samchain/econo-pairs-v1 huggingface dataset:
Eva Srejber: How do we create stability in financial markets? Speech by Ms Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, at a public hearing in the Riksdag: “Economic policy in a global economy - is the Tobin tax an obstacle or an opportunity?”, Stockholm, 3 April 2001. *  *  *  Thank you for the invitation to come here. This is a subject that I am often asked to discuss in various parts of the country. There is considerable interest in the challenges facing economic policy in an increasingly internationalised world. The credit market is central to a country's economy. Financial institutes are needed to mediate payments for households and companies, such as wage and invoice payments. In addition, the institutes mediate capital from savers to borrowers. This can comprise companies making investments or households buying their own home. All in all, a well functioning financial sector is a necessary condition for a country to achieve prosperity. However, mediating payments and lending money also involves taking risks. The international foreign exchange market in turn links together the national credit and payment markets, so that payments in one currency can be exchanged for payments in another currency. This enables trade, investment and foreign aid between countries. International capital flows enable savings in countries with a capital surplus, after exchange on the foreign exchange market, to finance investments in countries with a capital deficit.

A combination of insights, leadership, technical capacity and adequate preparation needs to be channeled into a general enthusiasm for both our regions to rise to the potential challenges and in the process become greater partners for success. In summary, the future direction of the ASEAN-EU relations will be dependent on several multidimensional facets that would include: the changing strategic landscape amidst globalisation, ASEAN's and the EU's desire to play a greater role in the global economy and international affairs, the EU's ability in managing its enlargement process, and ASEAN's commitment to forge greater regional integration. I am certain that the passage of time and closer analyses of the issues discussed at this Conference will yield more lessons that we could take to heart in making progress on expanding ASEAN-EU economic and financial links. It is my hope that in the future we can continue to have such constructive exchanges of views and experiences that will further nourish the broader learning environment. In closing, allow me to thank the speakers for enriching the Conference with their presence and their cutting-edge perspectives. I also wish to again thank the European Commission for giving Bank  1/2  Negara the opportunity to co-host this Conference. To all our participants from abroad, we hope you stay in Kuala Lumpur has been pleasant, and we wish you a safe journey home. 2/2
As a result of our strategy to increase reserves, which is applied in this framework, the amount of our reserves reached USD 60 billion as of May 26, 2006. Secondly, the Central Bank conducts interventions due to volatility. Taking into account the factors that cause volatility in either direction or potential developments, the Central Bank may intervene directly in the market or use announcements and warnings. These implementations do not have a mechanical nature. As the conditions of each intervention differ from each other, neither do they have a symmetrical nature. At this point, I would like to share my views about the activity observed in the value of the Turkish Lira lately. The international liquidity conditions, which change according to the monetary policies pursued by the central banks of developed countries, and the perceptions of uncertainty that emerged due to internal and external developments, had considerable effect on the exchange rate movements that have been observed almost for a month. In the short term, this activity is perceived to be more negative than the information it contains. However, there is no deterioration in the macroeconomic fundamentals. There is no change in the program projections and targets. The movement of the exchange rate is mainly caused by external developments. Similar movements are observed in other developing countries, as well. 4  BIS Review 68/2006  Today, the floating exchange rate regime performs its shock-absorbing function. We have observed similar developments in the past five years, as well.

Before all else, the point that I would like to emphasize is that our inflation targets are point targets. These targets have been set as consumer price index inflation. Our policies are established solely with the aim of achieving these targets. In our monetary policy implementations, we have announced our inflation targets for a three-year period in order to increase the emphasis placed on medium-term. In this context, the inflation target is 5 percent for 2006 and 4 percent for 2007 and 2008. To apply a rule to the Central Bank’s accountability in the event of any deviation or the possibility of deviation from the inflation target, a + 2 point-uncertainty band has been established around the point target. Once again, I would like to underline the significance of this issue. This band, which has been formed around the inflation target, aims at setting the accountability criteria. Looking at the practices around the world, we see that a 40 percent-uncertainty band has been formed around the point target in most countries. Our implementation is based on this approach. In the event that inflation is realized outside this band or, in case of such a possibility, the mechanisms specified with respect to accountability will start. With the introduction of the formal inflation targeting regime, interest rate decisions are made by voting at the Monetary Policy Committee meeting. Monetary Policy Committee meetings are held once a month on pre-announced dates. Nevertheless, when deemed necessary, extraordinary meetings may be held, such as yesterday’s meeting.
Banks and financial institutions should be more innovative and make arrangements to collect/capture remittances from legal/illegal migrants at the field level and coordinate with the host country’s banking/financial institutions to transfer monies to remitter's home country speedily and at a reduced cost. Informal transfers largely take the form of cash. The absence of an efficient financial infrastructure at the remitter's end as well as receiver's end is also found to be a discouraging factor that contribute to the use of informal channels. In some destinations, there is no access to sophisticated infrastructure in the host countries for cross-border transfers. Migrant workers, therefore, depend heavily on informal systems. In this context, a global attempt should be made to facilitate cross-border remittance transfers as such transfers have a significant impact on the development of many nations. 2  BIS Review 3/2007  Part II - Importance of remittances in Sri Lanka's economy I now proceed to illustrate how dependent Sri Lanka is on worker remittances. Over the last couple of years, worker remittance has been the single largest inflow of foreign exchange after exports in Sri Lanka. Remittances have played a significant role in financing the widening trade deficit and maintaining balance of payment surpluses. During 2005, over 75% of the trade deficit was financed by worker remittances.

Otherwise the central bank will be unable to keep its promise. Throughout history, central banks have tried various mechanisms for tying themselves to the mast. Being accountable for their promises in the form reporting and follow-up is one mechanism that ensures that the bank is tied to the mast. Relinquishing the opportunity to break a promise makes that promise more credible. These are matters I touched on in my speech “On the topic of keeping promises” in 2008. Keeping a promise is difficult, because reneging on a promise will often be the tempting or rational choice in the short-term. The legal scholar and economist Michael Woodford has pointed out that in order to keep your word it is not enough to make a promise today and keep your word tomorrow. When making interest rate forecasts, we must also take into consideration the promises made yesterday. Only then can we fully use expectations to stabilise the economy optimally. This is referred to as monetary policy from a timeless perspective (Michael Woodford, 2003: Interest and Prices, Princeton University Press). Today there is general consensus that price stability is [not only] the best contribution that monetary policy can make to economic stability over time, [but perhaps also the only promise the central bank can actually deliver]. In the long term, a stable value of money is the only promise that the central bank has the means to deliver. This promise was previously kept by regulating the supply of money issued. Today, the interest rate is the instrument.
And a recent study by IMF economists finds that risk-based capital ratios in the range 15-23% would have been sufficient to absorb losses in the vast majority of past advanced economy banking crises (Dagher et al (2016)).13 At the time of the Basel Committee’s study, there was little evidence on the impact of bank capital on the ∂∆ severity of crises (∂k ), which is why this channel was ignored in the quantitative calibration. That has since  changed. Jordà et al (2017) find that, while bank capital does not prevent a crisis from occurring, it matters for the pain suffered in its aftermath. They find that real GDP per head is 5 per cent higher 5 years after the onset of a crisis-related recession if bank capital is above its historical average when the crisis hits. The benefits of capital in reducing the severity of crisis are also borne out by experience since the crisis. Chart 15 plots international banks’ capital ratios prior to the crisis against their subsequent lending growth. The relationship has a statistically significant upward slope. Banks that entered the crisis with higher capital have, on average, been better able to continue their lending. On average, each extra 1 percentage point of pre-crisis capital boosted banks’ cumulative lending over the subsequent decade by over 20%. This finding is corroborated by micro-econometric evidence. Carlson et al (2013) find that US banks with higher pre-crisis capital ratios had stronger loan growth in its aftermath, with the effect particularly pronounced at lower capital ratios.

The time-inconsistency problem that pervades the debate over the balance between rules and discretion in monetary policy (Kydland and Prescott (1977), Barro and Gordon (1983)) is arguably even more acute for prudential policy. This is partly because adverse crisis outcomes are highly non-linear and costly, making it more difficult to pre-commit to avoiding forbearance and bail-out. The low probability of crises may also mean that policymakers are insufficiently tough in tackling financial sector risks when times are good and memories of previous crises distant (Reinhart and Rogoff (2009), Malmendier and Nagel (2011), Gennaioli et al (2015)). This can create political pressures to relax regulations to support shorter-term goals. Public choice theory (Olson (1965)) would also suggest that lobbying pressure is likely to be more acute for regulatory policy than for monetary policy. The private costs of regulation are borne strongly by narrow, but 26  All speeches are available online at www.bankofengland.co.uk/speeches  26  powerful, interest groups in the financial industry. And while higher than target inflation is quickly observable, it may be very difficult to judge in real time that regulation is insufficiently stringent given the difficulties of quantifying the probability of future financial crises. These arguments point to the need for strong institutional frameworks, supported by clear mandates, objectives and instruments, to deliver financial stability policy. Indeed, on conceptual grounds, the need for such a framework appears to be at least as strong, if not stronger, than for monetary policy.
Some analysts have pointed out that this could reflect certain doubts in the market regarding the credibility of these bonds for various reasons, including: i) the lack of ambition in setting goals, ii) the low penalties, iii) uncertainty regarding the possibility of not reaching goals and iv) the fact that prospectuses include language permitting the cancellation of coupon step-up in the event of changes in rules, regulations, guidelines or in the company’s operations. So the risk of greenwashing in this type of instruments could re-emerge. In order to avoid this, the verification and external review of their conditions and the possible inclusion of this type of bonds in the European green bond standard could help to provide reassurance. As we have seen, the existence of definitions is very important, as is transparency to avoid greenwashing. According to the European Supervisory Agencies’ (ESAs) common high-level understanding of greenwashing published last week, they understand greenwashing “as a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants.”5 Also it is recognised that greenwashing appears to result from multiple interrelated drivers and, moreover, that it depends on the area we are considering, whether asset management, the investment industry, corporates or benchmarks, but we can conclude that a common element in greenwashing is the lack of transparency.

[13] This presents a challenge when considering implications for policy – and highlights the importance of continuing to plug the kinds of capability gaps I discussed earlier. As the results publication sets out, the Bank will engage with firms individually and collectively to help them target their efforts, and share good practices identified in this exercise. Implications for policy I hope it’s clear by this point that the CBES will be a valuable tool for helping us and financial firms to understand the challenges ahead. This exercise is not going to be used to set capital requirements for banks and insurers. But it clearly sheds light on that debate. The CBES results make clear that climate risk is a first-order strategic issue for the firms we regulate. But in my view it is not yet clear that the magnitude of transition costs require a fundamental recalibration of capital requirements for the system. [14] A persistent drag on profitability would be very nasty for firms, but so long as they are able to continue to make sufficient profits to maintain their capital buffers, its impact on safety and soundness might be less material. Had the results of this exercise suggested a fundamental threat to the solvency of these firms, our response would of course have been quite different. Set against that high level view, though, a world with climate change is without doubt riskier than one without.
Tukiya Kankasa-Mabula: Modernising Zambia’s payment system Remarks by Dr Tukiya Kankasa-Mabula, Deputy Governor Administration of the Bank of Zambia, at the Ecobank Launch of Financial Products, Lusaka, 16 December 2009. *  *  *  • Members of the Ecobank Zambia Limited Board of Directors present; • The Managing Director of Ecobank Zambia Limited, Mrs Charity Lumpa; • Members of the Diplomatic Corps; • Ecobank Zambia Limited Customers; • Management and Staff of Ecobank Zambia Limited; • Members of the Press; • Distinguished Invited Guests; • Ladies and Gentlemen. It is with great joy and gratitude that I stand to address you at this important launch of the “Ecobank Rapid Transfer” and the “Non-Resident African Account”. I am informed that the two products are designed to transfer money faster and in real time while meeting the needs of customers resident in countries other than those where their accounts are domiciled. I am also pleased that these two products are aimed at promoting the efficient transmission of remittances at an affordable cost. Distinguished Ladies and Gentlemen, allow me to briefly highlight the importance of remittances to our economy. Remittances are increasingly growing to be one of the most important sources of finance in Zambia. Such funds are not simply an expression of fondness by people in the diaspora to assist their families in adverse situations. They also represent an important source of finance that augments capital inflows and investments in the economy.

Today, expectations are of a largely unchanged level of resource utilisation. Thus, price pressure is not as high, either, as long as no secondary effects arise from the energy price rises. Forecasts guide policy Let me conclude by underlining two important aspects when assessing monetary policy. Firstly, the Riksbank, like many other countries with inflation targeting, has chosen to look ahead when making monetary policy decisions. This is clearly seen when the actual policy is compared in the evaluation appendix with simple, rule-based decisions on the basis of observed GDP growth or actual inflation. The import of this is, of course, that forecasts of inflation and GDP growth become more decisive for monetary policy than the actually observed growth rates in price levels and GDP. A disadvantage of this policy is that forecasting mistakes have effects on policy. But one advantage, which we consider  4  BIS Review 15/2003  to outweigh this, is that monetary policy becomes less disjointed, more predictable and on the whole more stabilising for economic developments. Of course, the Riksbank could have raised its rate more when inflation rose because of higher food and energy prices during 2001. But would this have rapidly subdued inflation and led to a more beneficial development in the economy? I don't think so. Secondly, it is difficult both to make and to assess forecasts, as our picture of history and the current situation constantly changes as a result of revisions to the statistics.
But the consequences for economic stability will be determined, among other things, by the weight of each one and by the response of monetary policy and other economic policies. In any case, it is clear that something has to give. As Chart 1 shows, we are undergoing a period of several years during which unit labour costs are growing well in excess of the level that is consistent with the inflation target. At the same time, productivity growth is very weak. 2  BIS central bankers’ speeches  If the Central Bank’s most recent forecast materialises, the result will be as is shown in Chart 2: the real exchange rate and wage share will rise far above their historical averages, and the tension in the labour market will be amplified even further. But I consider it unlikely that this will be the outcome. Either the adjustment will take place through some combination of higher inflation and higher unemployment, or positive shocks will provide some assistance; for example, the improvement in terms of trade will be greater and more lasting, productivity growth will be stronger, and interest payments to abroad will be lower because of reduced external debt and improved credit ratings. It will be very interesting to see how things develop in the next few years. It would be imprudent, however, for economic policy and contingency planning to rely blindly on positive shocks. And then there is inflation.

7  P. Aghion, P. Askenazy, N. Berman, G. Cette and L. Eymard, 2012. “Credit Constraints And The Cyclicality Of R&D Investment: Evidence From France,” Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1001–1024, October. 8  P. Aghion, D. Hémous and E. Kharroubi, 2014. “Cyclical fiscal policy, credit constraints, and industry growth,” Journal of Monetary Economics, Elsevier, vol. 62(C), pages 41–58. 9  A. Bergeaud and G. Cette and R. Lecat, 2016. “The role of production factor quality and technology diffusion in 20th century productivity growth,” Working papers 588, Banque de France. 10  C. Reinhart and K.S. Rogoff. 2010. “Growth in a Time of Debt.” American Economic Review, 100(2): 573–78; Lane, Philip R. 2012. “The European Sovereign Debt Crisis.” Journal of Economic Perspectives, 26(3): 49–68. BIS central bankers’ speeches  3  impediments to the flow of resources, in particular in the labour market and in the way credit was allocated between sectors, hence revealing that a malfunctioning of the financial sector can reinforce structural weaknesses. 11 In some cases both were present at the same time. Of the uttermost importance were the structural changes targeting an improvement in the monitoring and the resilience of our financial system. Arguably the financial crisis partly resulted from excess risk taking and overinvestment in low productivity sectors. 12 The Basel 3 framework worldwide and the Single Supervisory Mechanism in the euro-zone provide new supervisory and prudential tools to mitigate these risks in the future.
Apparently, the issue of rising unequal income distribution is neither new, nor the world has been shielded from tectonic changes in the systems, such as for example the transition in Europe, which was “fertile soil” for rising inequality. However, it is only in the last ten years that we witnessed such substantial proliferation of literature, and academic and political debates on the roots and consequences of rising income inequality. It was the financial crisis that brought the issue to the fore. Even more, some authors link the severity of the financial crisis and its unexpected spell, exactly to the uneven societies. In his book “Fault Lines”, Raghuram Rajan argued that rising inequality in the past three decades led to political pressure for redistribution that eventually came in the form of subsidized housing finance, which was at the root of the global crisis. Whether or not policies of the central bank affect the income distribution gained lots of attention, as well. I would say that the pure fact that we inherently face with heterogeneity across households in terms of their primary sources of income – capital or labor – or with respect to their position of being saver, or borrower naturally implies that monetary impact, at least in the short-term, could differ along these groups. Macro-prudential measures, by design are targeted and selectively used to tackle identified points of vulnerability. Purchase of different types of assets, also significantly alters the pricing on the financial markets and can have different wealth effects.

Bank of England reserves) and, crucially, by requiring all private money to be exchangeable for Bank of England money, cash, on demand by the holder and without loss of value. Alongside regulation, the provision of Bank of England money to the public and reserve money to commercial banks institutions anchors the confidence, uniformity and interchangeability of money in the UK. Our assessment is that future developments in payments and money will make it likely that, alongside regulation, we will in future need a digital pound, issued by the Bank of England to perform this anchor function. The experience of digitalisation is that new products and services, enabled by new technology, can be adopted rapidly at scale. The Government has identified several characteristics of digital markets that may lead to concentration. Such characteristics include network effects, economies of scale and scope and data advantages, which can act as barriers to entry. This suggests that the future development of private money issuance could tend towards a small number of firms taking a significant market share. While concentration and market power are not inherently harmful and may reflect innovative products and services, they can damage consumer choice, competition and innovation. Dominant issuers of new forms of private digital money may create ‘walled gardens’ - payment systems that are not fully interoperable or restrict the development by smaller firms of payment services using the money they issue.