samchain/econo-pairs-v1 huggingface dataset:
What she wants now is an explanation for how and why we have come to this pass, and she wants to know how to translate that explanation into recommendations”. When I read this sentence (maybe in part because of the “she” used by Professor Dasgupta), I recognized myself. I am not an ecological expert, I am just “a concerned citizen” who does her best to understand what is happening and what I could do in my current position. So please allow me, as a non-expert, to adventure myself into three lines of thought today: -  (i) what scientist tell us about the current situation of the biosphere;  -  (ii) what this means for central bankers and supervisors;  -  (iii) and what may be required to address the situation. The situation is challenging, to say the least. Urgent action is needed. 1  Page 2 sur 12 1. Welcome to the Anthropocene: from climate change to biodiversity loss,  and  toward  a  comprehensive  assessment  of  our  interconnected ecological crises The scientific evidence tells us that while a lot of focus has been on climate change in recent years, it is only the “tip of the iceberg”, to quote a famous study by Will Steffen and co-authors.ii Other risks exist that are not only higher than climate change but also interact with it.

This growth was sustained with a strengthened balance of payments position. Macroeconomic policies during the year were focused on supporting domestic activities as the main driver of economic growth. Private consumption remained resilient despite the lower export earnings. National savings remained high at about 35% of GNP. Public sector investment increased by 15.5%, while consumption expenditure increased by 11.9%, mitigating the impact of the contraction in domestic private investment. The more diversified economic structure of the Malaysian economy also moderated the impact of the decline in external demand faced by the export-oriented industries. The weaker growth in the export-oriented manufacturing sector which contracted by -10.2% was mitigated by positive growth in all other sectors. Stronger growth in the domestic-oriented industries, which increased by 7.4% compensated for the shortfall from declining external demand. The agriculture and the mining sectors, which expanded by 2.5% and 0.2% respectively, accounted for 15.5% of GDP. Domestic-oriented industries in the manufacturing sector now accounts for more than one-quarter of total output. Domestic content in the services sector is now higher, at about 80%. The construction sector, which has high local content and multiplier effects, also performed better during the year. The pro-growth policies to stimulate domestic activities benefited in particular the services sector which sustained a growth of 4.9% in 2001. The expansion was broad-based, with strong increases recorded for intermediate services, particularly finance and insurance as well as communication sub-sectors. Strong expansion was also recorded in the final services group, particularly government services and utilities sub-sectors.
If the theory of purchasing power parity is valid, we can make decisions about which countries to invest in independently of which countries we import from5. Chart: GDP and regional allocation of equities in the Fund Today, just over half of the Fund’s capital is invested in Europe. The proportion of European investments in the Fund’s portfolio is considerably higher than would be implied by a market-weighted portfolio. The Fund’s holdings in European equity markets, for example, are twice as large as its holdings in Latin-America and Asia. As the world’s economic geography changes, it is natural to raise the question of whether the Fund’s investment strategy should be adjusted to improve the ratio of return to risk. In the annual report to the Storting (Norwegian parliament) on the management of the Fund, the Ministry of Finance pointed to a number of factors that indicate that the Fund’s overweight in Europe should be reviewed. This is in line with previous advice from Norges Bank6. Capital markets in emerging economies have become more developed. As these countries account for an increasingly large share of global output and there are prospects of strong growth, it may be advisable to invest more of the Fund’s capital there. A more even distribution of the Fund’s capital across major regions would also reduce the Fund’s overall risk. Such changes must be introduced over time. The owner’s most important investment strategy decision is the share of the Fund’s capital that should be invested in equities.

Mr. George discusses Britain in Europe and the economics of EMU Speech by the Governor of the Bank of England, Mr. E.A.J. George, at the Borsen in Copenhagen on 6/3/98. I am delighted to be here this morning, and to have this opportunity to meet with the Danish financial community. I would like to use this opportunity to explain to you something of the British attitude to Europe - as I see it - and in particular our attitude to monetary union. I am well aware that we British have something of a reputation for stubbornness about Europe. I should like to try to persuade you this morning that while we do have some - not wholly irrational - misgivings, we are nevertheless as anxious as anyone to see the project succeed. We have to be - it is clearly in our national interest that it should. Let me make clear at the outset that, of course, I recognise that monetary union is fundamentally a political issue. It necessarily involves some deliberate pooling of national sovereignty over important issues of public policy - monetary policy and overall fiscal policy - just as the single market involved the pooling of sovereignty over aspects of trade and competition policy and so on.
The Law ‘'On the recovery and resolution of banks in the Republic of Albania'’ entered into force 3/5  BIS central bankers' speeches  in July 2017, vesting the Bank of Albania with a new attribute, i.e. the Resolution Authority. This attribute completes the financial security mechanism of the banking sector, with the Bank of Albania responsible for regulating and supervising the banking sector, drafting macro-prudential policies, performing the function of the lender of last resort as well as the implementation of banks’ resolution. Together with the deposit insurance scheme provided by the Deposit Insurance Agency since 2002, the financial safety net framework in Albania is complete. For the purposes of this Law, the Resolution Fund was created with contributions from the banking sector. This Fund aims to reach ALL 6.3 billion within 2027. The implementation of the Albanian recovery and resolution Law consists in three important steps: The first step is the drafting of recovery plans by each bank operating in Albania, with reliable and concrete scenarios, as well as defining the indicators that signal the deterioration of the financial situation of a bank before it becomes irreversible. When drafting recovery plans, the bank should create credible options to withstand stress scenarios, constructing mechanisms that are part of the daily management of the banking business and that do not remain just part of a hypothetical plan.

The banking sector in the Balkans is dominated by foreign-owned banks. In Albania, subsidiaries of foreign banks account for around 78% of banking sector assets, while those from European countries account for 48%. The Bank of Albania is the Resolution Authority for seven subsidiaries of EU based banking groups, of which four are classified as systemically important under the mandate of the Single Resolution Board (SRB). Due to this, the signing of cooperation agreements between the resolution authorities of the banking group and the local authorities where the subsidiary operates is very important for coordinating actions, exchanging data for planning and implementing the resolution, and coordinating crisis management. I have the pleasure to share with you the news that the Bank of Albania has signed an important cooperation agreement with the Single Resolution Board, i.e., the Resolution Authority of the Banking Union, on 3 October 2018. Dear ladies and gentlemen, This Conference is the culmination of our work over the past 18 months for developing a complete framework for bank recovery and resolution. For this reason, the presence of colleagues from supervisory and resolution authorities from various entities assumes special importance. We have representatives from the European Union at the central level, from individual countries of the European Union and representatives from countries of the region, national and foreign bankers as well as the representatives of the media. This presence means sharing experiences and opportunity to evaluate what has been done.
Pension funds are active in repo markets but do not run highly leveraged positions. Financial leverage for risk taking is most prevalent in the hedge fund sector, but even here it appears to be relatively low compared to banks. 18  The risks from synthetic leverage - the leverage that is embedded in derivative contracts - is, however, much harder to measure, let alone categorise. Funds make very significant use of derivative contracts. An FCA survey published in 2015 suggested hedge funds have outstanding notional derivative positions 28 times greater than their net asset value. But, in many cases derivatives seem to be used to hedge and reduce rather than to gear up risk. And notional values are rarely an accurate measure of risk exposure from a derivative. So measures of total net economic leverage are preferable. That is, measures which show the extent to which derivatives increase or decrease a fund’s overall exposure to risk factors such as asset prices or interest rates. The issue here is not just whether we can identify how much synthetic leverage is being used to reduce rather than to take on risk. It is also to identify, at the level of the financial system, whether the large-scale use of derivatives to manage risk at the fund level creates a risk in the system as a whole. There are perhaps two related ways in which this could happen. The first is simply the degree of inter-connectedness this creates in the system as a whole.

10  For example, foreign currency debt securities were at the heart of the Latin American debt crisis in the 1980s in which bond investors played a significant role in volatile capital flows and ultimately in sovereign crises. 11 Recent Bank research shows that during the 2013 ‘taper tantrum’ asset managers sold bonds as prices fell, perhaps exacerbating the episode. See Czech and Roberts-Sklar (2017). 12 Whilst price-based measures of liquidity in fixed-income markets, such as quoted bid-ask spreads, are in line with historical standards, volume-based measure have deteriorated. In US and UK government bond markets, turnover ratios have declined materially since pre-crisis. In corporate bond markets, average large trade sizes have fallen. US corporate bond dealer inventories are over six times less than before the pre-crisis period and Sterling and US corporate bond inventories have been steadily declining since 2011. 13 Bank of England Financial Stability Report, Box 2, December 2015 6  All speeches are available online at www.bankofengland.co.uk/speeches  6  It is also less clear now that other investors like pension funds and insurance companies would come in to stabilise a falling market in the way that they may have done in the past. A Bank of England-led study in 2014 found evidence that in some instances, insurance companies and pension funds might indeed act pro rather than counter-cyclically in a severe episode of stress, selling into a falling market.
WSJ: When you spoke of a quantum leap last year, you referred to quasi-automatic sanctions on excessive deficits. Governments so far haven’t come along. What makes you optimistic that you can still get your point of view adopted by governments? TRICHET: There are a number of elements that are important: the reinforcement of sanctions; the reinforcement of the independent diagnosis that would be made by Commission. It’s a set of quantum leaps, including the quasi-automaticity of the start of the corrective procedures and of the sanctions, which in our view is extremely important. Governance is now discussed by the European Council and the European Parliament. The Parliament has in the past always demonstrated a remarkable capacity to capture what is essential for Europe. So, the involvement of the Parliament is very important. WSJ: Last year, governments made a watery compromise on sanctions, weaker than the European Commission’s proposals. Should governments rethink that compromise? TRICHET: Even the initial proposals from the Commission seemed to us too timid. Our position has not changed. WSJ: You have called for maximum flexibility for the European Financial Stability Facility. There is discussion whether EFSF should take over all or part of the bond buying program from the ECB. If that were to happen, would you be relieved? 2  BIS central bankers’ speeches  TRICHET: As I said, they have to improve the stabilization fund in both quality and quantity. By quality I mean having a tool that is as flexible as possible.

TRICHET: I will not say that I was myself surprised because I have been deeply involved in the negotiation of the Maastricht Treaty and the setting up of the euro. But I guess that a number of external observers are very positively surprised to see that price stability with the euro has been, over 12 years, better than with the previous national currencies and that as many as 17 countries and 331 million peoples are in the euro area since the beginning of 2011. But this is not time for complacency. As all of the advanced economies we have to draw – without any complacency – all the lessons from the present global crisis, in particular in terms of governance. WSJ: The Fed is doing more quantitative easing, while the ECB warns of inflation risks even though both regions are recovering in a broadly similar fashion. Are Fed and ECB policies diverging, and does it pose a risk to global financial stability? TRICHET: On both sides of the Atlantic we have each of us our responsibilities that are very important. We are placed in different economies, particularly in terms of the financing of the economy, and of the nature of the shocks we have to cope with. But we are united in purpose: to deliver price stability in medium term and to solidly anchor inflation expectations. 4  BIS central bankers’ speeches
If monetary policy can be made expansionary without this causing economic actors to fear that inflation will rise sharply, their expectations of what inflation will be in the longer term will not be affected either. However, if fears of sharply rising inflation arise as a result of the expansionary policy, long-term inflation expectations may also begin to creep upwards. If the anchor comes loose completely, the long-term consequence may be that inflation continues to rise in a price and wage spiral. And, just as it may take a great deal of effort to restore confidence in public finances that have begun to erode, it may be difficult and costly to bring inflation back under control. As I mentioned at the start, in Sweden we have some experience of price and wage spirals of this type, even though this was some decades ago. Too low inflation is also a problem… However, it is not only an anchor that is drifting ‘upwards’ that is a cause for concern. Monetary policy can also have major problems if it drifts ‘downwards’ and inflation becomes persistently very low. In this case, monetary policy becomes less effective because the main instrument, the policy rate, becomes more difficult to use.

Policies should be implemented to prohibit any behaviour or relationship that diminishes its quality. This is very often evident in conflicts of interest, connected lending, which is not on an arms length, and preferential treatment to related parties. The independence of directors too is crucial where directors should have the ability to exercise objective judgement, regardless of board structures or ownership structures. Well established corporate governance committees such as the Board Audit Committee which oversees the bank’s internal auditors, with objectivity and independence, should  1/2  comprise of non-executive members of the Board who have the requisite knowledge that is commensurate with the complex nature of the banking institution. Independent, competent and qualified auditors is an essential pre-requisite of good corporate governance which would achieve a number of important objectives. It would ensure timely identification of risks and the publication of financial statements which accurately represent the financial position and performance of the bank. Auditors should understand their duty to the bank and its stakeholders to exercise due professional care in the conduct of audits. In this connection, we have, in the recent past, strengthened the relationship of auditors with the regulator and the company to benefit from each others’ capabilities, expertise and knowledge. Basel II has attempted to capture all these critical aspects into the new accord.
2  BIS Review 132/2008  Within a day, AIG had to be rescued following rumours about the size of its losses on CDS contracts and pressures grew on the remaining securities dealers. Later in the week, Secretary Paulson announced his initial $ billion plan to purchase assets to support the banking sector. It didn’t entirely still the doubts. The pressures were also felt in Europe. At the end of September Dexia, Fortis and Hypo Real Estate all had to receive emergency capital injections, mostly government supplied. In the UK the authorities facilitated a rapid consolidation in the mortgage sector with Abbey Santander buying Alliance and Leicester, some mergers in the building society sector, and the proposed merger of LTSB and HBOS. Finally, in late September the Tripartite authorities intervened to resolve growing difficulties in Bradford and Bingley by transferring the deposits and branch network to Abbey Santander and taking the remaining assets and liabilities into public ownership for orderly wind down. But the loss of confidence went wider than a subset of vulnerable banks. Our report estimates the total US and European marked to market losses on credit assets at nearly $ trillion. While these will not all fall on banks and may exaggerate the losses to those who can hold debt to maturity, investors and counterparties became worried about the extent of the likely losses on banking and trading books in a wider range of institutions and in their ability to continue to finance their businesses.

The medium term agenda We all have lessons to learn from the turmoil of the last fifteen months. I would like to pick out three in particular, two of which are international and one UK specific: •  the need to develop new “macro prudential” policies to bridge the gap between monetary policy and the regulation of particular institutions and markets;  •  the need to establish a more effective regime in the UK for handling failing banks; and  •  the need to improve the handling of cross border crises and bank failures. Central Banks have always paid close attention to asset prices and credit growth in deciding monetary policy but they are setting interest rates for the whole economy and there is no guarantee that the rate or the rapid changes in rates that could be needed to dampen asset price growth will be appropriate more widely. On the other side, regulation and supervision are focused on the resilience and conduct of individual institutions: their management, risks controls, capital and liquidity and so on. What we have found in the last few years is that the sum of what makes sense at the level of individual institutions does not necessarily add up to what is needed for the system as a whole. We need to develop what are called “macro prudential” policies to bridge that gap.
For example, some additional confusion may arise from the fact that more than one consolidating supervisor will be involved. On top of this there would be several consolidating central banks and several consolidating ministries of finance. Therefore, I think that the lead authority model will not be sufficient for handling crises in large cross-border banks. In particular, it does not solve the basic dilemma of giving one country the mandate and opportunity to act, while letting the host country retain its responsibility for financial stability. The accountability problem also remains. To my mind, the lead authority model is a model that will work best for banks with limited cross-border activities that are insignificant in the host countries. But for large cross-border banks, I’m afraid that it will work only as long as the going is easy and the weather is fair. Another route that has been suggested is to give the home country authorities a formal mandate to act in the interest of all relevant countries, either through a European mandate or some kind of binding contract between relevant countries. A lead supervisor with a European mandate seems nice in theory and aims at solving the conflicts of interest by creating a central decision-making body. In practice, however, it could easily become very bureaucratic and inefficient. If we are establishing a central decision-making body anyway, why act through authorities from 25 different countries?

Joseph Yam: Can the euro be a benchmark for Asian monetary co-operation? Remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the keynote discussion: “The euro: a stabilising factor of the international monetary system. Can the euro be a benchmark for Asian monetary co-operation?” before the Paris Europlace Financial Forum: the euro markets in a global investment strategy, Hong Kong, 21 March 2005. *  *  *  It is a great pleasure to be here this morning to take part in this keynote discussion on the euro hosted by Paris Europlace. One of the great benefits of living in an international financial centre is the opportunity to share something of the life and culture of other parts of the world without leaving one's own city. We have always been fortunate in Hong Kong in our enjoyment of the fruits of European and particularly French - civilisation. We are currently enjoying, as part of "The Year of France in China", the superb Impressionism exhibition at the Hong Kong Museum of Art: together with all of the excellent performances in our international Arts Festival, and the growing popularity of al fresco dining, this is helping to create a very European atmosphere in Hong Kong this spring. And, from what I see on the streets, I do not get the impression that the strong euro is having any effect on sales of European fashion.