samchain/econo-pairs-v1 huggingface dataset:
In particular, we invest in green because we see it as a driver of long-term value, in addition to wanting to do the right thing. Contrary to some perception that investing in green undermines return, our experience shows that many green investments that are good for the environment can also be good for investors over the long term. I see the application of green and ESG in investment as just another balancing act that investors have to perform. Exactly where and how to draw the line depends on the specific circumstances at hand. While some green bonds may produce slightly lower yield or returns as compared with the conventional bonds, I truly believe that time has come for asset owners to take a more progressive and proactive stance in supporting green finance. I don’t think there is much disagreement amongst the stakeholders on whether green finance can make a difference in promoting long-term environmental sustainability. The big question is whether the 1/2  BIS central bankers' speeches  stakeholders, especially the asset owners, be they pension funds or sovereign wealth funds, want to make a difference by taking concrete steps to invest in green finance. We in the HKMA are prepared to play our part and I sincerely hope our peers will join us in owning and pursuing the goal of supporting green finance. 8. Ladies and gentlemen, we have today a rich agenda and the presence of many distinguished speakers.

Norman Chan: Welcome remarks - 2018 Green and Social Bond Principles Annual Conference Welcome remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the 2018 Green and Social Bond Principles Annual Conference, Hong Kong, 14 June 2018. * * * Financial Secretary, Martin, distinguished guests, ladies and gentlemen, 1. Welcome to the 2018 Green and Social Bond Principles Annual Conference, co-organised by the Hong Kong Monetary Authority (HKMA) and the International Capital Market Association, supported by the Hong Kong Financial Services Development Council. 2. Today’s conference is the flagship event in the world of green finance, and rightly so. Since the publication of the Green Bond Principles (GBP) in 2014, it has become the de facto global standard for green bond issuance. These days, a majority of the green bonds issued globally follow the GBP framework, and many major markets base their local green bond standards on the GBP. In this Conference, we will have the opportunity to hear more about the latest enhancements to the GBP, and how green standards have been developing in different parts of the world. 3. Today’s conference is notable also because of its location. As Martin said, it is the first time that the conference is held in Asia. Looking at the turnout, it is a good choice. I am not just referring to over 900 registered attendees – this is clearly impressive.
Yet the press and the markets focus on them as though they were the writ of all-knowing, all-seeing monetary sages. On Monday night, for example, there was much ado made about Janet Yellen noting in Chicago that the central tendency of our best guesses was that full employment would be somewhere between a 5.2 and 5.6 percent unemployment rate. It is nonetheless helpful to contemplate what may be useful guideposts for deciding when to raise the base rate and how we may convey this to the markets. And so the FOMC is grappling with just what, in fact, we can provide the marketplace in the form of forward guidance about our future modus operandi. 4  Monty Python is the British comedy troupe known for its satirical skits. A parody about the FOMC’s “dots” could rank up there with the spoof about the argument clinic “intended to create grievous mental confusion among the general public.” A link is provided here for your enjoyment: www.youtube.com/watch?v=kQFKtI6gn9Y. BIS central bankers’ speeches  3  Odysseus or Apollo? Research papers have addressed this subject. For example, some academic economists draw on Greek mythology to distinguish different techniques for crafting forward guidance, making a distinction between Odyssean and Delphic forms of guidance. The Odyssean model involves committing to a policy rule or to a criterion for choosing between different policy alternatives.

Policymakers tie themselves to the mast of this rule or criterion, sacrificing some of their short-run freedom of action in order to achieve what they hope will be superior outcomes over the long term. In monetary policy, commitment can in theory reduce the risk of future recession and more tightly control medium-horizon inflation expectations at the cost of a somewhat poorer near-term inflation or unemployment performance. Commitments come in lots of different flavors and styles, and forward guidance isn’t necessarily helpful or wise just because it’s Odyssean. Tying yourself to the mast isn’t an especially good idea if your ship is sinking, or if enemy forces are directing fire toward your deck. Committing to a particular path for the funds rate, or to a time schedule for funds-rate liftoff, is not something in which I or many of my colleagues have any interest. Commitments that are contingent on future economic conditions, in contrast, enjoy at least some support on the FOMC. President (Narayana) Kocherlakota of the Minneapolis Fed, for example, has notably proposed that the committee promise to delay liftoff at least until either the unemployment rate reaches 5 1/2 percent or forecasted inflation hits 2 1/4 percent (provided longer-term inflation expectations remain well-anchored, and possible risks to financial stability remain well-contained). My own view is that commitments aren’t always credible, especially if they purport to extend far into the future. It’s hard to bind future policymakers, and it’s difficult to anticipate all the various economic circumstances that might arise down the road.
The time to liquidate a given position is now seven times as long as in 2008, reflecting much smaller trade sizes in fixed income markets. In part the current liquidity illusion is a product of the risk asymmetries implied by the zero lower bound on interest rates, excess reserves in the system, and perceived central bank reaction functions. However, interest rates in advanced economies won’t remain this low forever. Once the process of normalisation begins or perhaps if market perceptions shift and it is expected to begin, a re-pricing can be expected. The orderliness of that transition is an open question. Certainly, conventional leverage and liquidity cycles – while dampened by reforms – can be expected to operate. High volatility, combined with lower prices, will tighten financing conditions, forcing some asset sales, dampening prices and increasing volatility further. An overshoot is possible. Some have argued there is an additional risk arising from pricing and asset allocations based on an illusion of liquidity. This could lead to “redemption risk” as detailed by Hyun Shin and others.15 Their argument begins with the observation that much of the shift towards market-based finance has been accompanied by an increase in assets under management. We know that almost half of the $ trillion in managed assets globally are in funds that offer their investors redemption at short notice.16 At the same time, funds are investing increasingly in higher-yielding, less liquid assets.

We must now consolidate our progress to build a financial system that can deliver strong, sustainable and balanced growth for all economies: large or small; advanced or emerging; home to large financial institutions or host to them. Success would be a global financial system that maximises its full potential to ensure that: -  The payments infrastructure is efficient and reliable;  BIS central bankers’ speeches  1  -  Companies can access the working capital they need to operate;  -  Core markets function continuously to allow risks to be diversified and managed; and  -  Capital is allocated efficiently across the globe. -  Liquid savings are transformed into long-term loans;  Achieving these ends requires a financial system supported by three pillars: diversity, trust and openness. Building these pillars should be the focus of the future reform agenda. A diverse system, with market-based as well as bank-based finance, can best support a wide variety of investment from infrastructure to SMEs that is necessary to create the jobs our citizens deserve. A trusted system can retain its social licence to support the real economy in innovative and efficient ways. An open system can avoid the risk of Balkanised finance, which would reduce the efficiency with which savings are matched to investment and lead to a global misallocation of scarce capital. This is a daunting agenda and some might feel that, having apparently reached the finish line, the race has been extended.
The trigger for the correction can vary – in the early 89–92 episode it was a sharp rise in interest rates as the UK sought to remain in the Exchange Rate Mechanism; in 2007–9 it was a sharp tightening in credit conditions amid a collapse in confidence in an over-levered banking system – but, unfortunately, there are more precedents in UK for periods of a rapidly growing housing market to end in this way. The question for the Financial Policy Committee, therefore, is whether the sustained momentum we are seeing in the housing market will continue and will lead to unsustainable growth in household indebtedness, undermining the resilience of the system. Our first thought must be to the direct exposure of the financial system to the housing market and its resilience to a major housing shock. Mortgage lending amounts to two-thirds of UK bank and building societies’ UK lending. Financial institutions are better placed now than they were before the financial crisis. The reinforcement of underwriting standards that I mentioned earlier, protects both borrowers from taking on unaffordable mortgages and lenders from bad debts. Since 2008, the amount of capital in the system has increased by £ with capital requirements against UK residential mortgages broadly trebling. We now have, for the first time, a new international liquidity standard, which should help to prevent long-term mortgage debt being funded from unstable short-term wholesale sources; since 2008, banks’ liquid assets have broadly trebled.

So it is particularly important at present to ensure that the current low levels of interest rates do not mask the likely cost of mortgages and so create more headroom for prices to rise. It is possible that affordability constraints, reinforced by lenders’ underwriting standards, will increasingly act as a brake on the speed at which house prices are growing and as a brake on mortgage debt. In that case, having recovered much of their fall following the crisis, we will see house price growth slow to match the pace of earnings growth – a soft landing. This is not without precedent. In 2004, having risen at an average rate of almost 20% over the previous 2 years, house price growth began to slow with the annual growth rate falling to just 2% by the middle of 2005. The 125bps increase in Bank Rate in the 13 months to September 2004 was no doubt part of the story. It proved, however, to be short lived episode. Amid a period of easing credit conditions, the pace of house price growth began to rise again through 2006, reaching double-digit rates by 2007. But it is probably an example of how affordability can brake the market. However, there is another way the story can play out – a major overshoot in prices and build up in debt followed by a sharp correction with negative equity and an overhang of debt for many households.
I wondered some years ago 2  whether such effects were at work after the financial crisis . Given the potential reallocative effects of any material change in the UK’s trading arrangements, it’s conceivable they could arise in this case too. Indeed it’s possible they could arise even ahead of the formal date of the UK’s departure. In September/ October a CIPS survey of procurement managers suggested there could be significant unwinding of supply chains through the course of next year: 40% of UK firms who currently use EU suppliers are actively looking for domestic alternatives; the equivalent figure in the other direction – the proportion of European businesses expecting to move away from existing UK suppliers – is 63%. A CBI survey in October found that, in the absence of a transition deal, 60% of firms would begin to activate “worst-case” contingency plans by the end of March 2018, a full year before the UK’s exit. Chart 3: Reductions in supply can add to It’s true that incremental changes in underlying  inflationary pressure  productivity can have knock-on consequences for wages, and for demand, that would blunt their impact on inflation. If in aggregate firms are less productive, they would probably spend less, including on pay awards. But to the extent those knock-on effects lag in any way, firms would also respond by raising prices. In other words, reductions in supply can add to inflationary pressure even as they also lower aggregate GDP. Chart 3 is an extremely stylised description of this effect.

The SNB in the centre of political debate Nowadays, credibility is even more important because of the fact that financial markets are extensive and closely linked. In the past, central banks were able to demonstrate their regulatory power by intervening in markets to influence rates and prices, particularly exchange rates. These days, they face global markets where the relative paucity of their means requires them to use tact rather than force to achieve their objectives. To this end, they depend upon their credibility. This smoothes out price volatility and makes it possible for monetary decisions to impact fully on market expectations. In other words, credibility is a precious monetary policy asset. We need to devote all our efforts to maintaining it. The SNB cannot merely rely on the good results it has achieved in the past. It must be able to convince markets of its determination to deploy all the means at its disposal to maintain monetary stability in the country, now and in the future. Nowadays it is generally recognised that a central bank is only credible if it can deploy its resources without having to obtain prior authorisation from the government, and without the risk of being penalised by the state authorities. This is why it is essential that a central bank be independent. In Switzerland, the independence of the National Bank is guaranteed under article 99 of the Federal Constitution and article 6 of the National Bank Act. This legal framework is sufficient. However, credibility is not merely a matter of legal independence.
However, these developments also project the improvements in regulatory and supervisory oversight which continues to be updated. Distinguished Ladies and Gentlemen, for Zambia the vision is to become a prosperous middle income country by the year 2030. In order for us to attain this vision, there is need to improve the financial infrastructure in Zambia. Since 2004, the Government has been implementing the Financial Sector Development Plan with the view to improve the functioning of financial markets and increase accessibility to financial services by a majority of Zambians. The second phase of the FSDP is currently underway after the initial five-year plan lapsed. We cannot deny that an improved financial infrastructure will result in efficient capital and money markets which in turn will attract domestic and foreign investment in the economy. Conclusion In conclusion Ladies and Gentlemen I would just want to emphasise that Zambia and many of our regional counterparts are small countries in need of investment. However, the high cost of capital has hampered the increase in investment, particularly among the SMEs which continue to face enormous financing challenges. Therefore provision of appropriate financing to this category of firms is likely to lead to higher investment opportunities and more efficient methods of production. In turn, this will translate into poverty alleviation due to employment creation.

Ladies and Gentlemen you will agree with me that we have come a long way since the time when many viewed the financial system simply as a sideshow, or a passive channel that allocated scarce resources to the most efficient uses. Today, almost everyone agrees that the financial system is essential for development. Improving the financial system can lead to higher growth and reduce the likelihood and severity of crises. It is essential that we have a clear understanding of the causes of business cycles and the working of monetary policy. In thinking about financial reform, we need to treat liberalization as a means rather than an end. Instead of pushing for immediate deregulation, we should try to understand the important role authorities play in financial markets. These steps will not only result in a better and more stable allocation of domestic capital, but also help countries to develop their capital markets with the requisite financial systems. In view of this I encourage you all to join hands with authorities in your countries in improving financial infrastructure so as to contribute to the development of our regional financial  BIS Review 149/2010  5  systems and thereby improving the availability of capital. I am also encouraged by the increasing number of financial service providers in our economies. As competition intensifies, banks and other financial institutions will start to reposition themselves by lowering the cost of lending to the private sector.
By avoiding the deepest downturns, fewer people are likely to end up outside the labour force. But monetary policy cannot have a primary responsibility for the level of employment. Keeping the policy rate at a persistently low level with the aim of boosting activity and employment more permanently could lead to price and wage pressures and to a sharp increase in house prices and credit growth. This could give rise to imbalances that in turn increase the risk of a downturn and job losses further out. 18  CONCLUSION  NORGES BANK  In the quote from 1970, Erik Brofoss predicted a shift away from a resource-based economy. Fifty years later the structural shift is underway. Brofoss was optimistic about the way ahead, and he was clear about what the main source of progress is as he formulated in his speech:  ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  “Now is the time to reap the fruits of our efforts in general education and vocational training to boost human capital.” Brofoss had high hopes for the coming generations of well-educated young people. The young workers in Brofoss’ day are now retired, or close to retirement. In the coming years, the dependency ratio will increase. The aim must therefore be to make structural changes without further declines in labour force participation. We also have reason to be optimistic despite an ageing population. We still have a highly skilled workforce. We have an economic policy framework that has served us well for nearly 20 years.

Importing the stability-oriented policy that had long been conducted in the EMU's core countries helped to create better conditions for future growth. The policy model we now follow comes originally from Germany. During the entire post-war period they have endeavoured, to a great extent successfully, to maintain price stability. The task of achieving this has fallen to the German central bank - the Bundesbank - which has operated independently, at arm's length from party politics. The Bundesbank model is now copied by a number of industrial nations, which have given their central banks a large degree of independence and the task of aiming for price stability. This policy is also reflected in the Maastricht Treaty and in the Riksbank legislation. My colleagues in the major industrial nations also try - as long as they are sure that inflation is not about to deviate from the desired level to take account of economic activity and unemployment. There are thus considerable similarities and this applies not only in Europe, but also in a comparison with, for instance, the US, although the stipulated targets vary, sometimes for historical reasons. In this sense we are all the children of the Bundesbank! Within the central bank world the methods of working have also become more similar in recent years. Although not all industrial nations with a floating exchange rate say that they use inflation targeting, they actually do so in some form.
But the different steps that have been gradually taken on a political level should, as I see it, be able to alleviate a confidence crisis that is largely political. This would point to an orderly resolution of the euro crisis. It then remains to be seen whether the crisis flaring up around Greece now can have more farreaching consequences. In a worried, nervous climate even a problem that only affects one small country can have contagion effects. Could things go better than we are forecasting? I have earlier listed various downside risks. Are there any conditions under which growth might be better than we are forecasting? My assessment is that this is the case, although things look uncertain right now and we cannot expect any rapid improvements. I think it is worth pointing out that we only expect a cautious recovery in growth in the euro area from the end of 2012 and onwards. What we are now seeing is a confidence crisis of gigantic proportions, but it also means that if political measures can build up confidence step by step, the economy in the euro area can recover with greater force than we are predicting. As I mentioned earlier, there are countries in the euro area with good fundamental conditions for a stronger recovery. In the United States there are good conditions for a better outcome. In this situation growth can be somewhat stronger than the fairly modest growth we are predicting. Particularly if housing construction picks up again, after several years of adjustment.

At the same time, there is great uncertainty surrounding fiscal policy as there is a political deadlock between the Democrats and the Republicans in Congress that may remain after the presidential election in 2012. The uncertainty has caused analysts to talk about the US economy facing a fiscal cliff next year. The concern applies on the one had to whether earlier income tax cuts and reductions in payroll taxes will be extended beyond the end of the year, and on the other hand is linked to the automatic expenditure cuts that will come into force at the turn of the year unless Congress can agree on long-term sustainable budget consolidation. All in all, these automatic tax increases and cuts in public expenditure entail a tightening during 2013 of 3–4 per cent of GDP. A further element of uncertainty is the result of the presidential election in November. If the results of the election are inconclusive and no party gains a clear majority, there is a major risk that the political deadlock will persist. The lack of credible budget solutions at present, and the low confidence in the political system’s ability to deal with the fiscal policy challenge, could led to companies and households beginning to act with greater caution. This would subdue growth in the world economy. We have given consideration to these risks in our forecast, but it is of course possible that the situation will be more problematic than we have assumed. Realistic to believe in an orderly resolution of the euro crisis?