samchain/econo-pairs-v1 huggingface dataset:
Norman T L Chan: 3Ds – an era of awakening? Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the 4th Santander International Banking Conference: “A Global Financial System for a Global Economy”, Madrid, 18 October 2011. *  *  *  Good afternoon ladies and gentlemen, I am honoured to receive the invitation to attend and speak at the 4th Santander International Banking Conference today. It is only a few short years ago that the world economy was shaken to its core by the Global Financial Crisis. That we again face the threat of profound and traumatic disruption so soon is a measure of the urgency that governments must employ to correct the structural imbalances necessary to get the economy back on song for the long term. Today I want to take up a little bit of your time explaining what I see as fundamental to righting the ship so that it can survive in the roughest of seas. Collapse of Bretton Woods System After World War II, the World’s Superpowers tried to maintain a system of semi (or quasi) Gold Standard in which major currencies were fixed to the US dollar, which was in turn fixed to Gold at $ an ounce. This global monetary system was basically a fixed rate regime, which imposed an external discipline to restrain monetary expansion globally.

Philipp M Hildebrand: From monetarism to the inflation forecast 30 years of Swiss monetary policy Public lecture by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the University of Berne, Berne, 23 November 2004. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  Following the collapse of the Bretton Woods system, the Swiss National Bank, in 1974, was one of the first central banks to adopt a monetary policy with monetary aggregates as intermediate targets. The monetarist phase of the National Bank lasted until 1999. During this phase, the National Bank repeatedly changed its monetary targets. In the course of time, it adopted an increasingly pragmatic monetary policy and paid more attention to the development of the exchange rate. In December 1999, the SNB introduced its current monetary policy concept, which uses an inflation forecast as the basis for monetary policy decisions. On the whole, monetarist ideas had a positive influence on Switzerland’s monetary policy. They brought the realisation that price stability is important, thus furthering the process of disinflation in the 1970s and 1980s. Moreover, monetarism caused the SNB to make its monetary policy more transparent and rule-based. The use of monetary aggregates as intermediate targets, however, was more problematic. With money demand proving to be too instable, simply controlling money supply growth was not sufficient to achieve price stability.
Our interpretation of the mandate is that the external value of the krone – the exchange rate – cannot be fine-tuned. However, low inflation also makes a contribution to exchange rate stability. The Ministry of Finance has not suggested, and Norges Bank has not requested, that house prices should be given particular weight. Macroprudential supervision and systemic risk Even though inflation targeting has served us well, it was not possible to shield Norway’s small, open economy, in an environment of free capital markets, from the liquidity crisis in global financial markets last autumn. As we have observed abroad, when many banks encounter liquidity problems at the same time, triggered by a deterioration in some banks’ financial strength, solvency problems can easily spread to other banks and to other countries. 11 This can occur when banks facing liquidity problems are forced to sell assets in a weak market. The market value of other banks’ assets may then also be reduced. Even otherwise solid banks can then lose their equity capital. Distrust spread among banks in Norway despite our generous and sound deposit guarantee scheme. Deposits were not withdrawn, but funding in foreign money and bond markets dried up. It was not easy for foreign investors to assess the value of banks’ assets. They also wanted to keep liquidity with themselves. Just as a bank deposit insurance scheme dissuades households and firms from withdrawing their deposits when uncertainty increases, new and improved banking regulation can contribute to bolstering confidence among financial institutions.

But we must obviously not turn a blind eye to the possibility that new disturbances may expose other weaknesses. Household behaviour in the housing market poses a considerable challenge to economic policy, particularly because demand for housing and residential mortgages is heavily subsidised via the tax system and because the very low level of equity capital required to extend a mortgage is reflected in the supply of loans. These challenges must be confronted at the source. Thank you for your attention. 8  BIS Review 119/2009  BIS Review 119/2009  9  10  BIS Review 119/2009  BIS Review 119/2009  11  12  BIS Review 119/2009  BIS Review 119/2009  13  14  BIS Review 119/2009  BIS Review 119/2009  15  16  BIS Review 119/2009  BIS Review 119/2009  17  18  BIS Review 119/2009
Residential investment, after experiencing strong gains in 2015 and in the first quarter of 2016, fell during the past two quarters. However, increases in single-family housing starts and permits in October suggest that we are likely to see a reversal of this trend in the fourth quarter and into next year. Business fixed investment has also been weak for some time. Part of this weakness reflects the collapse in oil and gas drilling activity following the plunge in crude oil prices during the second half of 2014. This adjustment now appears to be over, as oil and gas prices have recovered somewhat. But, even outside of this area, business fixed investment has been disappointing. Several factors may be at play here—including earlier uncertainty surrounding the presidential election outcome and the fact that capacity utilization rates remain unusually low at this point in the economic business cycle. While the election uncertainty has been resolved, I would expect business fixed investment to only rise slowly in the year ahead. In contrast, the trade sector has performed surprisingly well in 2016. This sector had to contend with headwinds created by weak growth in final demand by our major foreign trading partners, as well as the impact of earlier dollar strength on the nation’s export competitiveness. However, I’m not sure that I would take much signal from this performance.

The main driver of growth in 2016 has been the consumer, as real personal consumption expenditures have increased at a 2.9 percent annual rate during the first three quarters. This solid consumption growth has been supported by sturdy job gains and rising nominal wages. Payroll gains have averaged about 180,000 per month this year. While this is down somewhat from 2015’s monthly pace of nearly 230,000, it is still considerably higher than the 75,000–110,000 monthly pace consistent with the likely long-term growth in the labor force. And wage gains, while still relatively muted, have begun to rise more rapidly as the labor market has continued to 1/6  BIS central bankers' speeches  tighten. Another positive factor for the economy is that household finances generally are in good shape. The household saving rate is 5.9 percent, which is a bit higher than one would expect based on historical relationships between household net worth and disposable income. And, after a long period of deleveraging, household debt has been growing, but very slowly. Over the last four quarters, household debt has risen by 2.4 percent. This slow pace, combined with low borrowing rates and an improving labor market, has pushed down the ratio of household debt service to income close to its lowest level since at least 1980. This suggests that households have the financial capacity to sustain their spending. In contrast to consumer spending, many other areas of the economy have been considerably softer.
This can reduce the supply-side flexibility of the world economy. Combined, these shifts can make the job of keeping inflation low more demanding. How this will play out is highly uncertain. But there is one thing I am certain about. The global economy must make an absolutely necessary transition to a low-carbon economy. There are evermore signals of the urgency to achieve that transition. The number and intensity of heat waves, floods and droughts are on the rise. The transition is fraught with uncertainty and proceeding too slowly. For each year the transition is too slow, the more likely it becomes that stronger and more costly measures will be needed later on. To reach the targets, governments have a range of instruments at their disposal. Carbon pricing is particulary effective in that it sends a clear message as to what we should do less of and what we need more of. The rising costs of emissions is one of the main drivers behind today’s investments in renewable energy and more energy efficiency solutions (Chart 9). We can see that price mechanisms work. Chart 9 Transition to a low-carbon economy Carbon price in the EU Emission Trading System. EUR per tonne of CO2e 100 90 80 70 60 50 40 30 20 10 0 2010  2013  2016  2019  2022  Source: Refinitiv Datastream  Norges Bank  Economic perspectives 2023  11  The transition will not be seamless.

Norges Bank  Economic perspectives 2023  6  Real wage flexibility lessens the risk of wage price spirals. This also reduces the need to tighten monetary policy in response to a cost shock than would otherwise be the case. We can bring down inflation while avoiding a substantial increase in unemployment. But wage determination alone will not ensure low and stable inflation. That is the job of monetary policy, in Norway too. If the foreign exchange market is not confident that monetary policy will be tightened when inflation rises, the krone may depreciate.6 A weaker krone pushes up imported inflation. A weaker krone may also drive up wage growth, because the manufacturing sector’s wage capacity improves.7 Price and wage inflation can become self-reinforcing. Over the past three decades, low and stable inflation has been the rule, and in Norway we have avoided prolonged periods of high unemployment. The reform of the economic policy framework deserves a large part of the credit, but we have also benefited from global developments. Globalisation, especially China’s expanded role in world trade in the early 2000s, ushered in a period of low prices for globally traded goods. In many countries, the concern was that inflation was too low, not too high. And some were perhaps misled into believing that inflation was a thing of the past. The return of inflation But it turns out that inflation was not dead (Chart 5). Two events reawaken inflation. Chart 5 The return of inflation Consumer prices. Four-quarter change.
We have received more than 30 applications from financial and research institutions. We have now put out five calls for applied research proposals: in econometrics and data science, back-testing methodologies, quantum computing for the financial sector, and explainable AI. Last year, MAS and the industry also began collaborating with MIT Media Lab to do serious FinTech R&D. MAS, industry professionals, and MIT researchers have come together towards developing prototypes that look into applications of AI and distributed ledger technology in the financial sector. They include use cases in smart contracts, trade finance, and central bank digital currencies. And earlier this year, the Intellectual Property Office of Singapore established a FinTech Fast Track initiative for patents. 7/9  BIS central bankers' speeches  Under the Fast Track, FinTech patents can be granted in as quickly as six months, compared to the industry convention which can be up to two years. Once patented in Singapore, applicants can leverage on our global patent highways to expedite the registration of their patents in more than 30 overseas markets. Platforms for Innovation The final piece in FinTech ecosystem - platforms for innovation. Innovation does not occur in isolation. We need platforms to connect people and ideas; problems and solutions; and foster collaboration. One such platform we are excited about is AFIN – the ASEAN Financial Innovation Network. Let’s begin with the problem statement. There are about 1.7 billion adults globally who are unbanked.

As much of these efforts will involve interface with other parts of the public sector, it has been my experience that the participation of the Central Bank in many of these agendas will require careful boundary management and a signing off when it is completed so that it does not remain permanently with the Central Bank. New institutional arrangements will need to be developed to render effective coordination across the public sector. Of great importance in this process is also to carefully safeguard the independence of the Central Bank. Conclusion As policy makers in emerging economies, we have the added responsibility of building institutions for the country. Our quest is filled with challenges but we can learn much from each other. Going forward, the transitions that are taking place in the global economy necessitate continuous institutional building at the national, regional and international level. A regional institution such as SEACEN has an important role in enhancing future talents, facilitating the sharing of knowledge, ideas and insights on policy management in the region and from its research on subjects important to the region. In conclusion, allow me to express my deep gratitude and appreciation to my fellow governors and to all my colleagues at the SEACEN member Central Banks and to SEACEN for all the cooperation and support that has been extended to me and to Bank Negara Malaysia throughout my career. For the friendship and for the collaboration, it has truly been enriching and special for me.
Such risks can constitute a threat to both the stability of the macro economy and inflation. To me, saying that the Riksbank has no mandate to take these risks into account therefore appears rather odd. As the Governor of the Bank of England, Mervyn King, has put it: “Monetary policy cannot just ‘mop up’ after a crisis. Risks must be dealt with beforehand. I do not see this as inconsistent with inflation targeting because it is the stability of inflation over long periods, not year to year changes, which is crucial to economic success.”10 Similar thoughts are expressed in the IMF's Article IV consultation for Sweden: ”[I]f mortgage credit growth increases unsustainably, the Riksbank might have to raise the interest rate path relative to that warranted by short-run macroeconomic considerations alone.”11 Is it meaningful to consider risks linked to household debt in monetary policy? If one is thinking about giving consideration to risks linked to household debt when formulating monetary policy, it is reasonable to first take a stance on a number of specific questions.12 Does the repo rate have an effect on the variables one wishes to influence, housing prices and lending? How large are the risks linked to household debt? And finally, are there other tools at hand that are better-suited to managing these risks? The answers to these questions are important for determining whether it is justified taking the risks linked to household debt into account in monetary policy.

Let us begin by looking at the data and seeing how inflation has developed since the target was introduced. As you probably know, the target was announced in January 1993, but began to apply officially to the annual increase in the CPI with effect from 1995.1 To obtain an inflation series that better corresponds to the one the Riksbank had access to when making its repo-rate decisions, one has to take into account the fact that the calculation method for the CPI was changed in 2005. Inflation has varied substantially during the period, both overshooting and undershooting the target, but it has been 1.4 per cent on average during the period January 1995 to December 2012, that is six tenths of a percentage point lower than the inflation target of 2 per cent. Some critics seem to assume that this is all the information one needs to assess monetary policy. They argue that each tenth of a per cent below the target has entailed major costs to the real economy, and this is enough to draw the conclusion that monetary policy has not been able to deliver what it should. Do not forget how things were in the 1970s and 1980s! My view is that one must look at the development of inflation in the right perspective and remember how things were before the target was introduced. Let us compare inflation and economic developments in general during the twenty years the inflation target has been in place with the twenty years prior to its introduction.
At the onset on the pandemic, in the second week of March 2020, the Bank of England cut interest rates to close to the effective lower bound. Only a week later we announced further action to purchase £ of gilts. The first decision was motivated by the need to support the economy through the pandemic and through the hit to demand that was on the horizon. However, the second, as the MPC made clear 2/6  BIS central bankers' speeches  at the time, was motivated by the urgent need to reverse the increasing and unwarranted tightening of financial conditions driven by the disruption of the dash for cash. Though distinct, these two motivations – to keep demand and supply in line on the one hand and to restore market order on the other – clearly went in the same direction in the circumstance we faced at the time. But that may not always be the case. At a time of rising, externally generated price pressures or when demand is stronger than supply, inflation-targeting central banks may not find it so easy to provide massive injections of liquidity to restore market functioning. So it is important that the private sector, banks and non-banks, insures itself prudently against severe but plausible liquidity shocks, and that we do learn the lessons of March 2020.

Unlike 2008, the solvency and liquidity of the banking system was not at the very forefront of market and regulator concerns. And, of course, the shock itself did not originate in the financial system but rather in a once-in100 year pandemic that has left us with many other, more powerful, and disturbing memories. But it is worth refreshing our memories about just how extraordinary were the events of late February and March 2020. The realisation that we were facing a global pandemic – and that, in order to contain it, large parts of the global economy would need to be shut down – sparked a reassessment of financial asset values and, as one would expect, a ‘flight to safety’ by investors. In February 2020, as you would expect, risky asset prices fell sharply. At the same time, the price of traditionally safe assets rose sharply and yields fell – the yield on US treasuries for example fell by around 100 bps. This flight to safety was also reflected in the gold price, which rose by around 4% over this initial period. In the early weeks of March however – from the 9th to the 18th – a different dynamic took hold; an accelerating ‘dash for cash’ in which, given the illiquidity of other markets, investors sold their most liquid assets, driving safe asset prices down. A dash for cash which turned into a stampede. The numbers are impressive.
In the UK, the FSA has recently issued a consultation paper on RRPs, and an important initial pilot exercise will involve reviewing the contingency plans and procedures of the major firms as they draw them up over the coming months. The timetable for this work is ambitious with the plans being drawn up in the first quarter of next year, but that is necessarily so. The FSA and the Bank of England, working together, will review and challenge the submissions to assess their credibility. RRPs need to be owned by financial institutions at Board level. They should be of such importance that Boards need to understand that they are responsible for them. At the heart of the role of these plans is taking a forward-looking view of the threats that should be tackled. This is a clear change of approach. It builds from the work already done to embed stress testing into the toolkit. Stress tests are useful but limited tools. They provide a forecast of what we think is most likely to happen in the future conditional on a set of assumptions on what the future will bring. There are three obvious limitations to stress tests used on their own. First, typically they are a single point forecast of what could happen rather than a distribution of outcomes conditional on a range of stresses.

Caleb M Fundanga: A brief look at corporate governance in Zambia Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the launch of corporate governance guidelines for banks and non-bank financial institutions, Lusaka, 28 November 2006. *  *  *  ♦ The Chairperson of the Bankers Association of Zambia; ♦ The Chairperson of the Institute of Directors; ♦ The Chief Executive Officers of banks and non-bank financial institutions; ♦ Deputy Governors, Bank of Zambia; ♦ Representatives of Professional Bodies; Media Colleagues; ♦ Distinguished Invited Guests; ♦ Ladies and Gentlemen. I wish to welcome you all to the launch of the corporate governance guidelines for banks and nonbank financial institutions, in particular, deposit taking non-bank financial institutions. As you all may be aware, the recent debacle of corporate scandals has resulted in the resurgence of interest in good corporate governance. These scandals have not been restricted to large businesses in the US or Europe, but have surfaced in emerging economies as well, with equally devastating effects. This, together with concern about our environment and globalisation, has played an important role in this resurgence of interest in how companies are managed, directed and controlled. Here in Zambia, the collapse of a number of banks in the mid-1990’s has largely been attributed to poor corporate governance. Some characteristics of this included dominant key shareholders, poor transparency and inadequate disclosure.