samchain/econo-pairs-v1 huggingface dataset:
Such transformation will result in a shift in relative prices (away from carbon-based technology), influence the patterns of consumption and production (towards non-carbon, carbon-efficient, and carbon-capture technology), and redirect the financial resources to support the process. As I noted earlier, being a service industry, the financial sector will need to adapt by managing risk, developing supportive financial services, and exploring business opportunities. Both the threat and the opportunities that emerge will be a challenge for all segments of the financial system i.e. insurance, banking, and fund management. In this process, awareness, right incentive, and market mechanism will be key in determining the pace of change. Third, the financial sector can also be an agent of change, because of the three important roles it can play. Firstly, it can directly influence resource allocation by internalizing climate change in its core business decisions i.e. lending, investment, and fund management. Secondly, it can indirectly influence resource allocation by developing supportive financial services, markets, risk management and investment products that assist the adaptation process, for example, through the development of insurance products, weather derivatives, and “CAT”-bond, and also assist the mitigation process through trading of carbon credits and allowances. The scope for business opportunities on these two fronts are many, and are open for all segments of the financial system, ranging from commodities services to corporate finance, to investment banking, and retail banking. And thirdly, financial institutions can also engage climate change in its business agenda as part of the corporate social responsibility (CSR).

On the former, key principles guiding the policy approach should include clear global rule beyond 2012, the need for clear incentive structure by the government at the country level, reliance on market mechanism to innovate and grow the response, and financial regulation that is neutral on the issue. Under such policy setting, there will be ample opportunities for the financial system, especially in supporting green technology and carbon trading market. Lastly, for emerging markets that are starting up on the issue, five actions along the following lines could be useful. They are (1) establish the country’s overall strategy on carbon trading; (2) reduce search cost in matching buyers and sellers through a centralized system; (3) create awareness and educate all market players; (4) provide the needed tax incentive to build up the market, and (5) provide a clear legal framework. Actions in these five areas will go a long way in avoiding many of the problems that some countries are now encountering. Thank you. 4  BIS Review 97/2008
Chart: Key policy rate in the baseline scenario The degree of transparency regarding Norges Bank’s interest rate decisions has increased gradually since inflation targeting was introduced. We provide clear guidance about the future path of the key policy rate. Explicit interest rate forecasts were introduced in 2005. A key objective is to convey the contingency and the uncertainty in the forecast. To that end, we seek to be transparent about the considerations underlying each interest rate forecast and what the objectives and trade-offs are. We consider it important to explain why our forecast has changed. In our Monetary Policy Report, the interest rate forecast is accompanied by a separate chart showing the revision since the previous report due to changes in news and new assessments. Monetary policy also seeks to mitigate the risk of a build-up of financial imbalances. Operationally, and as a support to monetary policy decisions, our objectives and trade-offs are described by a monetary policy loss function7 The loss function is minimised subject to our model of the Norwegian economy, and the implied interest rate path is an important aid to the policy decision process8 Since models are simplifications, our projections are based on a combination of model analyses and professional judgement. Transparency allows financial market participants and other interested parties to make their own judgments on the revisions to our interest rate forecast – and the revisions will often be anticipated.

Reforms should, in particular, be conducive to capital accumulation and bring about tangible increases in total factor productivity. In other EU neighbouring regions, efforts in structural reforms have varied considerably. Following a severe financial crisis in 2001, Turkey witnessed a strong rebound in 2002 and began an ambitious process to reduce inflation, while still struggling with some of its long-standing problems. This achievement was supported by structural - though still insufficient - reforms. In Russia, after a long delay in the early years of transition, a first package of structural reforms has been implemented in recent years, positively contributing to the strong recovery the country has been enjoying since the 1998 crisis. United States Turning to the United States, labour, product and capital markets have reached a high degree of flexibility. This reflects both the traditional market-oriented nature of the US economic system and reform efforts over the past 20 years, including a variety of deregulation measures in the 1980s. The flexible microeconomic structure of the US economy has helped to make it one of the strongest growth poles in the world, with GDP growth averaging 3.3% from 1983 to 2002 (compared with 2.4% in the euro area). At the same time, the US experience shows that no country can consider structural reforms as “completed”. In its latest Article IV report on the United States, the IMF identified a number of areas where further efforts would be desirable, including the budgetary framework, the social security system and the energy sector.
Among these new standards are expectations that financial market utilities, including those that act as central counterparties (CCPs), be more resilient to shocks – with a particular focus on enhancing liquidity and liquidity risk management. While CCPs reduce aggregate risk, they also concentrate the remaining risk. That is, CCPs create potential single points of failure in global derivatives markets. Thus, CCPs need adequate capacity to absorb potential losses from the default of one or more of its members, and they need to have access to liquidity so that they can always fully settle their obligations. The new risk management standards include requirements that CCPs have pre-funded default arrangements, that CCPs measure and collect initial and variation margin even in extreme stress scenarios, and that CCPs be able to withstand, again in a plausible stress scenario, the failure of a member having the largest exposure to the CCP. In some cases, this last element is enhanced to require the ability to withstand the failure of the two largest members. As these standards are fairly new for the global population of financial market utilities and in many jurisdictions the standards have yet to be issued in new rules and regulations, progress across the industry in meeting these standards is mixed. •  In some cases, liquidity risk management frameworks are underdeveloped, with needed additional focus on measurement and monitoring to make the frameworks more robust.

The possibility to create new access channels provides opportunities for nimble firms that are not banks to act as middle men and provide interfaces that facilitate the initiation of the underlying, more old-fashion payment. Remember that payment initiation services and third-party providers have been at the centre of the discussions on the new Payment Service Directive. These firms don’t compete outright with the banks and in some cases they may even directly cooperate with them. In other cases, the non-bank may compete directly with the banks. It may even have built its own infrastructure or account structure through which it processes payments. This is most likely in cases where the non-bank already has a kind of network that it can adapt and utilize for payments. Telecom operators and Internet service providers are examples of such firms. A concrete example of such a case is M-Pesa, the mobile payment service launched by SafariCom in Kenya. Initially intended for person-to-person payments, it quickly became a success and a platform for a number of financial services. Non-banks can also act as suppliers of services to the banks, e.g. payment switches routing the payment information or the outsourcing of back-end services such as the operation of large IT-platforms, etc. These are all essential inputs for payment intermediation. Because non-banks can enter the payment process in so many places, we have longer and more complex payment processes with more actors involved. Banks, at least for some type of payment services, have less direct contact with the end-users.
Fourth, Basel II sets out to promote stress tests as one of the tools for managing and assessing risks. This is very important in dealing with the turmoil like that we are currently experiencing. Basel II stipulates that the stress tests conducted by banks must incorporate the effects of a large increase in credit and market risks as well as those of a rise in liquidity risk. The aim is to ensure that banks hold sufficient capital to absorb severe shocks. Fifth and last, Basel II aims to substantially reinforce transparency and market discipline. Pillar 3 of the framework lays down numerous requirements regarding the disclosure of qualitative and quantitative information about capital and risk, including in respect of risk transfer transactions. The importance of this information was thrown into sharp relief by the financial turmoil this summer, during which greater transparency, particularly regarding the nature and quality of assets recorded by credit institutions in securitisation vehicles, proved necessary. To sum up, and before trying to draw any preliminary conclusions from this turmoil aimed at optimal implementation of Basel II, I should like to emphasise that the new framework encourages banks to better assess and manage risks linked to securitisation transactions and to improve their financial reporting, two crucial areas in which the current problems have highlighted that significant progress needs to be made. 3. The financial turmoil has shown that optimal implementation of Basel II requires further progress in several areas.

The initial shock on the global economy did not differ much from the one that hit in the 1930s. There were many similarities between the Great Depression and the Great Recession. Worth noting are the initial fall in manufacturing output and trade, the collapse of stock prices and credit, and the increase in bond spreads (see Eichengreen and O’Rourke, 2010). These remarkable similarities in the first months of the crisis were alarming. The questioning of the profession was also worrisome. However, the subsequent evolution of the global economy was quite different from that of the Great Depression, and it was certainly the result of good macroeconomic management. There was a failure in crisis prevention, but the policy response has been good so far. More remarkable has been the response of emerging market economies. In particular, Latin America, a region that historically magnified the global cycle, this time will perform better than the world economy’s average. The world has still many macroeconomic problems to solve before we can declare victory. Indeed the same policies that averted a collapse require careful review to avoid planting the seeds for the next crisis. 3  On this issue, Rancière et al. (2008) find that “countries that have experienced occasional financial crises have on average grown faster than countries with stable financial systems”. 4  BIS Review 84/2010  First, there is a need to think seriously about moral hazard. It is true that during the crisis this was a second order problem.
(*)  Significant at the 10% level  (**)  Significant at the 5% level  (***)  Significant at the 1% level  BIS central bankers’ speeches  25  Table 4: Horse-race between different indicators of bank solvency for major global banks(a) Model 1  Model 2  Model 3  Model 4  Model 5  –0.23 (0.20)  T1 Risk-based  –0.55 *** (0.18)  T1 Leverage  –0.44 * (0.25)  CT1 Risk-based  –0.70 *** (0.23)  CT1 Leverage  –0.08 (0.05)  Market risk-based Market leverage McFadden R2  Model 6  0.023  0.177  0.070  0.203  0.071  –0.20 *** (0.06) 0.216  Model 7 0.97 (1.47) –0.48 (2.04) –1.52 (1.36) 1.22 (1.99) 0.13 (0.11) –0.35 * (0.20) 0.317  (a) Regression based on a smaller sample (45 global banks). This is because of missing information on market capitalisation (where banks were not publicly listed) or on consistent pre-crisis estimates of Core Tier 1 capital. Notes:  For all models, the dependent variable is “failure”. Standard errors are shown in brackets. (*)  Significant at the 10% level  (**)  Significant at the 5% level  (***)  Significant at the 1% level  Table 5: Risk-based capital versus leverage, FDIC-insured banks(a) Variable  Model 1  Leverage ratio  –0.01 (0.01)  Risk-based capital ratio  Model 2  Model 3  –0.06*** (0.01)  0.27*** (0.03) –0.22*** (0.03)  (a) Sample excludes outlier banks with very large risk-based capital and leverage ratios.

Effective fiscal measures are necessary in order to prevent monetary policy from bearing the brunt of these pressures, since this would have an excessive impact on the traded goods sector. The firmer the fiscal stance is at the peak of construction activity, the smaller is the increase in the real exchange rate that will inevitably will accompany it, with a correspondingly beneficial effect on current export and most competing industries. Ladies and Gentlemen The global economy is shrouded in uncertainty. A low rate of growth has been attained in most industrialised countries since 2001 and the recovery is slower than had been hoped. The war in Iraq heightens this uncertainty. Favourable economic conditions among main trading partner countries is important for Iceland’s terms of trade. A special cause for concern is therefore the deteriorating outlook in the euro region, which is important for Iceland’s foreign trade. The situation in Iceland is quite different. A prolonged growth phase was followed by one year, 2002, of a minor contraction, but at present we foresee a new period of growth when our task will be to maintain economic balance. Expectations of greater prosperity are already clearly visible. I would like to conclude by thanking the Office of the Prime Minister and other government authorities for their pleasant cooperation. I also thank the financial institutions for their good collaboration. Last but not least, I would like to thank the employees of the Central Bank for their fine work, without which the Bank could not have achieved such impressive results.
The evaluation has had greater scope to discuss these weaknesses in more detail than was possible in the Riksbank’s proposal, and it also highlights a number of important principles as to how one can conduct and organise the financial stability work. I believe that these arguments in particular can provide a valuable contribution to discussions in Sweden and to our own development work at the Riksbank, but perhaps most of all to the work of the financial crisis committee. 1  Proposal to the Riksdag 2009/10:RB4, “Proposal regarding certain areas that require investigation as a result of the financial crisis”. (http://www.riksbank.se/templates/Page.aspx?id=43390). BIS central bankers’ speeches  1  Something I consider to be quite crucial in this context is that we do not create institutions that lack the necessary power to make decisions. By this I mean that in all parts of the work on preventing and managing financial crises we should have some institution that is clearly responsible and this institution should also have the necessary mandate, tools and resources to handle this responsibility. When it comes to putting this into practice I believe that Goodhart’s and Rochet’s more theoretical reasoning regarding allocation of responsibility and institutional solutions could be very useful. But, as they are also careful to point out, the principles they discuss must be implemented in a way that suits each country’s individual characteristics. And each country must find its own way.

But before I hand you over to the MoneyPACIFIC team for their presentation I truly believe your goals and objectives in your respective designations can be greatly complemented with our agenda of financial literacy and that this latest resource will be of use to the pursuit of youth and women empowerment, assist the micro-entreprenuers, complement student learnings from the existing national education curricula, and overall greatly assist us in all our diverse capacities as financial consumers. Manuia le tātou fa’amoemoe. Thank you. 2  BIS central bankers’ speeches
Since September 2008 to date, the Bank has sold US $ million to the market against purchases of US $ million; •  Issuance of directives: On March 2, 2009, the Bank of Zambia issued directives to commercial banks prohibiting the extension of loans and/or credits and providing other sources of Kwacha funding to non-residents for any maturity period of less than one year. The Government is in the process of issuing a statutory instrument, which will clarify this position, in order to protect the integrity of the financial market. •  Collaboration with regulators: Engaged other regulatory authorities regarding measures to stem the growing trend of dollarisation, including some consideration to legislate and provide stringent regulations against this practice, which erodes the effectiveness of domestic monetary policy. In this regard, the Government is in the process of issuing a Statutory Instrument to ban quoting, invoicing and settling in foreign currency of domestic transactions for goods and services in Zambia. In addition, the Bank has enhanced its vigilance and interaction with the domestic financial system to ensure adherence to its supervisory guidelines and to enhance information flows between banks and the Central Bank. Accordingly, the Bank also introduced measures to ensure that financial market players under its supervision provide detailed information on their foreign exchange transactions. Further, the Bank has continued to reinforce the regulation and supervision of the financial sector.

Further, the value added tax on selected agricultural equipment and spares, was zero rated as incentive to increase agricultural production and productivity. (ii)  Tourism sector: – In order to diversify the economy and attain broad based economic growth, Government increased the allocation to the sector to improve access to the Northern Tourism Circuit (infrastructural development in Mbala and Kasaba Bay). Further, Government will embark on the development of a new world class tourism area in Livingstone, and step-up the development of road infrastructure in key national parks namely, Luangwa and Kafue. (iii)  Manufacturing: – In order to expand the manufacturing base, Government is promoting the establishment of Multi-Facility Economic Zones (MFEZ) on the Copperbelt (Chambishi), and Lusaka (Lusaka south and east) provinces by providing for fiscal incentives and quality infrastructure development in the budget. Operations at the Chambishi MFEZ have already commenced. Further, the budget reclassified and re-categorised certain manufacturing materials with the aim of lowering customs duty rates. (iv)  Mining sector: – In light of the adverse impact of the global economic crisis on the mining sector and with the view of easing these effects, the Zambian Government introduced tax concessions, which included removal of the windfall tax, increasing capital allowance to 100 percent as an investment incentive, and reduction of customs duty on Heavy Fuel Oils.
The main argument for central bank independence is inflationary bias, the existence of which was confirmed by the high rates of inflation seen in most advanced economies in the 1970s and 1980s. Inflationary bias is the outcome of discretionary monetary policy that leads to a higher than optimal level of inflation. Two theoretical explanations were offered for inflationary bias. The first was the time, or dynamic, inconsistency of governments, and the second was governments’ efforts to introduce an “inflation tax” to reduce public debt. Time inconsistency occurs when policymakers announce that they will pursue a particular policy in the future but then follow a different one in reality because their preferences change in the meantime. The “today’s actions = tomorrow’s regrets” problem arises because time-inconsistent decision-makers value the present more than the future. The general solution to this problem is not to allow decision-makers to make discretionary decisions, but to impose certain rules on them instead. This was the conclusion reached by Kydland and Prescott in a pioneering paper published in 1977, which later won them the Nobel prize for economics. The theory evolved in two directions. In 1985, Kenneth Rogoff developed the rules argument by introducing the concept of a conservative central banker. According to Rogoff, society can sometimes make itself better off by appointing a central banker who does not share the social objective function, but instead places a larger weight on inflation rate stabilisation relative to employment stabilisation.

The absence of extended periods of high unemployment in the face of significant adverse developments suggests that labour markets have been able to adjust. Indeed, unemployment in Malta has been less volatile than in the euro area. The exchange rate peg has also been a valuable nominal anchor, restraining price increases. In fact, inflation has averaged just 2.4% in the past five years (1.3% in 2003), indicating a considerable measure of nominal convergence with our major trading partners, and with the euro area in particular. Taken together, these features of the Maltese economy suggest that the likelihood of experiencing an asymmetric shock is small; and they lead us to believe that the exchange rate peg provides a suitable framework for joining ERM II and that the country should be able to adopt the euro sooner rather than later. We are also aware, however, that the peg will have to be maintained during the lira’s passage through what is essentially uncharted territory. Professor Eichengreen’s words of admonition to last November’s East-West Conference here in Vienna readily come to mind, “… prescribing bands for the new EU members for an extended period is the worst form of macroeconomic malpractice. Bands are fragile and difficult to manage. Their fragility is clear from Europe’s own experience in 1992.” In order to ensure a smooth transition towards, and through ERM II, therefore, it will be necessary to convince the markets that ERM II is indeed a natural culmination of the lira’s currency basket regime.