samchain/econo-pairs-v1 huggingface dataset:
Jean-Paul Redouin: Risks may be transferred, but they do not disappear! Address by Mr Jean-Paul Redouin, Deputy Governor of the Bank of France, at the Paris Europlace, Financial Forum, Stockholm, 29 March 2007. *  *  *  The international financial system is going through an extraordinarily benign phase. The world is enjoying stable inflation and strong and broad-based GDP growth. At the macrofinancial level, corporate profits have been sustained, risk premia have been very thin for a broad set of asset classes, and volatilities remain unusually low. Based on these market signals, risks appear very low. Do risk premia correctly reflect the risks currently facing the financial system? Or is their low level the result of excessive risk appetite on financial markets? Indeed, some recent warning signals have reminded us how fragile the current pricing of risk is, and how much it relies on the expectation that an “ideal scenario” of strong growth and contained inflation will prevail. In this context, I would like to focus my remarks on a very important structural development: credit risk transfer. Basically, the transfer of risks helps to spread them, according to a process I shall call the “atomisation of risk" (namely risk being split into elementary particles and then re-packaged). But do these techniques mean that risks disappear? The breakthrough of CRT has gone hand in hand with constant innovation and the emergence of powerful non-bank players.

), which have increased their exposure to risk transfer instruments, even though their investment policies remain fairly conservative. Third, banks themselves may, via credit derivatives, improve their risk management. They diversify their risk profiles by gaining exposure to companies or sectors in which they do not have customer relationships and by hedging risks while retaining customer relationships. Credit risk transfer mechanisms are also used by banks to deal with single-name concentration risk. Consequently, major improvements in risk measurement have been made. From a prudential viewpoint, the Basel II framework takes better account of risk mitigation techniques employed by banks, including the use of credit risk derivatives, and applies specific treatment to securitisation. BIS Review 33/2007  1  2. But this evolution should make us more – not less – vigilant regarding the assessment and tracking of risks. The wider benefits that CRT can bring should not give rise to a false sense of security. Risks do not disappear as a consequence of their transfer. Banks need to pay attention both to "residual risks" (e.g. tail or extreme event risks) and all of the risks (e.g. operational risk, documentation and settlement risk, legal risk) arising from the use of CRT. Furthermore, the growing complexity and volume of CRT transactions call for enhanced monitoring. Actually, understanding where risk ultimately lies and how risky exposures can build up is an essential prerequisite for safeguarding financial stability. The argument is fourfold: First, historically low interest rates and abundant liquidity have prompted an intense search for yield.
It is for this reason that we are gathered here today as stakeholders to share information on the progress to date and to adopt a strategic implementation framework for the work that remains to be done. Distinguished Guests, the tremendous support of the various stakeholders to the agenda of the FSDP cannot go unnoticed. The technical and financial support provided by a number of our development partners, including the Swedish Government, the World Bank, IMF, DFID, the United States Treasury and FIRST Initiative have gone a long way in slowly but surely making this vision a reality. The Bank of Zambia and the Government are, therefore, most indebted to our cooperating partners for helping us build capacity in our financial sector. Honourable Minister, the support of stakeholders from financial and other institutions on the various working groups has also been instrumental in facilitating the implementation of various FSDP activities. Further, the coordinating role of the FSDP Secretariat, anchored by the Bank of Zambia, has been key to the implementation of the FSDP. For this reason, we at the Bank of Zambia hope that the same level of technical, financial, material and morale support will be accorded to Phase II of the programme by all stakeholders. Ladies and Gentlemen, in recognising the critical role played by various stakeholders represented here, the work of the FSDP has, by design, taken a consultative approach in the identification of priority areas, formulation of strategies and the design of implementation frameworks.

Caleb M Fundanga: Zambia’s Financial Sector Development Plan Welcome remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Financial Sector Development Plan (FSDP) Phase II Consultative Meeting, Lusaka, 20 October 2009. * • • • • • •  *  *  The Honourable Minister of Finance and National Planning; The FSDP Steering Committee Chairman & Secretary to the Treasury; Co-operating partners; Chief Executive Officers and Representatives from Banks and Non Bank Financial Institutions; Distinguished Invited Guests; Ladies and Gentlemen. It gives me great pleasure, on behalf of the Bank of Zambia, to welcome you all to the Financial Sector Development Plan (FSDP) Phase II Stakeholders’ Consultative Meeting. Honourable Minister, this very important forum is a demonstration of the recognition, by Government and various stakeholders, of the strategic importance of the financial sector to the country’s development and poverty reduction efforts. Distinguished invited guests, there are a number of strategies currently being implemented by both the private and public sectors to make the financial sector more inclusive, thereby increasing the benefits for the average citizen to participate in the formal economy. The Financial Sector Development Plan is one such Government initiative. The FSDP was aimed at realising the vision of a financial system that is sound, stable and market-based and one that supports efficient resource mobilisation necessary for economic diversification and sustainable growth. Ladies and Gentlemen, various countries have established specific programmes to strengthen their financial sectors.
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.

9  STRUCTURAL CHANGES AND NEW CHALLENGES  NORGES BANK  We have always know that activity on the Norwegian shelf would eventually decline. After a half-century of oil production, about half of estimated total reserves have been extracted.3 About half of what remains has not yet been discovered. In recent years, known oil resources have shown little increase (Chart 10). There is also the question of how much of what remains would be profitable to extract. ECONOMIC PERSPECTIVES 13 FEBRUARY 2020  Chart 10 Fewer large discoveries. Reserve growth. In millions of scm of oil equivalents 1800  1800  1600  1600  1400  1400  1200  1200  1000  1000  800  800  600  600  400  400  200  200 0  0 1967  1974  1981  1988  1995  2002  2009  2016  Source: Norwegian Petroleum Directorate  The offshore oil industry features investments that generate income for a long time ahead. For many fields, the exploratory, development and production phases span several decades. The Johan Sverdrup field, where production recently started, will according to plan remain in production for at least 40 years. Exploration and field development decisions have always been based on estimated futures prices for oil and gas. Uncertainty linked to future profitability has also been a key factor. Today, global climate challenges add to that uncertainty. More and more people are waking up to the gravity of climate change.
Financial literacy, the Cyprus perspective and the role of the Central Bank of Cyprus In December 2020, an ad-hoc Committee was established in Cyprus with the aim of formulating a National Strategy for the promotion of financial literacy and financial education in the country. The CBC has coordinated the work of the ad-hoc Committee, which consists of members from the CBC, the Ministry of Finance, the Ministry of Education, Sport and Youth, the Cyprus Securities and Exchange Commission and two academic experts from the two public universities in Cyprus. The Committee was also supported by a Secretariat from the CBC and external scientific collaborators, all of whom are here with us today. The formulation of the National Strategy drew heavily from the results of the CBC survey on financial literacy. A key finding of the survey was that the average financial knowledge score in Cyprus is below the minimum level considered by the OECD as sufficient for someone to be counted as financially literate. The results of the survey also indicate specific population groups, which are in greater need for financial education such as the young, the unemployed, women, low income and lower  2/5  BIS - Central bankers' speeches  education citizens, and individuals who did not take economics courses during secondary education. They also indicate specific domains where lack of financial knowledge is evident, namely, interest compounding and diversification.

Nevertheless, strengthening the financial literacy of individuals constitutes a key complementary and preventive tool, which enables financial regulation to achieve its goals more effectively. In fact, the European Banking Authority (EBA) which is, the independent Authority responsible for ensuring effective and consistent prudential regulation and supervision across the European banking sector, stresses the importance of financial literacy. For instance, the EBA 2020 Report called for greater efforts to promote financial education and literacy across Europe. It also urged policymakers, financial institutions and other stakeholders to work together to develop effective financial education programs. Financially knowledgeable citizens, in combination with a well-regulated financial system, are critical components and prerequisites for safeguarding a country's financial resilience and stability. Financially literate citizens in addition to being able to protect their own financial well-being, also contribute to the efficiency of the economy and to sustainable long-run economic growth. Against this background, in recent years numerous countries have taken steps to improve financial education and promote financial literacy among their citizens. Many of these countries have now adopted or are in the process of adopting a National Strategy for the promotion of financial literacy, using as a common basis the relevant guidelines prepared by the Organisation of Economic Co-operation and Development (OECD). Cyprus has recently joined this group of countries.
Priorities for Emerging Nations in a New Global Environment Remarks by Veerathai Santiprabhob, Governor of the Bank of Thailand  34th Annual G30 International Banking Seminar Enrique V. Iglesias Conference Center, Inter-American Development Bank 20 October 2019  I would like to first thank the Group of 30, especially Chairman Tharman, for inviting me to be a part of this panel on a very important topic: what should be the priorities for emerging nations in a new global environment, which is changing rapidly, full of unknowns, and driven mainly by factors beyond control of emerging nations. As we all know, the world is changing rapidly, especially in technology, demography, climate, international trade pattern, domestic politics, and international geopolitics, which affect the structure of our society and economy and the way we conduct our business and policy. All of these rapid changes are challenges for all of us advanced economies and emerging market economies alike. But let me speak from the perspective of an emerging market central banker: within this new landscape, how do I see the priority economic areas for EMs. In the short time I have today, I would like to highlight three issues that should be among the top items on an emerging nation’s economic policy agenda. Safeguarding SMEs competitiveness from global challenges The first issue is the supply chain disruption which comes as a result of the technological changes and is further complicated by the ongoing trade tension.

The drift towards bilateral- and trade-focused international economic policies which bypass existing channels of trade conflict resolution severely undermines global governance of international trade. On their own, EMs have little bargaining power, and engaging in bilateral relationships with large countries could result in trade distortions and uncertainties that lead to inefficient allocation of resources. In addition to the direct impact on trade, this bilateral- and trade-focused thinking could lead to another serious implication, especially from the perspective of macroeconomists who are well-represented in this room: the distortion of macroeconomic policy framework. The global imbalance analysis illustrates this issue nicely. The existing framework that was developed by the IFIs prior to the GFC and was adopted internationally has been pivotal in the way we made policies to address global imbalances in the past. I have talked earlier about how the current framework based on current account balance alone needs to progress with the changing environment, the excess liquidity in the global financial system, and take a broader view that includes capital flows. I am afraid that the current geopolitical environment will not allow us to progress forward in our thinking. Even the existing current-account based framework of global imbalances is being challenged by the bilateral worldview that focuses on bilateral trade. A currency intervention assessment framework that focuses narrowly on current account and bilateral trade balances and disregards other types of fund flows like portfolio flows is an example of thinking that distracts us from macroeconomic reasoning.
Lars Heikensten: Risks and financial stability Speech by Mr Lars Heikensten, Governor of the Sveriges Riksbank, at the Department of Business Studies, Uppsala University, Uppsala, 7 October 2005. *  *  *  Let me begin by thanking you for the invitation to your homecoming party, although I have never studied at the Business Studies Department at Uppsala University. I intend to take this opportunity to speak about the rapid developments in the financial markets over the past 10-15 years and to discuss the question of whether this entails risks being built up that will later result in serious setbacks. The trends and tendencies I intend to highlight today with regard to market agents’ behaviour may be primarily observed outside of Sweden’s borders – it is important to emphasise this. I have nevertheless chosen to discuss these partly because they can give us an idea of what might happen in Sweden in the long term, and partly because these tendencies may lead to problems in the international markets and thereby indirectly affect the Swedish market, too.1  What has happened on the financial markets? The financial markets have developed rapidly in recent years, and there are many reasons for this. Technological developments have radically altered the potential for making financial transactions. Developments in IT, for instance, have enabled large numbers of prices to be stored and extensive calculations can be made in various risk models.

During the Russia crisis in 1998, for example, the models could not predict that the Russian government would default on payments – this type of event is generally very difficult to build into a model – and the slump in prices this would lead to on many markets. Nor could they predict that liquidity would decline so severely that the banks were unable to sell their securities without this leading to a slump in prices. Asset prices that had earlier moved in the opposite direction and thereby reduced the total risk in the portfolio were now suddenly moving in the same direction. The risks were thus much greater than the models had indicated. These rapid adjustments in market prices with reduced liquidity are one scenario we have repeatedly pointed to as a risk scenario in our assessments of financial stability. If the risk premiums are too low on asset prices in the financial markets, changes in expectations can lead to instability with large price fluctuations and reduced liquidity. If prices of various assets covary to a greater extent than before, the financial agents’ risk exposure could increase rapidly. The fact that many investors have gone over to new types of asset could in this situation lead to declining interest in these assets and to liquidity partly or wholly disappearing from some markets. The events following the collapse of the US hedge fund LTCM in autumn 1998 are an example of this. Do the risk models take these difficulties into account? Yes, or at least in theory.
Allow me to also extend a word of gratitude to Radu Deac, the Chairman of ELEC Romania since its establishment, for his steady contribution to promote Romania in Europe and Europe in Romania. It is not that the Eurozone does not have its own problems, yet the strengthening of its governance framework is what one may call “work in progress”. It is our duty, I think, to keep believing in the European project, as the only valid one for securing peace and prosperity on our continent. As I have previously stated, whenever obstacles emerge, I cannot help recalling the words of Jean Monnet, one of the EU founding fathers: “Europe will be forged in crises and will be the sum of the solutions adopted for those crises”. I trust that this Conference, which has a lot of outstanding panellists, will address those problems as well. Among the speakers, I am particularly pleased to see Jeffrey Franks, another old friend of Romania, with whom we had a fruitful co-operation in the past. On this note, allow me to finish and wish every success to the works of this conference. Thank you. 2/2  BIS central bankers' speeches

One reason behind the problems in the labour market is that we have not really been able to keep up with the structural change process that follows in the wake of globalisation or, expressed in another way, that we have not been quick enough in adapting to the increased pressure for change when, for instance, the manufacturing industry is challenged by low-cost countries in eastern Europe and Asia. To summarise: our look back in time leads to the conclusion that the change in monetary policy regime was a success, despite the fact that the period since the mid-1990s was a fairly turbulent time for conducting monetary policy. There have been, for instance, periods of considerable financial  4/7  unease and extraordinary events of various types. A few of the many examples are: the Asian crisis, the Russian crisis, the IT bubble and the acts of terrorism on 11 September 2001. In addition, food prices and various energy prices, in particular oil prices, have periodically varied substantially for varying reasons, such as war, natural disasters and dry summers. I would now like to give you a brief summary of the current economic situation and then conclude with a few thoughts on future challenges for monetary policy. The current economic situation As you have probably noted, we Executive Board members chose to hold the repo rate unchanged at our most recent monetary policy meeting in late October. This decision was also in line with market expectations. The outlook for the Swedish economy is bright.
In the case of the U.S., this could include changes in immigration policy, infrastructure investments that remove bottlenecks and job training programs that improve the quality of human capital. Implications for U.S. monetary policy Undoubtedly, we will continue to learn as we seek to implement monetary policy most effectively. Let me give a few examples of how my own thinking may evolve. In terms of our asset purchase program, I believe we should be prepared to adjust the total amount of purchases to that needed to deliver a substantial improvement in the labor market outlook in the context of price stability. In doing this, we might adjust the pace of purchases up or down as the labor market and inflation outlook changes in a material way. For me, the base case forecast is not the sole consideration – how confident we are about that outcome is also important. Because the outlook is uncertain, I cannot be sure which way – up or down – the next change will be. But at some point, I expect to see sufficient evidence to make me more confident about the prospect for substantial improvement in the labor market outlook. At that time, in my view, it will be appropriate to reduce the pace at which we are adding accommodation through asset purchases. Over the coming months, how well the economy fights its way through the significant fiscal drag currently in force will be an important aspect of this judgment.

Wage increases have been moderate even though the increase in employment is the highest for 40 years and unemployment has dropped to a level that few believed would be feasible after the profound crisis in the early 1990s. Moreover, the labour shortage figures in the Swedish economy have continued to be moderate. More people have joined the labour market. Many of those who were full-time students earlier and thus not classified as participating in the labour force have now found work. The number of persons on labour market programmes has also fallen, thereby making a further contribution to the increased labour supply and helping to meet demand. These are some signs that the extent of the unutilised resources has been somewhat larger than allowed for earlier. We have therefore gradually altered our appraisal of resource utilisation in the Swedish economy in recent years. There are, accordingly, a number of factors that have contributed to such a good economic development in recent years. A combination of favourable circumstances has so far made it possible to combine high total demand with price stability. But if the strong demand continues, sooner or later there will be labour shortage situations. Shortages of labour with certain qualifications already exist in some regions. As the labour market becomes increasingly tight and shortages arise more generally, the risk of accelerating wage and price increases will grow. Then, if not before, the repo rate will have to be raised.