samchain/econo-pairs-v1 huggingface dataset:
This is specially so in emerging markets, where regulatory and political risks heighten the likelihood of default, transaction lead times are long, projects require prohibitively large amounts of start-up capital, and there is limited access to expertise in project development and financing. Second, we need to reduce the risks in marginally bankable transition projects to attract private capital. The return profile on many such projects is not commensurate with the risks facing private financiers or investors. To reduce overall risk and improve bankability, we need more catalytic and concessional funding from the public sector, multilateral development banks, and philanthropic sources. Such funding can be in the form of grants, risk-sharing arrangements, debt at below-market rates, technical assistance, and structuring advice. They can help crowd in additional multiples of private sector funding. But while public capital can potentially do more to mitigate risk, private capital must still bear a fair share of project risk and exercise the appropriate due diligence on project viability and performance. Third, we need to make the financial ecosystem work more synergistically. Banks play a key role as lead managers for financing sustainability projects. However, with limited balance sheets and regulatory capital and liquidity requirements, banks need to offload these loans to institutional investors who have more absorptive capacity. But institutional investors prefer larger deal sizes with a diversified pool of assets to reduce concentration risk. We need to shift towards a portfolio approach to blended finance deals, through the structuring and securitisation of typically illiquid green and transition assets.

Ravi Menon: Blended finance for the net-zero transition Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the "Transition Finance towards Net Zero" conference, Singapore, 4 October 2022. *** Good morning and welcome to the inaugural Transition Finance towards Net Zero conference. COP27 will be held in Sharm El-Sheikh, Egypt, in a little over a month. We are privileged to have with us Dr Rania Al-Mahsat, Egypt's Minister for International Cooperation, who will set out the Egyptian COP27 Presidency's priorities to turn climate ambition into climate action. Why are we gathered here? Let me briefly lay out the problem statements and then set out how this conference hopes to contribute in specific ways to help the situation. First, the world is currently not on a trajectory to achieve net zero emissions by 2050. And we know this is what is required to prevent or avoid catastrophic climate change. To reach Net Zero by 2050, the world needs to reduce greenhouse gas emissions by 45% by 2030, relative to 2010 baseline levels. But emissions today are still rising, not falling. And according to the UN Emissions Gap report 2021, based on our current policies in place, the world is 55% short of the emissions reduction target for 2030. Second, the world is investing nowhere near what is required to get to net zero by 2050.
The CBI Industrial Trends Survey shows that in manufacturing industry investment intentions are the strongest recorded since 1997. BIS Review 158/2010  7  making tax payments to ease cash flow constraints. And a further supporting influence has been the relative strength of company cash flows I commented on earlier. The flip side of the fact that more companies have survived the recent recession is that there has been a fall-off in measured productivity. Instead of slack being created in the labour market through company failures and job losses, there is the possibility that more spare capacity has been retained within companies which have survived the recession – particularly in the services sector, which accounts for the bulk of business activity in the UK. However, the extent of this margin of spare capacity and the way it will impact on the performance of the economy going forward is a big uncertainty at present, as I will discuss later. The 1990s recovery A third reason for optimism about the private sector and business activity to drive the UK economy forward in the current recovery is the experience of the previous recovery from the early 1990s recession. Through the mid-90s, the UK economy grew healthily – with annual GDP growth averaging close to 3.5% while the public sector deficit was being brought down in a broadly similar way to the reduction planned by the current government.

Indeed, it is most unusual for the UK to experience a period as long as eighteen months or more with no change in the official interest rate, as we have done since March 2009. The period over which Bank Rate has been held constant at 0.5% is now the longest period without a change in the official interest rate since 1951 (prior to which the Bank’s official interest rate had been held at 2% since the 1930s). I do not believe that the current economic conditions justify a continuation of this policy. The longer we keep interest rates at an exceptionally low level, the greater is the risk that Bank Rate would need to rise sharply in the future – creating a serious setback to business and consumer confidence. We should seek to avoid such a sudden lurch in policy. A gradual transition to higher interest rates appears much more likely to provide a stable and predictable approach to policy-making which enables the business community to plan sensibly for the future. As the private sector of the economy “gets back to business” and we get accustomed to a resumption in growth following the financial crisis, so monetary policy also needs to “get back to business”. It is quite right for the MPC to support the economy in recession when there are significant deflationary risks. But, as the economy recovers, a key task for the MPC is to maintain monetary discipline and confidence in a world of low and stable inflation.
Initially, liquidity was added through the traditional discount window, and later through a wide range of new liquidity facilities that were developed. Up until the Lehman bankruptcy, the FOMC provided this liquidity without expanding the size of its balance sheet (Chart 13). As the crisis intensified following the Lehman bankruptcy, the FOMC significantly escalated its support for the economy. The FOMC could not provide additional support to the economy in the traditional manner by reducing the fed funds rate since the policy rate was already at zero. Instead, the FOMC initiated the Large-Scale Asset Purchase (LSAP) program. The objective was to ease financial market conditions to provide more support to the economy. Central bank purchases of assets raise the price and therefore lower the yield on these assets. These purchases crowd out some investors who shift their purchases to other assets, which lowers the yields on these assets, as well. In this way, financial market conditions are eased more generally. A consequence of the LSAP program was a rapid expansion of the central bank’s balance sheet. The combined monetary and fiscal support for the economy helped to arrest the decline in economic activity. As final sales began to stabilize, firms were able to manage down their inventories. The aggregate inventory-to-sales ratio rapidly declined to its pre-recession level (Chart 14). With their excess inventory worked off, firms needed to meet demand by increasing production. Aggregate industrial production rebounded – especially for durable goods (Chart 15).

Second, given the deterioration in the labor market, households would also have a strong “precautionary demand” for saving to help buffer their consumption in the event of a job loss. Finally, homeowners might react to falling house prices by increasing their saving rate in order to rebuild the capacity to make a down payment on a future tradeup house. In more extreme cases where house price declines have put owners in a negative equity position where the value of the house is now less than the balance on the mortgage, homeowners may increase their saving rate to have the capacity to pay off their mortgage to avoid a costly foreclosure. At the same time that the real economy was contracting there was an on-going crisis in financial markets. The balance sheets of banks and securities firms were under severe strain and liquidity was drying up. A good barometer for problems in the financial sector is the price for credit default swap (CDS) contracts for financial firms (Chart 9). These CDS prices started to rise in 2007 as news of losses for subprime mortgages began to hit markets. There was a  BIS central bankers’ speeches  1  jump in CDS prices in March 2008 when Bear Sterns was taken over by JPMorgan Chase. For a brief period over the summer of 2008, CDS prices retreated.
Over the years, Bank Negara Malaysia working together with the insurance associations has invested significantly in informing the public about insurance through our financial literacy initiatives. We have come a long way in this process. Today, schoolchildren as young as 10 years of age will already be introduced to insurance through subjects taught in the formal school curriculum. By 2021, we expect to complete the process of integrating financial education content in the formal school curriculum at all levels of primary and secondary education. We have also continued to expand the ways in which we reach consumers, through different mediums and leveraging in particular on social media. We have adopted a life cycle approach to guide education initiatives, so that education content is more targeted and delivered when consumers are most responsive to receiving information. And we continue to adapt our education content so that it remains relevant and current to the issues and experiences that consumers face. In parallel with these efforts, agents will have a more important role going forward. With greater proliferation of online avenues for consumers to obtain information, contacts between agents and consumers are likely to be more targeted and specific in nature. Consumer needs and appetite for advice will also be greater in a more diverse insurance landscape.

Under the so-called Solidarity Alternative, or wage moderation policy, the social partners were to ensure moderate wage growth and competitiveness. The authorities promised to deliver a stable krone. Structural reforms were implemented to increase growth capacity. Confidence in monetary policy gained a firm footing and inflation and the real interest rate declined. But the regulatory pendulum that swings back and forth was still in motion. In the period up to the turn of the millennium, petroleum revenues were on the rise and fiscal policy came under pressure. The fixed exchange rate regime amplified fluctuations in the economy and the social partners were no longer able to rein in cost growth. The Solidarity Alternative had played its role. Unexpected growth in petroleum revenues also highlighted the importance of designing a long-term government savings plan. We needed a new anchor for both fiscal policy and monetary policy. Chart 5: Inflation. Moving 10-year average and variation in CPI. Per cent. 1980 – 2010 Report No. 29 from 2001 sets out long-term guidelines for economic policy. The division of responsibility was further clarified. Norges Bank was given a clear responsibility for keeping inflation low and stable. The government and the Storting can build on Norges Bank’s response pattern when drawing up annual budgets. They can also take into account that increasing spending via government budgets may trigger an appreciation of the krone.
And let me recall that Eurosystem loans currently carry much lower interest rates than the loans from the IMF and EU Member States. To be clear: ECB support and IMF / euro area member state support are not on an equal footing. They are no substitutes and for good reasons there is a distinction between central bank funding and fiscal financing. By the time the programme of financial support was agreed with the international lenders in late 2010, the ECB had already been providing extraordinary levels of support for several years. To continue the analogy, the Eurosystem was providing life-sustaining transfusions to the banking system. While this support was fully in line with the general rules applied by the ECB to all euro area countries, Ireland benefited more than any other country as its banking sector imbalances were particularly large. The ECB was thus an established key partner of the Irish authorities in staving-off the worst effects of the crisis, well before the EU/IMF programme was designed. This state of affairs is a far cry from the claims that the ECB “bounced” Ireland into the programme in late 2010. By that time, we had already been standing for quite some time with Ireland, and that remains the case today. This support would, of course, not have been possible had Ireland not been in the euro area.

I understand the strong desire of the authorities to minimise the costs associated with the banking sector rescue, including costs incurred to date, and those still to come. Let me make some comments in this area. When the programme for Ireland was designed, the costs of the banking sector measures already in place, including the promissory notes, were fully factored in. The annual cash repayments of promissory notes is thus financed by programme resources. That programme is on track. Any deviation from that programme should be considered very carefully indeed. The perceptions that have built-up around Ireland’s successes in the programme should not be jeopardised. It has been hard-won and it is worth fighting for. Therefore, the ECB remains of the opinion that Ireland should honour its commitments stemming from the promissory notes, as foreseen. This in our view is the best way to regain sustainable market access. I frequently hear in the Irish debate the sense that the debt resulting from the bank rescue is not Ireland’s debt. I can understand this sentiment and how many people feel about this situation. But what must be understood, is that in the run-up to the crisis, insufficient domestic policies (banking supervision and economic policies) played a major role in excessive credit growth and risk management failures in the Irish banking sector, the bubble in the housing market and the loss of competitiveness. The ECB has no supervisory responsibilities, despite claims to contrary.
Systemic banks must have the capacity to replenish capital, up to minimum regulatory standards, even if all capital – of all tiers – has been completely burned through. 8 It’s a game changer because it hardwires the recapitalisation of failing banks. Bailedin debt holders become, very quickly, the proud new owners of the bank. Case study evidence is striking. Rapid recapitalisation of failed banks speeds economic recovery. It cuts the long-term costs of systemic bank failure in half. But resolution through bail-in is more than a fire extinguisher. It’s a non-flammable coating of the banking system too. It helps to prevent bank failures in the first place. Unsurprisingly, the evidence is that when debt holders face the consequences of failure, banks take fewer risks. International estimates suggest that the removal of the heads-I-win-tails-you-lose ‘too big to fail’ subsidy cuts the risk of failure by a third. As you know, the removal of that subsidy isn’t a pipedream. Rating agencies are already removing “state support” uplifts from bank debt ratings. 9 And yes, it will raise  7  This is very similar to estimates of Miles et al (2012), who find the effect of increasing capital from 3% of total assets to 6% of total assets to be around 6% of GDP. 8  The Bank of England, as UK resolution authority, is now consulting on proposals to implement that principle in the UK for all systemic banks, as it must do under the European Bank Recovery and Resolution Directive.

(c) From 2014 , the chart shows common equity Tier 1 capital ratios as reported by banks. Table 1 Average Tier 1 capital requirements across UK systemic banks Tier 1 Capital Requirements  %RWA  % Total Assets (leverage)  Minimum requirements (no less than 75% CET1)  8.5%  3%  Pillar 1  6%  Pillar 2a (reflecting shortcomings in risk measures)  2.5%  Baseline capital buffers (CET1)  10  5%  Capital conservation buffer  2.5%  Additional buffers for systemic importance  2.5%  0.75%  Total Tier 1 baseline requirements  13.5%  3.75%  + UK countercyclical buffer rate at standard risk level  1%  0.35%  BIS central bankers’ speeches  References Baker, M and Wurgler, J (2013), ‘Do strict capital requirements raise the cost of capital? Bank regulation and the low risk anomaly’, National Bureau of Economic Research Working Paper No. 19018, May. Bank of England (2015), ‘Supplement to the December 2015 Financial Stability Report: The framework of capital requirements for UK banks’, available at http://www.bankofengland.co.uk/publications/Documents/fsr/2015/fsrsupp.pdf Bank of England (2015), ‘Stress testing the UK banking system: 2015 results’ available at http://www.bankofengland.co.uk/publications/Documents/speeches/2016/ speech883.pdf. Bank of England Prudential Regulation Authority and Financial Conduct Authority, ‘The Failure of HBoS plc’ http://www.bankofengland.co.uk/pra/Documents/ publications/reports/hbos.pdf. Bank of England (2016), ‘Bank of England response to the European Commission Call for Evidence on the EU Regulatory Framework for Financial Services’, available at http://www.bankofengland.co.uk/financialstability/Documents/regframework/detail edanswers010216.pdf.
12 Short Message Services are also used in the case of many other public services ― in the Philippines, crime victims are able to monitor the progress of investigation using text messages. In Singapore, citizens can order the service of SMS-reminders about dates of payment the road tax, return of books to the library or extension of the passport expiry date. They can also receive medical examination results using SMS. 13 The public sector faces a great challenge of provision of services aimed at the comfort of citizens (customers) rather than at the comfort of clerks, as it used to be for many years. It entails not only the necessity to change the way of communication with citizens, but it also forces public offices to adjust their internal processes and enhance their cooperation. As a consequence, projects such as “any door is good” are launched, whereby each office assumes the responsibility to provide an answer to a received query, even if the query goes beyond its authority. Another project entitled “one case — one contact point” is operated in many countries, under which registration of a new company is possible online, by filling all the necessary forms (for registration, tax, statistical etc. authorities) available on a website and authorizing them by means of the electronic signature. Integration of all the “back office” functions and processes has enabled Estonia to hold the world’s first online elections. In October 2005, more than 9000 Estonians cast their votes in e-elections.

The lessons we derived from this experience will lead global decision makers to reconsider their policies. We have already started to observe critical and permanent changes in global financial order. The future of the financial system will be in a much better shape with a pre-emptive approach. The coordination is especially needed in terms of better regulation and supervision of financial market instruments. In order for the mission of the COMCEC and thus of the Organization of the Islamic Conference to be successful, it is necessary for the decision making mechanisms to acquire a more active and global dimension. The success of the economy policies of the Islamic counties under the roof of the COMCEC depends on the formation of measures to increase trust and establishment of a close cooperation in economic and commercial areas. Annual meetings of the Governors of the Central Banks of the COMCEC countries will be very important in terms of catching up with the world’s agenda and following the recent developments. Economic activities of the related countries will be supported the most by increasing the cooperation between the central banks of the COMCEC countries, enhancing the functioning of the active mechanisms of communication in international platforms and sharing the experiences. The recovery of the economies of the Islamic countries will be fastened by increasing the exchange of information in the fields of economy, finance and banking among the member and observer countries’ central banks and financial authorities.
Reducing the European economy’s vulnerability to future shocks will also call for continuing progress towards a full Banking Union and a Capital Markets Union. The necessary support of the European Central Bank On this occasion, and unlike previous crises, the approval of the European recovery fund will prevent the European response to the crisis in the euro area from resting exclusively on the common monetary policy. The European Central Bank (ECB) has deployed a range of emergency measures during this crisis. These have involved, first, the extension of sovereign and corporate bond purchases in the euro area, with the aim of improving financing conditions. Specifically, the ECB has increased its pre-existing purchase programme and added a new emergency programme currently worth € trillion (11.3% of euro area GDP in 2019) and which will last, at least, until June 2021. One new feature is the fact that asset purchases under the new programme are being made with a high degree of flexibility regarding their distribution over time and across asset classes, and, in the specific case of public asset purchases, also as regards the issuing countries. As a result, the Eurosystem is focusing its purchases there where they are most needed at each point in time. The aim is to ensure the smooth transition of the single monetary policy to all countries in the area and to head off the risks of financial fragmentation.

Today, there are no signs of a financial bubble, but we are ready to act, if necessary, by implementing macroprudential measures, in the framework notably of the Haut conseil de stabilité financière (High Council for Financial Stability – HCSF) that you created via the Banking Act of 2013. For instance, at our eighth meeting held on 15 March 2016, we issued a warning about the office sector in the Paris area. BIS central bankers’ speeches  1  2. Monetary policy thus contributes greatly to our economy, but it can’t do everything. It cannot be the only game in town. It is vital that Europe and France seize this opportunity now. In France, growth is expected to be both robust and inadequate: Robust, as it should remain in 2016 at least at the 1.2 percent level observed last year. But inadequate, as it will probably linger a little below the euro area average of 1.4–1.5 percent. For growth and employment, three essential actions are necessary: reforms in France; private and public investment; the coordination of economic policies in Europe. First, in France, orderly and sustained reforms are needed to rebuild confidence. Keeping our public deficit and our debt under control is a contributing factor: the good figures published on Friday (deficit reduced to 3.5% in 2015) are another reason to strictly respect our European commitments by bringing it below the 3% limit in 2017.