samchain/econo-pairs-v1 huggingface dataset:
The scenarios bring together the financial and economic impacts of different temperature and climate policy pathways – a critical input for firms and policymakers to understand the future impact of the decisions they are making today. Scenario analysis makes questions like how resilient is this business, this financial system, or this set of policies, to each climate scenario possible to address. Accordingly, the Bank continues to be a strong advocate of the NGFS’ work and in 2019 announced our intention to assess the resilience of individual banks, insurers, and the wider UK financial system to different 1 2  See ‘Tackling climate for real: the role of central banks’ speech by Andrew Bailey, June 2021 NGFS climate scenarios 2  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  2  climate scenarios through a Climate Biennial Exploratory Scenario exercise (CBES). I am pleased to say that exercise, which draws on the NGFS scenarios, will launch next week on 8 June. The CBES will involve the UK’s largest banks and insurers and explore three different climate scenarios, testing different combinations of physical and transition risks over a 30-year period. It is an important tool to size the financial exposures, to understand how different bank and insurance business models will be affected and how they might respond, and finally as a way of improving firms’ risk management practices through the process of carrying out the exercise.

In addition, this year COP26 has an ambitious agenda that spans all of the areas that I have spoken about today – in particular establishing a better understanding of best practice, and fostering greater technical cooperation. The Glasgow Financial Alliance for Net Zero (GFANZ)12 initiative will do this by bringing together over 160 firms (responsible for assets in excess of $ trillion) for the first time. Such technical collaboration and cooperation is no less important among central banks and supervisors. The NGFS with the scope of its membership is key to that exchange of knowledge. The Bank has widely shared what we have learnt and we will continue to do so.13 The creation of the Central Banks’ and Supervisors’ Climate Training Alliance (CTA) will also further support technical cooperation and assistance on climate risks. Let me conclude. In spite of the Covid-19 pandemic, central banks have continued to make progress in responding to climate change, but we know there is still work to be done. The next stage of our journey will require us to deepen our analysis, evolve our approaches and further our collaboration. The coming year will be critical for all of us on this journey – in allowing us to better convert climate change risks into something that we can tackle for real. 12 13  See New Financial Alliance for Net Zero Emissions Launches, UNFCCC, April 2021 See Centre for Central Banking Studies, Bank of England 7  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  7
Mark Carney: The European Union, monetary and financial stability, and the Bank of England Text of the Cairncross Lecture by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, St Peter’s College, Oxford, 21 October 2015. *  *  *  I would like to thank Ben Nelson and Iain de Weymarn for their assistance in preparing these remarks, and Aaron Clements-Partridge, Rashmi Harimohan, David Ronicle, Thomas Smith, James Talbot, Ryland Thomas, Nicola Anderson, Phil Evans, Richard Blows, George Murphy, Mike Flood, Peter Nagle, Nicola Shadbolt, Sinead Meany, Jumana Saleheen, Dennis Reinhardt, Bob Hills and Siobhan Clark for their work preparing EU Membership and the Bank of England. 1. Introduction  It is a great honour to give this Cairncross Lecture in Wren’s exquisite Sheldonian Theatre. Sir Alec Cairncross was a celebrated economist whose career bestrode public service and academia. Born to a Lanarkshire ironmonger in 1911, he rose, via Glasgow University and Cambridge, to serve as the first head of the Government Economic Service and later, much more illustriously of course, as Master of St Peter’s College. His work serves as a reminder of how enduring are the most trying economic questions we face. His PhD thesis, eventually published after great anticipation in 1953, concerned British investment at home and abroad during the last great wave of globalisation – a Golden Era for global commerce that stretched from Canadian Confederation to the eve of the Great War.

4.2  Financial stability  The impact of EU membership on financial stability is more challenging. Given the close integration of the UK financial sector with the rest of the EU, it is imperative that the EU has a robust regulatory framework. This is in the process of being achieved. Through its membership of the EU, the UK is promoting a strong global regulatory framework, and UK authorities have worked in close concert with our European partners to find solutions to the fault-lines of the past. Examples include moves to end Too Big To Fail by enhancing bank recovery and resolution, a solution developed locally at the Bank of England, implemented regionally in the European Union, and now agreed globally through the Financial Stability Board. Given the scale of the UK’s financial sector relative to its economy, the Bank of England also has a special responsibility to the UK, to Europe and the world. The UK must ensure that the  11  See Broadbent, B (2011), “Rebalancing and the real exchange rate”, Speech at Thompson Reuters, London. BIS central bankers’ speeches  7  system is robust to shocks and that financial institutions can be resolved in an orderly manner. After all, financial stability is a national responsibility, with the UK taxpayer serving as the ultimate backstop of the UK financial system. The comprehensive reform of the UK’s institutional framework for financial stability since the crisis creates a coherent architecture of national macroprudential and microprudential regulators and supervisors.
Here work is being done to achieve convergence – hitherto non-existent – between the accounting standards of the main economic areas. Also of great interest is the analysis of proposals for the proper valuation and classification of financial instruments, and for the development of a countercyclical provisioning system, similar to that in place in Spain. There is universal agreement that these improvements in regulation can hardly be successful unless they are implemented in a widespread and consistent manner. Hence the FSB is acting on several fronts to ensure the implementation of international standards, demanding greater commitment (and transparency) of the main economies in terms of compliance. In this respect, peer review exercises have begun and a major effort is being made to identify those areas in which the regulatory framework does not sufficiently recognise risks, placing particular emphasis on those institutions, instruments and markets which are not currently regulated or supervised. In addition to all these efforts in the field of regulation, work is ongoing to set in place more effective and uniform microprudential supervision of financial institutions. The financial crisis has revealed major supervisory failings in certain jurisdictions. In these cases supervision did not adapt sufficiently to the increasingly global nature of financial activities and it was not as intensive as would have been necessary. As a result, certain banks ultimately built up excessive risks, prompting public interventions with a high cost for taxpayers.

The network of trade unions and branches would provide the life insurance co-op with a clear advantage over private enterprise. 4. To ensure that the co-op would succeed, the realist in Dr Goh laid down a few principles for its operation. First, the co-op must be fully competitive with private enterprises and cannot expect privileged treatment from the Government. Second, the co-op must have effective management. Third, all levels of staff should be recruited based on merit and not affiliations with the labour movement or government. It was the steadfast adherence to these sound principles that has kept INCOME successful over the past 40 years. The growth of Singapore’s insurance industry 5. At INCOME’s 30th anniversary celebration, I had sketched out the changes in the global financial landscape, and how MAS had to liberalise the domestic insurance industry. Reputable foreign insurers were allowed to set up in Singapore or enter into strategic alliances with existing local insurers. The hope was for the entry of new players to engender competition, which would in turn promote greater innovation and raise the efficiency of the incumbent insurers. MAS also worked on deepening the local talent pool and fine-tuned the already prudent regulatory framework. 6. Ten years on, these efforts have yielded significant results. The Singapore insurance industry, which saw a number of acquisitions, consolidations and new entrants, experienced strong growth, with total assets tripling to $ over the past decade. The industry has also matured in terms of the breadth and depth of products and services offered.
Antonio Afonso, Ludger Schuknecht and Vito Tanzi, Public Sector Efficiency: Evidence for New EU Member Sates and Emerging Markets. ECB Working Paper No 581 (2006). 2  BIS Review 113/2006  result, the 6% of GDP allocated to capital spending had to be funded almost entirely by additional borrowing, which gives rise to further debt-servicing costs. Repeated year after year, this pattern pushed the debt/GDP ratio steadily upwards to a peak of 75% in 2004. This tendency for recurrent revenue to be matched by recurrent expenditure in the context of fiscal retrenchment has had a crowding-out effect on investment, and partly explains why the country’s investment/GDP ratio has been static at best in recent years. A more telling indicator of the relatively small investment in productivity-enhancing activities is the share of GDP devoted to R&D, 0.6% in 2004, compared with an average EU ratio of about 2%. It is doubtful whether the existing pattern of resource allocation is conducive to the desired improvement in Malta’s international competitiveness. The latter can only be achieved by increasing the size, flexibility and skill level of the labour force, while simultaneously creating an institutional and physical infrastructure more likely to attract high value-added foreign direct investment. And since the State must play a leading role in this effort, the question of financing arises spontaneously. Now in the context of a fiscal consolidation process that has not yet run its full course, increasing recurrent spending beyond the natural creep caused by existing commitments such as pensions is clearly not an option.

But history is full of stories of reformers who made progress, declared victory, and paused, only to find their accomplishments threatened or reversed. For the post-crisis reforms to be durable, we cannot rest on our laurels – we have to keep learning and adapting. CCPs should keep themselves central by again being part of the solution. Over the past two years, two episodes of extreme market stress caused by external factors have tested the system: first, a once-in-100 year pandemic and second, the unprovoked invasion of Ukraine by Russia. We should use the lessons from those episodes to make central clearing stronger. Global Pandemic – Spring 2020 In early 2020, the COVID-19 pandemic sparked a ‘flight to safety’ by investors, with considerable volatility across asset classes, including government bonds. We saw the biggest two-day price  Page 3  moves for some cleared products in the past decade. [1] Thankfully, the financial system entered the pandemic in a much stronger position than in 2008, with at least $ in additional collateral against over the counter (OTC) derivative exposures; [2] and a significant increase of central clearing in OTC markets. [3] CCPs in this period functioned as intended. Very significant and sudden changes in asset prices did not lead to counterparty credit risk – actual or anticipated. There were no major clearing member defaults during the pandemic, so clearing was not tested to the limit. But there was no panic about counterparty credit risk, no ructions in the interest rate swap markets.
Our accounting and prudential regimes have increased procyclicality in recent years. This is detrimental to a stable flow of credit to the economy. In a mark-to-market environment, asset price increases quickly translate into a larger capital base of financial institutions, which, in turn, trigger additional demand for assets and a further increase in their prices. A spiral is launched. Actually this is a kind of “inverted demand curve” where demand increases with prices and vice-versa, possibly creating the conditions for deep and lasting financial instability. Addressing procyclicality caused by the regulation itself is therefore a priority. The first line of defense against procyclicality should be the accounting framework. I strongly support the current focus on changing the accounting rules. Reducing the scope of the markto-market approach and moving from an incurred loss model to a forward-looking model is essential. The ultimate objective of ongoing negotiations is to create synergies between prudential and accounting standards. Some of the procyclicality can also be trimmed through prudential regulation. Efforts to make solvency ratios potentially less procyclical are welcome and should be pursued. In particular, those efforts aimed at imposing a measure of risks “through the cycle” are useful. Other options to reduce some of the procyclicality through prudential standards include a fixed buffer or a countercyclical capital buffer. I see clear limitations to the former and challenges for the latter. In any case, such mechanisms may not necessarily be cumulative and we may have to choose. How can we address systemic risk?

Christian Noyer: Banking regulation and the financing of the economy Introductory speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, to the Paris-Europlace Forum, New York, 26 April 2010. *  *  *  It is a great pleasure for me to be here in New York and address the audience of this ParisEuroplace Forum. As always, the forum is an opportunity for sharing experiences and perspectives. As we make progress in our efforts to strengthen financial regulation, such discussions are very valuable for confronting views and making sure that we are on the right track. To some extent, the ultimate aim of financial regulation has to do with financing the real economy. Sound regulation should enable the stable provision of financial services to economic agents as they strive to finance their activities. This is why I would like to discuss with you a few aspects of the current reforms of financial regulation that are critical in terms of the financing of the economy. More precisely, in the few minutes I have, I would like to share with you some thoughts on three important policy challenges. How can we make our financial systems more resilient and therefore capable of financing the economy on a long term basis? How can we reduce the procyclicality of financial systems? How can we address systemic risk?
This process of careful study and discussion proved highly valuable during the development and implementation of inflation targeting in decades past, and will be equally valuable in the present debates. Thank you. 1 See Federal Reserve to review strategies, tools, and communication practices it uses to pursue its mandate of  maximum employment and price stability, November 15, 2018. 2 Shigeaki Fujiwara, Yuto Iwasaki, Ichiro Muto, Kenji Nishizaki, and Nao Sudo, Developments in the Natural Rate  of Interest in Japan, Bank of Japan Review 2016-E-12 (October 2016); Kathryn Holston, Thomas Laubach, and John C. Williams, Measuring the Natural Rate of Interest: International Trends and Determinants, Journal of International Economics, Volume 108, Supplement 1, pp. S59–S75 (May 2017); Thomas Laubach and John C. Williams, Measuring the Natural Rate of Interest Redux, Business Economics, Volume 51, Issue 2, pp. 57–67 (July 2016); John C. Williams, Monetary Policy in a Low R-star World, FRBSF Economic Letter 2016–23 (August 15, 2016). 3 Carlos Carvalho, Andrea Ferrero, and Fernanda Nechio, Demographic Transition and Low U.S. Interest Rates,  FRBSF Economic Letter 2017–27 (September 25, 2017); Marco Del Negro, Domenico Giannone, Marc P. Giannoni, and Andrea Tambalotti, Safety, Liquidity, and the Natural Rate of Interest, Brookings Papers on Economic Activity, Spring 2017. 4 John C. Williams, The Future Fortunes of R-star: Are They Really Rising? FRBSF Economic Letter 2018–13 (May  21, 2018).

This downward shift in inflation expectations has a secondround effect on real interest rates, the economy, and inflation. When policy is constrained by the effective lower bound, the downward shift in inflation expectations raises the real interest rate, further diminishing the degree of monetary stimulus, making the downturn worse and reducing inflation even more. Even in times when policy is not constrained, the expectation of belowtarget inflation in the future affects current decisions, putting additional downward pressure on inflation. In other words, monetary policy is always swimming upstream, fighting a current of toolow inflation expectations that interferes with achieving the target inflation rate. A number of alternative monetary policy frameworks have been proposed that aim to tackle the problems associated with the lower bound on interest rates. Although they differ in many ways, it is useful to divide these proposals into three broad categories. The first option is to maintain the basic framework of inflation targeting and to rely on a combination of aggressive conventional and unconventional policy actions when facing economic downturns to limit the deleterious effects of the lower bound. This carries with it the risk that inflation expectations become anchored at too low a level. The second option is “average-inflation targeting,” whereby the central bank purposefully aims to achieve an above-target inflation rate in “good” times when the lower bound is not a constraint.
Rather, because of the difficulty of making individual credit assessments and the probably relatively high transaction cost facing the small investor, he is more likely to have indirect exposure to the debt market through collective investment schemes, pensions, etc, or to keep money in a bank deposit while the bank invests in debt instruments - a growing feature of bank balance sheets nowadays as an alternative to conventional lending. Mandatory provident funds are one example of such collective arrangements, and their advent in Hong Kong may be expected to add to the demand for good quality debt instruments. The prospect of an additional channel of demand should to some extent stimulate interest in issuance from the supply side. In sum, there are many opportunities for innovation and development in our debt markets. I have mentioned rating agencies, credit enhancement, more varieties of asset-backed securities, potential for more channelling through collective investment vehicles, the important though perhaps modest role of the direct retail investor, opportunities relating to MPFs, and so on. These are, by and large, activities for players in the banking and finance industry to follow through themselves if they see the commercial justification. I am sure that at least some of you here today are already giving attention to at least some of these topics. I hasten to add that not every bright idea necessarily results in a viable business proposition.

However, we cannot rule out that, given the good numbers of recent quarters, we see a faster recovery of developed economies. In the emerging world, the main source of risks continues to be the Chinese economy. Despite good first-half results and policies implemented, doubts persist about imbalances in a number of Chinese markets. There is also the uncertainty surrounding the path that the reforms agenda will take once the Chinese Communist Party Congress concludes. In Latin America, the landscape has not changed much and political risks remain the main source of uncertainty. The copper price surpassed $ per pound at the statistical cutoff, but the baseline scenario assumes that it will stand near $ during the next two years. Should the present price last, it would have positive effects on domestic activity and expenditure. At the same time, it could strengthen the peso and lower short-term inflation. The implications for monetary policy of such a scenario are not straightforward. Although in the short term inflation is reduced, the greater dynamism of the economy could imply a somewhat faster closure of the activity gap in the projection horizon. This crossroads, in a way, reminds us of the sharp peso depreciation between 2013 and 2015. In those days, when the exchange rate accumulated an increase of around 45%, annual CPI inflation was above 4% for several quarters. At that time, monetary policy did not react to this increase in inflation by raising the MPR, understanding that it would have a significant but transitory effect on prices.