samchain/econo-pairs-v1 huggingface dataset:
And investments that might have looked speculative in the past could look much safer in the context of a transition to net zero. Uncertainty and lack of data is not an excuse. We expect firms to make reasonable judgements rather than default to “zero”. UK banks and insurers must work to develop these capital assessments over the coming year and the Bank will be working in tandem to develop its approach to reviewing them. There is at least one further role for the financial system to facilitate investment in the economy to support climate change. It is important to put this into a broader context. The level of investment in the UK economy as a whole has been weak for some time, and alongside this we have seen weak productivity growth. Covid has further hit investment, including the investment intentions of firms. An important part of the recovery from Covid will be to stimulate and support investment, particularly if we do see some elements of structural change in the economy reflecting, for instance, the way we work. Investing to support the transition to zero net emissions will be a critical part of the recovery. Capital markets will therefore need to play an important part in the transition to a resilient carbon-neutral economy.

Bank Negara Malaysia, working together with the JC3, is committed to supporting these efforts within our mandates for financial and monetary stability. On that note, I wish you productive discussions in the sessions ahead. We look forward to concrete outcomes from these discussions given the heavy and urgent responsibility we all bear to mitigate the devastating effects of climate change.
BoZ has issued Directives to all regulated financial institutions on combating money laundering to ensure that the potential threats posed by money launderers are limited; and  BIS Review 99/2008  7  iii. BoZ has also developed a supervisory framework aimed at conducting targeted inspections to ensure banks and NBFIs are complying with the anti-money laundering legislation and directives. 5.3  Improvement of credit culture  In order to improve the credit culture in the country, the BoZ issued the Credit Data (Privacy) Code and the Credit Reference Services (Licensing) Guidelines to facilitate the establishment of credit reference bureaux (CRBs). The guidelines were gazetted on 30 January 2006. Subsequently, the first credit bureau, namely, Credit Reference Bureau Africa Limited (CRBAL) was licensed on June 5, 2006 and was launched on January 11, 2007. The main task of a CRB is to provide lenders with factual information upon which they can base their lending decision. While CRBs facilitate sharing of information without approving or disapproving credit, or collecting debts they also assist consumers understand the responsible use of credit and help lenders in identifying good payers from defaulters. Once fully operational the credit bureau will: i. Allow for increase in credit extension because of better risk profiles;  ii. Reduce credit processing costs and times as well as loan write-offs;  iii. Lower borrowing costs; and  iv. Enhance the credit culture, which in turn will allow for the provision of the much needed finance for the development of various sectors.

BIS Review 99/2008  5  The BoZ also recognizes that financial stability is essential for strong macroeconomic performance and execution of monetary policy. This is clearly reflected in the Bank’s mission statement, referred to earlier. To ensure stability, our supervisory processes are based on a robust regulatory framework, underpinned by on-site inspections and off-site surveillance, which places emphasis on banks proactively managing the risks inherent in their products and services. Financial stability can only exist when all financial system risks are adequately identified, allocated, priced and managed. FSPs face a significant number of risks, which include credit risk, operational risk, market risk and liquidity risk. As a result, a minimum regulatory capital charge is defined to cover these. In responding to the challenge, in 2006, the Capital Adequacy Regulations of 1995 were amended to provide for a tiered capital structure to encourage entrants into the financial sector (see Table 4) The review was aimed at ensuring that banks are adequately capitalised at commencement, and as they operate. In 2005 amendments were made to the Buildings Societies Act, Development Bank of Zambia Act, National Savings and Credit Bank Act and the Banking and Financial Services Act, to ensure harmonisation of these pieces of legislation under this sector. The amendments have enhanced the supervisory oversight of the BoZ on the financial sector. The Bank of Zambia Act is also being reviewed with a view to enhancing operational independence of BoZ.
A partial representation of the economic structure can only partially help in monetary policy decision-making, notably in real time. For instance, it is very difficult to find empirical models that allow for an integral view of both non-financial (‘real’) and monetary-financial phenomena. So, it may be impossible to arrive at a convincing explanation of the origin and propagation of a significant financial shock, say, on the basis of sets of equations that do not elaborate on the role of the financial sector or account for only tenuous links between that sector and the rest of the economy. Another example is provided by the many pitfalls that come with using “synthetic” indicators of inflationary pressure. The most famous of these “synthetic” indicators is the so-called “output gap”. The “output gap” can be defined as a measure of the deviation of the aggregate output of an economy from the maximum level that would be consistent with price stability. This maximum level is then the “potential output”. When current output is above potential, the pressure on the scarce resources should then translate into an increase in prices, that is, inflation. In the real world, the monetary authority constantly faces the challenge of observability and measurement. Unfortunately, we cannot “assume” to know the “potential output”. The best we can do is to try to “estimate” the output gap by using observations of many other correlated variables. We all know how imprecise and model-dependent this “estimated” measure can be.

At the same time, just as a good meal not only requires high-quality ingredients but also an excellent cook and recipe, high-quality monetary policy analysis also requires excellent staff and an appropriate analytical framework. The importance of the latter can hardly be overstated. While central bankers around the world are “data fiends” in their heroic attempts to minimise errors of inference and to make robust decisions amidst uncertainty about the true structure of the economy, the availability of a vast wealth of raw data from diverse sources may mean that policy-makers become constantly bombarded by conflicting signals. Amidst such a flood of information, policy runs the risk of losing its bearings and of over-reacting to the latest indicator. It is against this background that the ECB decided to adopt an analytical framework within which all possible sources of information - statistical as well as judgemental - can be brought together in a coherent fashion while at the same time allowing for alternative and diverse models and perspectives of the workings of the economy. In our view, this framework enables a wealth of information to be “digested” routinely without compromising the ultimate objective: to maintain a clear sense of direction. In order to give a structure to the diverse sources of information, a structure that is consistent with our view of the monetary policy transmission mechanism, we have organised our analytical framework into “two pillars”. These consist of two complementary perspectives on the determination of price developments.
If the interest rate differential against other currencies is small, the exchange rate will remain stable. In practice, this is not always the case. On the contrary, studies indicate that short-term movements in the exchange rate are best described by the random walk process. This means that the best projection of the krone exchange rate tomorrow is that it will be the same as today. In the somewhat longer term, we still believe that monetary policy and the interest rate differential against other countries are important for developments in the exchange rate. But  1  See box "Developments in the krone exchange rate", Inflation Report 2/05. BIS Review 97/2007  5  in the short run the krone fluctuates to some extent and not necessarily in line with the interest rate differential. The chart shows the effective exchange rate for Norway and some other countries. Compared with the currencies of Switzerland, the UK and Sweden, the Norwegian krone does not fluctuate to any particular extent. Compared with other commodity-exporting countries such as Canada, Australia and New Zealand the movements in the krone exchange rate have been modest. If such movements are felt to be uncomfortable, hedging instruments can be used. The markets for the purchase and sale of currency for future delivery – the forward and options markets – have grown in recent years. A deeper market has reduced trading costs and it is easier to find counterparties. This has improved companies' possibilities for hedging against exchange rate risk.

It cannot therefore be argued with great conviction that it is possible to identify one particular interest rate forecast that provides the indisputably “best” trade-off in monetary policy. More often than not, there will be a number of possible interest rate paths that might be said to provide a reasonable balance in view of the uncertainty involved. The results of this trade-off are presented in the Monetary Policy Report in the form of a chart that presents central projections for the interest rate, inflation and capacity utilisation in the economy. The formulation of a precise inflation target, our projection for the interest rate 3-4 years ahead and our desire to achieve a balance between output and inflation stability may perhaps give an impression of excessive optimism with respect to managing the economy and invite a repeat of earlier attempts to fine-tune the economy. But it is important to bear in mind the lessons drawn from the 1970s and 1980s, i.e. high stabilisation policy ambitions may lead to wide fluctuations in the economy, with high and variable inflation. In our conduct of monetary policy, we must not underestimate the uncertainty surrounding the decisions taken. Even if Norges Bank publishes an interest rate forecast, this does not mean that the interest rate will follow this precise path throughout the projection period. Forecasts of inflation, output, the interest rate and other variables are based on an assessment of the current situation and a perception of how the economy functions.
One could oblige banks to build up buffers using part or all of the increase in the value of securities held so that until you have finally sold the security, have booked the profit, you’ve got a potential profit that you can turn into a cushion. So when you enter a downturn and market values drop, the cushion would be the first defence against that. How it would work exactly still needs to be developed. These are two different types of activities, two different types of cushion. You could have both. FT: Could you imagine the ECB embarking on a large-scale programme of quantitative easing, or would you rule it out? CN: I would not rule out anything and we have not ruled out anything. What I believe we must do – and we keep studying various options – is to look at a few things and see whether we need to go beyond what we have done already. By the way, I consider that we are already implementing a non-standard monetary policy. The fact that we have, first, enlarged the pool of collateral and, second, decided to make the provision of liquidity at all maturities up to 6 months at fixed rates and for unlimited quantities, means we are not in a normal framework. FT Would you call that quantitative easing? CN: It is a way of doing quantitative easing, certainly, because, it means that we can provide liquidity to each institution beyond what they actually need.

Overbanking in Europe Two years ago, the ESRB’s Advisory Scientific Committee (ASC) published a widely cited report entitled “Is Europe overbanked?”.1 It pointed out that, over the preceding two decades, the banking sector had outgrown capital markets. In the late 1990s, the ratio of total bank assets to equity and private bond market capitalisation in Europe was below two. By 2008, this ratio had risen to four. By contrast, the comparable ratio in the US remained below one over this period, and that of Japan remained below two. Banks play a vital role in financing small and medium sized enterprises, which are a key part of the European economy. This lending must continue to flow to productive projects if Europe is to prosper. But bank lending has a tendency to be procyclical: growing too quickly when the economy expands, and shrinking sharply when it contracts2. As a result, in the aftermath of a financial crisis economic growth in countries with bank-based systems lags behind that of countries with more balanced financial systems.3 The clear policy message is that it is better to finance the real economy through several channels rather than to rely on just one. Capital markets in particular can act as a useful “spare tyre”.4 That is why the ESRB fully supports the capital markets union, which aims to remove barriers to the development of capital markets. Removing these barriers will foster changes in the structure of the financial system in Europe.
To accommodate this, I understand that Deutsche Bank's trading floor in this building is one of the largest in Singapore. Singapore's economic growth for 2006 continues to stay strong at 7.7%, with almost 170,000 jobs created last year. Our market indices have breached the 3,000 point mark and our GDP per capita has exceeded $ We are also witnessing the strong growth of Asia propelled primarily by the two economic powerhouses of India and China. The economies in South East Asian have seen a resurgence with countries like Vietnam rushing forth and is one of the fastest growing economies in the region. Trade and investments among Asian countries, and between regions including the Middle East and Asia, have increased substantially. We have also seen substantial wealth creation in the Middle East and Asia. Asia is estimated to have about 2.4 million High Net Worth Individuals with assets over $ trillion and comprise almost 20% of global High New Worth wealth. This is projected to grow annually by about 6.5% to about $ trillion by 2010. All these represent substantial financial sector opportunities for Deutsche Bank in Asia, including trade & infrastructure financing and wealth management. Singapore, being at the heart of Asia, provides global financial institutions a unique location to harness the growth opportunities from this region. Singapore offers a stable and trusted environment for investments and businesses in the region. Companies in Singapore are supported by a robust network of infrastructure as well as an educated workforce, and coupled with open and consistent Government policies.

We strive to keep our markets pro-business and to keep operating costs competitive. Being cost-competitive is not sufficient by itself. We need to make sure that Singapore continues to stay at the confluence of business opportunities. To facilitate business reach into major markets, Singapore has signed a series of Free Trade Agreements with many of our trading partners include the US, India, Japan, Korea, Vietnam as well as beginning free trade discussions with China and the Gulf countries. I am certain these strong ties that Singapore has built can only facilitate Deutsche Bank's business expansions in this part of the world. BIS Review 15/2007  1  Conclusion On that note, let me again extend my heartiest congratulations to Deutsche Bank on its 35th Anniversary in Singapore. We appreciate your commitment to Singapore and hope that Singapore will continue to play an important role in your growth in Asia and the world. Thank you. 2  BIS Review 15/2007
Another reason that our new objective should not encourage risky bets on regulatory standards is that we all remember what happens when such bets backfire. Over the last thirty years we saw the spectacular unravelling of the Bank of Credit and Commerce International, a subsequent small banks crisis, the equally spectacular collapse of Barings, and problems in the insurance sector including the closure of Equitable Life. And that was before we even got to the historic crisis of  Page 6  2007-08. In case anyone has forgotten, government support to the financial system peaked then at almost £ trillion. [15] The economic damage was immense and enduring. [16] Good prudential regulation – like a good immune system – remembers previous crises so that it can tackle similar ones when they come along in future. But to reiterate, strong regulation also needs to be responsive to the needs of the UK and to accommodate beneficial innovation. While I do not believe there is a fundamental tension between strong regulation and competitiveness for a global financial centre like the UK, it’s obvious that stronger and ever stronger is not the right answer. The PRA will not be turning the dial up to eleven. We will turn the dial down when we can. This is what we are doing as we go through the hard and unglamorous work of considering our detailed prudential rules to tailor them to the circumstances of the UK.

This will broaden rule-making powers for the PRA, as requirements which are now in statute will be replaced by new elements of our Rulebook, which we will have the power to change. The FSM Bill also introduces a new objective. The PRA’s primary objectives will remain the safety and soundness of firms and, for insurers, an appropriate degree of protection for policyholders. We will keep our existing secondary objective to facilitate effective competition in markets for financial services. But alongside these we will have a new secondary objective to facilitate, subject to alignment with relevant international standards, the international competitiveness of the UK’s economy and its growth in the medium to long term. We know it is important that we explain what we think these changes will mean for our policymaking. We also want to hear how other people think we should approach our objectives and use  Page 3  new powers. That is why on 8 September we published a discussion paper setting out our vision for the PRA as a strong, accountable, responsive, and accessible rule maker. [1] Today I am going to explain how those principles will guide us as we seek out new opportunities to pursue all our objectives; including competition, competitiveness, and growth. In particular, I will explain how rules that are strong and responsive can protect resilience and facilitate competitiveness at the same time. Taking our new competitiveness objective seriously will not mean entering a regulatory race to the bottom.
Provided there is stable confidence in the policy for price stability, price effects from a weakening of the exchange rate are generally BIS Review 32/1997  -3-  transitory. A depreciation is a problem for monetary policy only when it has a lasting expansionary effect or if inflation expectations rise. The economy’s inflation propensity, which seems to have decreased in recent years, is an important factor to consider when assessing the threat from future inflation. The term inflation propensity stands here for the structure of the inflation process, which is liable to be changed by various factors. If stronger competition, for example, in certain segments of trade results in lower price increases than before when consumption is rising, then the economy has a lower inflation propensity. Examples of factors that may have helped to reduce the inflation propensity are the fall in market expectations of inflation and the higher acceptance of the Riksbank’s inflation target. Another cause of a decreased inflation propensity can be lower inflation as such. Price comparisons are easier for households and firms when inflation is low. Price increases are more visible and producers have more difficulty in raising prices without a relative price shift. The situation in this respect is one of the main issues that the Riksbank will have to evaluate. We shall be returning to this later in the year. All in all, the picture that emerges of the Swedish economy suggests that the monetary stance is well balanced.

In time, however, 10 per cent inflation will be regarded as normal and wage demands will be based on this level. With higher nominal wage increases, real wage costs will move up again and unemployment will tend to return to its initial level. In the figure this means moving from B to C. In order to boost employment in this situation, inflation would have to rise to say 15 per cent and the procedure will be repeated. All that is ultimately achieved is higher average inflation. The level of unemployment to which an economy returns when inflation expectations have adjusted is usually referred to as equilibrium unemployment. It is determined by structural factors such as demographic changes, technology and the institutional set-up in the labour market, factors that are immune to monetary policy. The important conclusion to draw from this is that permanently low unemployment cannot be achieved by accepting permanently high inflation. Under favourable circumstances, to which I will shortly return, monetary policy can promote an economic recovery; but an appreciable improvement in the unemployment situation calls for measures in many other fields, above all in the workings of the labour market and wage formation. What should monetary policy aim for? If a central bank is incapable of “creating jobs” on a permanent basis, what should be its primary task? By means of an appropriately balanced monetary policy a central bank can determine, or at least strongly influence, the rate of inflation that prevails in the economy and underlies economic decisions by firms and households.