samchain/econo-pairs-v1 huggingface dataset:
Bandid Nijathaworn: Is climate change a big deal for the financial system? Speech by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at Bank Indonesia’s Annual International Seminar on “Macroeconomic Impact of Climate Change: Opportunities and Challenges”, Bali, 2 August 2008. *  *  *  Thank you Chairman, First, let me thank Bank Indonesia for the kind invitation. When I was asked whether I could speak on climate change and the financial system, I felt the suggestion was a challenging one, especially at this time when we need to build some momentum on this important issue. My topic today is “Is climate change a big deal for the financial system?”. Given the limitations of time, I want to focus my discussion on just two issues. The first, is why climate change is a big deal for the financial system, and the second, is to offer some thoughts on how to engage the financial system going forward on climate change, especially in the context of emerging market economies in Asia. Much of what I will say is still very much a preliminary thought, which is still evolving. Is climate change a big deal for the financial system? The answer is definitely yes, and there are a number of good reasons why this is so. First, although uncertain, the macroeconomic impact of climate change is thought to be large, which is likely to pose risk to the financial sector, as well as to financial stability.

But we must obviously not turn a blind eye to the possibility that new disturbances may expose other weaknesses. Household behaviour in the housing market poses a considerable challenge to economic policy, particularly because demand for housing and residential mortgages is heavily subsidised via the tax system and because the very low level of equity capital required to extend a mortgage is reflected in the supply of loans. These challenges must be confronted at the source. Thank you for your attention. 8  BIS Review 119/2009  BIS Review 119/2009  9  10  BIS Review 119/2009  BIS Review 119/2009  11  12  BIS Review 119/2009  BIS Review 119/2009  13  14  BIS Review 119/2009  BIS Review 119/2009  15  16  BIS Review 119/2009  BIS Review 119/2009  17  18  BIS Review 119/2009
My wish is that banks will assist the ECB and Eurosystem central banks in conducting these investigations, so that we are ready when needed to roll out a digital euro that can be a positive addition to the European payments landscape. 4/5  BIS central bankers' speeches  Thank you for your attention. 5/5  BIS central bankers' speeches

ahap Kavcolu: Recent economic and financial developments in Turkey Speech by Mr ahap Kavcolu, Governor of the Central Bank of the Republic of Turkey, at the Istanbul Chamber of Industry Meeting, Istanbul, 29 July 2022. *** Distinguished Members of the Istanbul Chamber of Industry, I would like to thank you for your invitation to the regular July meeting of your Assembly, which is among the leading representative councils of our country's industrial sector with its history of 70 years and more than twenty thousand members. I am pleased to meet with you here today. I will start my speech by giving a brief account of the developments regarding the macroeconomic outlook. Then, I will talk about the structural transformation that our country is going through. After sharing with you the Central Bank's contributions to this important transformation, I will leave the floor to you. Esteemed Participants, Geopolitical risks that increased in the first half of the year, and energy problems, supply constraints, and supply chain disruptions due to the lingering effects of the pandemic have led to negative consequences on a global scale. However, recently, there has been a partial improvement in energy and commodity prices as well as in supply conditions and lead times. In this context, lead times in emerging economies have improved considerably in recent months, and significantly converged to their normal levels. Meanwhile, lead times in advanced economies have remained elevated despite some decline.
12 This set a medieval financial accelerator in train (about 750 years before Ben Bernanke coined the term) 13 by providing an alternative to storing one’s wealth in silver coin (prone to being whisked away by the King). This led to a reduction in the demand for silver money balances. An increase in money velocity would have followed and with it, all else being equal, price inflation until the transactions demand for silver had risen sufficiently to equal its supply. At the very least, the existence of an alternative store of wealth provided an environment in which money velocity could take off, were it to be nudged in that direction. One possible nudge was the anticipation of the re-coinage of 1204. 14 Re-coinages were good for the King because he benefitted from the seigniorage of the re-minting fee. They were bad for cash holders both because of the re-minting fee and because they had to exchange their clipped coins for what they were actually worth, rather than their face value (a medieval haircut – some of which were appalling). Consequently, there was a strong incentive not to be the one holding the old-issue coins when the music stopped. 15 So to sum up: a fiscal squeeze exacerbated by accelerating inflation, combined with monarchical ambition and incompetence to stretch and then break relations with the barons.

On this subject of the “Eckert Act", the insurance companies monitored by the ACPR paid out EUR 2 billion to the beneficiaries of unclaimed policies in 2015; banks, for their part, transferred 5.5 million inactive bank accounts to the Caisse des dépôts et consignations in 2016, representing a total amount of EUR 1.9 billion to be claimed by the account holders or their beneficiaries. The fourth challenge is the fight against money laundering and the financing of terrorism, which in 2016 was a higher priority for action. We carried out 30 missions among banks and insurance companies on this subject in 2016, as against 22 in 2015. These missions complement the substantive action of the ongoing supervision, which resulted last year in close to 700 follow-up letters. In total, we initiated and published six disciplinary sanctions against institutions. The year 2016 was therefore an active year in this field, raising to 22 the number of sanctions taken since 2010 for noncompliance with the regulations. * * * In conclusion, it is with pride that I look at what was achieved in 2016, but without any let-up or complacency: many projects await us in 2017, both nationally and internationally. A strong ACPR must have the necessary means to accomplish its missions: I would like to emphasise this imperative. I will now give the floor to Bernard Delas, who will present the prudential developments in the insurance sector. Rémi Bouchez will then discuss the work of the Sanctions Committee. Thank you for your attention.
With interest rates set at low levels, financial repression curtailed domestic resource mobilization thus making the economy dependent on foreign savings as reflected in huge foreign debt at the time.   Low interest rates provided an incentive for fiscal indiscipline as the government obtained almost zero-interest-denominated resources to finance its deficit. In the state-owned banking sector, poor lending decisions (often politically influenced) and low repayment rates ultimately led to large budgetary bailouts.   In the face of high inflation rates and fixed nominal interest rate, real interest rates remained negative for the larger part of the period, leading to low domestic savings and other forms of capital flight. A growing awareness of these economic costs led to financial “liberalization” as the dominant policy paradigm. Zambia embraced financial-sector liberalization policy prescription and embarked on a fairly ambitious reform program. This program entailed a variety of measures including the liberalization of interest rates; the establishing of the freedom and the procedures for entry into and orderly exit from the financial sector; the reduction of commercial banks’ reserves and liquidity requirements; the elimination of credit allocation directives; the elimination of preferential credit at concessional interest rates; the liberalization of the exchange rate; and the removal of controls on the current and capital accounts of the balance of payments. Due to liberalisation, the banking environment in Zambia has become competitive as banks compete for the share of the customer deposits and good quality credit. Prior to 2005, the banking industry’s balance sheet was largely concentrated in Government Securities.

One lesson that authorities in this part of the world drew from the financial crisis in the late 1990s was that strong policy fundamentals are not always enough to guard against the vagaries of international capital flows. A sizable cushion of international reserves is important as a buffer to guard against sudden changes in market sentiments that can lead to capital outflows and pressures on the currency. Starting shortly after the Asian financial crisis reserves were thus accumulated in the region to build up such buffers. But holding large amounts of reserves is of course costly as they are typically invested in highly liquid assets with relatively low yields compared with some alternative uses of the funds. It is partly for this reason that authorities in the region have taken steps to create a mechanism for pooling some of their reserves in the form of the Chiang Mai initiative which started in year 2000 and its multilateral extension which was agreed on in 2010. While the size of the pool of reserves under the Chiang Mai agreement is relatively modest compared to the potential needs for some of the larger economies in the region, the importance of the agreement goes far beyond the aggregate amount of reserves involves. It reflects a desire by authorities in the region to foster financial cooperation in the region while at the same time creating arrangements which will help safe-guard financial stability.
For example, the recent upsurge of capital flows can be a prelude to a number of common shocks to financial stability that can hit in the region in the future. In this environment, a unilateral approach to deal with the issue, through macroprudential policy, can be inefficient and may lead to more volatility as investors engage in regulatory arbitrage  1  Roengpitya and Rungcharoenkitkul (2009) “Measuring Systemic Risk and Financial Linkages in the Thai Banking System”, Bank of Thailand Discussion Paper. 2  BIS Review 143/2010  across different economies. To address this dimension of the challenge, a more coordinated approach to macroprudential measures may be needed. Although steps towards formal coordination have yet to be established, ongoing close cooperation amongst regional economies has already resulted in a number of common platforms through which greater policy coordination can be conducted. For example, the Asean+3 Macroeconomic Research Office (AMRO) to be launched next year is already mandated to conduct economic and financial surveillance across the region. The office will be in a good position to study this type of policy coordination. In the meantime, more discussion among policy makers in the region should be encouraged, as we increasingly are facing common problems that are of a global nature. To this end, I would like to commend Bank Indonesia for organizing this international conference, which contributes tremendously to the region’s discussion and efforts along this line. It is on this note that I would like to end my remark. Thank you. BIS Review 143/2010  3

But we need to do things in an accountable manner and use our statutory discretion credibly to protect the public trust in us. For that we need to maintain credible procedures for decision-making where the public and courts can scrutinize to judge whether we have made decisions in fair manner considering all available information. In that regard, the Central Bank has long way to go. My initial days of office are spent to put in place these procedures in line with the mandate and nature of public interest. I know it is not easy to change things that have been there for long time. A lot of sacrifices are necessary. Ladies and Gentlemen, I know what I have stated here are confusing you enough. However, I am sure you had some technical insight into the Central Bank. I have no doubt you now appreciate that the Central Bank is the heart of the economy as many state so. Thank you very much for listening to me. 8  BIS central bankers’ speeches
In other words, Icelandic banks had only limited access to ECB liquidity (although there was some access through subsidiaries in Luxembourg), which proved fatal during the global run on crossborder liabilities of banks that immediately followed the collapse of Lehman Brothers. But there is always a silver lining. The lack of an adequate safety net and the absence of international or regional co-operation at the peak of the panic forced Iceland to adopt a radical solution in order to ring-fence the sovereign from the collapsing banks. These were private banks, and a bail-out by the Icelandic sovereign would have bankrupted the country. The banks were split overnight into domestic and international banks without disruption in the public’s access to banking services, and the international part went into resolution. The result was a drastic cut in the leverage ratio of the remaining banking system, from over 30 to around 5. Yes, Iceland had to introduce capital controls, which are still in place. But those controls did not take the form of limiting deposit withdrawals from banks, as was done in Cyprus, and current account transactions have been mostly unrestricted. History and further research will tell whether this cold turkey response turns out to be better than more gradual approaches that sometimes turn into “death by a thousand cuts”.

Some of that is inevitable, and some retrenching from the excess levels of finance in relation to the real economy is probably beneficial at this stage, both at the national and the global level. The risk, however, is that the process could go too far. Yes, there are risks to financial globalisation, but there are also benefits. In order to reap those benefits, we need a safer framework for cross-border banking at the regional and global level and some ground rules for capital flows and capital controls. Let me briefly turn my own country, Iceland, into a case study of some of the issues involved. During the financial crisis, three small European countries that had relatively big banking systems but no apparent fiscal problems prior to the crisis have suffered very serious financial and economic crises. These are Iceland, Ireland, and Cyprus. In all three countries, the balance sheets of the banks were around 8–9 times GDP. All three are members of the EU single market – in Iceland’s case, through the agreement on the European Economic Area. That includes free movement of capital and provision of financial services. The underlying principles are those of home licensing for operation anywhere in the area and of a level playing field for competition, where size and location are not supposed to matter. It therefore goes against the underlying principles of this framework to consider the size of banks relative to GDP as a metric for concern, as is now so rightly in fashion.
This outlook of progressive re-balancing of the external and domestic components of demand is not free from uncertainty. In particular, while the likelihood of fresh bouts of instability in the euro area has lessened significantly, this cannot be ruled out completely in the future. Moreover, should growth in certain emerging regions be checked more sharply than is currently projected, this might have consequences for Spanish exports, which in recent years have been increasingly underpinned by these markets? In this respect, the potential reduction in the degree of monetary expansion in the United States might significantly affect the emerging countries, in their capital movements and in their exchange rates, most particularly Latin America. The State Budget for 2014 It is against this macroeconomic background that the discussions on the draft Budget for 2014 are framed. I shall first refer to the forecasts for the end of the current budgetary year and the macroeconomic projections for the coming year. As regards 2013, the revised figure for the overall general government balance, in National Accounts terms, has been released for the second quarter. It shows a deficit of 2.8% of GDP, excluding the effect of the public assistance to financial institutions, compared with the figure of 3% recorded in the same period a year earlier, marking an improvement of 0.2 pp of GDP. More updated figures (to August) have also been released for overall general government,  2  BIS central bankers’ speeches  excluding local government.

This information is necessary for making a proper assessment of the budget projection in Spain, given the high degree of decentralisation of our public sector: in 2012, central government was responsible for 27% of total consolidated public spending; the social security system for 32%; the regional governments for 30%; and local government for 11%. As I indicated here a year ago, this Budget Plan marks an important step forward: over time, this document is destined to play a key role in the overall programming of total public spending, with the dual aim of making the budgets of the different tiers of government consistent and offering this information in an accessible and transparent fashion to the public at large, analysts and institutions. The macroeconomic figures accompanying the 2014 Budget project real GDP growth of 0.7%, as a result of the positive 1.2 pp contribution of the external sector, offset in part by the negative contribution of national demand. These forecasts are prudent and in line with the above-mentioned central growth scenario and, broadly, with what may be inferred from the consensus reached by analysts. The deficit targets for 2014 are well-known and match those approved by the European Council last July. The overall general government deficit should stand at 5.8% of GDP, 0.7 pp down on the forecast for 2013.
They will benefit from these changes by using the richer data to develop new products and services and by streamlining processes, making their businesses smarter and more efficient. The move to the renewed RTGS is a crucial transition requiring considerable change, but there is a big prize: to enhance the payments industry for everyone, including customers. Cross-border payments And this prize extends beyond domestic payments, and could enhance cross-border payments too. The importance of cross-border payments is growing, and the value of global cross-border payments estimated to soar from almost $ trillion in 2017 to over $ trillion by 20279. Yet they still suffer from a number of long-standing challenges. Enhancing the speed, cost, transparency and access to cross-border payment services would have widespread benefits for citizens across the globe both directly and indirectly –by supporting economic growth, international trade and global development. For these reasons, the G20 has made enhancing cross-border payments a priority. In October 2020 the Financial Stability Board (FSB), in close collaboration with the Committee on Payments and Market Infrastructures (CPMI), published a roadmap to enhance cross-border payments.10 The roadmap is made up of 19 building blocks, grouped into five focus areas ranging from enhancing the existing payment infrastructures, to advancing consistent international rules and standards, to more exploratory steps such as multilateral platforms and CBDC (see Annex 1Opens in a new window). 11 of the 19 building blocks are owned or co-owned by the CPMI, and I am the Deputy Chair of the Programme Co-ordination Board that oversees this work.

1 UK Finance Payments Market Summary 2021Opens in a new window 2 UK Finance Payments Market Summary 2019Opens in a new window 3 Innovation to serve the public interest – speech by Andrew Bailey City at City UK Annual Conference June 2021 4 Bank of England Discussion Paper: New Forms of Digital Money June 2021 5 Bank of England announce Joint CBDC Taskforce with HMT 2021 6 Bank of England publishes policy for omnibus accounts in RTGS 7 RTGS Renewal Programme Industry Engagement 8 RTGS Renewal Blueprint 2017 9 An Interactive Guide to Global PaymentsOpens in a new window 10 FSB Enhancing Cross-border Payments Stage 3 Report 2020 Opens in a new window 11 FSB Targets for Addressing the Four Challenges of Cross-Border Payments: Consultative document  2021Opens in a new window 12 G7 Finance Ministers and Central Bank Governors CommuniqueOpens in a new window  6/6  BIS central bankers' speeches
(G)  Enhancing Research and Talent Development  The HKMA, together with our anchor partners, Hong Kong Applied Science and Technology Research Institute, Science Park and Cyberport, will step up our already close collaboration in research and talent development. Of course, we will also make good use of our cooperation frameworks with authorities and partners in other jurisdictions to achieve a win-win outcome in this area. Ladies and Gentlemen, the upgrading of our banking system to a new and higher level of Smart Banking is not just something nice to have. It is a must! To meet the rising aspirations and demands of customers, banking and technology must converge sooner rather than later. Unlike the social media world, which deals with messages and life style amenities, it is not enough for tech firms just to offer speed and convenience when it comes to banking and finance. Tech firms wishing to venture into finance must recognise and accept the need for regulation, which is essential in the provision of appropriate protection to consumers and investors. The element of trust cannot be earned by speed and convenience alone. For the banking industry, it is not realistic or sustainable to rest on the laurels of public trust they presently enjoy and refuse to adopt new technologies that can offer more efficient and personalised services demanded by the customers. In the new era of Smart Banking, the industry, the fintech community and the HKMA must work together to transform the financial ecosystem of Hong Kong.

And for this reason they are quite different in nature from some of the riskier financial activities that banks undertake, such as proprietary trading. In other industries we separate those functions that are utility in nature – and are regulated – from those that can safely be left to the discipline of the market. The second approach adapts those insights to the regulation of banking. At one end of the spectrum is the proposal for “narrow banks”, recently revived by John Kay, which would separate totally the provision of payments services from the creation of risky assets. In that way deposits are guaranteed. At the other is the proposal in the G30 report by Paul Volcker, former Chairman of the Federal Reserve, to separate proprietary trading from retail banking. The common element is the aim of restricting government guarantees to utility banking. There are those who claim that such proposals are impractical. It is hard to see why. Existing prudential regulation makes distinctions between different types of banking activities when determining capital requirements. What does seem impractical, however, are the current arrangements. Anyone who proposed giving government guarantees to retail depositors and other creditors, and then suggested that such funding could be used to finance highly risky and speculative activities, would be thought rather unworldly. But that is where we now are.