samchain/econo-pairs-v1 huggingface dataset:
This analysis draws out an interesting interaction between the quality of climate disclosures, the structure of the asset management industry and the scope for rapid growth in the role of capital markets in climate investment. Poor disclosures force investors either to form crude portfolios – which cannot send particular finely graduated price signals – or to seek active management – which, being costly, is not available to all. Neither is ideal. It is only when disclosures have reached true maturity that the full panoply of modern asset allocation techniques can be brought to bear. That underscores just how vital it is to make progress on disclosures. There are as yet few comprehensive studies of the relative performance of current strategies. Indeed, there is a genuine question about how such performance should be measured, given that one motivation for investing in climate-based funds is the desire to generate a measurable beneficial environmental impact alongside a financial return – so-called ‘impact investing’. There has been a long and lively debate about whether achieving this requires a willingness to sacrifice financial gain. Some funds explicitly recognise this possibility in their construction, for example granting explicit concessionary rates to climate-positive projects. But others dispute the existence of such a tradeoff, noting the range of non-financial tools such as investor engagement that can act as ways to achieve impact.

I want first to review why that historical performance has been so sluggish, before turning to look at how things are changing, and fast, under the influences of shifting public policy and consumer behaviour, and the physical realities of a changing planet. I will focus mainly on developments in private financial markets, but will also touch on some of the ways that we in the UK public sector can contribute, as market participants in our own right. Why markets have struggled to price climate risk: externalities, horizons and opacity Given the sheer scale of the climate challenge, it is at first glance surprising that financial markets have struggled to reflect it in asset pricing. The reasons for that failure are threefold. First, it is in the nature of climate change that many of the costs of failing to address it, and the opportunities for positive change, fall to society as a whole, rather than specific individuals or companies. The freedom to emit unlimited amounts of carbon is one example. Markets are notoriously poor at pricing such ‘externalities’. Not all climate risks are externalities, of course. Investor activism can bring consequences to bear on firms viewed to be responsible for climate harm.8 And climate-related natural disasters – already three times more frequent than 40 years ago – fall on real individuals and real companies.
One of the biggest challenges to supervisors now is to develop more detailed guidance for the implementation of Pillar 2 and to follow that guidance in a consistent and coordinated manner across the supervisory community. Despite work done by the Basel Committee to encourage coordination among supervisors in this area, there remains a significant risk of inconsistent approaches and resulting supervisory arbitrage. While the rollout of the Basel II principles will be extraordinarily demanding, I am heartened to observe that there is momentum gathering among banks and supervisors around the globe to meet the challenge. BIS Review 42/2004  3  Beyond Basel II: what would further installments look like? Even though the ink is still drying on the final version of the new framework, and we are just starting to tackle the implementation issues, it is not too early to think about how Basel II capital framework might evolve in the future. Because we can be sure that Basel II is not the “End of History” as far as regulatory capital requirements for banks are concerned. Greater applicability of risk quantification techniques Beyond Basel II, there may be greater scope for use of quantitative tools in setting minimum regulatory capital requirements. The most promising areas are quantitative tools for interest rate risk in loan portfolios and concentration risk. Three robust pillars I also think, despite my fears about inconsistency and arbitrage, that over time supervisors will develop more consistent approaches to Pillar 2 of the capital framework, and greater harmonisation of supervisory reviews across jurisdictions.

I wish you fruitful discussions and I am looking forward to seeing what answers you might find to address the issues highlighted in the panels of this conference. As the focus of the conference is on economic growth and development in Romania and the wider South-East Europe region, allow me to elaborate on this topic. I will approach the subject from the perspective of a central banker. Let me start by saying that sustainable economic growth of both Romania and the region relies mainly on economic policy consistency. The global economic and financial crisis has proved yet again that there is no valid substitute for consistent economic policies. The correction of economic policy errors is, everywhere and always, painful and, while difficult to comprehend by the public at large, it is absolutely necessary. The case of Romania is highly illustrative in this respect. Large macroeconomic imbalances had been steadily accumulating during the boom years, as a result of sizeable foreign capital inflows and credit expansion, the impact of which was augmented by a pro-cyclical stance of fiscal policy, especially in the last two years before the onset of the crisis. As a result, Romania had large twin deficits at the start of the crisis, specifically a sizeable structural fiscal gap (around –8% of GDP in 2008) and a current account deficit in the double-digit area (between 2006 and 2008). After the crisis hit, Romania had no other choice but to undertake the necessary adjustments in order to eliminate these imbalances in an orderly manner.
Speech Central Bank of the Republic of Turkey  Prof. Şahap Kavcıoğlu, Central Bank Governor German-Turkish Chamber of Commerce and Industry 8 September 2021, Ankara  2  Dear Guests, First, I would like to thank the German-Turkish Chamber of Commerce and Industry for their kind invitation. In my speech, I will share our views on the recent economic developments in Turkey. The European Union is Turkey's top trading and investment partner. EU countries account for 55% of our exports and 50% of our imports. Most of our exports are destined for Germany. Despite the pandemic-driven drop in numbers, the majority of foreign visitors Turkey receives are from the EU. European countries account for about 60% of foreign direct investments. Therefore, I would like to express that I find your participation and the mutual exchange of ideas that will come out of this meeting very important. The sped-up vaccine rollout worldwide bolsters global economic recovery. Looking at the world economy, the services sector appears to have been more hampered by COVID-19 restrictions than the manufacturing industry. Recent PMI data indicate that the services sector is matching the ongoing recovery in the manufacturing sector. This supports a more balanced global economic outlook in terms of demand composition. Strong increases in services PMI hint at a worldwide economic rebound, particularly for the pandemic-damaged euro zone. Growth prospects for our main trading partners suggest that the growth outlook might be more upbeat in August than in April.

The Fair and Effective Markets Review – which I am leading along with my cochairs, Martin Wheatley from the Financial Conduct Authority and Charles Roxburgh from the Treasury – was set up to restore confidence in the operation of these markets. We don’t want to do this alone. That is why we have launched a consultation document today soliciting the views of anyone with an interest in FICC markets. The consultation is open for three months, and we will issue our final recommendations in June. In the meantime we want to work closely with: •  Market participants – who have the primary responsibility for putting things right. We have enlisted the help of a panel of senior market practitioners to help launch and take forward the Review’s final recommendations. •  International policymakers and regulators – because these markets are global in scope, although a significant share of these markets is based in London. •  The academic community – with which we are actively consulting – including the audience here tonight. •  The general public - including companies and households, for whom, I will argue, these markets matter most of all. In the rest of my speech I would like first to dismiss any notions you may have that Fixed Income, Currency and Commodity markets don’t affect your lives. Then I’ll talk about what went wrong in these markets and why, including a discussion of some of the markets’ key characteristics.
The evolution of the sanitary emergency shows that activity began to contract in the second half of March, possibly on a larger scale than the contraction observed in the second half of last October after the social outbreak. Explanations are manifold. On the one hand, unlike the events of October when education and activity in sectors such as retail, hotels and restaurants came to a partial halt—mainly in communities with the most severe episodes of violence—since mid-March the interruption in the aforesaid sectors is generalized throughout the country. Something similar occurs with transportation, especially airline travel, which in October suffered alterations in its normal functioning, but now has been almost completely halted due to border closures and social isolation. The sharp drop-in activity in late March brings down first quarter growth, although not making it negative in terms of quarter-on-quarter variation, and is the starting point for the contraction it will face in the second quarter of the year. This projection reflects the greater restrictions already applied by the authority up until the close of this Report, which are supposed to be intensified in the course of the second quarter, as has been seen signaled by the authority. A rough estimate of the effects suggests that for each month that the current restrictions are maintained GDP growth for the year loses one percentage point.

The Bank intervened in particular when a downward spiral seemed to be forming, or when the Bank felt that its intervention could have a positive effect in changing market expectations. This was based in part on the Bank’s conclusion that the exchange rate had already dropped more than was reconcilable with long-term equilibrium in the economy. The Central Bank expended substantial sums in intervening on the foreign exchange market, over ISK 40 billion in total, without this sufficing to halt the slide of the króna. At best, it may have slowed the depreciation until the economy had cooled somewhat, and it also contributed to making the inflationary impact of the exchange rate drop less than it would otherwise have been. An article by Gerður Ísberg and Þórarinn G. Pétursson in this February’s issue of the Central Bank’s Monetary Bulletin describes the Bank’s actions on the foreign exchange market during 2000 and 2001 and assesses their impact. The article concludes definitively that at best the intervention had only short-term effect in each case and the market soon returned to its previous situation. In other words, their conclusion is that intervention on the foreign exchange market against strong prevailing currents has precious little effect unless accompanied by corresponding changes in the domestic interest rates. This is in full accord with the experience in other countries.
Emerging market economies in Asia, Europe and Latin America have accounted for an increasing share of global output. Several hundred million people have been lifted out of poverty. So what went wrong? Or in the words of Rimbereid: “And the cause of the depression? Theories conflict, as if surrounding a virus not yet discovered. Was it due to the far too unrestricted life of share trading? Or was it because the hand of the state constantly interfered with its unnatural contagion? Or did the virus worm its way into the calculating machine itself?” 4  4  6  Øyvind Rimbereid (2008): Herbarium, p.56. (Unofficial translation by Norges Bank’s translators). BIS Review 16/2009  Substantial trade imbalances developed between industrialised countries, particularly the US, on the one hand and emerging market economies, particularly China, on the other. This is partly due to government budget deficits and low private saving in the US since the 1990s, and partly due to export-led growth in China, particularly over the past few years, combined with strong competitiveness and a managed exchange rate. In short, rich countries borrowed and developing countries saved. The imbalances grew when oil and other commodity prices rose markedly. Financial market participants found it too difficult to channel capital. Longterm interest rates were too low, the search for yield too aggressive and compensation for risk-taking too meagre. With long-term loans in ample supply, demand for residential and other property became excessive in almost the entire western world.

Dimitar Bogov: Policy nexus and the global environment – a new consensus emerging from the crisis? Address by Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, at the 2nd Research Conference “Policy nexus and the global environment – a new consensus emerging from the crisis?”, Skopje, 26 April 2013. *  *  *  Ladies and Gentlemen, Dear guests, Let me wish you welcome on our second Research Conference that we usually organize on the day of the monetary independence anniversary of the Republic of Macedonia. The subject of this year’s conference we believe is highly topical, in line with the ongoing lively discussions among central bankers, research and academic institutions worldwide. The global economy in the last couple of years undergone remarkable changes, both from institutional and policy design setup. We witnessed financial market turbulences, banks failures and sovereign debt crisis with strong contagion around the world economy that was almost unique by its size, and the global economy is still struggling to recover. After five years of global crisis we could say that we experienced a lot, and hopefully, we learnt a lot. One of the main lessons of the crisis was exactly related to the topic of the conference – the need of policy nexus as a kind of a consensus emerging from the crisis. What is the policy nexus about?
(a)  About 1% of total consumer credit is obtained from moneylenders. Although this is a small segment, there is a risk that some borrowers may turn to multiple moneylenders out of desperation. They may take on more debt than they can afford, or be faced with extraordinarily high rates and fees. The Ministry of Law has thus formed an Advisory Committee on Moneylending in June to review the moneylending regulatory regime. Measures being considered include limiting the aggregate amount of loans that a borrower can obtain across multiple moneylenders, restricting the fees charged by moneylenders, and capping the interest rates of loans from moneylenders. (b)  The Ministry of Home Affairs has also stepped up efforts to arrest unlicensed moneylending activities. The number of reported unlicensed moneylending and related harassment cases has declined2 following the enhanced police enforcement and the punitive legal measures introduced in the Moneylenders Act in 2010. Thrust two: help the indebted reduce their debts 17 The second thrust is to help borrowers who are already over-extended, to reduce their debts in an orderly manner. We have to address the legacy debt problems, and help the borrowers who got into this over-extended situation before the recently tightened standards. 18 Many individuals who have been helped by CCS can testify that with resolve and determination, it is possible to overcome serious debt problems. Since CCS’ setup, about 870 individuals counselled by CCS have already fully settled their debts. Many others, aided by CCS, are on their road to recovery.

The second point is that Iceland is a small, open economy, where domestic demand is often less of a driver of GDP growth than foreign demand than is the case in much larger economies. There is a tendency in Iceland to forget this in discussions of economic policy. Honoured guests: We are at a turning point with respect to monetary policy implementation. For most of last year, inflation and inflation expectations were well above the inflation target, and the economic recovery was gaining momentum, while inflation forecasts suggested that it would remain above target for a sustained period, provided that the exchange rate remained close to the level prevailing at the time. It would have been possible to conclude from this that the monetary stance was too loose. Actually, several critics maintained that the monetary stance was too tight, but economic developments have shown no signs to support  2  BIS central bankers’ speeches  that argument, nor is it consistent with common measures of the appropriate stance of monetary policy. The Monetary Policy Committee considered the monetary stance sufficient to bring inflation back to target in the near future. In February, we were gratified to see inflation subside to target for the first time since early 2011. As far as monetary policy is concerned, there are three factors that have contributed to this achievement. The first is the interest rate hikes between August 2011 and November 2012, a response to the foreseeable inflation spike following the spring 2011 wage settlements.
See Tucker (2012), “Credit conditions for firms: stability and monetary policy.”  BIS central bankers’ speeches  9  More resilient banking systems will enhance the capacity of monetary policy to underpin growth in an economic downturn. And reduced financial system and macroeconomic risks should make the cost of finance less volatile, helping businesses and households to plan for the future. It will be a while before confidence in the system is restored, and never again should confidence be so blind. But if the destination lies further ahead, we do know where we are going. And that itself should be a source of strength, helping our economies to recover. 10  BIS central bankers’ speeches

By and large, we would like to avoid a situation in which competition for the benefit of a customer in the form of the state or a public company, is undermined by such lists or unreasonable criteria. Therefore we suggest a course of action wherein only limited supervisory information is disclosed to a potential customer, with the bank’s consent, if that customer is seeking to raise public funds. We believe that this approach may help to ensure a competitive environment for banks of different size. I am certain that banks convinced of their own stability will give us permission for such a disclosure. We suggested this approach to the government for the funding of agricultural companies, among other things, and the Chairman gave the command to do so. Therefore, I hope we will be able to work on this, bearing in mind large customers’ concerns about the possibility of money loss. Coming back to the banking resolution, I would like to emphasise that we intend to complete clearing in the upcoming years. We estimate that this process will take two to three years. I hope that a bank’s financial fragility leading to the revocation of its licence will have become an extraordinary event by that time. However, it does not mean that today we should not try to keep a troubled credit institution afloat. If a bank does not conceal difficulties or produce inaccurate reports, we let it remedy the situation.
The Commission's assessment is that the fundamental reason is the lack of competition in Swedish trade and industry. One indicator of the lack of competition is that prices on a large number of goods are much higher in Sweden than in other countries. Other indicators are the many public regulations of the market, the agreements between companies that limit competition and the monopoly-like market structure in many sectors. The limitations to competition are a clear example of how vested interests dominate over general consumer interests." More recently, this type of question has arisen with regard, for instance, to the EU Commission's revelations of price collaboration between the airline companies SAS and Maersk. From an economic perspective, these are important questions that motivate a broad discussion. From a monetary policy perspective, an influence on price developments from changed conditions for competition is one of several important areas that we at the Riksbank must consider, as the potential growth rate depends on how effectively resources are allocated. To summarise, there has been considerable change in the Swedish economy in recent times. The external framework is currently characterised by significant fiscal and monetary stability, which facilitates planning and decision-making by both households and companies. These fundamental conditions, together with a pronounced increase in openness towards the outside world give reason to expect a continued favourable development in productivity. At the same time, one should remember that several markets in Sweden still show clear signs of poor competition. This involves considerable cost.

At the same time, we understand that several banks are looking at the use of technology to allow remote account application by the use of video conferencing. We are working closely with those banks and the industry association and we believe this is another promising development on the horizon. 9. Admittedly a lot of related work is still in progress, but we hope that you would begin to feel that customer experience is improving. The HKMA will continue to work with the banking industry, business community and stakeholders to deal with this global and very complex issue. And if you have any ideas and comments, please feel free to raise it at the panel discussion, or you may approach your “targeted” banks at the networking session that follows, or make use of the HKMA’s dedicated webpage and email account to provide feedback to us. 10. I have talked long enough and now is the time for me to pass the stage to Mr Charles Ng, Associate Director-General of Investment Promotion of InvestHK, co-organiser of today’s event, to say a few words. Charles, please. 2/2  BIS central bankers' speeches