samchain/econo-pairs-v1 huggingface dataset:
ADB should draw on the experience in the aftermath of the global financial crisis and stand ready to provide timely and flexible crisisrelated assistance to its needy members. While macroeconomic policies and prudential measures could help smooth cyclical economic fluctuations, in the longer term, credible structural reforms are needed to sustain the growth of the region and preserve investors’ confidence. The vulnerabilities now faced by some regional economies are in part due to the overheated domestic demand in the past years amid strong capital inflows. However, they also reflect, to a considerable extent, supply-side constraints on potential output and limited capacity of the region’s financial markets. While the situation differs across economies in the region, there are a number of structural reform needs that are common to the region and in which the ADB can play an active role. BIS central bankers’ speeches  1  First, the supply-side constraints in a number of regional economies are linked to weak investments, in particularly infrastructure investments. Many investors have cited that there is no lack of funds or interest in investing in Asian infrastructure projects. The problem, however, is a lack of a pipeline of bankable projects, which in turn is due to fundamental issues such as uncertainties relating to the government’s commitment in supporting a specific sector; lack of a credible PPP framework; political force majeure; and project governance.

Part of the problem was that when the music stopped, just as the market was uncertain which banks were sound, investors and savers could not tell a sound ABS from an unsound ABS. So one lesson must surely be that securities regulators and exchanges, which admit ABS to listing, should set more exacting but also simpler standards for transparency. They surely have a clear role to play in the regime for the issue and distribution of such securities. IOSCO has been working on this. 11 A second lesson is that we have to be clearer about the nature and extent of risks retained by originators. The Basel Committee is focused on this. Other ideas are more radical. It has been suggested that, when combined with repo, the ABS market amounts to a major shadow banking system – portfolios of loans financed short term, so with maturity mismatch risk. It follows from this, it is suggested, that the kind of social contract that applies to the mainstream banking system should be extended, suitably adapted, to the ABS market. On that view, AAA tranches occupy a place in the capital structure of a securitised shadow banking system equivalent to that of retail deposits in the capital structure of mainstream banks, and so should be guaranteed by governments or, in a closer analogy to retail-deposit protection, by industry-funded insurance schemes; and with issuers subject to authorisation criteria. 12 I am not at all endorsing those prescriptions here. Rather I mention them because they serve to highlight two things.
By the 1970s, an era of supervision – as distinct from regulation – had begun in the UK. The more recent history of insurance regulation over the last century is a major topic in its own right, so I only propose to outline a few points. In 1923, the Industrial Assurance Act introduced a Commissioner to discharge statutory powers on behalf of the Board of Trade, with the idea of specific regulatory bodies introduced 21. By 1946, the regulatory framework had expanded to include motor, aviation and transit insurance and, significantly, the deposit system was replaced by a more sophisticated solvency margin which specified that a particular margin of assets over liabilities should be maintained. 22. A string of high-profile failures in the 1960s and 1970s – including the failure of Fire, Auto and Marine which left 400,000 (mostly motor) policyholders uninsured, and an even bigger failure in 1971 when Vehicle & General, with 1.2 million policyholders, collapsed – led to demands for further reform 23 at a time when a wave of consumer protection laws beyond the insurance sector had put regulation firmly on the agenda in any event. Relatively speaking, up until the 1970s, individuals running insurance companies attracted scarce regulatory attention. This all changed in the 1970s when conditions around the fitness and propriety of senior individuals were introduced.

After all, most businesses do not work with margins that can absorb such extreme exchange rate fluctuations, in terms of both speed and level. The Swiss economy is very open and dependent on exports. Every second Swiss franc is earned abroad. The massive overvaluation of our currency this summer carried with it the risk of a recession and of deflationary developments. This is why  14  It is worth noting that this long run average is a purely backward-looking statistical concept and not a forwardlooking or equilibrium concept. We use it throughout as a statistical yardstick. The SNB does not endorse a specific equilibrium exchange rate level as the notion of equilibrium is model-dependent and thus not uniquely defined. Every model we know of concludes, however, that at CHF 1.20 per euro, the Swiss franc remains high. 15  This is an approximation of the real effective exchange rate, assuming constant weights and inflation differentials. 6  BIS central bankers’ speeches  the SNB concluded that it had to act in order to protect the economy and safeguard price stability. On 3 August, the SNB announced that it would be aiming for a three-month Libor as close to zero as possible. This was to take immediate effect. It would also expand banks’ sight deposits from their then level of around CHF 30 billion to CHF 80 billion.
According to a 2021 study of seven European cities, individuals who switched one trip per day from driving to cycling reduced their carbon footprint by about 0.5 tonnes over a year. CONCLUSION Let me conclude. This is a gathering in the name of the dismal science. I hope I did not give too dismal a speech. But it is important that as economists and as Singaporeans, we appreciate the gravity of the net zero challenge. The climate crisis demands collective action: nothing short of a whole-of-society effort across countries will suffice. And the time for action is now, not tomorrow. Yes, we wish we can postpone carbon taxes, costly investments in energy efficiency, restructuring of business processes, mandatory reporting of climate risks, until economic conditions are better. But the planet cannot wait, it is continuing to warm up. The cost of delay is having to make sharper and more painful adjustments later amid a worsening climate. The road to net zero is not easy. But we have seen time and again that when confronted with grave challenges, humankind has risen to the challenge. The recent COVID-19 pandemic is a good example. Yes, the world’s response was not optimal, and not everyone played their part.

There is also scope to recycle capital by taking loans off the balance sheets of commercial banks and multilateral development banks and structuring them in a form that could be subscribed by institutional investors, insurance companies, and sovereign wealth funds. Several blended finance models have been piloted. But they need to be substantially scaled up to channel the extra $ trillion in financing needed for the net zero transition. Singapore is building a comprehensive ecosystem for green and transition finance to facilitate Asia’s net zero journey. We are building capabilities in environmental risk management in the financial sector through climate stress tests. We are providing grants to defray the costs of issuing green and sustainability-linked loans and bonds. We are supporting industry efforts to build the infrastructure for a liquid and transparent voluntary carbon credit market in Asia. 7/9  BIS central bankers' speeches  We are deploying technology to address data challenges, such as through an ESG registry to maintain provenance of green certifications and an ESG disclosure platform to allow listed companies to upload corporate sustainability data in a structured and efficient manner. SUSTAINABLE LIFESTYLE The fifth and last key to achieving net zero: a sustainable lifestyle. While many of the changes necessary to mitigate climate change are in the realm of public policies, business practices, financial decisions, and technological advances, people will also need to make lifestyle adjustments.
But the economy also became badly unbalanced – overly dependent on domestic demand and with a trade deficit that was steadily expanding relative to domestic output. The real exchange rate change brought about by the depreciation of sterling (and indeed the increase in VAT) reflected a need to rebalance the economy away from domestic expenditure and towards net exports. That real exchange rate shock will cause a change in relative prices, with import prices rising relative to domestic wages and prices. It may take several years for that price level effect to work through fully, generating higher inflation rates for the duration. It is possible, but by no means certain, that this effect has now worked through. A key and recurring theme in setting monetary policy is that one has to look at the source of the shocks to understand their inflationary consequences and judge the appropriate policy prescriptions. The first question I want to address today is, given our inflation target, what is the right monetary policy response to these shocks? I then want to talk a little about how we make such decisions and, in particular, the role played by models and forecasts. How should monetary policy have responded to the recent shocks to inflation? The economics profession has long accepted that different shocks warrant different policy responses. Assume for a moment that one can perfectly identify the source and nature of a shock to the economy (which of course, one never can).

By the time Bank Rate had exerted its full influence on the price level, the effect of the shocks was likely to have already dissipated, if not reversed. Second, Bank Rate would have dampened inflation by adding even more downwards pressure on demand on top of the existing recessionary forces. The consequent fall in output and rise in unemployment would have been greater. These two considerations mean that a monetary policy response would most likely have only injected extra volatility to inflation: by the time the price shocks wore off, we would have been facing a severe undershoot of the inflation target and deflation would have been a distinct possibility. The path of output would have been unnecessarily volatile and the deviation of inflation from target might have been different but no more acceptable. The possibility of such shocks, and indeed the ability to respond as we have done, was foreseen when the inflation target regime was conceived. Indeed our Remit from the Government is clear on the consequences. The Remit says that (with my emphasis): “The framework takes into account that any economy at some point can suffer from external events or temporary difficulties, often beyond its control. The framework is based on the recognition that the actual inflation rate will on occasions depart from its target as a result of shocks and  4  The latter would affect CPI directly though its impact on imported consumer goods and services, and indirectly by affecting the cost of domestic production reliant on imported intermediate inputs.
The not so buoyant economy and the gradual decline in inflation-in line with expectationssuggest that, under the assumptions of the baseline scenario, the discussion about the gradual withdrawal of the monetary stimulus could be delayed with respect to March expectations. Overall, any future changes in the MPR will depend on the evolution of domestic and external macroeconomic conditions and their implications for the inflation outlook. Indeed, if inflation is higher and more unrelenting than we have foreseen, the normalization should be anticipated; but if the convergence of inflation to the target is faster than foreseen, the opposite should happen. Let me now present a brief review to the main issues in our Financial Stability Report. The Financial Stability Report Our Financial Stability Report discloses, on a half-yearly basis (in June and December), the recent macroeconomic and financial developments that might have an incidence on the Chilean economy’s financial stability. The Report we present today examines the same external risk scenarios I have just described. As I said, monetary policy in developed economies remains expansionary. The measures of the ECB and other central banks that cut down their benchmark rates have continued to push down sovereign long-term rates, although lately they have shown some reversal. This, 4  BIS central bankers’ speeches  plus still bounded risk premiums, have led to increased issue of debt, mainly corporate. Thus, an environment of low-cost funding and incentives to risk taking persists, where vulnerabilities may be incubating that could emerge as the global financial situation approaches normality.

•  We should harness technology to support the pooling of data in regional and global data centres. •  Data aggregation will help enhance consolidated risk management and ensure better protection of customer data. Insurance integration In insurance, ASEAN member states have agreed on an ASEAN Insurance Integration Framework. •  ASEAN members have agreed in-principle to liberalise the cross-border supply of Marine, Aviation and Goods in International Transit (MAT) insurance in the seventh package of financial sector commitments of the AFAS. •  When this agreement is signed and ratified in 2016, insurance companies will be able to offer MAT insurance across ASEAN’s borders. •  This move will help to lower the cost of insuring cross-border business risks and help to spur intra-ASEAN trade. The next key steps will be to liberalise the catastrophe insurance and reinsurance markets. •  ASEAN’s insurance penetration rate is barely half the global average, even as the incidence and severity of natural catastrophes in ASEAN continue to increase. •  This large and widening gap in insurance coverage leaves ASEAN countries vulnerable to economic loss and production disruptions from natural catastrophes. •  As risk exposures grow in scale, size and complexity, they will exceed the capacity of individual states to underwrite the risks confronting their communities and economies. Liberalising ASEAN’s insurance markets will reduce the cost of insurance protection to governments, to businesses as well as to consumers.
What is harder to judge is the extent to which the Bank of Japan’s decisions may have been influenced at times by recognition of the latent ministerial powers. Notwithstanding those nuances, what can be seen from Figure 2 is that the Bank of England is quite distinctive amongst the five leading industrial countries. We have: •  the least independence in setting interest rates;  •  the most comprehensive responsibility for banking supervision (though some other banks have broader financial regulatory responsibilities);  •  the greatest role in managing government debt - we provide substantial policy input as well as actually handling auctions as issuing agent for the Treasury;  •  the smallest branch network - we have consciously reduced the scope of our private banking activities in recent years (focusing on areas of  2 Charles Goodhart, Forrest Capie and Norbert Schnadt, “The development of central banking” in  The future of central banking, the tercentenary symposium of the Bank of England, Cambridge 1994, page 169. BIS Review 33/1997  -4-  comparative advantage as a public sector institution) and are now also leaving note distribution to be handled largely by the private banks; •  a comparatively limited but increasing role in the operation of payment and settlement systems - typically, the Bank of England participates in payments systems which are run by the private sector, and has only involved itself in the establishment and operation of settlement systems when the private sector has not itself succeeded in doing so.

The importance of the sector is evident in the balance of payments data where it ranks third in terms of its contribution to the total value of exports of services at 19% for 2021, after the financial services and ICT sectors, with contributions of 32% and 23%, respectively. Concluding remarks Let me conclude by underlining the challenges for policy makers: The global inflation dynamics are currently being addressed by central banks, but the fight is far from over. Monetary policy is being utilised at a different pace in different regions, due to the differences in economic fundamentals. However, we should not forget that other policies also play a role. For instance, state support should avoid horizontal measures and instead use targeted fiscal measures,  3/4  BIS - Central bankers' speeches  which focus on the economically vulnerable, in order to support social cohesion but avoid undermining monetary policy measures against inflation. Finally, regarding the shipping sector, it is and will continue to be the backbone of the global economy. In fact, when talking about the importance of shipping, I cannot avoid the temptation of referring to the British writer Arthur C. Clarke, who said and I quote: "How inappropriate to call this planet, Earth when it is quite clearly Ocean". Cyprus, a tiny spot on the planet, continues to strengthen its role in the shipping sector. As a hub for ship management, ship owning and vessel chartering services, it aims to maintain and enhance further the competitiveness and prospects of the sector.
All these features lead to numerous inefficiencies in the system, which makes for lower productivity and categorical failure in the goal of reducing unemployment. Under its current design, unemployment compensation is an absolute deterrent to labour mobility, since it depends on workers’ years of service at the last firm at which they were employed. And in today's world the reallocation of workers from one firm to another is crucial if the economy is to adjust suitably to the rapid changes unfolding in demand and in technologies. In that way, workers move from firms in decline to those pursuing more productive activities. The compensation system in force is not conducive either to the start-up or growth of more productive firms. And not only because it deters employers, discouraging new hires. Spanish workers themselves ultimately do not accept changing job because even though more productive firms may offer them substantially better wages, the change does not compensate for the fact that any severance payment would be back to zero in their new job. The fact that unemployment protection largely resides on a compensation package (which is colloquially known as firing costs) payable exclusively by the private sector also adds numerous distortions. The fundamental one is that it discourages company start-ups and hiring in general, a matter which, while important, is all the more so now that the inevitable and massive reduction in employment in housebuilding needs to be offset by job creation in other sectors. The Spanish system is inefficient.

Like Kashmir, it is difficult to see a definitive solution to the North Korean problem. But this too can be managed. The six party talks have reduced the risk of accidental war. The key actors are rational and, despite their differences, share a common interest in a peaceful resolution of the issue. Kim Jong Il is a master of brinkmanship. But he too is rational and must know that war will lead to the outcome that he fears most, the disappearance of North Korea as a sovereign state. Therefore, while he may go to the very edge, unlike Saddam Hussein, Kim will not deliberately step over it. The North Korean issue is a strong incentive for the US and China to cooperate for their common interest. The risks of miscalculation are perhaps highest over Taiwan. The issue is extremely delicate because it engages the domestic politics of China, US and Taiwan. There is growing tension between economic forces that are integrating Taiwan with the Mainland and Taiwan’s desire for a separate identity. No PRC leadership can ever tolerate a bid for independence by Taiwan. If Taiwan pushes too far, the Chinese must react or be exposed as a ‘paper tiger’. The US stand, and perceptions of the US stand in China and Taiwan, are key to the problem. President Bush has said publicly that he does not support Taiwan’s independence. But the US may still be drawn into a Cross Straits conflict. If this happens, there will be serious consequences for the entire region.
[17] And the liquidity framework has been designed from the start to facilitate the usability of those liquid asset buffers when banks face liquidity pressures. For example, there is no minimum and buffer structure in the LCR. It’s all one giant buffer. And there are no automatic restrictions that result from drawing down liquid asset buffers, unlike in the case of usage of capital buffers that incurs distribution restrictions. There is no specific time period in the regulatory framework within which banks need to rebuild their high quality liquid assets (HQLA) after a draw down. And there is no expectation on banks to hold excess liquid assets in order to avoid falling below the regulatory standard in the event of a potential stress. And some jurisdictions, like the PRA, had gone out of the way before the crisis to say that liquid asset buffers should be usable. [18] Yet during the early stages of Covid-19, we saw evidence that suggested banks were overly reluctant to use their HQLAs, reinforcing similar evidence gathered from the Bank of England’s exploratory liquidity stress test. In February 2020, the market reacted to the Covid-19 stress through a typical flight to safety leading to increased prices of safe assets and falling safe asset yields. In mid-March however, the illiquidity of other markets turned a ‘flight to safety’ into a fevered ‘dash for cash’: to meet sudden large margin calls, firms began to sell their most liquid assets, which drove safe assets prices down.

However, as the banking system became more and more levered, as banks’ balance sheets grew and grew, the measured riskiness of banks’ assets – measured in large part by their own models – declined. In the ten years to 2007, the size of banks’ balance sheets in the UK had doubled relative to the size of the economy. But over the same 10 years, the average risk-weight for the assets of the major UK banks had fallen to almost 40% – down by around a fifth from its level a decade earlier. As a result, the increase in banks’ balance sheets was not matched by anything like a commensurate increase in capital. When the crisis struck, not only did a significant portion of the assets turn out to be far riskier than estimated. Market confidence in the risk-weighted capital adequacy framework as a whole pretty much evaporated. We have taken steps, through the new international capital standard, “Basel 3”, to address the main failings in the risk-weighted framework. We have tightened up on the required quality of regulatory capital. The “hybrid” debt instruments that proved not to be loss-absorbing no longer count as Tier 1 capital. Efforts have been made to ensure losses are recognised at an earlier point. Material deferred tax assets are now deducted from the regulatory definition of capital. The minimum amount of common equity capital banks are now required to hold has been increased to 4.5% of their risk-weighted assets. And we have put in capital buffers.