samchain/econo-pairs-v1 huggingface dataset:
In the process, the private sector gets to mitigate the climate risks of its own assets while at the same time seeking reasonable returns. By doing well, we also aim to do good. As an international financial centre and a green finance hub, our vision is to play a big role in harnessing the power of finance to support the transition efforts in the region. The vision is underpinned by our strong commitment and concrete actions that help create a conducive ecosystem where climate financing can scale, and bring about desirable opportunities and outcomes for the financial sector. A vibrant and competitive climate finance ecosystem needs to be underpinned by a few other critical elements: standards, data and, above all, talent. The work requires leadership from the public sector and partnership with the private sector. In all these areas, the HKMA is joining hands with Government agencies, fellow regulators as well as stakeholders from the financial sector, academia and business community. Much of our joint effort is coordinated through the Cross-Agency Steering Group on Green and Sustainable Finance co-founded by the HKMA and the SFC. 1/4  BIS - Central bankers' speeches  First, on standards. A common set of green standards, to the extent possible, is important to enhance the transparency, comparability and efficiency of climate finance. Hong Kong is a front runner in setting regulatory requirements for the financial sector.

Moreover, the effect of bank market power on financing constraints increases in financial systems that are more bank dependent. 13 This underscores the general need, as I mentioned earlier, to create a more balanced financing mix between banks and capital markets. But it also points again to the particular importance of securitisation. With well-functioning securitisation markets some of the benefits of cross-border banks – for instance risk-sharing – can be replicated by having small, local banks originate-to-distribute loans while larger, global banks securitise and market them. In  9  See for example Anna Kovner, James Vickery, and Lily Zhou, “Do Big Banks Have Lower Operating Costs?,” Federal Reserve Bank of New York Economic Policy Review, Volume 20, No. 2, forthcoming. 10  “Financial Integration in Europe”, March 2007. In line with this, Carletti, E., Hartmann, P., and Ongena, S. (2007), “The economic impact of merger control: What is special about banking?”, ECB Working Paper No 786, July, find empirical evidence that the opacity of national bank merger reviews entered elements of inefficiency in banking relative to non-financial corporate sectors. 11  For a discussion on why retail bank integration may be a particularly attractive risk-sharing mechanism, see e.g. Fecht, F., Grüner, H.P. and Hartmann, P. (2007), “Welfare effects of financial integration,” CEPR Discussion Paper No. 6311. 12  See for instance Reinhardt, D. and Riddiough, S. (2014), “The two phases of cross-border banking flows”, mimeo, Bank of England.
Eva Srejber: Internationalisation and financial integration Speech by Ms Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, to The Bankers' Club, Gothenburg, 29 March 2001. *  *  *  Thank you for the invitation to come to Gothenburg and speak about internationalisation and the ongoing process of integration in the financial markets. I intend to begin by putting developments on the financial markets in a historical perspective and then to deal with the forces behind current developments. I shall then focus more specifically on Europe and the role played by the euro and, finally, I shall briefly discuss the important work pursued by international organisations in strengthening the financial system and thus reducing the risk of crises arising. Globalisation from a historical perspective Over the past few decades we have seen how the global economy has been internationalised on a large scale and how deregulation and technological achievements, particularly within the IT field, have created new conditions for growth. During the same period, global purchasing power has more than doubled. And it is not only the western world that has benefited from the opportunities offered by internationalisation; many poor countries have managed to climb a few steps up the global income ladder. The Asian 'tiger' economies are good examples of this. A look back in time shows that this development is not unique.

We hope that the interaction through presentations and panel discussions will provide ample opportunities for participants to share the experiences and challenges in their home markets. To provide a global perspective, we are honoured to have distinguished speakers from the US Securities and Exchange Commission, the UK Financial Services Authority, and the Australian Securities and Investments Commission. The presentations by leading industry practitioners will add an important market dimension. To start off the programme this morning, let me put to you three broad propositions which regulators should reconcile with, in keeping with the demands of global capital markets: (a)  First, the need for cross-jurisdiction regulatory collaboration;  (b)  Second, a growing impetus for international standards; and  (c)  Third, how can regulators and regulations respond and facilitate capital markets’ continued innovation and growth. The need for regulatory collaboration The importance of cross-border regulatory cooperation is evident from the cross-border element in the regulator’s job. Local investors buy financial products overseas while foreign funds own substantial stakes in locally-listed stocks. Capital market intermediaries compete vigorously to add value, servicing global orders. Even markets now seek direct presence, in the form of trading terminals, in different jurisdictions. Increasingly, cross-border operations are no longer conducted predominantly via telephone or fax wires, but by proprietary networks capable of channeling orders and funds across the globe almost instantaneously. Such proprietary systems combined with the reach of the internet has pooled isolated pockets of liquidity into a single global market.
The CRF, which was set up at the end of March 2020, and the loan guarantees provided by the Swiss federal government have together contributed significantly towards ensuring the continued supply of credit and liquidity to small and medium-sized enterprises. One of the instruments that has been reactivated is US dollar swap lines between central banks. These swap lines, which were established in late 2007 during the Global Financial Crisis, were used to counter a sharp rise in US dollar funding costs. 1 Finally, the SNB resumed monetary policy repo transactions in the Swiss  1  US dollar swap lines have been operational since 2007. From spring 2012 until early March 2020, there was no demand in the US dollar auctions conducted by the SNB. Page 2/13  franc money market, after a hiatus of eight years, with the aim of keeping secured short-term Swiss franc money market interest rates close to the SNB policy rate. The focus of today’s speech relates to this last point – to the role of the money market in the implementation of our monetary policy. Why did we choose to shine a spotlight on the money market? The role of the money market For one thing, examining the workings of the money market is in keeping with the original aim of this event.

12/15  Second, last December saw the publication of RDL 22/2018, which assigned additional powers to the Banco de España, in the form of new tools, such as the sectoral countercyclical capital buffer and limits on credit conditions and sectoral concentration of credit exposure. What is the difference between these tools and the ones approved in 2014? The first fundamental difference is that instead of a global buffer, we can now make use of much more focused tools. In this respect, we need to be aware that, although the application of a global capital buffer affects lending, it does so indiscriminately, and in certain circumstances its application may have unintended consequences. Allow me to give an example. Imagine that the supervisor observes excessive growth in consumer credit and decides to activate the global buffer to limit this growth. It is very likely that institutions will react to this tightening of capital requirements by increasing credit, precisely in those sectors that offer the highest returns, in order to compensate for the increase in their capital costs. Therefore, the activation of this global buffer may mean that consumer credit growth, instead of moderating, increases, largely at the expense of financing to other sectors, in which the supervisor had not observed any problem. The new legislation, by giving the Banco de España the power to limit the assumption of risk at sectoral level, allows the measures to be restricted to exposures to the specific sector in which the risks are concentrated.
The rise since then has not been large in a longer context (Chart 5) but in itself it is a healthy correction. At the same time we have seen a fall in the dollar over recent months which should tend to reduce the risk of a sudden correction of global imbalances, another of the key vulnerabilities we have been monitoring in recent years. But the story of the sub prime market is not yet over and it certainly does point to some vulnerabilities in modern financial markets which need to be factored into financial firms’ risk management. First, this was a layered market in which many originators had an incentive to maximise volumes, where the loans were then securitised and the securities were in turn combined into CDOs for onward distribution. One risk in such markets is that there is a loss of information along the chain and that incentives become misaligned; in particular the quality of credit monitoring and credit assessment declines. It is difficult to avoid the conclusion that occurred in 2006 in the sub prime markets. Chart 6 shows the arrears on successive tranches of loans and shows that the quality declined over time particularly in 2005 and 2006. Second, the new derivatives markets change the way in which credit losses hit balance sheets. In the world of on-balance-sheet lending, when defaults begin to turn up, there can be scope for rescheduling and for discussing with your accountants what provisions are prudent.

The credit cycle and monetary policy The knock on effects of defaults in the US sub prime market and the impact of big investors on asset prices are factors we need to assess not just in trying to understand the financial sector and the stresses it faces but in gauging the state of the economy more widely. The story of the sub prime market illustrates a wider point. In traditional banking markets in the past there has been an observable tendency for banks to overshoot both in offering credit at the top of the cycle and retrenching afterwards. That feeds through into asset prices and can have an impact on the wider economy. Despite the sophistication of the new capital markets, a very traditional cycle seems to have been alive and kicking in sub prime. 3  The definition of the official sector in the US Treasury survey also includes public bodies such as oil stabilisation funds. 4  See ‘International capital flows and US interest rates’, NBER working paper 12560, October 2006. 6  BIS Review 84/2007  A similar story could be told about the credit card and other unsecured lending over the last few years. The growth rate rose in the late 90s until defaults began to build up over the last 2 years and the banks and other lenders tightened up terms and conditions sharply (Chart 13). The path of commercial property prices in recent years suggests the same has been happening there (Chart 14).
First, the latest improvement in the external balances together with the already strong fiscal balances is likely to boost the effectiveness of the monetary policy. The ongoing tight monetary policy stance is then likely lead to lower inflation than otherwise. Second, in coming years the implementation of the structural reforms identified in the 10th Development Plan aims to address the structural causes of inflation and hence is expected to support disinflation process. Finally, the Food Committee (the Food and Agricultural Products Markets Monitoring and Evaluation Committee) was founded in December 2014 with an objective of identifying policies to alleviate the contribution of structural and cyclical factors to elevated food inflation. Of course, the credibility of monetary policy is key to achieving price stability. Therefore, let me devote the final part of my talk to explaining our policy strategy to cope with current challenges. BIS central bankers’ speeches  1  Like most emerging market economies (EMEs) Turkey has also faced tightening external financial conditions since May 2013. The normalization of US monetary policy, diverging monetary policies of advanced economies, uncertainty in commodity prices and the risk of China’s economic hard-landing all have created volatile global financial markets and widened spreads for EMEs. The Central Bank of Turkey has introduced several mutually complementary policies and announced a “road map” document back in August 2015 outlining monetary policy, foreign currency liquidity and financial stability related measures.

We are also learning about how best to prepare for the eventual normalization of monetary policy. For example, we may need to update our thinking with respect to the so-called exit principles that we published in June 2011 in order to bring them up to date with developments since then, and ensure they do not unnecessarily constrain our ability to conduct policy in the most effective way today. Those exit principles stated that we would first stop reinvesting, then raise short-term interest rates, and finally sell agency mortgage backed securities over a three-to-five year period. This seems stale in several respects. In particular, how does one time the end of reinvestment given that we now have economic thresholds that govern the timing of liftoff? Also, the thresholds are thresholds, not triggers. Thus it is hard to link the timing of the end of reinvestment to the unknown liftoff date for short-term rates. More broadly, it may be desirable to update our thinking around the path and composition of the balance sheet over time, in light of our capacity to shape this path in a way that mitigates potential costs and risks. For example, the agency MBS portfolio is substantially larger today than it was when the original exit principles were devised. To the extent that the Committee wants to reduce the risk of disrupting market functioning during normalization, it could decide to indicate that it will avoid selling the MBS portfolio during the early stages of the normalization process.
5 / 13  BIS central bankers' speeches  Agency MBS purchases were eventually targeted at newly issued, to-be-announced (TBA) securities, which tend to be the most liquid and readily available.27 Further, we spread our agency MBS purchases out across multiple settlement months and used dollar rolls to facilitate the orderly settlement of unsettled purchases.28 As a more general practice, the Fed actively promotes market functioning by running a securities lending program through which primary dealers can borrow Treasury and agency debt securities held in the Fed’s portfolio. Lesson 4: Reinvestments matter Relatively quickly, the Fed came to learn that the reinvestment of principal payments received from securities held in its portfolio represented a distinct balance sheet tool that could help to maintain the FOMC’s desired level of monetary policy accommodation. The FOMC initially allowed agency debt and agency MBS acquired in the first LSAP program to run off as principal was repaid. However, as purchases ended, a decline in mortgage rates generated increased refinancing activity that accelerated repayments of principal on agency MBS held by the Fed. The resultant reduction in the Fed’s agency MBS holdings pushed a large supply of securities into the hands of private investors, putting upward pressure on longer-term interest rates. In August 2010, after considering the implications for financial conditions and the economic outlook of not reinvesting these repayments, the FOMC announced it would reinvest principal payments from these securities in longer-term Treasury securities.

In 2000, relative price stability was achieved and the inflation rate on annual basis (December 2000 / December 1999), measured through the retail prices index equals 10.8%. Measured through the costs of living index, as agreed with the IMF arrangement, the inflation in 2000 equaled 6.1%. In 2000, compared to the previous several years, the inflation is higher, however it should be underlined that the reason for that is not the monetary policy, but the impact of the non-monetary factors. These factors are the following: •  one-time effect of the introduction of the value-added tax on prices;  •  increase in the price of oil on the world markets, accompanied with the appreciation of the US Dollar;  •  increase in the price of electricity and maintaining higher tariff for calculation of the price of the electricity;  •  increase in the prices of particular services which are under direct control of the government  However, it is crucial that the potential fundamental generators of inflation such as the monetary policy, the fiscal policy, the exchange rate and the wages remained under control and coordination. Therefore, the Central Bank considers that the impact of the non-monetary factors that gave rise to the inflation in 2000 are of temporary character and that in 2001 the inflation will get back to the level from the previous several years.
As investment banks originate more complex financial solutions to meet the needs of the more discerning and sophisticated wholesale customers, they also need to be mindful of the importance of preserving trust and personal reputation in business practices. In this regard, focus will be accorded to strengthen the overall market conduct of investment banks, as any lapses in market conduct can have widespread implications on their reputation. The emphasis will be on promoting greater market discipline to drive the performance of investment banks. Disclosurebased initiatives will be continued to ensure that consumers and investors have access to appropriate information to allow them to make well-informed investment decisions. The changes in the merchant banking landscape will also bring a host of new opportunities. In this regard, offshoring represents an important avenue for merchant banks to diversify their business potential and income stream. The strengthened capacity of merchant banks arising from the transformation process will open new lucrative business opportunities, especially abroad. Merchant banks would need to capitalise on these opportunities to strengthen their presence beyond the domestic borders, particularly in areas where they have the niche and capabilities to compete with their counterparts abroad. Cross-border deals are no longer the exception but the norm. This is especially so with the liberalisation of the foreign exchange administration rules which provides broader opportunities for corporations to invest abroad. A greater degree of awareness of global developments and adoption of international best practices will thus enhance the capacity and capabilities of merchant banks to excel in their ventures abroad.

2  BIS Review 137/2007  And finally the ongoing process of significant market correction which we experience since August should trigger a very deep and candid review in all the areas which have a substantial influence on the functioning of the global financial markets. This review process should concentrate on what could be done to promote financial stability and to diminish to the maximum extent possible the elements of procyclicality that may be inbuilt in a large number of fields. The financial stability forum, which has been set up by the G7, under the proposal of Hans Tietmeyer, to draw the lessons of the Asian crisis, is in an ideal position to identify the areas where appropriate improvements could be introduced. I encourage very strongly the Financial Stability Forum and all the Committees that are actively working at a global level, including the Basel Committee, to draw all the lessons of the present turbulences and to examine the situation without any complacency.
14  BIS Review 9/2010  Figure 14 EES: Inflation expectations (annual change, percent) 7  7  6  6  5  5  4  4  3  3  2  2  1  1  02  03  04  1 year ahead  05  06  2 years ahead  07  08  09  In December 2010  Source: Central Bank of Chile, Economic Expectations Survey (EES). Figure 15 Expected MPR (percent) 9  9  8  8  7  7  6  6  5  5  4  4  3  3  2  2  1  1  0  0  Jul. 09  Jul. 10 Jul. 11 Jul. EES December 2009 Forward, Monetary Policy Report Sep. 2009 (*) Forward, Monetary Policy Report Dec. 2009 (*) MPR  (*) Estimated using average financial asset prices in 2 weeks before 15 December 2009. Source: Central Bank of Chile. BIS Review 9/2010  15  Figure 16 Net portfolio balance (*) (percentage of GDP) 3 2 1 0 -1 -2 -3 -4  Latin America 08.III  08.IV  Emerging Europe 09.I  09.II  Emerging Asia  09.III(e)  Chile  Portfolio liabilities  Commodity exporters Portfolio assets  (e) Estimated with preliminary data from Brazil, Czeck Republic, Indonesia, Pakistan, Poland, Taiwan and Turkey. (*) Flow of the quarter over GDP accumulated in 12 months. Simple averages.

The Great Stability appeared to be a permanent break from earlier periods – periods when monetary policy exhibited more unpredictable behaviour and left the economy to the north-east of the Taylor frontier (Chart 2). And in one important sense it was – the dark days of double-digit inflation were consigned to the past. 1  The inflation measure used is the quarterly rate of increase of the GDP deflator, defined as the ratio of nominal GDP to real GDP. The output gap is estimated as the difference between the log of real GDP and the trend path of log GDP, derived using the HP-filter. Source: ONS and Bank of England calculations. BIS central bankers’ speeches  1  But the Great Stability was not representative of a new normal. The variance of the output gap – though not inflation – has been much higher over the past five years as the financial crisis generated a deep recession (Chart 3). So what have we learned? The banking and broader economic crisis has demonstrated that macroeconomic policy can face an additional trade-off between ensuring the soundness of the financial system in the medium term, and keeping output in line with potential output and inflation on target in the near term. Such a trade-off arises because financial vulnerabilities can build even while output is growing steadily and inflation is low and stable. Let me give three examples of the sort of underlying mechanisms at play.