samchain/econo-pairs-v1 huggingface dataset:
The goal of my speech, which is constrained in time to ten minutes is to stimulate discussion on what could be the implications of global imbalances on emerging markets, in particular what are possible EM scenarios in case of soft and hard landing of the global plane. As you will see later the range of possible outcomes depends on what is the actual cause of the emergence of the global imbalances. Let me briefly review the most popular hypotheses. How did we get into global imbalances? The need to identify the type of the flying airplane and its technical conditions implies that one has to understand the nature of global imbalances. And here we run into the first problem, as the top ‘aviation specialists’, including ‘pilots’ themselves cannot agree on that. I have identified at least ten major views about the nature of global imbalances, namely 2 : 1.  emergence of the new Bretton Woods regime 3 .

BIS Review 124/2006  3  •  Anglo-saxon countries which are very good at producing financial assets have already shown enormous imbalances, with US current account deficit and housing market bubbles as the headline examples;  •  emergence of (long lasting) asset bubbles and drop in inflation (and possibly even emergence of deflation) are market mechanisms to bridge the asset gap;  •  bursting an asset bubble makes asset shortages problem worse;  •  while financial markets development moves ahead (think about large listings in China, improving corporate governance or rapid development of credit derivatives) it is unlikely that excess demand for assets will be eliminated soon, as it seems to have a structural origin, related to demographics (aging), or to higher uncertainty for corporations operating in more competitive global economy in XXI century, which probably explains why profits to GDP ratio is at 40-years high and investments fail to recover to pre-Asia-crisis and pre-dot-com-boom levels  It does matter to what view of the world you subscribe, as it dramatically alters the subjective likelihood of competing scenarios for 2007. As PIMCO Michael Gomez puts it in September emerging markets note titled “Is it safe?” 19 : “EM has historically been vulnerable to deteriorating economic and financial conditions in the United States and other developed countries.
With your help, we are determined to understand what is happening in every region and country of our economy so that we can set the right monetary policy. I want to assure you that the Bank of England is there to serve the whole economy, right across the length and breadth of this country. The costs of this crisis will be with us for a generation. And we owe it to the next generation to seize this opportunity to put in place the reforms that will make another crisis much less likely and much less damaging. We at the Bank of England and you in the trade union movement should work together. That is why I am pleased to be with you today. It will require patience and determination on all our parts, including your members. But the prize of restoring and maintaining economic stability – and a return to sustained rises in employment and living standards – will be worth the effort. BIS Review 117/2010  3

The real point is whether, given the bank’s particular circumstances, the risk management practices they adopt are adequate. And that, primarily, is a matter for the bank’s management to determine, although we will of course, given our statutory responsibilities, also have an interest in this. I stress these points for three particular reasons. First, because I don’t want anyone to think that we are against banks taking risk. We’re not. That’s the business they’re in. We simply want to make sure they recognise and manage the risk effectively. Second, because I want to make clear that we are not hell bent on driving banks to invest in unnecessarily sophisticated risk management systems. What’s appropriate will clearly vary from bank to bank, depending on the nature and scale of their business and the risks they run. Third, because I want to be perfectly clear that Basel II is not some underhand means of making life difficult for smaller banks by raising the hurdle too high in terms of what they need to spend on risk management and on regulatory compliance. Indeed, on the contrary, the whole thing is carefully designed so as to accommodate banks of all shapes and sizes. So, how will Basel II change banking in Hong Kong? The answer, I would suggest, is that we won’t see any dramatic changes overnight, but we will over time see some re-focusing of how the risks within banks are addressed, both by banks themselves and by the supervisors.
Jon Cunliffe: Regulatory reform and returns in banking Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at Chatham House, London, 20 October 2014. *  *  *  On 13 October 2008 – just over 6 years ago – the UK government injected nearly £ of public funds to stabilise Royal Bank Scotland and Lloyds Banking Group. Parts of both banking groups had started the year in a precarious position, with swollen, highly levered balance sheets and a reliance on short-term wholesale funding. By October, losses had left them dangerously undercapitalised. Absent a resolution regime for dealing with failing banks, and given the importance of these two banks to domestic lending, the government was left with no choice but to inject public funds, bailing out the banks’ creditors. In the intervening 6 years the landscape of banking has changed beyond recognition. Some of this is due to a very different approach to regulation and supervision. Some is due to a very different commercial environment. And most important, there has been a sea change in public attitudes towards banking and bankers. Bankers should not expect to be popular. But the outburst of public anger that accompanied the crisis and its very painful and protracted impact on the real economy – families and jobs – has not abated much. The latest polls put public trust in bankers at nearly the bottom of the class – only marginally above politicians.

But it is less clear what the changes on the other side will be: how banks will respond to the new regulatory and economic environment. There is much soul searching in the industry about what the future looks like. The reform programme and returns in banking The most marked change in this new landscape is the much greater amounts of capital in banks and as a consequence the much reduced level of leverage. Headline levels of required capital have increased. And the risk associated with many types of assets and business activities has been fundamentally re-appraised. For the largest firms, the equity levels required will be around 7 times higher than before the crisis on a risk weighted asset basis. 4  BIS central bankers’ speeches  Moreover, international standards will determine not just the leverage firms can carry on a risk weighted basis but also, when an international leverage ratio is agreed in 2019, the absolute amount of assets they can carry for any given level of capital. A number of major jurisdictions such as the US have implemented leverage ratio rules in advance of that; the FPC will shortly issue proposals to do so in the UK. Lower leverage will reduce the returns that banks’ shareholders make, relative to pre-crisis. But it also means that banks will be safer investments which should also reduce the returns that investors require.
Over the same period, the stock of household, corporate and government debt outstanding rose by $ trillion, more than three times as much. But it is possible that the global imbalances may have played into the credit boom through another route. Bernanke’s “savings glut” hypothesis was advanced primarily as an explanation for the decline in long-term real interest rates seen during this decade; see Fig. 8. And that low level of real returns on government bonds may in turn have encouraged financial institutions to shift into other, riskier, assets that offered a higher return, such as the burgeoning class of asset-backed securities – what came to be known as the “search for yield”. There is not a lot of research yet that sheds light one way or the other on the role of the global imbalances in the credit/asset-price boom. There is quite a strong correlation across countries between house price inflation and current account deficits (Fig. 9), but this says nothing about causality, which plausibly could also run from house prices, via demand, to the current account. In fact, Granger-causality tests point to bi-directional causality, running from both current accounts to house prices and vice versa 5 .

We will have many opportunities during the course of this work to discuss with the Committee on Finance how we can develop and improve our analyses. BIS central bankers’ speeches  3
Low bond yields reflect global economic conditions: Governments, businesses and households are seeking to save more, while demand for safe investments has increased. Substantial asset purchases by central banks are pushing in the same direction. Low yields may also reflect modest expectations of economic growth further ahead. Historically, equities have yielded higher returns than bonds. We also expect that to be the case ahead. Still, it is doubtful that equity prices will continue to rise at the same pace as in recent years. Weak or moderate growth in the real economy will feed through to the return on equities. The share allocated to real assets has increased gradually after equities were first introduced in 1998. Soon, almost two-thirds of the fund will be invested in real assets. As we gain experience in real estate investing, it may be natural to invest in other types of real assets, or increase the equity allocation further. In the long run, a bond allocation of 20–25 percent should suffice to maintain the fund’s needed hedge against fluctuations in equity prices and execute the rebalancing strategy. Chart: Global investments Another of the fund’s characteristics, which in particular has an effect on risk management, is its large size. A main tool to manage the risk faced by the fund is diversification. With a fund of this size, we have ample opportunities to diversify.

In particular, the fund provided fiscal leeway during the economic setback in 2008 and 2009. Fund governance Let me now turn to the actual management of the fund. Chart: A fund owned by the Norwegian people The Ministry of Finance holds the political responsibility for the oil fund. The overall management principles and strategy are anchored in the Norwegian parliament, to which the Ministry reports at regular intervals. The operational management of the fund is fully delegated to Norges Bank. Our task as manager of the fund is strictly commercial: to maximise returns within the guidelines defined 2  BIS central bankers’ speeches  by the government. This structure ensures that the fund is not used as a foreign policy instrument. Individual investment decisions are made by Norges Bank Investment Management, a separate division within the central bank. Norges Bank reports on risk and return to the Ministry, and we also provide advice to the government on the investment strategy. The investment strategy Our management objective is to achieve the highest possible long-term return, with an acceptable level of risk. The investment strategy is developed by keeping in mind the fund’s objective as well as its key characteristics: its size and its long-term horizon. Let me elaborate on some important aspects. The fund’s purpose is to support long-term considerations in the spending of government petroleum revenues. Both current and future generations should benefit from the petroleum resources. Hence, the fund itself has a long-term investment perspective. This has fundamental implications for the investment strategy.
As Vice Premier Liu He said earlier, we must focus on increasing the proportion of SME loans, to promote economic transformation and upgrading. Two, we could work together to apply innovative FinTech solutions to promote green finance. The Sustainable Digital Finance Alliance (SDFA) founded by China’s Alibaba Ant Financial and UNEP is a good example. The SDFA has engaged the FinTech community on applying digital technology to promote green finance – such as the digitisation of green bonds. MAS’ annual Global FinTech Hackcelerator is another platform through which financial institutions and FinTech firms in Shanghai and Singapore can collaborate on innovative green finance solutions. The Hackcelerator is a global competition that invites market-ready solutions for real problems faced by the financial industry. This year, green finance is a key theme for the programme, and because of the Covid19 situation, we are conducting the entire Hackcelerator – from sourcing proposed solutions to curating prototypes – on a cloud-based platform called the API Exchange (APIX). Through APIX, financial institutions and FinTech firms in Shanghai can engage other players across Asia in collaborative experiments to create digital solutions to support green finance. I would also like to take this opportunity to invite Shanghai FinTech firms and financial institutions to participate in the Singapore FinTech Festival this November. Conclusion There is much that our two financial centres can do together.

I once again congratulate you and your parents, for it is only through their guidance and care that you shall continue to succeed. I wish you well in your studies and hope to see the day when all of you will graduate with flying colors. Lastly, let me commend the President of this Foundation, for the noble work that you undertaking. I hope others will emulate your commitment towards developing the youths so that they can contribute to the welfare of our country. Mr. President, I salute and urge you to keep up with the good work that you are doing. To the sponsors and the Board of Directors,  2  BIS Review 160/2008  may the good Lord continue blessing your deeds and may he give more to those who had a hand in helping the cause. Let me finish by saying that I can not wait to see these beaming young faces to lead our future generations into a better Zambia and a better life for all. I thank you. BIS Review 160/2008  3
But Hong Kong’s expertise in developing markets, in building the market infrastructure and, where necessary, in regulating markets and supervising market participants to uphold the efficiency and integrity of financial markets is there for everybody to see and tap. Furthermore, we know the region, and particularly in the case of the mainland of China, I would argue that we know a lot more than others, and so we are in an advantageous position to perform an advisory role. And the financial community of Hong Kong, including the regulators, have been actively playing that advisory role. I can speak from experience here, although it would not be appropriate for me to be too specific. In many of the Hong Kong Monetary Authority’s  BIS Review 112/1997  -2-  contacts with, for example, our counterparts in the mainland of China, the subjects for discussion are increasingly on financial affairs in the mainland rather than those in Hong Kong. 6. I believe that in performing this advisory role effectively we will open up opportunities for the financial services industry of Hong Kong. As markets are built and liberalized in these neighbouring economies, I am confident that our own financial institutions will gain access to the business in those markets through establishing a presence there, and eventually compete, I hope, on a level playing field with the domestic financial institutions.

While important progress is being made, this has recently been overshadowed by financial turmoil in the region, and the focus of attention has as a consequence been diverted to the provision of credit to assist Asian economies in need in making structural adjustments. We had the financial package for Thailand, and there have since been many ideas put forward for a general facility of some sort. These are being actively considered and we are taking an active part in the discussion, although there are currently still quite significant differences of opinion. The position that we are taking is that whilst regional solidarity is highly appropriate for a region with increasing economic, trade and financial integration and increasing interdependence, any regional financial arrangement must be structured with regard to international standards and practices. It would not be appropriate, for example, for a regional institution, if there is to be one, to prescribe medicine, along with financial assistance, that is different from those prescribed by the International Monetary Fund. It would immediately be seen as a soft window for financial support, thus creating moral hazard problems. I am hopeful that well-structured arrangements will emerge in due course. Certainly the climate is right and the momentum is there. 14. Perhaps I should take this opportunity to put the recent financial turmoil in Asia in a global perspective. First, the world is in very good economic shape. World economic output is estimated by the IMF to expand by 4-4½% in 1997 and 1998, the strongest pace in a decade.
Ravi Menon: Singapore as convenor, catalyst and contributor for climate action Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the launch of the COP-27 Singapore Pavilion, Sharm El-Sheikh, 6 November 2022. *** Ladies and gentlemen, good evening. Welcome to the launch of the Singapore Pavilion at COP27. As we gather in beautiful Sharm El-Sheikh, let us remind ourselves of the task before us: to reduce global greenhouse gas emissions to net zero by 2050 in an orderly and inclusive way. Singapore is committed to the net-zero by 2050 target and has laid out our plans and strategies to get there. This Pavilion is not just about Singapore's plans to get to net-zero. After all, Singapore's contribution to global emissions is just 0.1%. But as a global city, technology hub, and financial centre, we can play a larger role in the fight against climate change. Singapore wants to be a convenor, a catalyst, and a contributor of solutions for global climate action. This is the broader purpose of this Pavilion. As a convenor, we will bring together partners in industry, finance, academia, civil society and the government, to spark new ideas and forge new collaborations for effective climate action. As a catalyst, we will work with partners to step up the pace of transition in this critical decade, which will substantially determine whether the world gets to netzero by 2050.

The policy consensus that has emerged from this experience has a more cautious view of the benefits of financial integration, a greater awareness of the damage caused by creating incentives that distort the composition of flows and a greater appreciation of the importance of having in place a strong set of institutions, in the financial system in particular. It has also fostered a greater skepticism within governments of their ability to sustain and adjust a set of limited controls on capital flows, once an economy has passed a certain point of relative openness. Money tends to move around these controls with progressive ease, and it becomes more difficult over time to counteract this force with acceptable costs to other objectives. For this basic reason, many emerging market governments that were early proponents of selective controls have moved to eliminate them. Faced with the challenges of managing policy in an increasingly integrated world economy, the dominant instinct of officials is often to try to shield the economy from volatility. But the crises of the 1990s helped demonstrate why this approach can be both futile and counterproductive. As economies become more open to capital flows, policies designed to insulate an economy from external shocks, whether they be fixed exchange rate regimes or selective capital controls and restrictions on international transactions, rarely offer durable stability, and they bring additional risks. These risks come in the form of additional distortions that might undermine future growth or magnify vulnerability to future financial volatility.
This allowed for a significant carry-over: according to Commission's forecasts published last Friday, euro area economy should grow by 3.2 % in 2022 as a whole(ii), more than the forecast for the United States. As for 2023, while slowing down, growth could remain positive at 0.3 %, and it should rebound to 1.5 % in 2024. All economic forecasts are nevertheless surrounded with high uncertainty at present times, in light in particular of the latest of an unprecedented series of shocks. By the way, this is why we need to regulate strongly and quickly crypto assets internationally: the last episodes show us that we cannot allow for a second "crypto winter" to still add to uncertainty and financial instability. The Russian war in Ukraine is feeding a further surge in energy prices and other commodities, hence a negative shock on terms of trade. This geopolitical and economic environment weighs on the confidence of businesses and consumers. In particular, inflation has become the prime concern of our European citizens. The rise in consumer prices has amplified in recent months, reaching 10.7% in October – France displays the lowest rate in the euro area with 7.1 %, thanks in particular to its "tariff  1/4  BIS - Central bankers' speeches  shield" which protects households from increases in energy prices.

But two stand out. First, price stability does not guarantee stability of the economy as a whole. Second, the instruments used to pursue financial stability are in need of sharpening and refining. Setting Bank Rate to maintain price stability was successful in itself, but did not prevent a recession induced by a financial crisis. But let’s not throw out the baby with the bathwater. The period prior to the crisis was the most stable economic environment for generations. And, unlike most previous recessions, this crisis wasn’t preceded by an unsustainable boom in output. In the five years leading up to the crisis, overall GDP growth remained close to its long-run average and inflation differed from the 2% target on average by only 0.2 percentage  2  BIS Review 76/2009  points. Diverting monetary policy from its goal of price stability risks making the economy less stable and the financial system no more so. To argue that monetary policy should be directed to counter inadequately priced risk is to argue that unemployment is a price worth paying to tame the banking system. Inflation targeting is a necessary but not sufficient condition for stability in the economy as a whole. When a policy is necessary but not sufficient, the answer is not to abandon, but to augment, it. Indeed, the overarching lesson from this crisis is that the authorities lacked sufficient policy instruments to take effective actions. Nowhere was this more evident than in dealing with Northern Rock in the absence of proper resolution powers.