samchain/econo-pairs-v1 huggingface dataset:
6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  The new finance must be inclusive, allowing everyone to be better connected, better informed and more empowered. By adapting our hard and soft infrastructure, the Bank of England will help create the conditions for such innovation to flourish to promote the good of all the people of the United Kingdom. 7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  7

But increasingly the task will also fall to the capital markets – and that’s where I want to focus my remarks today. Well-functioning capital markets are amongst the most powerful tools we have for turning the vision of a resilient carbon neutral economy into reality.7 Cold hard price incentives that reward investments aligned with that goal, and penalise those which aren’t, are worth a thousand entreaties on the dangers of inaction. Establishing those incentives requires three key building blocks. First, credible public metrics of the climate impact of specific investment projects and corporate activities, and the financial risk and return involved. Second, effective capital market instruments to package that risk and return and match it with 4  https://www.unenvironment.org/news-and-stories/press-release/cut-global-emissions-76-percent-every-year-next-decade-meet-15degc https://www.iea.org/reports/global-energy-review-2020/global-energy-and-co2-emissions-in-2020 6 See eg https://www.irena.org/financeinvestment/Investment-Needs, https://www.fca.org.uk/publication/corporate/climate-financial-riskforum-guide-2020-innovation-chapter.pdf and https://www.iea.org/news/deep-energy-transformation-needed-by-2050-to-limit-rise-inglobal-temperature 7 Indeed, a recent paper by Ralph De Haas and Alexander Popov (https://www.ecb.europa.eu/pub/economicresearch/resbull/2019/html/ecb.rb191127~79fa1d3b70.en.html) argues that capital markets (and in particular equity markets) may be superior to banks in incentivising climate-supporting investment. 5  3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  growing investor demand. And third, asset allocation strategies allowing those investors to construct portfolios aligned with, and facilitating, the transition to a carbon neutral economy. For much of the past decade, those three building blocks have been slow to develop, or vulnerable to charges of ‘greenwashing’ (projects, vehicles or investment strategies that are ‘green’ in name only).
In addition, despite that the economic recovery of developed countries has consolidated, the situation in some key emerging trading partners has worsened. The difficulties now facing emerging economies stem from the major changes observed in the global economy, especially the end of the commodity price boom. One must recognize, however, that the impact of these changes on each economy hinges on how well each one prepared to face them during the good years. Many countries incubated weaknesses that are now hampering their adjustment processes: high current-account deficits, fiscal mismatches and increased corporate debt – part of which is denominated in foreign currency and not properly hedged – , are some of the elements that make the adjustment more complex and risky. Of course, there are also strengths. In particular, many emerging economies and countries in the region have better monetary policy frameworks in place to confront these challenges. Independent central banks with clearly defined objectives, flexible exchange rates, and an appropriate level of reserves, are key lines of defense. 6  BIS central bankers’ speeches  Chile stands out in these issues. Our net public debt is nearly zero, because we saved during the copper price bonanza. Our financial system is a well regulated one and shows no significant weaknesses. The actions of the Central Bank have provided room for a significant adjustment of relative prices and, although at the expense of higher inflation, expectations have remained well anchored, a clear signal of the market credibility of our commitment to keep inflation low and stable.

However, the reverse can also apply: stock market developments also have some significance for the shaping of monetary policy. The price of  2/7  various assets, such as shares, is important in itself for the dynamics of a country’s growth and inflation trends. If, for instance, share prices rise, this stimulates household consumption and corporate investment, and vice versa. This in turn affects price trends. Thus, the stock market, like the housing market, can affect the Riksbank’s monetary policy decisions. Since the 1960s and 1970s, Swedes have been saving more and more in shares, both directly and via mutual funds and insurance, and the market has developed considerably during this period. The return on shares has been very good, seen over the past 30 years, but it has also been something of a roller coaster ride. Here I am thinking of periods of overvaluation, which have been followed by sharp price falls, for instance in connection with the financial crisis and the later IT bubble. Despite these periods of falling share prices, the percentage of shares in household wealth has increased, and stock market developments have thus become increasingly important for households’ consumption decisions and for inflation. Another reason to be interested in the stock market is its significance for efficiency and thereby for growth. An efficient securities market fulfils many important functions, for instance, as information bearer, channel for risk management and as mediator of capital.
The average return on equity varies significantly across countries – and France ranks among those with the most solid in the euro area – but on average it has stagnated at around 5%. This situation raises three questions, about three possible factors: low rates, non-performing loans and the digital transformation. The first factor, and the one most frequently mentioned, although sometimes to excess, is the low interest rate environment. Insurers and pension funds with a high level of fixed rate guarantees may suffer. As for banks, their net margins have been squeezed by the low interest rates and the flattening of the yield curve. However this question needs to be examined from all angles [slide 5]. Monetary policy has also had offsetting effects: lending volumes have picked up again; banks have booked significant capital gains; the cost of risk has fallen as borrower solvency has improved; the cost of funding including market and ECB financing has become cheaper. All in all, the overall impact of our non-standard monetary policy measures on bank profitability is expected to be modest for the period 2014–17. Furthermore, nominal interest rates are slightly on the rise since the turning point in August 2016, and nominal rates are the ones – not real ones – which matter for bank profitability, as well as the slope of the yield curve. The second factor putting pressure on profitability is the level of non-performing loans [slide 6].

On the costs side, the digital transition involves preparing for shifts in jobs and in skills, through enhanced dialogue with social partners. Moreover, it calls for major IT investment aimed at providing services that remain aligned with customer needs, reducing structural costs and improving regulatory compliance. IT systems will need to be – and this is far from simple – more secure so that they provide strong protection against cyber-risks, but at the same time more flexible and open to interconnectivity. Our duty as regulators in this revolution is obviously not to discourage innovation, but to ensure a level playing field with FinTechs – taking into account their lifecycle according to a “proportionality principle” – and still more tomorrow with bigger data platforms, be they GAFAs or their equivalents. This level playing field will have to apply for capital or liquidity requirements, for prudential supervision as well as for data protection: if you play the same game, you have to obey the same rules. 3/9  BIS central bankers' speeches  In addition to adjustments to business models, cross-border bank consolidations in the euro area would also help tackle this efficiency issue. The Banking Union provides both the justification and the framework for such a financial integration – we still lag far behind the American market in this respect. Cross-border consolidations on a sound and safe basis would make banks better able to diversify their risks across the euro area, and channel savings more effectively towards investments across borders.
Co-ordination is stressed in the Treaty itself, which requests that Member States treat national economic policies “as a matter of common concern” and subject them to a multilateral procedure. Naturally, this economic co-ordination can in no way undermine the independence of the ECB and the Eurosystem. Even more importantly, the euro area possesses institutional mechanisms which are conducive to an appropriate policy mix: the Stability and Growth Pact includes, on the part of the Member States, strict fiscal requirements. I will cite three economic justifications for the Treaty provisions that gave rise to the Stability and Growth Pact: –  First, by keeping a rein on the fiscal policies of the EMU Member States, the Pact ensures a satisfactory policy mix within the euro area. This is essential for monetary policy, in order to counterbalance the fact that Europe does not have a federal government and hence no significant “federal” budget. Mutual surveillance and close co-ordination of fiscal policies are the responsibility of the "Eurogroup" and of the Ecofin Council. Keeping the deficit below 3 % of GDP, and achieving budgets that are "close to balance or in surplus" in the medium term, ensure a balanced policy mix throughout the euro area. –  Second, the Pact helps to prevent well-managed economies from having to bear an unjustified risk premium on interest rates, resulting from the poor management of other EMU economies, by setting up a penalty system for excessive deficits.

And output has risen in every single quarter since the middle of 1992, something that is true of no other G7 economy. Why were the 1990s so successful? And can that success continue? Four features of our economy lie behind this improved performance. First, the new monetary framework - based on an explicit target for inflation, a high degree of transparency, and, since 1997, independence of the Bank of England made it clear to everyone that monetary policy was, and would continue to be, targeted on maintaining low and stable inflation. Second, a substantial fiscal consolidation turned a deficit of 8% of GDP in 1993 into a sustainable position for the public finances based on a set of clear rules for government debt. Third, a continuing programme of supply-side reforms, over a period of 20 years, made it possible to reduce unemployment without generating higher inflation. Fourth, although the unexpected twists and turns of the world economy did pose real challenges to monetary policy, especially in the latter half of the decade, those shocks tended to average out over time rather than cumulate in either an upward or downward spiral. In other words, the economic surprises alternated between good one year and bad the next, rather than adding up to “one damn thing after another”. In that sense, Lady Luck smiled on us. Of course, we were not alone in enjoying the 1990s.
Going forward, I view that there is a need for international institution that oversees all finance-related conducts to ensure strict compliance of rule, implementation of ethical codes and avoid double standard across nations. Lastly, continuous and collective reforms are vital. Crisis is a recurring phenomenon and no lessons from previous crisis will ever fully prevent the next one. But through the process of reform after each crisis, the market grows and becomes more efficient. Crises provide a window or “political feasibility” to undertake needed structural changes that  3  International Labor Organization (ILO). BIS central bankers’ speeches  3  may be hard to sell to the public in normal circumstances, so one should not waste a good crisis. I am pleased to see numerous improvements in key areas of finance and supervision such as the use of macroprudential measures to complement traditional monetary policy tools. It is also more acceptable to require banks to provision in good times against losses in bad times, for after all most bad loans are made in good times. In addition to structural reforms, change in “mindset” is probably the most important. In order to keep up with the dynamic global environment, we may need to challenge and correct some of our old beliefs.

MONETARY POLICY REPORT PRESENTATION BEFORE THE FINANCE COMMITTEE OF THE HONORABLE SENATE OF THE REPUBLIC  Mario Marcel Governor Central Bank of Chile 1 April 2020    The Monetary Policy Report of March 2020 can be visited at http://www.bcentral.cl. 1. Introduction Mr President of the Senate’s Finance Committee, Senator Jorge Pizarro; Senators members of the Committee, ladies, gentlemen, Thank you for your invitation to the Board of the Central Bank of Chile (CBC) to present our view on recent macroeconomic developments, its outlook and implications for monetary policy. This Monetary Policy Report is seeing the light in unprecedented circumstances, both because of the worldwide sanitary emergency and because of the economic consequences of the policy responses to stop the spread of COVID-19 in many countries. Unprecedented also because the need to restrict social contact has prevented us from presenting this Report normally instead of by this remote connection. The Monetary Policy Report we released this morning shows the dramatic change in the economic scenario that our country and the entire world are confronting. The global spread of COVID-19, the measures that have been adopted to contain it and the uncertainty about its reach have been reflected in plummeting stock markets and asset prices around the world, triggering a global economic recession in 2020. Chile will also feel this contractionary impact: in the baseline scenario that I will share with you in a few moments, we project that the Chilean economy will contract between 1.5% and 2.5% this year.
When we changed over from keeping the repo rate constant in our forecasting work to basing the forecasts on market expectations, we had made the assessment that the advantages of this system outweighed the disadvantages, compared with using a constant repo rate assumption. The assumption of a constant repo rate worked well in as far as it made communication simple, which I believe was particularly important when establishing the new monetary policy regime and building up credibility for the inflation target. At the same time, it was of course usually an unrealistic assumption that made it difficult for us to make good forecasts. This applied in particular in cases where there were expectations of substantial repo rate adjustments. Normally, changes in the repo rate are required to guide inflation towards the target. If we had kept to this assumption for the interest rate, these difficulties would have been particularly prominent when we changed over to making forecasts in a slightly longer time perspective. Of course, the assumption of a constant repo rate also made it difficult to compare our forecasts with those of other forecasters and to evaluate our monetary policy. But, perhaps even more importantly, it gave no clear guidance as to how we viewed interest rate developments in the long term. The general public’s and the markets’ expectations of the future interest path are at least as important for the way monetary policy influences the economy as the expectations around the decision on the current interest rate.

I think that for the Asia-9 economies, increased trade-linkages and cross-border investment have resulted in a “symbiotic” relationship, with China as the driver of growth for the rest of Asia, AND vice-versa. Together, this relationship has helped raise the profile of Asia-9 as an important pillar for regional and international trade. Factors underlying Asia-9’s growth in trade What have been the driving forces behind this synergy in the evolution of trade among the Asia-9 economies? When one speaks of the remarkable growth in Asia, the general perception is that growth has been dominated by China. While it is true that growth has been driven by China, the traditionally strong trade and investment ties between the remaining Asia-8 have been just as important in allowing the high rates of growth to be sustained in the region. In terms of intra-regional trade among the Asia-9 economies in 2005, 13% of trade flows are with China, while 28.4% of trade goes on among the other 8 economies. Why has this intra-regional trade grown so substantially? One explanation is that East Asia has adopted an outward oriented policy of internationalization of production process which has allowed the benefits to be derived from the linkages and alliances among the players in the region, both at firm level and at the level of the macro economy.
Another key issue, mentioned in many comments, is the need to maintain a level playing field. The Committee is very conscious of this matter, and I will say something about our efforts in this respect a little later. Finally in relation to the general issues raised in the comments, I would mention fears of over-conservatism in the proposals when taken as a whole. I would like also to pick out a few of the more technical comments on CP3. For example, one issue, a high-level issue, which has also received a lot of attention, is the calibration of capital requirements to expected and unexpected losses. We have also received many comments on the securitisation proposals, on the issue of “double default”, on the incentive structure and on the recognition of insurance within the operational risk proposals. After five years of work, the process has reached a critical stage. Leading market participants and supervisors alike have long understood that sophisticated banks have “outgrown” the 1988 Accord and are in need of a more refined regulatory capital regime, and we have all worked extremely hard to achieve this. So it is important to finalise the new Accord, and open the way to its effective implementation. To that end, as I have already said, we appreciate the candour and thoughts that members of the IIF and other institutions have shared with the Committee and its working groups over the years. We are studying your latest letters and suggestions carefully.

Jaime Caruana: Basel II - the road ahead Remarks by Mr Jaime Caruana, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Institute of International Finance Annual Meeting, Dubai, 21 September 2003. *  *  *  Ladies and gentlemen, It is an honour and a pleasure for me to address the members of the IIF. In the kind invitation to participate in this meeting, two topics were proposed to me, the first being the economic situation and Spain’s experience in the euro area, and the second the new Basel II capital accord. I thought that Basel II would be more appropriate, given the very crucial stage we have now reached. But these two topics, the economic situation and the new accord, have suggested to me two preliminary comments. First, while policymakers have long understood the importance of price stability to the health of an economy, in recent years we have all learned much about the concurrent need to promote broader financial stability as well. A number of different episodes of economic crisis and financial disturbance have plainly illustrated the threats that weak financial systems and poorly managed banks can pose to the macroeconomy. This is why I have always stressed that banking regulation should be analyzed not only from a micro viewpoint but also from the macro perspective.
Durmuş Yılmaz: Current issues in economic governance Opening remarks by Mr Durmuş Yılmaz, Governor of the Central Bank of the Republic of Turkey, at the Conference on Current Issues in Economic Governance, organised by Bilkent University, Ankara, 2 April 2008. *  *  *  Ministers, Academicians, Bureaucrats and Guests, Thank you all for accepting the invitation. It is a great pleasure to address such a distinguished audience. I would like to thank Bilkent University for organizing this conference at this juncture. In fact, the timing could not be any better. The recent global financial turbulence has put good governance principles at the center of public debate. I hope, the conference will strengthen our understanding of the subject by building on the lessons derived from the conference last year. Let me start with reviewing the recent developments in financial markets. You may have heard about a proverb attributed to the Chinese: “May you live in interesting times!” Here, "interesting" means dangerous or turbulent; therefore, the whole phrase is something of a curse. It turned out that the phrase was not of Chinese origin, but ascribed to them to make it sound wiser. Whatever the origin, it is certain that we are experiencing such a spell right now. We have been witnessing a global financial turbulence since mid-2007. Its magnitude, measured by the volatility index (VIX), is larger than that of the turbulence in 2006. It was triggered by the falling house prices and subsequent problems in the sub-prime mortgage market and mortgage based securities.

Even before recent upward revisions in GDP figures, Turkey easily met the Maastricht criteria for the budget deficit and debt stock. Turkey has demonstrated significant improvement in the World Bank’s Governance Index since 2000. Thanks to better governance practices, competitiveness of Turkish economy has advanced drastically in recent years as well. In the last two years, Turkey moved up a total of 18 steps in the Global Competitiveness Index prepared by the World Economic Forum. Turkey also moved up 34 steps compared to the previous year in the Ease of Doing Business Index of the World Bank. Distinguished guests, I tried to highlight some of the important developments in Turkey regarding economic governance in recent years and the resulting improvement in the economic structure. All these led to improvement in the confidence, which was instrumental in further confidence building and credibility for the economic management. These are all key ingredients of good governance. These achievements, however, are not enough. We still have much to do in terms of reaching price stability and securing sustainable high growth rates. There is still much to be done to improve economic governance and to reach a level compatible with the EU-15 average. As we are going through difficult times both internally and externally, we should not lose the momentum gained in institutional capacity building. It is even more imperative at this juncture to show and utilize the dexterity that we gained from our past experiences.