samchain/econo-pairs-v1 huggingface dataset:
Michael Gondwe: Importance of the SME sector in Zambia Opening remarks by Dr Michael Gondwe, Governor of the Bank of Zambia, at the launch of the Soweto branch of Stanbic Bank Zambia Limited, New Soweto market, Soweto, Lusaka, 31 August 2012. *  *  *  •  The Standard Bank Chief Executive for Personal and Business Banking in Africa, Mr Terry Moodley;  •  The Managing Director of Stanbic Bank Zambia Limited, Mr Dennis Kennedy;  •  Distinguished Customers of Stanbic Bank Zambia Limited;  •  Management and Staff of Stanbic Bank Zambia Limited;  •  Distinguished Invited Guests;  •  Members of the Press;  •  Ladies and Gentlemen. I feel honoured and privileged to be amongst you this morning. I wish to thank the Stanbic Bank Management for extending an invitation to me to deliver a keynote address on this important occasion. Ladies and Gentlemen, I would like to begin by applauding Stanbic Bank Zambia Limited for opening the Soweto Trader Branch. I commend Stanbic Bank as I observe that the Trader Branch is specifically designed with the Small and Medium Sized Enterprise (SME) sector in mind. This branch opening fully complements the Bank of Zambia which has set Financial Inclusion as one of its key strategic objectives. It is our expectation that the opening of this branch will provide opportunities for the SMEs to access financial services which for a long time have been lacking in this sector.

In recognition of the importance of the financial sector towards national development, the Bank of Zambia has continued to address various weaknesses in the Zambian financial system, among them being the low financial intermediation and limited access to finance. The Bank of Zambia is encouraged to see banks in the country exploring new ways in which they can take banking services where they are needed the most and this is mainly to the unbanked. On its part, the Bank of Zambia has continued to implement measures to reduce the cost of borrowing. In the recent past, the Bank introduced the Policy Rate which is aimed at fostering transparency in the determination of lending rates. Under the new framework, all financial institutions are now required to realign the pricing of loans with reference to the Policy Rate. Furthermore, in January 2012, the Bank of Zambia introduced the new minimum capital requirements for commercial banks. The minimum primary capital was raised from K12 billion to K104 billion and K520 billion for locally and foreign owned banks, respectively. This measure is intended to make commercial banks more resilient to financial instability and provide banks with strong balance sheets that would meaningfully support economic activities in the country. I am pleased to note that Stanbic Bank Zambia Limited was one of the first banks to reduce their lending rates in line with the objective of the Bank of Zambia policy rate.
While they vary across firms and scenarios, overall loss rates are equivalent to an average drag on annual profits of around 10-15%. These are big numbers, and the limits of the exercise mean the actual impact could well be larger due to some significant exclusions. [9] But it bears repeating that based on this exercise the costs of a transition to net zero look absorbable for banks and insurers, without a worrying direct impact on their solvency. By themselves, these are not the kinds of losses that would make me question the stability of the system, and they suggest that the financial sector has the capacity to support the economy through the transition. But any positive message needs to be taken with a major pinch of salt: both because there is a lot of uncertainty in these projections and because this drag on profitability will leave the sector more vulnerable to other, future shocks. A world with climate change is a riskier one for the financial system to navigate. A second key lesson is that how and when we transition makes a big difference. Costs to the financial sector will be substantially lower if early, orderly action is taken. For example, projected climate-related bank credit losses were 30% higher in the LA scenario than the EA scenario. Among other factors, this reflects that in the scenario, adjusting late and abruptly to climate risk triggers a messy recession – with rising unemployment as the corporate sector adjusts.

[13] This presents a challenge when considering implications for policy – and highlights the importance of continuing to plug the kinds of capability gaps I discussed earlier. As the results publication sets out, the Bank will engage with firms individually and collectively to help them target their efforts, and share good practices identified in this exercise. Implications for policy I hope it’s clear by this point that the CBES will be a valuable tool for helping us and financial firms to understand the challenges ahead. This exercise is not going to be used to set capital requirements for banks and insurers. But it clearly sheds light on that debate. The CBES results make clear that climate risk is a first-order strategic issue for the firms we regulate. But in my view it is not yet clear that the magnitude of transition costs require a fundamental recalibration of capital requirements for the system. [14] A persistent drag on profitability would be very nasty for firms, but so long as they are able to continue to make sufficient profits to maintain their capital buffers, its impact on safety and soundness might be less material. Had the results of this exercise suggested a fundamental threat to the solvency of these firms, our response would of course have been quite different. Set against that high level view, though, a world with climate change is without doubt riskier than one without.
A series of environmental changes over the past decade or so have affected the quantity and price of credit generally. Greater macroeconomic stability, and perceptions that it will persist more or less uninterrupted, probably increased the supply of credit; and by reducing risk premia, may have increased demand too (Diagram A). Other developments are more likely to have worked purely through credit supply. The most obvious is the growth of instruments such as credit derivatives and securitisation, associated with an increased role for rating agencies in monitoring credit risk. This was in effect a shock to technology, making portfolios transferable. By offering the prospect of better meeting desired risk profiles and by separating origination from investment, it has brought more nonbank financial institutions, and so more capital resources, into the credit markets, increasing the supply of credit (Diagram B). This seems to have been borne out in the significant shift in actual credit quantities and prices up to the middle of this year. In the United Kingdom, non-bank lenders have accounted for a greater share of credit extension to both the household and corporate sectors (Charts 2-4). 2  Stiglitz, J. E. and A. Weiss (1981), “Credit rationing in markets with imperfect information”, The American Economic Review, Vol. 71, No. 3, pp 393-410. 3  Bernanke, B. and M. Gertler (1989), “Agency cost, net worth, and business fluctuations”, The American Economic Review, March 1989, pp 14-31. 2  BIS Review 149/2007  A lot of that has been securitised (Chart 5).

My remarks today will focus on the implications for the strategic direction of the Islamic financial industry taking into consideration the lessons learned from such financial turbulence including the current crisis. As Islamic finance becomes an integral part of the international financial system, it will be increasingly tested by such developments. History has shown that the world will continue to be plagued by such crises. The key for the Islamic financial industry is therefore to ensure that it would not be a source of such financial instability and is able to achieve a level of resilience that would ensure its sustainability. Lessons learned from systemic banking crisis The world has experienced more than 124 distinct banking crises in the recent 27 years. 1 While the triggering factors that precipitated financial crisis have been different, for most, it resulted in a general loss of confidence and a downward spiral in asset prices. Such a crisis was experienced in the Asian region just over ten years ago. Following the lessons that were learnt from this experience, Asia has emerged in a better position to manage the spill over effects of the current financial turmoil. The key elements in the efforts have been the strengthening of the foundations that accord the resilience to withstand shocks to the system and that will ensure sustainability through episodes of such turmoil. There are several similarities in the current financial crisis and the Asian financial crisis.
Chart 8 plots wholesale price indices for oil, metals and agricultural goods. The latter two are aggregate measures. The six-fold rise in the price of US lumber provided one of the more spectacular examples for an individual commodity (Chart 9). Chart 8: Non-oil commodity prices have also risen sharply  Sources: S&P Dow Jones Indices, Bloomberg Finance L.P and Bank calculations. Chart 9: The spike in lumber prices didn’t last long  Sources: CME Group5 and Bank calculations. But there have also been sharp price increases further up the supply chain – one notable example is computer chips. And the overall picture, evident in both surveys and official data, is that manufacturers the world over have been facing significantly higher prices for their inputs than they were not just some months ago but even before the pandemic (Chart 10). In many cases (Chart 11) firms have been unable to get hold of them at all, except with long delays, with knock-on effects on their own delivery times. 5  CME Group market data is used under license as a source of information for certain Bank of England products. CME Group has no other connection to Bank of England products and services and does not sponsor, endorse, recommend or promote any Bank of England products or services. CME Group has no obligation or liability in connection with the Bank of England products and services.

Mr George talks about monetary policy in the United Kingdom: The Economic Prospect Text of the Chancellor’s Lecture delivered by the Governor of the Bank of England, Mr E A J George, at Hertfordshire University on 18/02/99. As you would expect of a central banker I will talk about monetary policy – under the title of “The Economic Prospect”. I will begin by explaining what it is that we are trying to do through monetary policy; then I’ll describe how we’ve been doing, where we are now, and where we might be headed. What we are trying to do So let me begin with what it is that we are trying to do. In one sense that’s very easy to explain these days. The previous Conservative Government had already in 1992 defined the objective of monetary policy in terms of a target rate for retail price inflation. The new Labour Government, immediately on assuming office, similarly defined the objective in terms of an inflation target, but went an important step further. As soon as Gordon Brown became Chancellor of the Exchequer, in May 1997, he announced that he would no longer exercise his powers to set short-term interest rates, which is the heart of monetary policy, but instead he would set the inflation target, and delegate the achievement of that target to a new Monetary Policy Committee to be established in the Bank of England.
Øystein Olsen: Management of the Government Pension Fund Global Introductory statement by Mr Øystein Olsen, Governor of Norges Bank (Central Bank of Norway), before the Standing Committee on Finance and Economic Affairs of the Storting, Oslo, 2 May 2017. * * * In 2016, it was 20 years since the Ministry of Finance made the first capital transfer to the Government Petroleum Fund, as the Government Pension Fund Global (GPFG) was aptly named at the time. This transfer marked the start of a transformation of petroleum wealth in the form of oil and gas in the ground into financial assets invested outside Norway. Since the first capital transfer was made, the GPFG has grown considerably, to more than 2.5 times the size of GDP. The year 2016 also saw the first net withdrawal from the GPFG. Ahead, the value of the GPFG will therefore, to a greater extent than previously, depend on the return on the fund’s investments. The period of steady growth in the GPFG as a share of the economy is now probably over. The key variables determining the GPFG’s long-term performance have been specified by the Ministry of Finance and approved by the Storting. For its part, Norges Bank has developed its management assignment in accordance with the fund’s growth and in line with the owner’s mandate. At the same time, Norges Bank has focused on its role as advisor in the further development of the fund’s investment strategy.

Source: Bloomberg  Panel B: 10‐year ggovernment bond term premium (bassis points) 200  94-01  150  2004  2015 5  100 50 0 -50 -100 -150 -200 -250 24 -2  -12  0  12  24  36 6  48  60  72  Source: Bloomberg  obal Spread, basis b points Panel C: EMBI Glo  Source: Bloomberg and JJP Morgan  6  Panel D: Commodityy Prices (GSCI, Index t0=100) 200 94-01  180  2004  160  2015  140 120 100 80 60 -24 4  -12  0  12  24  36  48  60  72  Source: Bloomberg  Panel E: US Dollar B Broad (Index t0=100, increasse means apprreciation)  Source: Bloomberg  Figuree 3 PCE Co ore (percent, aannual changee) 3.5  94-01  2004  2015 5  3.0 2.5 2.0 1.5 1.0 0.5 -24 4  -12  0  12  24  36  48  60  72  Source: Bloomberg  7
4/4  BIS central bankers' speeches

2  BIS central bankers’ speeches  Nevertheless, contribution of net foreign demand to the economic growth of the third quarter is considered to be lower compared with the first half of the year. Annual improvement of trade deficit by 10.7% in the third quarter was lower than the one recorded in the first two quarters of 2010. Furthermore, trade of goods in the first two months of the fourth quarter proves a lower contribution of the external economy for the last quarter of 2010. The growing tendency of imports and an expected slowdown of exports growth may halt the process of correcting foreign trade balance and reduce its influence on the economic growth for 2011. In the aspects of macroeconomic policies, these developments suggest that strong stimulating policies for the economy may be buffered by a rapid increase in imports that accompanies the increase in domestic demand. In the structural aspect, these developments reiterate the need to continue with structural reforms, which should orientate the Albanian economy towards a more stable development model and a higher competitiveness in global markets. Among other things, these reforms, should aim at establishing a favourable climate to attract stable capital flows as in foreign direct investments or long-term capital inflow. A further increase of aggregate demand enabled the Albanian economy to move closer to its producing potential, yet remaining clearly under-utilised. Consequently, decreasing pressures on inflation continued to be present even during the second half of the year.
A third argument is that Banking Union membership should benefit participating countries through the removal of an incentive for deleveraging on the part of banks with foreign capital. The on-going cross-border deleveraging process, while reflecting balance sheet repair in host countries, as well as constrained demand for new borrowing, must be monitored carefully. To give you an idea of the size of the phenomenon, as compared to the beginning of the crisis, external funding from parent banks has decreased in Romania by 35 percent, about half of the reduction occurring last year. The rebalancing of bank funding away from parent-subsidiary lines of credit and more towards domestic funding is necessary and appropriate (inter alia, it reduces loan-to-deposit ratios and the stock of foreign private indebtedness, both processes impacting financial stability favourably), but must not be unduly accelerated in the short and medium term, especially when superimposed on an on-going fiscal consolidation effort, as this puts excessive downward pressure on economic growth. As a fourth argument for Banking Union membership, there are also potential benefits which relate to eliminating the possibilities of jurisdictional arbitrage (for example, by preventing the widespread potential conversion of foreign-owned bank subsidiaries into branches), as well as to creating a more competitive market by reducing distortions and entry barriers. There is a lot of potential for increased efficiency of the banking sector by virtue of being a member of the Banking Union. A more efficient banking sector cannot but bolster the long-run growth potential of an economy.

Until then, to paraphrase the conclusion of a very recent article by Simon Tilford, having a seat at the top table, where the big decisions are made, comes at the cost of taking on much more economic risk. To sum up, each and every Member State should put their houses in order before joining the euro area so as to be able to seize the opportunities of the single currency. I share the opinion that thorough preparedness is essential. In Romania, a political consensus has emerged recently, as both the President and the Government stated publicly their support for 1 January 2019 as a target date for euro adoption. The objective was subsequently included in the latest Convergence programme update (April 2014), but a detailed roadmap is still pending. Personally, I think that setting a target date is a good idea and I have publicly supported it myself. I believe that having such a target is not inconsistent with the idea of thorough preparedness, provided that the process is well-managed. Let me elaborate. First, the opportunity to have a political consensus on a topic of national interest cannot be missed in a country such as Romania, where political passions run high and general disagreement – over almost any issue – is much more common than agreement. Second, such an objective – feasible, yet ambitious – acts as both a policy anchor, thus fostering coherent policy action, and a catalyst for the needed structural reforms.
The guidance is given in the form it is precisely because the outlook is uncertain – it allows us to explore how much spare capacity there really is in the economy before raising Bank Rate. Much has been made of the market reaction to forward guidance since its launch, with market prices currently implying that Bank Rate will rise by 25 basis points by the middle of 2015, around six months earlier than at the time of our August meeting. I think there are a range of reasons for that and it does not necessarily imply that forward guidance “isn’t working”. First, gauging the “market reaction” depends who you ask. Surveys of economists by Thompson Reuters and by Bloomberg have indicated that the median expected timing of the first increase in Bank Rate has been pushed later since our announcement (Chart 5). Second, there has been UK specific news which might have justifiably caused UK rates to  6  BIS central bankers’ speeches  have risen somewhat: the positive flow of economic data since the start of August has been consistently stronger than market expectations. Third, UK rates have clearly been pushed up by international developments. The correlation in short rates between the UK and US is unhelpful given the relatively subdued recovery in the UK and, as I have already noted, somewhat puzzling. It probably, in part, reflects continuing poor liquidity in sterling money markets over this period.

On average we’ve seen rates on two-year fixed rate mortgage products come down by around 110bps since the FLS was announced, and floating rate mortgages by a bit less (around 60bps) (Chart 6). The availability of household credit, particularly secured credit, has improved according to recent Credit Conditions Surveys by the Bank of England. 8  BIS central bankers’ speeches  Chart 6 Changes in quoted mortgage rates and indicative UK bank funding costs over the first year of the FLS(a) Change in mortgage rate Change in bank funding cost(b)  Percentage points  0.0  -0.5  -1.0  -1.5  75% LTV two-year floatingrate mortgage  75% LTV two-year fixed-rate mortgage  75% LTV five-year fixed-rate mortgage  90% LTV two-year fixed-rate mortgage  -2.0  Sources: Bank of England, Bloomberg and Bank calculations. (a)  Change between 30 June 2012 and 30 June 2013. (b)  For fixed-rate mortgages, calculated as the sum of indicative UK bank secondary market bond spreads and the swap rate corresponding to the term of the mortgage. For floating-rate mortgages, three-month Libor is used in place of a swap rate. For more details see Chart 1.8 of the August 2013 Inflation Report. It’s harder to measure what has happened to lending rates to businesses as the borrowers and loan products available are less homogenous than in the household sector.
Export revenues as a share of GDP.1) Percent 30 Shipping  30  Oil and gas  25  25  20  20  15  15  10  10  5  5  0 1875  0 1895  1915  1935  1955  1975  1995  2015  1) Break in the data series for shipping in 1970. Sources: Statistics Norway and Norges Bank  That same year, production at Ekofisk started in earnest. Fields such as Frigg and Statfjord followed, and combined with yet another jump in oil prices following the Iranian revolution, a new flagship ushered the Norwegian economy into the 1980s. Oil prices fell during that decade, but oil and gas production was growing at a vigorous pace. The activities on the Norwegian shelf also had a strong impact on mainland businesses. Shipyards learned to build oil platforms as new ship orders sagged. What might have been viewed as a rescue buoy eventually became a springboard to the rest of the world. The oil service industry’s breakthrough overseas came into clear evidence in the 2000s. Strong demand from China and other emerging economies led to a further jump in oil prices, and offshore oil exploration expanded worldwide. The technology developed in the search for deep-water oil and gas became one of Norway’s major exports. The offshore oil industry paved the way for wealth gains no future generation is likely to experience (Chart 3).

While the key motif ensures coherence within a given denomination, core design elements which appear in all denominations – a hand, a globe, a location and the security features – create continuity across all the notes and lend the series a sense of overall cohesion. The design thus sets new standards when it comes to combining security, functionality and aesthetics. Issuance successfully concluded Thanks to the close cooperation of all those involved, we were able to clear the numerous hurdles we encountered. We would like to take this opportunity to thank all of our partners sincerely for their contribution. Special thanks go to Manuela Pfrunder and her team for their designs. Their work has been consistently impressive – from the earliest drafts right through to the issuance of the final denomination. I would also like to thank our suppliers: Orell Füssli, Landqart, Sicpa and Kurz. Furthermore, allow me to thank our cash distribution partners, the banks and Swiss Post for their valuable cooperation and support in enabling a smooth issuance process. And finally, let me thank the many SNB staff who have managed this project so diligently over the years and have seen it through to a successful conclusion. In issuing modern and secure banknotes, the SNB is fulfilling its statutory task of ensuring the supply and distribution of cash in Switzerland.