samchain/econo-pairs-v1 huggingface dataset:
I have been involved in attending or speechwriting for this dinner for 25 years, and I well remember in the early days that the speeches of Lord Mayors featured each year a plea to get Crossrail agreed, started, finished. Well finally, Lord Mayor, you can notch that one up. Now, “getting stuff done” is not a lead in to a speech on reforming Solvency 2. I can hear the murmur of relief going round. Instead I am going to talk about the economy and monetary policy. I think I just heard someone say, can we have Solvency 2 for light relief please. Fair point, but no. A member of the public sent me an email recently, in which she said that she appreciated what I am doing, but can I please, please, please be more cheerful. I should say that I do seek earnestly to avoid the role of Private Frazer in Dad’s Army – we are not doomed, far from it. But we are in difficult times. From the perspective of monetary policy, these times are the largest challenge to the monetary policy regime of inflation targeting that we have seen in the quarter century since the MPC was created in 1997. That emphatically does not mean the regime has failed. Far from it. The regime was set up for times exactly like these. The regime, founded on central bank independence, is now more important than ever. The worth of any regime is tested in the difficult, not the nice, times.

At its next meeting, it is also time for the MPC to discuss the strategy for beginning to sell the gilts held in our Asset Purchase Facility portfolio. We will publish, alongside the Monetary Policy Report, more detail on how we will do this, to allow financial market participants to make the necessary preparations. This will ensure we have the option to commence a sales programme shortly after a confirmatory vote by the MPC, which could be as early as at our September meeting. Based on analysis conducted in conjunction with colleagues at the DMO, we are currently looking at a total reduction in the stock of gilts held by the APF, which covers both sales and gilt redemptions, of something in the region of £ in the first year. Our Market Intelligence suggests that’s broadly in line with what market participants are expecting. Let me end by going back to the plea that I be more cheerful. Lord Mayor, let me tell you about one thing that has made me most proud as Governor this year. Recently, the Governor of the National Bank of Ukraine, asked me if we had any spare armoured vehicles. He wanted to use them to support cash distribution around Ukraine. It so happened that we have stopped using our own transportation to move bank notes around this country, and our fleet of three vehicles was due to be taken out of service. Our staff immediately set about getting them ready, drove them to the Polish-Ukrainian border and handed them over.
at  Barnett, A, Batten, S, Chiu, A, Franklin, J and Sebastiá-Barriel, M (2014a), “The UK productivity puzzle”, Bank of England Quarterly Bulletin, Vol. 54, No.2, pages 114–28, available at http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2014/qb14q2.asp. Barnett, A, Broadbent, B, Chiu, A, Franklin, J and Miller, H (2014b), “Impaired capital reallocation and productivity” National Institute Economic Review, No. 228, 2014. Dustmann, C, Frattini, T, and Preston, I (2013), “The Effect of Immigration along the Distribution of Wages”, Review of Economic Studies, Vol. 80, No. 1, pp. 145–73. Gardiner, L (2014), “All accounted for: The case for an ‘all-worker’ earnings measure”, Resolution Foundation Briefing. Goos, M and Manning, A (2007), “Lousy and lovely jobs: The rising polarisation of work in Britain”, Review of Economics and Statistics, Vol. 89, No. 1, pp. 118–33. Goos, M, Manning, A and Salomons, A (2009), “Job polarization in Europe”, American Economic Review: Papers and Proceedings, Vol. 99, No. 2, pp. 58–63. Gordon, R (2012), “Is US economic growth over? Faltering innovation confronts the six headwinds”, NBER Working Paper 18315, available at: http://www.nber.org/papers/w18315.pdf Gregg, P, Machin, S, Fernandez-Salgado, M (2014), “The squeeze on real wages – and what it might take to end it”, National Institute Economic Review, No. 228, 2014. Haldane, A G (2014), “The corridor of uncertainty”, speech at the Scarborough Business Ambassadors’ dinner, 18 June 2014, available at http://www.bankofengland.co.uk/publications/Pages/speeches/2014/738.aspx.

Chart 7 plots the path of real GDP following five UK recessions and subsequent recoveries: the 1930s, the 1970s, the 1980s, the 1990s and currently. The fall in GDP during this time’s crisis is little different than in the 1970s and 1980s and smaller than in the Great Depression. 5  Again, the value for 2014 is an estimate based on projections consistent with the August 2014 Inflation Report. BIS central bankers’ speeches  3  The subsequent recovery in output has been materially slower than in the 1970s, 1980s and 1990s – and slower even than in the 1930s. As a result, the cumulative loss of output from this time’s crisis will very likely be larger than followed the Great Depression. Nonetheless, once you allow for the longer lags, the growth in GDP over the past two years has not been greatly dissimilar to previous recoveries. And if you believe the MPC’s growth forecasts, that recovery is set to continue in the period ahead. At a global level, the IMF’s recent World Economic Outlook paints a not dissimilar picture. Although global growth was revised down, it is expected to pick up from 3.3% this year to 3.8% next and 4.0% the year after. In other words, the IMF also foresees a slow march back to growth normality, albeit at potentially somewhat lower trend rates. So why might this time be different? One illuminating piece of evidence comes from looking at how forecasts for real wages, productivity and real interest rates have evolved during the recovery.
This is demonstrated by the fact that we have the largest, deepest, and most open Chinese capital markets outside of the Mainland: half of our stock market capitalisation comprises Mainland related companies. At the end of August, our stock market was the sixth largest in the world and the second largest in Asia in terms of market capitalisation. It ranked first in the world in securitised derivatives turnover, and first in Asia for stock options turnover and exchange-traded funds turnover. It also ranked fifth in the world in total equity raised through IPOs. 4 In the other direction, many Mainland companies have set up regional headquarters or offices in Hong Kong as part of their strategies to step up their international presence. Continuously high growth in recent years has resulted in a vast accumulation of wealth on the Mainland and the authorities there are progressively liberalising the requirements for Mainland financial institutions to invest overseas. As a result, Hong Kong has benefited from the outward investment flows given our geographic, cultural and linguistic affinities with the Mainland and our ability to provide a broad access to numerous Asia-Pacific and global markets. The potential demand for wealth management thus presents capital-market intermediaries in Hong Kong with huge opportunities. We are also the first jurisdiction outside of the Mainland with the ability to conduct renminbi banking business and deal in renminbi-denominated financial products. The establishment of a renminbi bond market in Hong Kong last year marked a key milestone in the development of renminbi business here.

We don’t have a clear and measurable definition of the term financial stability and, in most cases, nor do we have a clear policy or decision-making structure for pursuing financial stability, unlike in the field of monetary policy, in which many central banks follow well-defined strategies which in one form or another respect the principle of “constrained discretion”. Achieving a coherent approach to financial stability may be challenging, if only because it requires a consistent combination of macro and micro elements and because of the large number of interested and participating parties. Also, it should foster financial innovation, and ensure a level playing field. However, I think that our future author might take some comfort from the fact that supervisors, central bankers, policymakers and others learned valuable lessons in the late 20th and early 21st centuries, which will remain valid for the rest of the century. Let me outline four of those lessons. First, we have learned of the need for businesses and consumers to have access to credit on fair and reasonable terms, through all stages of the business cycle, so that the economy can grow through the financing of the best opportunities. We have learned that we need an efficient and resilient payments system to maintain the flow of funds through the economy at all times. We need financial markets to remain active, liquid and trusted, regardless of events in the economy.
There will be some similarity in functions, but there will also be scope for each city to develop its own characteristics as a financial centre. The logical trend in financial services, given the continuation of exchange controls on the mainland, in contrast to the free flow of capital in and out of Hong Kong, as enshrined in the Basic Law, seems to be for Shanghai to develop as China’s domestic financial centre and for Hong Kong to develop as its international financial centre. But there is no reason why they should be deliberately constrained to these roles. China has room for at least two global cities. Nor is there any reason why, in the event the mainland attains the financial and other freedoms enjoyed in Hong Kong, Shanghai should not have a go at the business of international finance, or why Hong Kong, with its highly sophisticated financial infrastructure, to facilitate efficient international as well as domestic financial intermediation, should not have a go at the RMB business. A little competition is no bad thing, as long as it is fair competition, and Hong Kong’s free enterprise is very good at it. The only residual worry is that the playing field might be a tilted one, involving subsidies and other forms of support or protection from the authorities. But WTO entry is thankfully conditional upon the removal of many of these obstacles to free and fair competition, to the advantage of those that are good at this game and are prepared to embrace it.

BIS Review 7/2007  1  Other strategies include the following: Improvements to public service •  addresses issues relating to public service and improve the delivery mechanism. About 15% of govt. revenue has been provided for administrative, regulatory and other services and improvements to the public service delivery programme to make it more responsive to public needs. In delivering public services the budget advocates to use e-governance structures which are speedier than the present rule based structures. •  promotes productivity and request public service to eliminate waste and duplication while encouraging to complete activities which have already begun by spending agencies before venturing into new areas. To further facilitate the completion of unfinished work, the budget enables the roll over of all unspent provisions of previous years to the ensuing year. •  addresses the welfare issues of selected community groups and measures to extend the safety nets. Reopening of closed factories and revival of failed businesses In the 2007 budget, the fiscal arm has been extended to promote the re-opening of closed factories, abandoned companies and business entrepreneurs which can be revived through provision of debt relief, 3 year tax holidays and an exemption from economic services tax for a period. The budget proposes to grant Rs. 2 bn. to Lankaputhra Development Bank which will provide equity or debt to such factories on the basis of solid restructuring plans. These efforts will also increase employment throughout the country.
According to the IMF’s World Economic Outlook, global growth was projected at 4.8 percent in 2010 with Asia and Latin America experiencing strong growth. Africa was also expected to experience robust growth, but growth in Europe was sluggish whilst in the United States, it remained subdued. BIS central bankers’ speeches  1  This uneven scenario in global growth has created several downside risks, including risks to the financial sector. There is no guarantee that the problems in the financial sector have been adequately addressed, but there have been concerted efforts to ensure that they do not recur. The introduction of new rules, in particular Basel III is expected to help in this direction, as Basel III will address issues including strengthening risk coverage of capital for banks, the buildup of capital buffers and the introduction of global minimum liquidity standards. However, countries are now realizing that in addition to these new rules there is the need for better supervision and the creation of crisis resolution mechanisms. Your Excellency, distinguished guests, despite the down side risks to the global economy, there is room for optimism which stems from the progress being made to repair and reform the financial sector, including developing macro prudential approaches to limit systemic risks. Monetary policy in the developed economies should remain accommodative in order to serve as the first line of defense in the event of a future shock.

Your Excellency, distinguished guests, with the increase in the number of banks, the Bank of Sierra Leone has taken steps to ensure that commercial banks are adequately capitalized to absorb shocks and enhance their capacity to extend credit. In this regard, the Bank has increased the required minimum paid-up capital from Le15 billion in 2009 to Le30 billion over a five year period and preliminary indications are that most commercial banks have met this minimum capital as at end December 2010. Cross-border challenges Your Excellency, distinguished ladies and gentlemen, as investors extend their investment outreach across national frontiers, the Bank of Sierra Leone has in addition to signing a memorandum of understanding for information sharing last year in the WAMZ member states, has also seen the need for further action to enhance cooperation with other supervisory bodies in the sub region. To this end, Sierra Leone became a member of The College of Supervisors of the West African Monetary Zone in 2010, an institution set up to coordinate and harmonize supervisory information and practices among central banks of WAMZ member countries. At its recent meeting held in Accra, the College agreed, amongst others that:   Capacity building through training to be delivered by WAIFEM, should be central to its future operations;    A common supervisory framework for member countries should be established;    Financial Stability Reporting should be standardized and uniform; and    Regional corporate governance guidelines should be developed.
14  At the international level, the Basel Committee’s Cross-border Bank Resolution Group has published a report with recommendations to improve the resolution of failing financial institutions that conduct cross-border activities. At the European level, the European Commission has launched a public consultation on the EU framework for cross-border crisis management in the banking sector. As regards derivatives, the aim is to increase transparency and risk management, especially through the creation of market infrastructures to centralise transaction settlement. Another area in which more stringent requirements are to be imposed is that of securitisation and credit derivatives activity. 15 During the crisis, there was a strong decrease in securitisation. For this segment of the market to experience a broad recovery, fundamental changes towards more transparency, standardisation and simplicity are required. There are various initiatives, both public and private, targeting this. The ECB is taking measures in order to gradually align the collateral eligibility criteria and risk control measures with best market standards and investors’ requirements. 16 In the context of the regulatory reform, the international community has committed itself to reducing the moral hazard posed by systemically important financial institutions. A number of proposals are being discussed with international bodies, in particular the Basel Committee and the Financial Stability Board. The debate recently gained momentum following the President of the United States’ proposal to adopt the “Volcker rule”, which aims to separate the activities of large financial institutions.

The element that marks a growing concern with regard to restrictiveness relates to the capital of banks. Clearly, the considerations in respect of the need to replenish capital are starting to exert a strong influence on the decisions of banks to grant new credit. This dynamic is worrying. It indicates that the banking system is interpreting the new regulations restrictively for credit. This approach is undesirable and out of line with the objectives so far followed by the economic policy authorities of supporting the financial system, not as an end in itself but as an essential function of savings intermediation. The outcry surrounding the effects that future capital standards and risk management – the so-called “Basel 3” – will have on credit developments in the short term seems unjustified. The new rules are specifically intended to ensure a more orderly and sustainable flow of credit, not a reduction. Moreover, as I said earlier, a gradual process of adaptation to the new requirements is foreseen. The new capital requirements may be attained in two different ways, although they have opposite effects on banking activities: reduction in banking activities, particularly in credit to firms, on the one hand, and capital increase on the other. The alarm that seems to be widespread in the banking sector concerning the new rules seems to mask the intention of adapting to them via a reduced exposure to the real economy, rather than via a capital increase.
Robust compliance function The compliance function of a financial institution is an important element in mitigating risks of abuse of the financial system, especially financial crime and terrorism financing risks. To this end, financial institutions are expected to ensure that the compliance function is independent and have sufficient authority, stature and resources to perform its function effectively. The required AML/CFT compliance program of each institution must clearly describe and outline the roles and responsibility of different segments of the institutions with respect to its compliance function. In this regard, the principle of collective responsibility between senior managements and compliance officers should be upheld in the case of failure. In compliance, continued vigilance is necessary and required. The 2017 National Risk Assessment, by the National Coordinating Committee for Money Laundering (NCC) and the financial sector, showed that the banking sector continues to face high money laundering risk and medium high terrorism financing risk. The sector records the highest value of cash transactions and high risk customers; and provides the highest number of high risk products compared to other sectors within the financial industry. This reflects the central role of the banking sector in intermediating money flows within an economy. One important compliance function that needs to be undertaken is the identity of the ultimate beneficial owner of companies, assets and financial transactions. Financial institutions need to have controls and procedures to identify, verify and conduct due diligence on the beneficiaries. This must be complemented by a rigorous monitoring process.

Of course the foreign exchange costs in the eurozone were limited right from the start of the EMU in 1999, but they will now disappear completely. For the economy as a whole, however, this exchange of cash has involved a relatively small cost, which is nevertheless symbolically important. A somewhat larger cost has arisen from the handling charges the companies have been forced to bear to hedge against undesirable fluctuations in exchange rates. This cost disappeared as early as 1999 within the eurozone, but it is not particularly large in relation to our GDP – perhaps a few tenths of a percentage point. A single currency will promote competition within the EU and benefit the consumers, who will experience lower prices and thereby have more money in their pockets. When everyone uses the same unit of currency, it is easier to compare prices between countries. It will also be an advantage for the national economy as a whole, since competition facilitates the work on holding down inflation. Some differences in prices are unavoidable and arise from transport and information costs, but not all of the differences can be attributed to these costs. Despite the fact that we now have a common market with free trade for goods and services throughout the entire EU, there are still large differences in prices between different countries within the union.
In addition, the industry itself has failed to co-operate to enable it handle mega risks and stop the externalisation of insurance funds. Unlike the Bankers Association of Zambia (BAZ), whose existence and strength is cemented by the banks themselves, the insurance industry has a very loose arrangement about how it should promote a common front. There is neither a written nor binding memorandum of understanding among the insurance companies to foster cooperation on some of the thorny issues confronting the insurance industry today! However, I must acknowledge here, that there is an organisation called the Insurers Association of Zambia (IAZ), whose membership is compulsory but which may not be very strong in guiding its membership. BIS Review 74/2004  1  Ladies and Gentlemen, from my observation, the insurance and pension industry in Zambia is facing many challenges. These include: 1)  Amendments to the Insurance Act of 1997 and the Pension Schemes Regulation Act of 1996 so that laws and regulations that impose stricter corporate governance practices and structures in all institutions managing pension and insurance funds are introduced;  2)  The Investment Act must be harmonised with the Insurance/Pensions Acts in such a way that all insurance companies formed or already formed must have local ownership/equity partnership. This would greatly contribute to minimising capital flight and huge repatriation of dividends;  3)  Need for the establishment of a national re-insurance company to avoid capital flight;  4)  Insurance companies need to harmonise their operations so that clients benefit from fair competition.

Ladies and Gentlemen, many of you will agree with me that the recent downward trend and stabilisation in the macro-economic variables, such as interest, inflation, and exchange rates, has induced high levels of investor confidence in our economy. As many of us are aware, a stable macroeconomic environment is one of the critical ingredients for achieving sustainable economic growth and, ultimately, poverty reduction, in our country. In this regard, allow me to reiterate what I have been saying at other fora that the insurance industry plays a critical role in the economic growth and development of any country. Here in Zambia, the insurance industry, with gross annual premiums of approximately K273 billion for life and non-life business, and about K550 billion for pensions, controls colossal sums of money which could be used for investment locally; and if properly regulated could contribute to developing a strong financial sector in Zambia. However, the problem has been that the insurance industry has been under-regulated for many years. In this respect, it is high time that regulations are put in place to harmonise the operations of this important industry. I have several times been told that the Insurance Act of 1997 is inadequate in many areas such as licensing, separation of life and non-life business and investment outside the country. I have similarly been told that the Pension Schemes Regulation Act of 1996 is equally deficient. To make matters worse, the Zambian public has insufficient knowledge of insurance matters.