samchain/econo-pairs-v1 huggingface dataset:
However, from Q4 this year we will make adjustments to our approach to the composition of this portfolio in order to incentivise companies to take actions contributing to an orderly transition to a net–zero economy. Given the relatively small scale of these holdings – in the context of sterling and global capital markets – we hope this change will by example influence how larger investors take account of climate risks in their own asset allocation decisions. Some may worry this change moves us away from central banks’ core responsibilities, into territory best left for governments. However, the case for taking this action is clear, it is in line with the change in the MPC’s remit I described earlier, and far from impeding the effective execution of our policy objectives, it may well contribute to a future outcome that delivers a more stable monetary and financial system. Conclusion I have spoken about the relevance of climate change and the transition to a net-zero economy to central banks. It is about faithfully executing our mission for monetary and financial stability, taking into account those structural shifts on the horizon. That brings with it several analytical challenges and demands new ways of thinking – we welcome this. But it is clear that the biggest component of the journey to net-zero rests not with central banks, but with government, through the delivery of sector-level climate policy pathways – without these the real economy cannot adjust effectively.

Just as we have had to adapt to these changes, to fulfil our mission going forwards we need to look ahead to the structural shifts we face over the coming years and decades. That will mean hearing central bankers like me speak about things that we have not in the past – terms like central bank digital currencies, cyber risk, and climate change are now firmly part of our lexicon. This is not about us adding new things to our mission, nor is it about doing that which is rightly for others. It is about taking these new things into account alongside the old as we go about fulfilling our mission, delivering monetary and financial stability through time. Climate change Climate change is an obvious, and indeed urgent, example of this. The physical effects of climate change, such as rising sea levels and more frequent severe weather events, as well as the transition to a net-zero economy, through changes in government climate policy, technology and consumer preferences, create financial risks and economic consequences. The question is not if but where, to what extent, and how should we respond. Answering all three of those questions has been at the heart of our work on climate change over the past 6 years. Ignoring them is not an answer. Indeed the longer we wait, the greater the costs of adjustment.
For instance, the downswing in inflation in 2003 was captured to a greater extent than the upswing at the beginning of 2001. The inflation forecasts are on the whole more accurate than the time series models. The forecasting memory for the CPIX extends eight quarters ahead (Figure 8). The correlation between forecasts and outcome is almost 0.8 one year ahead and just over 0.5 two years ahead (see Figure 9). None of the other variables has as high a correlation two  7  We have earlier analysed this in the context of a structural model, Ramses. The evaluation appendix to Inflation Monetary Policy Report 2007:1 contains an analysis of, for instance, the effects of productivity shocks on the economy. 4  BIS Review 138/2007  years ahead. The fact that the correlation wanes in time is natural as the uncertainty in the forecasts increases. Is there any bias one or two years ahead in the forecasts? Let us now look at whether there is any bias, that is, systematic over-estimation or underestimation in the forecasts one and two years ahead. The smaller the bias a forecast has, the better it is. One year ahead the bias for annual GDP growth is very small. However, two years ahead the forecasts have been almost been four tenths too high on average, compared with the outcomes, which is not negligible (Figure 10). With regard to the annual development in employment, the bias is just under three tenths one year ahead and two tenths two years ahead.

We need to cultivate and foster greater bilateral, if not, multilateral cross-border relationships with each other to develop greater liquidity in regional securities and derivatives markets. The current economic growth in Japan, Singapore, as well as in the broader South-East Asian region, gives us a window of opportunity to act swiftly to deepen and enhance trading linkages so as to strengthen Asia's competitive edge. Together, I believe we can present an attractive value proposition to global investors who are looking to Asia for growth. BIS Review 124/2006  1  Conclusion On that note, let me extend my heartiest congratulations to the Tokyo Stock Exchange on its Singapore Representative Office 10th anniversary celebration. The Tokyo Stock Exchange and Singapore have enjoyed an excellent relationship over the years and I do treasure the very important ties and partnerships between Japan and Singapore. I certainly look forward to many more years of close and fruitful cooperation between the 2 countries in future projects. I wish Tokyo Stock Exchange great success in their endeavours. Thank you. 2  BIS Review 124/2006
Last year, the Topaz Solar Farm project in California was structured with a $ debt package featuring $ of bonds. Banks took the construction risks, and the loans were subsequently refinanced via bond issuances. In the Asian context, there may be additional considerations in refinancing bank loans via the capital markets, given the greater reliance on bank lending in this region. Project sponsors need to get more comfortable accessing the bond markets instead of relying solely on their relationship banks. Credit or risk guarantees provided by multilateral development banks or export credit agencies may also need to be adapted for use in the capital markets. Banks need to be innovative and develop a broader suite of financing instruments beyond bank lending in order to meet the financing needs of their clients. MDBs/ECAs are important risk mitigants and could explore new ways to make efficient use of their funds This brings me to the next point – the role of multilateral development banks, or MDBs, and export credit agencies in catalysing broader private sector participation. Given the scale of financing required for infrastructure, discussions at international fora have started to focus on how the multilaterals can further support the sector. For example, part of the G20 agenda for 2013 involves getting multilaterals to increase their lending capacity. Post global financial crisis, these entities have in fact stepped up and filled project financing gaps when bank liquidity is constrained.

Hence the balance of financing sources will eventually have to shift. Policy makers have recognised the need for broader private sector participation. Long-term investors such as insurance companies, pension funds and sovereign wealth funds can be alternative sources of financing, as the life cycles of infrastructure assets match their long-term liabilities. However, these investors are not participating actively enough in the infrastructure space, especially in debt financing. I am sure we all recognise that there are many reasons including a lack of familiarity with the asset class and bespoke nature of infrastructure projects. Some see higher perceived political risks in Asia, and a limited range of investment instruments relating to infrastructure. To catalyse broader private sector participation to complement the traditional bank lending space, a few things could be considered. Firstly, we recognise that investors have varying risk appetites, and that the expertise to evaluate and undertake greenfield project risks still resides mainly with banks. Banks should therefore consider bringing in different types of capital at different stages as the risk profile of a project changes over time. For instance, transactions could be structured such that banks finance the construction stage of projects using their balance sheets, and the bank loan is then refinanced in the bond market post-construction. This way, institutional investors gain exposure to a steady stream of cash flows from operating projects, while banks can recycle capital to lend to new greenfield projects. There have been precedents in other parts of the world.
Earlier today, we published criteria for money market mutual funds to become eligible to participate in reverse repo operations, which was a first and important step in that direction. We are currently working with other types of firms to assess their potential participation in the program, as well. Our expectation is to have arrangements in place and to be ready to transact with some non-dealer firms by the end of the second quarter. This expansion of counterparties is important for boosting the capacity of the program. 4  BIS Review 39/2010  The bottom line is that the preparation of both facilities is advancing very effectively. Looking across the two programs, we will have established the capacity to drain a significant portion of excess reserves by the second half of the year. Of course, achieving this capacity does not say anything about how and when the FOMC will decide to actually drain reserves. The actual timing and size of draining operations, and their relation to changes in the interest rate paid on reserves, will depend on how market and economic conditions evolve. Chairman Bernanke discussed one possible sequence in his February 10 testimony. He suggested that operations to drain reserves could be run on a limited basis well ahead of policy tightening, in order to give market participants time to become familiar with them, and then could be scaled up to more significant volume as we approach the time for policy tightening.

To get to this point, the Trading Desk at the New York Fed has so far conducted 126 discrete operations to purchase Treasury and agency debt, and has managed 292 trading days on which either it or its investment managers have acquired MBS. My view is that the purchase programs have helped to hold down longer-term interest rates, thereby supporting economic activity. With the conclusion of the programs approaching, the Desk has been tapering the pace of its purchases of agency debt and MBS. However, even as the pace of our purchases has slowed, longer-term interest rates have remained low, and MBS spreads over Treasury yields have remained tight. This pattern suggests that the  2  BIS Review 39/2010  effects of the purchases have been primarily associated with the stock of the Fed’s holdings rather than with the flow of its purchases. In that case, the market effects of the purchase program will only slowly unwind as the balance sheet shrinks gradually over time. 3 In my previous speech back in December, I discussed in detail the channels through which these market effects may arise. By removing large amounts of duration and prepayment risk from the market, the Fed’s asset purchases reduced the volume of risk that the market had to hold, which lowered the risk premia on those assets. Put differently, the purchases bid up the prices of those assets and hence lowered their yields.
I have been involved in attending or speechwriting for this dinner for 25 years, and I well remember in the early days that the speeches of Lord Mayors featured each year a plea to get Crossrail agreed, started, finished. Well finally, Lord Mayor, you can notch that one up. Now, “getting stuff done” is not a lead in to a speech on reforming Solvency 2. I can hear the murmur of relief going round. Instead I am going to talk about the economy and monetary policy. I think I just heard someone say, can we have Solvency 2 for light relief please. Fair point, but no. A member of the public sent me an email recently, in which she said that she appreciated what I am doing, but can I please, please, please be more cheerful. I should say that I do seek earnestly to avoid the role of Private Frazer in Dad’s Army – we are not doomed, far from it. But we are in difficult times. From the perspective of monetary policy, these times are the largest challenge to the monetary policy regime of inflation targeting that we have seen in the quarter century since the MPC was created in 1997. That emphatically does not mean the regime has failed. Far from it. The regime was set up for times exactly like these. The regime, founded on central bank independence, is now more important than ever. The worth of any regime is tested in the difficult, not the nice, times.

Thus, in this way central banking for the first time really became a cornerstone of the building of world prosperity and world peace. Of course the single reserves might be sufficient under normal circumstances but when things get out of hand, it may not be sufficient, and banks do shut down. The government and the central banks thereupon undertook that most important function of building world peace, which is looking after the poor and the disadvantaged, by putting up deposit insurance schemes, the first being in New York in 1829 but the first nationwide schemes being in Czechoslovakia in 1920 whereby at least the smallest and the least knowledgeable depositors are protected. Of course, a better alternative would be to try and make banks less liable to failure. Since banks are often in an oligopolistic system or at the very least, they are leveraged by the ratio of debt to equity of around 12:1, being the inverse of the capital adequacy ratio now defined by the Bank for International Settlements to be at least 8%, and using other people’s money in a way that normal companies cannot 1  BIS Review 111/2000  do - the central bank then underpins the viability of commercial banks by supervising and examining them so that sensible decisions are made and fraudulent activities are minimised. Surprisingly, that may not even be the biggest way central banks contribute to world peace. For nations taken individually, the biggest function deemed to be of the central banking is monetary policy.
They were accompanied by what I think of as "re-regulation" that is to say more formal and structured regulation of both the prudential behaviour and standards of conduct of virtually all financial services activity targeted more specifically at both institutional stability and consumer protection but, subject to that, leaving the market to do its job. Such regulation in the UK has now been consolidated in a single, over-arching, financial services regulator, the FSA (Financial Services Authority). The Bank of England remains responsible for macro-prudential  BIS Review 48/2001  1  oversight, that is to say the stability of the financial system as a whole, including oversight of payments systems. But we are no longer responsible for prudential banking supervision at the micro-level. The re-regulation process, of course, conforms with the access provisions of the WTO and with internationally-agreed standards agreed within the IMF. It incorporates the minimum standards of banking supervision agreed (and now subject to revision) under the Basel Accord. It incorporates, too, those measures that have so far been agreed at the regional, European, level relating to a wider range of financial services activity in the context of progress towards the single financial market.

I have no doubt that the effort will prove to be worthwhile. 4  BIS Review 48/2001
The successful operations of both Macedonian Interbank Payment System (MIPS), the RTGS system of which the central bank is both the owner and operator and Klirinski Interbankarski Sistemi Skopje (KIBS), of which the central bank is the settlement agent, have contributed to a high level of confidence throughout the years and have a positive effect on the stability of the banking and financial system and the economy as a whole. To conclude, commercial banks transferring among them funds held in accounts with central banks have facilitated the proper functioning of the banking and financial systems and mitigated disruptions and instability globally. This historical development has been accompanied with a slow, but steady movement towards a higher velocity of money circulation. Settling payments in accounts at the central bank still provides the link with the two main tasks of monetary policy and financial stability. While steering monetary conditions the central bank cooperates with commercial banks and thereby reduces transaction costs. This reality is a layered architecture in which central bank money is the ultimate settlement asset in the economy. The positive network externality is best described by referring to the risk reduction, service assurance and competitive neutrality the central bank provides. Using money held in accounts at the central bank to effect payment is generally regarded as risk free, service is assured even in extraordinary times of global and domestic crises, while using the central bank as a hub ensures that payment systems’ participants are not forced to rely on actual or potential competitors for payment.

Albania owns around 24% of its territory as agriculture land, and offers still fully unexploited possibilities in the fields of agritourism and agribusiness. This potential should be considered a joint growth possibility to both agriculture and banking industry, as well as a possibility to diversify credit risk sources in your balance sheets. The continuous structural improvements, modernisation of agriculture and productivity growth, the enhanced support with funds and public attention, provide a new reality in agriculture sector. In this framework, the convergence process with the European Union provides for additional opportunities. In this light, without affecting its soundness’ indicators, I am confident that banking system will know to position itself as a supporting-development agent. This sector ought to increase its attention and the financing, analysing and advisory capacities, by fulfilling its mission for the sustainable growth of the country. Thank You! 2/2  BIS central bankers' speeches
Among other things, these sound practices call upon banks to: •  establish clear policies governing their involvement with HLIs;  •  adopt credit standards addressing the specific risks associated with HLIs;  •  establish meaningful measures of potential future exposure;  •  establish meaningful credit limits, incorporating the results of stress testing; and  •  monitor exposure on a frequent basis. Banks generally tightened the credit risk management standards for their HLI exposures after the near-collapse of LTCM. However, it is important that supervisors ensure that progress  3  BIS Review 37/1999  continues. Memories tend to be short, and we want to make sure that as markets calm down, as they have in the past months, banks do not return to the old ways of doing business. Possible Future Changes in the Capital Accord As you know, the Basle Capital Accord is one of the great successes of the Basle Committee. Well before the events of last fall, the Basle Committee was developing fundamental revisions to the Accord to better reflect the many changes in financial markets and risk management practices since the Accord’s creation in 1988. Among the G-10 supervisors, there is broad agreement that the future Accord should make greater distinctions among a bank’s credit risks. These discussions are continuing. The strong link between sound risk management practice and the Capital Accord provides another reason for rapid adoption of the Basle Committee’s sound practices. The HLI report raises several important technical issues of relevance to the Accord.

In particular, the Committee observed an imbalance among the key elements of the credit risk management process, with too strong a reliance upon collateral to protect against credit losses. This undue emphasis, in turn, caused many banks to neglect other critical elements of effective credit risk management, including in-depth credit analyses of counterparties, effective exposure measurement and management techniques, and the use of stress testing. The Credit Approval Process For a bank to make sound lending decisions, it needs to obtain sufficient information about the borrower. Supervisors routinely emphasize the need for banks to have an effective credit approval process consisting of formal policies and procedures, accompanied by documentation of actual credit decisions. I should note that banks’ credit exposure to LTCM was in two forms: the exposure arising from the trading of financial products with LTCM, and the exposure stemming from loans made to LTCM. Banks’ primary exposure to LTCM was through their trading activities. Loans were not a large factor in the events that transpired last fall. Regardless of whether a bank is a trading counterparty with, or a direct lender to, an HLI, it must obtain comprehensive and timely financial information about that HLI’s risk profile and credit quality, and it must perform ongoing credit analysis of that HLI. In addition, a bank must have a clear understanding of an HLI’s operations and risk management capabilities. The Committee observed weaknesses in each of these areas. Let me give a few examples.