czechoslovak state had quickly recognisable consequences for the common currency.
Eighty years of the Central Bank of Chile and how inflation was conquered in Chile The Central Bank of Chile was created in 1925 as an entity apart from the Executive Power. That year, also two laws related with the Bank’s startup were enacted: the Monetary Law and the General Banking Act. The former established a gold standard, while the latter created the Superintendency of Banks to supervise commercial banks. The Central Bank was granted the monopoly for printing bills, which under said Monetary Law would be gold convertible. But the foreign exchange regime and the Bank’s institutionality as set forth in 1925 weren’t strong enough to cope with the Great Depression with some success (it had enormous impact on the Chilean economy) and the growing demands for fiscal funding. These forced the abandonment of the gold standard, the imposition of foreign exchange controls, the creation of multiple exchange rates and the beginning of trade. Since the Great Depression – except for very short spans of relative macroeconomic stability –, the country suffered decades of high, volatile inflation. The ultimate cause of this was the systematic expansion of credit on the part of the Central Bank, both to state-owned organizations and to the private sector. Inflation followed inevitably and caused the failure of stabilization attempts in the years 1950 and 1960. The deterioration of the fiscal and monetary situation culminated in the early 1970s in a short hyperinflation.

Simultaneously, in 1999-2000, the Central Bank formalized the conduct of its monetary policy into monthly meetings, it increased its capacity for analysis and projections and enhanced the transparency of its policies through the publication of a four-monthly monetary policy report (with forecasts for inflation and growth) and the dissemination of communications and minutes of its monthly monetary policy meetings. It also adopted a target range for annual inflation, of 2% to 4%, centered in 3%, that would be in force indefinitely since 2001. The formalization of this inflation targeting scheme has continued in recent years, along with advances in the transparency of monetary policy. During the period 2001-2004, average annual inflation was 2.2%, and for the twelve months to September 2005 it rose to 3.9%, largely influenced by the recent oil price shock. In fact, core inflation rates are still below 3% per year. Today Chile has an IT regime in place that is proven and credible, and that includes a floating exchange rate within an increasingly deep market to provide coverage against foreign exchange risks. Also, its fiscal accounts are in order, the financial system is robust and fully integrated into the world’s capital markets. As a result, our country is more prepared than ever before to deal with external or internal shocks, and has the capacity to use a countercyclical monetary policy, which it has reinforced since the beginning of this decade. Hot topics for monetary policy under inflation targeting – in Chile and elsewhere A central bank’s tasks never end.
The combination of low short-term rates and asset purchase programs has driven yields on long-term sovereign debt to historically low levels (Figure 2). In large parts of Europe and Japan, short- and long-term yields remain near zero, a full decade after the onset of the financial crisis. Economic developments since this unprecedented monetary stimulus provide valuable insights into the efficacy and limitations of monetary policy. On the positive side of the ledger, advanced economies have seen steady growth and significant declines in unemployment, with rates today near, or in many cases well below, those seen before the crisis (Figure 3). Bold monetary policy actions surely played an important role in averting far greater catastrophes and aided economic recovery. However, this success was achieved only after a disappointingly slow recovery and many years of economic hardship. And, despite the improvement in the real side of economies, inflation rates have persistently been below central banks’ goals (Figure 4). The fact that inflation has been running below target in most advanced countries—the United Kingdom being the most prominent outlier—suggests that this challenge is not due to factors specific to a single country. Instead, there are more systemic factors at play. Investors view these low inflation readings not as an aberration, but rather a new normal. This is evidenced by a broad-based decline in market-based measures of longer-run inflation expectations since the mid-2000s, with the UK again providing the exception (Figure 5).

The Bank of Canada already regularly does this, and the Federal Reserve is currently undergoing a review of its framework and strategy.8 Absent such changes, central banks will be severely challenged to achieve stable economies and well-anchored inflation expectations. Outside of monetary policy, there are a number of avenues by which fiscal authorities can enhance the resilience of economies to negative shocks. One is to strengthen the “automatic stabilizers” that provide a boost to the economy during a downturn. A second is to align debt management decisions more with monetary policy. For example, during a downturn, the fiscal authority could choose to shorten the duration of debt issuance to reinforce the effects of central bank quantitative easing. Third, regulatory and supervisory policies that support the resilience of the financial system can limit the economic effects of negative shocks. Finally, fiscal and other economic policies can attack directly the sources of slow growth and low r-star. This includes raising public and private investment in human and physical capital, infrastructure, science and technology, and policies aimed at removing barriers to participation in the labor force and the economy more broadly. Conclusion The facts have changed, and so it is time our change our minds also. It is often said that change is hard. But, experience teaches us that it is better to prepare for the future than wait too long. Ultimately, failure to prepare often means preparation for failure. 1 This is not true for all population groups.