samchain/econo-pairs-v1 huggingface dataset:
Caleb M Fundanga: Employing African resources for African development Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the 2009 Africa Investment Forum, Istanbul, 5 October 2009. *  *  *  Introduction I feel particularly honoured and grateful to be a discussant at this important forum, whose theme is “Employing African Resources for Africa’s Development”. This forum could not have come at a more opportune time than now when all our economies are faced with the challenges emanating from the impact of the global financial and economic crisis. This seminar is also timely in that the fiscal policy response is going to play a large role in determining how well African economies emerge from the financial crisis. This is because Africa must sustain and enhance investment flows in infrastructure, energy, health and education if it is to accelerate the growth momentum achieved prior to the crisis. The question of resource mobilisation for development, whether this is at a national, regional or international level, is thus something that policy makers in Africa are grappling with. Global financial crisis and Africa’s development For most of the current decade, several African countries have been registering positive economic growth rates averaging 5.3 percent between 1999 and 2008, with growth in SubSahara Africa slightly higher at an average of 5.6 percent over the same period. 1 This growth has contributed to rising income levels in several African countries leading increased investments in education, health, water sanitation and general infrastructure development.

It will also give the board the opportunity to convey its views directly to us, for example on whether we are imposing too much of a regulatory burden. As a result of the consultation exercise, we have received a number of supportive comments. It is difficult, after all, to argue against the principle that banks should be encouraged to raise their governance standards. However, a number of concerns have also been voiced. I will not go into these in detail, but some of the questions that have been raised are as follows: Is the HKMA interfering too much in the way in which banks choose to manage themselves? Is too much burden being placed upon the board, and upon non-executive directors in particular, in terms of establishing policies and controls? Should there be a distinction between listed and non-listed banks? Is it right to place more onerous requirements on banks compared with other companies, for example as regards the required number of independent directors? And is it going to be possible to find sufficient independent directors of the right quality? I have answered some of these questions already in this speech. We do believe that banks are different from other companies because they are looking after other people’s money. From this point of view, it does not matter whether the bank is listed or non-listed. We also believe that banks are exposed to special risks compared with other companies, and that the board needs to ensure that policies are in place to manage these risks.
Thomas Jordan also referred to this phenomenon in his remarks on exchange rates. Replacing Libor with SARON  I would now like to update you on the work that is under way to replace Libor with SARON as a reference interest rate. Since the UK Financial Conduct Authority announced nearly a year ago that it would not guarantee the continuation of Libor beyond 2021, this topic has attracted significant public interest. Alternative reference interest rates have now been identified for all currencies in which Libor is used as a reference rate. In Switzerland, the National Working Group on Swiss franc Reference Interest Rates (NWG) is drawing up  Page 2/5  Berne, 13 December 2018 Andréa M. Maechler  News conference  recommendations to ensure a smooth transition. Many of the leading market participants sit on the NWG, which is co-chaired by the SNB and a representative from the private sector. The SNB principally acts as a facilitator and is responsible for running the secretariat. 1 It also maintains links with international bodies charged with preparing recommendations for reference interest rate reforms and ensuring a well-coordinated transition. In October 2017, the NWG recommended that the Swiss franc Libor be replaced by the Swiss Average Rate Overnight (SARON) used for overnight transactions in the secured segment. SARON has already gained in importance as a reference interest rate. In the course of 2017, an interest rate curve developed based on swap transactions referencing SARON.

If one assumes, for instance, that both the conventional bond market and the inflation-indexed bond market are efficient and arbitraged by economic agents so that they incorporate the same information about the real interest rate, then the difference between the conventional nominal rate and the real rate would provide, by factoring in an inflation risk premium, a measure of the expected inflation rate over the same period, known as the “break-even inflation rate”. Now, if we had both nominal and indexed bonds across the whole maturity spectrum, up to, say, 30 years which is the maximum maturity at which inflation-indexed bonds are currently issued, then we would be able to pin down market expectations of inflation for all the forecast horizons, up to 30 years, as well as forecasts of inflation for each year up to the maximum maturity. So you can easily imagine the importance of such information for central banks, information which is, moreover, updated on a daily basis. Our staff and also private forecasters are unable to routinely produce inflation forecasts in such a detail, at such a frequency and for such horizons! As far as the euro area is concerned, the reliability of both the inflation-indexed yield and the break-even inflation rate is strengthened by the significant development of the market for indexed bonds over the recent years, which accelerated further in 2003 with the arrival of two new government issuers: Greece in March and Italy in September.
Had this happened, the króna would probably have plunged in the meantime and not recovered before prices and wages had adjusted. But the problem was not restricted to non-residents. Residents, including Iceland’s pension funds, allocate substantial funds that must be invested on a continuous basis. With the economy paralysed and the Treasury’s ability to fund a large deficit over the next few years uncertain, domestic institutional investors also became reluctant to invest in domestic assets. Under these conditions, central government financing would have been extremely challenging, which would have undermined exchange rate stability still further. The third reason for the capital controls was the shaky balance sheets of the newly established financial institutions and the other financial firms that survived the onslaught, however briefly. Their balance sheets were fraught with uncertainty and potentially unstable. BIS Review 138/2010  1  A considerable share of their deposits could prove unstable as well. The balance sheets of households and businesses were likewise in a state of disarray. In the absence of exchange rate stability, it would be extremely difficult to restructure the finances of Iceland’s households, corporations, and banks. Prerequisites for capital account liberalisation The foregoing discussion should make it clear that the capital controls will not be lifted in full until confidence has been restored to the extent that their removal will not cause prolonged instability.

Iceland now has access to enough foreign currency reserves to pay all Treasury debt falling due from now through 2013 – and through 2015, if it draws in full on the loan facilities associated with the IMF Stand-By Arrangement. There is an underlying current account surplus. The real exchange rate is still at a low level, which indicates that investments in krónur should be appealing for the long term. If efforts to attract direct investment in export sectors are successful over the medium term, the conditions for gradual removal of the capital controls will improve. The Central Bank emphasises lifting the controls in a way that minimises exchange rate and bond market instability to the maximum extent possible. Careful preparation will take place before the next steps are taken. However, the Bank cannot create greater certainty in the markets than it faces itself. BIS Review 138/2010  9
As I have already noted, this is a difficult issue which is likely to keep researchers busy for many years to come. Second, even if one were interested in the rather narrower issue of the impact of Quantitative Easing on the public finances, whether the Treasury ends up with a profit or a loss from the Asset Purchase Facility represents only a small part of the picture. Gilt yields will be lower than they would otherwise have been during the period that they are held in the Asset Purchase Facility, so reducing the cost of financing a given budget deficit. This needs to be factored into any calculation of the implications for the public finances. Rather more significantly, Quantitative Easing is intended to boost spending and activity. In the process, it should raise tax revenues and reduce benefit payments. And, unless Quantitative Easing proves to be largely ineffective, this effect is likely to dominate the other elements of the calculation. Finally, it is worth noting that normal monetary policy, conducted by varying Bank Rate, also generally affects both gilt yields and activity. Consequently, it too has an influence on the public finances, including through the Bank’s balance sheet. Yet we usually do not try to conduct such an exercise. The success of policy is instead judged by whether the macroeconomic objectives are met.

Charles Bean: Quantitative Easing – an interim report Speech by Mr Charles Bean, Deputy Governor for Monetary Policy at the Bank of England, to the London Society of Chartered Accountants, London, 13 October 2009. *  *  *  It’s a great pleasure to be invited to speak to you this afternoon. It is almost exactly a year since Lehman Brothers collapsed, precipitating a near-fatal heart attack for the global financial system. And in its wake came an unprecedentedly sharp and synchronised contraction in global economic activity, from which we are only just starting to emerge. In part, that stabilisation reflects the intensity of the countervailing policy actions by governments and central banks around the world. Injections of capital, funding guarantees, ring-fencing of toxic assets and abundant liquidity support have helped to return the banking system towards normality, though the process of balance-sheet repair still has some way to go. And substantial increases in fiscal deficits and aggressively expansionary monetary policies have helped to arrest the fall in spending, output and employment. For its part, the Bank of England’s Monetary Policy Committee not only cut Bank Rate from 5% in September last year to just 0.5% in February, but also embarked on a programme of large scale asset purchases financed by the issuance of extra reserves – so-called “Quantitative Easing”. This unlovely phrase was originally coined to describe a related policy conducted by the Bank of Japan in the early part of this decade and has perhaps lost something in the translation.
In providing the full range of financial services, Labuan offers a total financial solution both in both conventional and Islamic finance. Labuan also has the top-ranked financial institutions that originate from more than 80 countries, including Islamic financial institutions that also originate from different parts of the world. The Labuan Offshore Financial Centre has seen steady expansion both in terms of the number of players, the diverse financial product offering and the volume of activity. Labuan today has also become a thriving regional business centre. It is making its mark as a regional base for the oil and gas industry and as an entreport for the regional triangle of Brunei-Sabah-Philippines. Its convenient location and excellent deep harbour are natural advantages. Its modern airport which has been enhanced has also promoted increased tourism. Being a duty free zone and a free port status has supported these activities. Growth in these peripheral commercial and economic activity in Labuan has provided the potential for Labuan to succeed as an international business and financial centre. Labuan benefits from being centrally located in the Asia Pacific region, a region that has been one of the fastest growing regions in the world. The Asian region is also among the most open in the world in terms of international trade and investment. A more recent phenomenon is the increased intra-regional trade and investment resulting in greater regional economic integration. This has been reinforced further by increased investment flows from the Middle East to Asia.

This growth in intra-regional trade has been spurred, in part, by the integration of production network and supply chain in the region, especially the emergence of China and its integration into the regional economy. Also, government policies to support freer trade through bilateral and multilateral trade agreements have also had a strong supporting influence. Accompanying the growth in intra-regional trade is a deepening process of financial integration in the region, defined as cross-border investment flows within East Asia. Evidence of this can be seen from the data on cross-border flows in FDI, portfolio investment, and bank lending that point to a rising trend. Also, financial prices in the region’s financial markets show greater tendency to converge. For example, cross-border interest rate and bond yield differentials have narrowed while the volatility in money market interest rates across the region has declined. To me, a key stimulus to the current process of financial integration has to be East Asia’s rapid economic growth and the accompanying growths in intra-regional trade and cross-border investment. Government policies to develop financial markets in the region have also been important in so far as helping to provide a clear direction of policy preference towards greater regional integration. As a result, cooperative government efforts to develop regional financial markets, especially the bond and equity markets, are being carried out in many regional fora.
History shows that innovative capacity in the private sector functions best when it can use state infrastructure and clear regulations that develop apace with the possibilities offered by technology as a launching pad. 11 And, if the payment market is to be privatised completely, an active decision should be required in this case from the legislator regarding choosing such a new direction. It cannot be allowed to just happen. Confidence in money is a socio-economic asset Since confidence in money among the general public is a public good, there is a social benefit in monitoring the development of the payment market. The confidence that has been built up is a kind of social capital and there are many examples from other countries of how badly it can go when confidence in money is lost. 7 PTS-ER-2017:20. 8 See Erlandsson, F. and Guibourg, G. (2018), “Times are changing and so are payment patterns”, Economic Com-  mentary No. 6, Sveriges Riksbank. 9 See the Riksbank’s e-krona project report 2 for more information. 10 See Söderberg, G. (2018), “Why did the Riksbank receive a banknote monopoly?” Sveriges Riksbank Economic Review, No. 3. 11 This relationship is also pointed out in Carney, M. (2018) “New economy, new finance, new bank”. Speech published 21 June. Bank of England. 4 [8]  Theoretically, it is often assumed that the possibility of converting private bank money into secure central bank money is a basic precondition for maintaining confidence in privately issued money.

It is possible that the e-krona could play a role for Sweden's crisis preparedness. But in any case, the Riksbank needs to clarify its role as provider of money in appropriate forms in a crisis situation. In the same way as the Riksbank is ‘lender of last resort’ for the banking system, we have a responsibility to enable payments in a crisis, to be a ‘money provider of last resort’. Personal reflections Two years of intensive work on the e-krona have now passed and I will be leaving the chairmanship of the steering group as the project enters the next phase. It has been two incredibly educational years, but I think it is still too early for me to decide whether or not I shall support an e-krona for the general public in the future. As has hopefully been clear from my earlier reasoning, this depends on whether it emerges that there are better alternatives to guarantee both the security and efficiency of the payment market. And to answer this, the analysis needs to continue. At the Riksbank, we will work in two parallel tracks: partly, we will develop the pilot version of a simpler form of the e-krona and learn the lessons that may be needed if it turns out that an e-krona is to be issued. And partly we will deepen our analysis of the consequences for Sweden if the payment market should become entirely privatised.
Luis M Linde: Brief comments on the interactions between monetary policy and macroeconomic adjustments Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the XXXI Conferencia del Círculo de Economía, Sitges, 30 May 2015. *  *  *  Let me first thank Antón Costas, President of Círculo de Economía, for his invitation to participate in this final session of the XXXI Conference, which is a classic on our schedule of economic meetings and conferences. Many thanks, too, to Andreu Mas-Colell for accompanying us in this session, where we are joined by the Vice President of the ECB, Vitor Constancio, to whom it will be an honour for me to give the floor immediately after my address. First, by way of introduction, I should like to make some brief comments on the interactions between monetary policy and macroeconomic adjustments, one of the major matters raised in the euro area monetary policy framework in recent years. Long periods of very low inflation pose risks to medium-term price stability, to economic activity and to financial stability. The first of these risks is the de-anchoring of inflation expectations from levels consistent with price stability which, as we know, the ECB defines as an expected inflation rate below but close to 2% in the medium term. Being in the proximity of a deflation dynamic may encourage the postponement of spending decisions by households and firms.

Should such a risk materialize, the CBRT will not react to temporary price movements, yet the Bank will not tolerate any deterioration in expectations.” Likewise, at the Monetary Policy Committee meeting held on 27 March; after pointing out that “uncertainties in oil prices pose upside risks to the inflation outlook”, we underscored “[…] we will continue to closely monitor supply-side developments and we will not tolerate any deterioration in inflation expectations”. In view of the current level of inflation, I would like to re-underline on this occasion that it is essential to eliminate upside risks. To this end, last month, we implemented a “strong, effective and temporary” monetary tightening in order to eliminate the impact of recent cost developments on inflation expectations. We will closely monitor factors affecting inflation in the forthcoming period and additional monetary tightening (AMT) will be repeated when deemed necessary. Dear Participants, At this point, I would like to give you a quick overview on the monetary, financial and fiscal policies that Turkey has implemented for economic stability. The global demand shock that came after Lehman crisis brought steep declines in commodity prices with it. In response, expansionary monetary policy as well as supportive fiscal and financial policies were implemented at the same time.
What we have to do, in actually operating monetary policy is to monitor all the relevant evidence as it emerges for signs that the economy is proving to be either stronger or weaker than we expect, and modify our view of the prospect for inflation - and our monetary policy - in the light of that. And in that context I repeat the assurance, which I gave recently to the TUC in Blackpool, that we will act symmetrically. We will be - have been - just as rigorous in reducing interest rates with the overall evidence pointing to the balance of risks to inflation on the downside, as we have been - and will again be - in raising rates with the evidence pointing to a significant or sustained overshoot of the inflation target. Now there are those - perhaps even one or two of you here this evening - who regard this assurance as cold comfort. It misses the point - they say - because the present approach to monetary policy focuses too narrowly on inflation. What we want - they say - is a monetary policy which puts more emphasis on growth and employment. You hear this complaint not just in this country but increasingly these days in Continental Europe. I must say, President, that it leaves me totally bemused. What it suggests is that growth and price stability are seen as alternatives - you can have a bit more of one if you’re prepared to accept a bit less of the other.

We have therefore issued advice to the banks on the steps that they need to take, such as: review of business strategies and business processes that might be affected by the Euro; review of nostro accounts in the legacy currencies; adaptation of information systems; and review of contracts that might be affected by introduction of the euro. Secondly, we have thought it sensible to introduce legislation that will provide for continuity of contracts in relation to the introduction of the euro. In doing so, we are following the example of the EU itself as well as some other jurisdictions. In theory, such legislation may be unnecessary since the well-established “lex monetae” or “law of the currency” principle means that the currency of a payment obligation should be determined by the law of the country of that currency. This means for example that a payment obligation payable in French francs would become payable in euros after the introduction of the euro because that is the situation that applies under the law of France. However, despite this general principle, concerns have been expressed that parties to contracts might argue that the introduction of the euro represented a fundamental change of circumstances, bringing the contract to an end or requiring its terms to be adjusted. In addition, another feature of the introduction of the euro is that it will replace the ECU at a rate of one for one on 1 January 1999. The ECU is a currency basket but not a currency in its own right.