samchain/econo-pairs-v1 huggingface dataset:
Second, economic policy is part of the reality we observe. The outcome of a particular measure will depend both on shifting economic conditions and on economic agents’ expectations of the effect of that measure. It goes without saying that in a situation like that, drawing useful lessons from history can be a challenge.2  1  Thomas Kuhn (1962), The Structure of Scientific Revolutions. University of Chicago Press. 2  Here the natural sciences may be more stringent, and in some cases it may be easier to set up experiments that can refute the theory. For example, Einstein’s theory of relativity was considerably strengthened, and  BIS central bankers’ speeches  1  Scientific truths provide a common basis for further research and development, but they can be a scourge if they are not challenged. The recognition of economic correlations lays the groundwork for good economic policy, resulting in a better life for more people. The outcome can be disastrous if the established truths lay the foundation for bad economic policies. Economics as a discipline has in the past hundred years undergone several prominent paradigm shifts, with widespread impacts and implications. What have we learned from 1930 to the present day? More than five years have passed since the turbulence in financial markets began. Today’s situation resembles the one Governor Nicolai Rygg described in his annual address in 1933: “The figures for world output are truly disheartening.

I am further informed that ATI has so far this year supported Zambian companies and businesses by offering insurance cover to some very large and essential projects primarily in the energy, mining, manufacturing and agriculture sectors valued at over $ million. The Agency has also continued to assist many African countries by facilitating foreign direct investments with its political risk insurance that protects investors. Ladies and Gentlemen, the role that trade plays in the economic growth and development of a Country cannot be emphasised. There are many regions and countries of the world that have been able to lift their peoples from poverty to prosperity through trade. However, although Africa in general and Zambia in particular has an economy which is characterized by a relatively high degree of openness, trade has not been utilized to an extent of achieving rapid and sustainable economic development necessary to eliminate poverty. This failure for trade to serve as a catalyst for sustainable economic development could be attributed in part to the nature of Africa’s export trade which is heavily concentrated on primary commodities that are characterized by relatively slow growth, price instability and long‐term deterioration of terms of trade. The need for African countries and Zambia in particular to participate in the dynamic sectors of global trade such as manufactures and services cannot be over-emphasised.
Ladies and gentlemen, there are small risks and big risks. There are risks that affect a single 1/2  BIS central bankers' speeches  bank and risks that affect the entire sector. And then there are risks that stretch across sectors and even countries. In that regard, there is one thing that comes to mind: Brexit. Right now, it is still very unclear how the world will look after the UK has left the EU. Still, banks and supervisors must prepare for any scenario. The worst case would certainly be a “hard Brexit”. In that scenario, the UK would become a “third country” from the viewpoint of the EU. As a result, UK banks might lose their European passport and, with it, access to the Single Market. This would affect many of the 40 UK banking groups that currently operate in the Single Market. They would then have to find another way in. Most likely, they would seek to obtain a banking licence in an EU country to regain the passport. In the euro area, these licences are granted by the ECB. We obviously don’t care whether UK banks move to Frankfurt, Dublin, Paris or some other location in the euro area. What we care about are safe and sound banks. We will therefore resist any supervisory or regulatory race to the bottom. Any bank that moves to the euro area will have to meet our standards – regardless of whether it comes from the UK or any other place.

Sabine Lautenschläger: Caution should be the life of banking Introductory statement by Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the Single Supervisory Mechanism, at the Association for Financial Markets in Europe (AFME) Board Meeting, Frankfurt am Main, 22 March 2017. * * * Ladies and gentlemen, Taking risks is at the heart of any healthy business, including banks. After all, it is the job of banks to take and allocate risks. But as Walter Bagehot said: “Adventure is the life of commerce, but caution is the life of banking”. I agree with him. Banks are far too important for the economy to indulge in adventures. They enable business by providing loans to companies or by helping them to tap the capital markets. And they also facilitate business by providing services in fields such as payments, mergers and acquisitions, and global trade. Banks help the economy to grow and prosper. But they can also badly hurt it; we saw that in the financial crisis. That’s why banks need to be cautious. In practical terms that requires, among other things, sound risk management. And this sets the scene for my short statement today. The topic is risk management. I will begin with some smaller, or rather bank-specific, risk management topics and end with a few big issues. Sound risk management depends on good data. It also depends on firm-wide risk aggregation and reporting. Those who take decisions must be in the picture.
The interest rate shall in the short and medium term contribute to stable inflation and stable developments in production. At the same time, it shall in the long term also contribute to equilibrium in the market for real capital. Capital accumulation shall over time correspond to saving. To achieve this, the real interest rate must not over time deviate substantially from the return on real capital. Substantial deviations can give rise to undesirable fluctuations in the markets for real capital that have no basis in economic fundamentals. The economic situation varies over time. Monetary policy will set an interest rate that is alternately above and below the neutral rate. Consequently, the interest rate level will probably not deviate substantially from the long-term equilibrium rate over time. By taking a gradualist approach to interest rate setting, it is also possible to assess whether imbalances are developing in capital markets. Interest rate developments from a historical perspective In the long term, the equilibrium real interest rate will be determined by underlying structural relationships in the economy. These relationships will probably only be changed gradually so that changes in nominal rates will primarily reflect changes in expected inflation. In the short term, however, the real interest rate will vary, not least because monetary policy seeks to influence the real interest rate in the short and medium term. Changes in nominal interest rates might therefore reflect changes in both real interest rates and inflation expectations.

After 1945, with the introduction of the Bretton Woods system, a number of countries’ currencies were pegged to the US dollar, which was in turn pegged to gold until 1971. In many ways, US monetary policy and nominal interest rate levels functioned as a nominal anchor, and to a large extent governed global interest rates and inflation developments. Inflation has been particularly high in times of war. The 1970s and 1980s were characterised by fairly high inflation following the collapse of the Bretton Woods agreement, the oil price shocks and countercyclical policy. From the end of the 1980s, an inflation target for monetary policy has functioned as a credible nominal anchor in a number of countries, curbing the pace of inflation. To calculate historical real interest rates, an estimate must be made of expected inflation. Figures for actual inflation are normally used. Inflation expectations may deviate from actual inflation, especially in periods when the latter is subject to considerable fluctuation. From 1870 to today, developments in global real interest rates can be roughly divided into 5 periods. In the period 1870 – 1896, the real interest rate ranged between 4 and 5 per cent, and inflation fluctuated around zero. No new major gold finds were made in this period and the economy in general was exhibiting brisk growth. The real interest rate fell to about 1-3 per cent in the period 1897 -1913, reflecting some acceleration in inflation in this period. New discoveries of gold were again made in this period.
18 With an appropriate policy response, what should we expect to see in bank balance sheets, in broad money growth, following a credit-supply shock? It might be that the path for broad  15  See Kashyap, A. K., R. Rajan and J. C Stein (2002), “Banks as liquidity providers: an explanation for the coexistence of lending and deposit-taking”, The Journal of Finance, Vol. 57, No. 1, pp 33–73. 16  Acharya, V. V., H. S. Shin and T. Yorulmazer (2007), “Fire sales, foreign entry and bank liquidity”, C.E.P.R Discussion Paper, No. 6309. 17  See Goodhart, C. A. E. (2007), “Whatever Became of the Monetary Aggregates?”, Peston Lecture at Queen Mary College, London; King M. A. (2007), “The MPC ten years on”, lecture to the Society of Business Economists, Bank of England Quarterly Bulletin, Summer 2007, pp 272-85; and Tucker P. M. W. (2007), “Central banking and political economy: the example of the UK’s Monetary Policy Committee” speech at the Inflation Targeting, Central Bank Independence and Transparency Conference, Cambridge, Bank of England Quarterly Bulletin, Autumn 2007, pp445-52. 18  There is an echo here of a channel stressed by Brunner & Melter, but with the impulse coming from the central bank’s short-term interest rate rather than the quantity of reserves, and the transmission into risk premia and so other asset prices coming via the expected path of the policy rate and broad money rather than via narrow money. BIS Review 149/2007  7  money should be unaltered in the medium term.

Across all of these, we will also want to dig into systemic risks – most obviously those associated with cyber-attacks and the risks associated with a heavy concentration of activity across firms with a handful of outsourcers. But there is also a much wider set of more day-to-day operational issues and problems which arise for firms, and given the increasing importance of digital service delivery firms need to get much better at this. Sometimes these issues will engage the FCA’s objectives, which will be a judgement for Andrew and his team. But in general, they will only be a priority for the PRA if they meet the criteria I have just mentioned. With sufficient but limited resource we need to focus our efforts where they can have the biggest impact in terms of advancing our statutory objectives. Brexit Now Lord Mayor, I admit that I am very tempted to conclude this speech without a mention of the B-word, not least because this would surely guarantee a speech shorter than Andrew’s. But our philosophy on Brexit issues happens to illustrate the point I am making here about shared endeavours. Because getting from A to B on Brexit is very much a shared endeavour, although let’s be honest it doesn’t always feel like that! Of course there are some debates between us and firms as they restructure, in particular where we see structures that appear overly complex or lacking in proper accountability.
First, a three-phased approach to promote Green and Sustainable Banking. (i) In the first phase, we will develop a common framework to assess the existing baseline of individual banks in order to establish how “green” they are. (ii) The second phase is to engage and consult the industry and other relevant stakeholders to develop our supervisory expectation or requirements, particularly on how to incorporate Environmental, Social and Governance (ESG) risk elements in banks’ corporate mandate, risk management practice and financial disclosure. The key objective of this phase is to set tangible deliverables for Hong Kong’s banking industry to become greener and more sustainable. (iii) The third phase will focus on implementation, monitoring and evaluation. During the process, 2/4  BIS central bankers' speeches  we will take into account the unique circumstances, risk profiles, nature and scale of business of each bank. 16. The second measure is adoption of the responsible investment principle by the Exchange Fund. (i) Apart from it being a good cause, responsible investment makes good investment sense. ESG risk has become too significant to be ignored in the investment decision making process. Assets or companies with high ESG risk might see diminishing value over time or even risk becoming “stranded” assets. By integrating ESG factors into investment, we aim to seek better risk-adjusted return in the long run, which is consistent with the objectives of the Exchange Fund.

According to the International Monetary Fund (IMF), in the past four decades, we have witnessed the warmest years on record and the number of natural disasters has more than doubled. 4. The global community is already taking concrete actions to tackle climate change and there have been many admirable efforts. For example, countries around the world are putting in place policies to implement the 2015 Paris Agreement. In the world of finance, central banks, financial regulators and institutions are increasingly adopting agendas to promote green finance. The IMF has highlighted in its latest Global Policy Agenda the importance for international collaboration to combat climate risk and what the IMF will do to support this effort. 5. Here in Asia, huge investments in green and climate-resilient infrastructure are needed across the region. The Asian Development Bank (ADB) estimates that $ trillion per year will be needed through 2030 for the region to maintain growth momentum, eradicate poverty and respond to climate change. 6. There is also growing awareness in the region of the need to ensure not just the level but also the quality of growth. This has forced policymakers to make a fundamental shift towards a more sustainable economic model which is less resource and carbon-intensive. 7. This requires a massive reallocation of capital and substantive involvement of the capital markets. Hence, the momentum of sustainable finance is building up strongly and will continue even more so in the coming years. For the global financial community, sustainable finance is no longer nice-to-have, but a necessary direction.
This underscored a critical structural weakness of money market mutual funds created by the convention that the net stable asset value could be fixed at par. When a money market mutual fund incurs losses that cause it to “break the buck,” this encourages investors to rush to withdraw their funds from other funds before they break the buck. The result can be a run on money market mutual fund assets. In the United States, the Securities Exchange Commission has already tightened the rules with respect to liquidity, quality and the average maturity of so-called 2a-7 fund assets, but there is still more to be done to address the remaining vulnerabilities. As mentioned earlier, the final major strand of regulatory reform is to strengthen the core of the financial system and make the system as a whole robust to the failure of a large bank or non-bank financial institution. In this realm, there are several notable initiatives. First, an effort is underway to create robust resolution regimes that allow large systemically important financial institutions to be wound down smoothly in a way that minimizes contagion and the risk of a broader panic or that causes damage to other parts of the financial system. For example, the Dodd-Frank Act gives enhanced resolution powers to the Federal Deposit Insurance Corporation (FDIC) to use to wind down large, complex non-bank financial institutions. If such a firm becomes troubled, the regulators, with concurrence from the U.S. Treasury, can avert a bankruptcy filing and instead put the non-bank financial company into resolution.

The globalisation of Iceland’s financial markets means that, in the short run at least, the exchange rate of the króna is determined less by economic aggregates than before. International conditions have much greater impact, such as changes in exchange rates and interest rates in other advanced industrial countries. One consequence of the unease in 2006 has been that many more people, including investors in the Icelandic market, now know about Iceland, the Icelandic economy and Icelandic banks, and watch them more often and more closely. One lesson of last year’s experience was that events in or connected with Iceland can cause contagion in other countries, so that it is important now to know what is going on there. And more people these days definitely do know more about Iceland than simply that it is the country that produced Björk and Eidur Gudjohnsen. BIS Review 60/2007  5
The EMU countries that are less dynamic and with lower growth potential think that they had to deal with higher interest rates than were suitable for them, owing to the fact that the more dynamic countries had a tendency for higher inflation than them. And this is also true. Both views are true. The lesson we should all draw is that, on one hand, the less dynamic countries have their work in terms of structural reforms: more privatisation, more competition, a greater weight of the private sector in the economy, etc. to increase their growth potential. And, on the other, the countries with more inflationary tendencies should, as I said a couple of weeks ago in Zaragoza, pursue their own structural reforms, reforming labour institutions, the rental market, etc. so that increases in demand, arising from relatively low rates, cannot generate inflation. The celebration of these ten years is taking place just as the global macroeconomic scenario has undergone a deep-seated change as a result of the financial crisis, leaving it covered in great uncertainty and powerful recessionary tendencies. Now, those who are against a single  2  BIS Review 24/2009  monetary policy underscore the uneven impact that changes in the world economy can have on euro area members, as these are deprived of the macroeconomic stabilisation instrument that national monetary policies provided. Once again, this is not an argument against EMU but one in favour of accelerating structural reforms.

Miguel Fernández Ordóñez: A decade with the euro Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the Conference “10th Anniversary of the entry of Spain into the EMU”, Bank of Spain, Madrid, 27 February 2009. *  *  *  Let me first welcome you and thank you for being here today at the Banco de España headquarters for this conference commemorating the tenth anniversary of the creation of the Economic and Monetary Union (EMU), of which Spain was a founding member. I particularly appreciate Professor Rojo joining me here for these opening remarks. He was the architect of the enormous effort of persuasion and economic and monetary policy action that secured Spanish access to the Union. He was the Governor of the Bank from the signing of the Maastricht Treaty until 2000, when the project had become a reality and when, to many people’s surprise, the Spanish economy had successfully completed a rocky road to convergence. A celebration like today’s without the presence of somebody so closely involved in this project would have been incomplete. Thank you, Ángel. For a country such as Spain, which has frequently been a late arrival at defining events in modern history, having been a founder member of this key project of European integration is a landmark. It demonstrates Spaniards' willingness and ability to contribute actively to European construction and, therefore, to the present and future welfare of its citizens.
As a result of our measures, the Albanian banking sector is sound, with high degree of capitalisation and liquidity, and positive levels of profitability. The conditions for lending in Albania have improved and are on the course of constantly improving. In the light of its mission, the banking sector should translate these positive premises in more lending: showing far-sighted decisions; assessing properly the development perspective of the Albanian reality; utilising the potential from various sectors of the economy. On the other hand, the phenomenon of non-performing loans – which reflects to a large extent the retroactive effect from the crisis shocks – is being addressed, although a lot remains to be done until its eventual solution. ***  Dear guests, When we discuss about the development perspectives, as policy makers, we may not ignore the risks and challenges we face. Relations with our economic and financial partners in the euro area have been and continue to be a source of progress as well as an open channel of shocks. As a region, we have generated and consumed crisis, but recently the balance has been notably on the consumption side. Beyond economic and financial problems, the global crisis was also reflected in notable social problems. These problems have materialised in different forms in different countries, but the antiglobalisation movement is a common thread of tension in global economic developments.

Why not persevere with the minimum exchange rate, instead of exposing the Swiss economy to the downsides of negative interest rates and the challenge of a stronger currency? With this question in mind, let me turn straight to a second fiction regarding Swiss monetary policy, namely, that an unlimited lengthening of the SNB balance sheet would be riskless. This fiction flies against common sense and is mostly prevalent in academic circles. I will try and clarify some misunderstandings with respect to central bank balance sheets by stressing three important facts that apply both generally and to the current Swiss monetary policy situation in particular. First, a central bank balance sheet is never a target per se, but rather, its size and composition simply mirror monetary policy decisions. Second, massive balance sheet expansions carry financial and economic risks. 3 This is clearly the case when the policies underlying the balance sheet expansion comprise outright purchases of foreign exchange. This puts foreign exchange risk on the central bank’s balance sheet. Third, policy measures involving a significant balance sheet expansion should be taken only as long as the benefits in terms of the broader policy objective clearly justify the risks and cover the costs associated with the balance sheet expansion. It is important to note that the costs and benefits of a given policy measure may change over time, and must therefore be reassessed repeatedly.