samchain/econo-pairs-v1 huggingface dataset:
There is no parallel with this practice in any other jurisdiction. BIS Review 87/1998  -6-  24. But the process of modernization of our currency board arrangements is likely to be a continuous one, in the light of possible rapid and significant changes in the international financial architecture. The Financial Secretary as controller of the Exchange Fund, and myself as Monetary Authority under his delegated authority, are responsible for making decisions in this area, in consultation with the statutory Exchange Fund Advisory Committee (EFAC). Recently, with the agreement of the Financial Secretary, a subcommittee of the EFAC on currency board operations chaired by me has also been set up to advise, among other things, on currency board arrangements. 25. Whilst it can be argued that transparency in this area of work would help to enhance the credibility of the system and the HKMA, it must, however, be noted that proposals in this area are likely to be market sensitive. It will not be easy to strike a balance. But we should obviously try. I shall shortly be making a proposal to the Financial Secretary initially for the minutes of meetings of the subcommittee, other than those concerning market sensitive issues, to be published, with an appropriate time lag. Consideration will also be given to the subcommittee conducting public hearings to receive opinions and suggestions on monetary management from members of the public.

Rodrigo Vergara: Chile in the international scenario Keynote address by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, at the 2014 IIF (Institute of International Finance) Latin America Economic Forum, Bahia, Brazil, 29 March 2014. *  *  *  I thank Luis Oscar Herrera, Enrique Orellana, Consuelo Edwards, Ivonne Vera and Luis Alvarez for helpful comments. Thank you for inviting me to this year’s Latin America Economic Forum of the IIF, where I will share with you the Central Bank of Chile’s views on where my country stands in the current global scene. I will also talk about the Chilean macroeconomic policy framework and how does it cope with the changing global economy. International scenario The external economic environment in which Latin America operates is changing, and it is necessary for the economies of the region to adjust to these changes. First there is the rebalancing process the world economy is undergoing. The developed economies are beginning to show more evident signs of recovery. Consensus forecasts are that global growth will be stronger this year than it was in 2013, but virtually all the extra boost will come from said recovery in developed economies. Growth projections for emerging markets in 2014, on the contrary, have been revised down time and again throughout the past year. These revisions have been particularly sharp in Latin America, and the region probably will grow less this year compared with 2013.
In terms of quarterly performance, a significant rebound is expected over the summer in line with the removal of the most severe lockdown measures. However, the scenarios differ in terms of the duration and severity of virus-related restrictions on economic activity and the behaviour of households and firms in the rest of 2020 and throughout 2021. In all scenarios, a deep recession is envisaged: in the severe scenario, real GDP would fall by 12 percent in 2020. Chart 1 Euro area real GDP under the mild, medium and severe scenarios  https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200519~e5203d3520.en.html  1/14  5/19/2020  Pandemic central banking: the monetary stance, market stabilisation and liquidity  (index, 2019 Q4 = 100)  Source: ECB calculations. Note: For details on the scenarios, see Battistini, N. and Stoevsky, G (2020), “Alternative scenarios for the impact of the COVID-19 pandemic on economic activity in the euro area”, Economic Bulletin, Issue 3, European Central Bank. Chart 2 shows the household savings rate, as projected in the European Commission Spring Forecast that was published a couple of weeks ago. The household savings rate is forecast to jump by a remarkable 6 percentage points to around 19 percent for 2020, and is expected to remain elevated even in 2021. Although “forced saving” during the lockdown is surely contributing to the increase in household saving, it is plausible that the precautionary motive will remain significant so long as virus-related uncertainty persists. Elevated uncertainty may also hamper investment prospects for an extended period of time.

As a result, companies that can bypass the banks to access capital markets directly are doing so. Indeed, in the first four months of this year, more finance was raised in debt and equity markets than is normally the case in an entire year. Most companies, however, especially smaller and medium-sized enterprises, rely heavily on bank finance. And with current market sentiment it may take further additions to equity capital before the banking system will be able to supply credit at a price and on a scale to finance a sustained recovery. That is likely to take time. It is too soon to reverse the extraordinary policy stimulus that has been injected into the UK economy through monetary policy, the provision of liquidity support to banks, guarantees of bank funding, and fiscal policy. Nevertheless, it is not too early to prepare such “exit strategies” and to explain how they would work. The challenge facing the Monetary Policy Committee is straightforward in principle but difficult in practice. As activity returns to more normal levels, the outlook for inflation will pick up. And it is the outlook for inflation that will guide decisions on the pace and timing of a withdrawal of monetary stimulus. Reaching judgements on the outlook for inflation is never easy, and assessing their implications for policy will always be a matter of balancing risks. In contrast, the choice of instruments is simple.
But let me sketch three broad areas that seem important to us. First, successful transition away from LIBOR in its current form will unbundle the risk-free and bank sector credit risk elements of the interest rate curve. Including compensation for banking credit risk may have made eminent sense for those syndicated loans made in the 60s and 70s, without greatly affecting variation in the level of LIBOR (as shown in Figure 1). But many LIBOR-linked instruments no longer directly involve banks, yet remain exposed to variations in the perception of bank risk seen in the past decade. That does not reflect an efficient allocation of risk in the economy, and poses material economic and distributional risks at times of stress, as we saw during the financial crisis.

Our regulations, which restrain the banking business operational, liquidity or market risks, are in full compliance with the international standards, providing at the same time enough room for the development of the interbank market. We have also taken major steps in terms of the institutional development of this market, through the establishment and maintenance of TRIBOR and TRIBID reference rates, through constant communication with the dealers’ association and promotion of new interbank market instruments. I would like to inform you today of the last Bank of Albania’s step in this regard, and also ask for your greater attention in terms of taking prompt actions that will boost the activity and role of the interbank market. Change of the Bank of Albania’s operational target framework The Bank of Albania is in the final phase of reviewing its operational targets. The latter will soon change their form, shifting from the quantitative targeting of the Bank of Albania’s balance sheet to the targeting of interbank market interest rates. The operational targets of monetary policy play a key role in the formulation and conduct of monetary policy. In a theoretical background, these targets serve as a link between the monetary authority’s interventions in the interbank market and the intermediate target of monetary policy. Thus, the operational targets serve as the starting point of the monetary policy transmission mechanism. In practice, these targets serve to steer and discipline the monetary authority’s interventions in the money market quantitatively.
As a matter of fact, since 1982 the total real return on shares (the inflation-adjusted price level including reinvested dividends) has risen in Sweden at an average annual rate of around 16%. That is around two and a half times more than the trend rate since 1918. After 1982 the total real return in the United States has also been appreciably above the trend rate since 1871 (Fig. 1).1  Total annual real return on shares USA 1871-1999, index: S&P 500 1870 = 100 Sweden 1918-1999, index: normalised to 1928 level of S&P 500 1000000 USA 100000  Sweden Trend 6%  10000 1982-1999 Sweden 16% USA 15%  1000  100 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Sources: Global Financial Data, Frennberg & Hansson, Affärsvärlden and Statistics Sweden  1  Note that the chosen initial year has consequences for the trend rate of return; the path shown in the figure should therefore be seen as an approximation. 1  BIS Review 137/1999  The price-earnings ratio for the Stockholm Exchange is currently around 30 according to Affärsvärlden. This means that the price of an average share portfolio is equivalent to around thirty times the annual earnings. The ratio in the United States is even higher, around 35 (Fig. 2).

Today, however, the situation in Sweden does not resemble what happened in the second half of the 1980s. Asset prices have certainly risen strongly in recent years but credit has not grown to the same extent. It seems that, at least to date in the present upswing, Swedish banks and their customers have taken a different line on the provision of credit and borrowing. Everyone is hopefully more accustomed to a deregulated credit market than was the case in the late 1980s. Still, it is important to be alert to the future path of asset prices and credit aggregates, as well as to the underlying forces at work in the Swedish economy. Real assets prices and total lending 270  1,6  240 1,4 210 180  1,2  150 1,0 120 0,8  90 1970  1975  1980  1985  1990  1995  Ass et p rice in d ex: 1980= 10 0 (left scale) L en d in g in p e r c en t o f G D P (rig h t s cale) S ource : R iksbanke n  capital in an economy is dependent on the level of output and how this income is shared between labour and the owners of capital.
Giannone, D., M. Lenza and L. Reichlin (2007), “The Equilibrium Level of the World Real Interest Rate”, paper presented at the First Annual Risk Management Institute Research  12  BIS Review 9/2008  Conference “Capital Flows and Asset Price: The International Dimension of Risk”, Singapore 6-7 July. Hartmann, P., F. Heider, E. Papaioannou and M. Lo Duca (2007), “The role of financial markets and innovation in productivity and growth in Europe”, ECB Occasional Paper No. 72, September Ihrig, J., S.B. Kamin, D. Lindner and J. Marques (2007), “Some Simple Tests of the Globalization and Inflation Hypothesis”, International Finance Discussion Papers, Board of Governors of the Federal Reserve System, No. 891. Kose, M.A., E. S. Prasad, K. Rogoff and S.-J. Wei (2006), “Financial Globalisation: A Reappraisal”, NBER Working Paper 12484 Kose, M. A., E. S. Prasad and M. E. Terrones (2005), “Growth and Volatility in an Era of Globalisations”, IMF Staff Papers, vol. 52, pp. 31-63 Kose, M. A., E. S. Prasad, and M. E. Terrones (2006), “How Do Trade and Financial Integration Affect The Relationship Between Growth and Volatility?”, Journal of International Economics, vol. 69, pp. 176-202. Kroszner, R. S. (2007), “Globalization and Capital Markets: Implications for Inflation and the Yield Curve”, Remarks at the Center for Financial Stability (CEF), Buenos Aires, Argentina,16 May.

And we will insist that banks' risk  2/3  BIS - Central bankers' speeches  management practices are fully aligned with all our expectations by the end of 2024 at the latest. It is clear that central banks and supervisors are not primarily responsible for addressing the ongoing climate and environmental crises. They are climate and environment policy-takers, whereas governments and legislators – including the European Parliament – are climate and environment policymakers. The European Union and its co-legislators are clearly committed to the Paris Agreement. The EU is taking concrete steps to implement legislation that puts this commitment into practice. Central banks and supervisors cannot ignore this in the pursuit of their mandate. Similarly, on the path to meeting the Paris Agreement goals, we cannot ignore scenarios which include a greater manifestation of physical risks from climate change and environmental degradation. And we will not ignore all this. To the contrary. We acknowledge that we cannot deliver on our mandate if we assume a status quo in which the world will not transition as the baseline scenario for the future. And by rejecting that status quo as the baseline, we are becoming a force that contributes to the transition. And we will continue to be just that: a force that contributes to the transition. Within our mandate. And in the pursuit of our mandate. Thank you very much for your attention. 3/3  BIS - Central bankers' speeches
Boris Vujčić: Adapting to climate change has no alternative Speech by Mr Boris Vujčić, Governor of the Croatian National Bank, at the online event "The role of banks in greening our economies", 29 April 2021. * * * Ladies and gentlemen, dear colleagues, Let me first welcome all of you who have gathered in front of your screens and decided to devote a couple of hours to join today’s conference. It is yet another event that the Croatian National Bank organizes jointly with EBRD, with whom we have a long lasting and productive relationship. Both our institutions have recognized our responsibility to put the issue of banks’ role in climate transition into the spotlight, and open a discussion on how banks, other financial institutions, and central banks and regulators can properly address the climate emergency that is already transforming our living and working patterns. Until recently, it was uncommon for central bankers and bankers in general to talk about environmental issues. So, how did we get to this point, and why should we study the dynamics of climate change and environmental degradation and incorporate it into our business decisions? For more than fifty years people have known that the technological advancement and development that we enjoy comes at a price – the destruction of the environment and a perilous rise in global temperatures. As worrisome scientific discoveries heated up the activism and triggered a grass-roots ecological movement, global institutions and politicians soon embraced the environmental concerns as well.

Already in 1972, representatives from 113 out of the UN’s 132 member states convened in Stockholm for the first international conference on human environment. Their decisions, enshrined in a declaration, action plan and five resolutions seemed to be a clear demonstration of their firm decision to fight environmental degradation. From then on, numerous meetings, conferences, agreements, protocols and declarations ensued, the Climate Change Convention was forged, the Kyoto Protocol was adopted, but the outcomes fell short of targets adopted in these documents. It wasn’t until 2015 when heads of states and representatives of 197 countries, being aware of the real possibility that the world was approaching a climate tipping point, adopted the Paris Agreement and committed to make sincere and ambitious efforts to drastically cut their greenhouse emissions to prevent further global warming. The agreement, later ratified by 189 countries, did not only result in those countries’ pledges on GHG emissions, but also in their understanding that engaging in climate change mitigation and adaptation should include a grand coalition of public and private entities devoted to achieving the same goal. Central banks around the world were fully prepared to join this coalition. Mark Carney, then Governor of the Bank of England, was one of the first central bank governors who on the eve of the Paris summit sent a warning message to his peers in his seminal speech about the tragedy of the horizon, a tragedy caused by “climate change, which might threaten financial resilience and longer-term prosperity".
At the margin, it might have led to a little more caution among financial institutions, but unless policymakers had been prepared to shock the economy into a period of slow growth it seems unlikely that the financial crisis would have been wholly averted. However, modestly higher Bank Rate might have had the merit of discouraging households and firms from increasing their own debt levels, and therefore left the economy somewhat more resilient in the face of the crisis. Thirdly, action only in the UK might have had limited effect on what has proved to be an internationally widespread crisis whose roots lie to a significant extent in the excess of savings in Asian countries and consequent excess of capital inflows into the US and Europe. The conventional answer to the question about the pre-crisis period therefore has become that policymakers did not have the right tools available. In the UK there was no provision for macroprudential instruments to be used to deal directly with the problems building up within financial institutions, and to a lesser extent in the indebtedness of households and firms. A more targeted approach to these issues seems highly preferable to using the blunt instrument of Bank Rate. But despite these cautions, it is possible that it would have been preferable to have taken a more long-term view of the risks to inflation from economic instability.

Joseph Yam, JP: Hong Kong Foreign Exchange and Money Market Practices Committee Opening remarks by Mr Joseph Yam, JP, Chief Executive of the Hong Kong Monetary Authority, at the inaugural seminar of the reconstructed Hong Kong Foreign Exchange and Money Market Practices Committee, held in Hong Kong on 16 January 2001. *  *  *  Good afternoon Mr Powell, Mr Mathieson, Guests, Ladies and Gentlemen, 1. I am delighted to welcome all of you to today’s seminar. This is the inaugural seminar of the reconstructed Hong Kong Foreign Exchange and Money Market Practices Committee (MPC). The organisation of seminars by the MPC will, I hope, provide bankers, treasurers and other market practitioners with an opportunity to focus on issues of common interest. It will help specifically to fulfil at least two of the objectives of the MPC: to promote understanding and expertise relevant to the markets; and to encourage communication among market participants and professional bodies, both local and overseas. 2. The MPC was first established in 1992, as a non-statutory body, with the mandate to give advice on matters relating to the health and development of Hong Kong’s foreign exchange and money markets. Last year was a year of restructuring and recovery for Hong Kong, and the MPC seems to have been following very much the same path. After a review of its functions, the Committee decided to restructure itself, with a view to playing a fuller role in developing and promoting the forex and money markets in Hong Kong.
The openness of capital accounts means that the world today is very different from that of the Bretton Woods era. Capital flows - both public and private – are very large. And, for many countries, private capital flows now dwarf official flows. Because domestic demand is no longer constrained by current national output, a current account deficit does not necessarily indicate any "fundamental disequilibrium" nor require any official help to finance. For example, New Zealand received the largest annual disbursement of any industrialised country as a share of GDP during the Bretton Woods era: 1.9% in 1967. That was associated with a current account deficit of 3.7% of GDP. Since 1990, New Zealand's current account deficit has averaged more than that, but it has had no need of an IMF  2  BIS Review 11/2006  programme to finance these deficits. Indeed, the need for official financing for industrialised countries has become redundant. 3 Many of the "imbalances" that reflect private decisions to save and invest are desirable because they improve the efficiency with which capital is allocated throughout the world. Since it is difficult to measure “equilibrium” flows of capital from one country to another, it is equally difficult to define meaningfully “fundamental equilibrium” exchange rates. As Alan Greenspan has pointed out, current account deficits and surpluses are now the norm rather than the exception.

In response to the crisis, a network of swap agreements between advanced economy central banks was established giving us the ability to provide a range of currencies to UK-based institutions. This network of swap lines should not necessarily be limited to the G7 economies. In June, the Bank of England signed such an agreement with the People’s Bank of China, reflecting the growing international role of the Renminbi. That dovetails with the possibility of establishing a Renminbi clearing bank in London and our decision to include branches of Chinese banks in our broader policy of openness to hosting foreign wholesale banking activities. Helping the internationalisation of the Renminbi is a global good, consistent with London’s historic role. But rest assured that the Bank will act in a manner consistent with our domestic responsibilities. As my colleague Andrew Bailey said last week, our risk appetite for foreign branches will largely be determined by whether their activities in the UK are covered by credible recovery and resolution plans.15 As always, renewing globalisation and building resilience go hand in hand. 5. Conclusion  After perhaps the worst financial crisis in the FT’s long lifetime, it is reasonable to expect financial services will again grow in importance. The process of financial deepening in emerging markets is only beginning. In Europe, there is a strong case for greater reliance on robust financial markets relative to weakened banks. The UK stands to benefit because of London’s place at the heart of the global financial system.