samchain/econo-pairs-v1 huggingface dataset:
Ravi Menon: The future of capital is green Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at IMAS-Bloomberg Investment Conference, 9 March 2021. * * * Ms Susan Soh, Chairman of IMAS Mr Steven Yankelson, Head of ASEAN, Bloomberg Distinguished guests, ladies and gentlemen, good afternoon. The future of capital is green. There are three powerful forces driving this: growing recognition of climate change as a global priority; advances in approaches to sustainable investing; and changing investor preferences. First, climate change has become a risk that is too important for investors to ignore. The world needs to sharply reduce greenhouse gas emissions if we are to limit global warming to well below 2, and preferably 1.5 degree Celsius above pre-industrial levels as committed under the Paris Agreement … … specifically, reducing carbon emissions by half from 2010 levels by 2030, and reaching net zero around 2050. This implies a major transformation of economies and societies – affecting how we work and how we live. The transition to a low-carbon economy will impact every sector. It is not just about renewables and electric vehicles. Greening will have to take place across all industries – steel, cement, mining, buildings, construction, maritime, agriculture, the list goes on. Given the scale of the transformation, asset values will change quite fundamentally. Technological changes leading to a sharp decline in the cost of renewables or policy interventions such as a sharp hike in carbon taxes, will have diverse effects on asset values.

With today’s interest rate increase, we are also raising the interest rate on sight deposits above the threshold. For domestic banks, this threshold is calculated on the basis of their minimum reserve requirements. 1 By remunerating sight deposits above the threshold now at 0.5%, we ensure that our tighter monetary policy will continue to be passed through efficiently to interest rates in the money market overall. 1  Further information is available in the Instruction sheet governing interest on sight deposits. Page 1/2  Berne, 15 December 2022 Andréa M. Maechler  News conference  Page 2/2
4.2  Financial stability  The impact of EU membership on financial stability is more challenging. Given the close integration of the UK financial sector with the rest of the EU, it is imperative that the EU has a robust regulatory framework. This is in the process of being achieved. Through its membership of the EU, the UK is promoting a strong global regulatory framework, and UK authorities have worked in close concert with our European partners to find solutions to the fault-lines of the past. Examples include moves to end Too Big To Fail by enhancing bank recovery and resolution, a solution developed locally at the Bank of England, implemented regionally in the European Union, and now agreed globally through the Financial Stability Board. Given the scale of the UK’s financial sector relative to its economy, the Bank of England also has a special responsibility to the UK, to Europe and the world. The UK must ensure that the  11  See Broadbent, B (2011), “Rebalancing and the real exchange rate”, Speech at Thompson Reuters, London. BIS central bankers’ speeches  7  system is robust to shocks and that financial institutions can be resolved in an orderly manner. After all, financial stability is a national responsibility, with the UK taxpayer serving as the ultimate backstop of the UK financial system. The comprehensive reform of the UK’s institutional framework for financial stability since the crisis creates a coherent architecture of national macroprudential and microprudential regulators and supervisors.

For example, at the onset of the crisis, a large adjustment of the UK’s real exchange rate was necessary to rebalance from domestic to foreign demand, reflecting the severe headwinds to domestic growth from deleveraging by UK households.11 The consequences of this real adjustment for inflation depended on the monetary policy response. The MPC was able to strike an appropriate trade-off, consistent with its remit, between the needs to stabilise inflation and to avoid undue volatility in employment and output. Some have put this more colloquially as “looking through” the effects of sterling’s depreciation on inflation on this occasion. More persistent shocks require monetary accommodation. For example, the euro area’s difficult sequence of internal price adjustments, together with its overall fiscal restraint and tight credit conditions, imparted persistent headwinds to UK growth, and, had they not been addressed, on inflation. Those headwinds contributed to a persistent lowering of the “equilibrium” interest rate in the UK – the rate required to maintain demand in line with potential. That called for Bank Rate to be held lower for longer in order to lean against the disinflationary impulse emanating from abroad. And low real rates have had to be complemented by targeted macroprudential measures to insure against the risks of excessive indebtedness. Both of these points illustrate that the UK’s openness is central to the deliberations of the MPC in formulating monetary policy strategy. But neither openness nor any obligation of EU membership ultimately prevents the MPC from doing its job.
This is particularly visible in the components that are most sensitive to the cycle and to expectations, such as durable consumption, inventories, and gross fixed capital formation in machinery and equipment. The evolution of indicators of consumers and entrepreneurs’ expectations – IPEC and IMCE – despite a recent small rebound, shows levels below those seen in the few months leading to the crisis (Figure 7). The fall in domestic demand also responds, albeit to a lesser extent, to a cyclical adjustment component. Up to the third quarter of 2008, domestic demand grew at annual rates above 10  BIS Review 65/2009  3  percent during several quarters (Figure 8), driven primarily by investment and durable consumption. Output, meanwhile, was showing clearly lower growth rates, because a significant portion of the demand was deviating to imported goods. The worsening of the financial crisis in the developed markets only sped up and deepened this cyclical adjustment. The drop in domestic demand has been most visible in a fall in imports, limiting the extension of the current account deficit forecast for this year. Accordingly, the impulse of the world economy and the response of domestic demand to the worsened expectations and to the prevailing uncertainty will be negative this year, although partly offset by expansionary monetary and fiscal policies. Because of the connection between our economy’s prospects and the external environment, whatever judgment is made regarding the future pace of global recovery is crucial in the evaluation of our economy and its relevant external environment.

10  BIS Review 65/2009  Table 1 World growth (*) (annual change, percent) Average Average 90-99 00-05 World World at market nominal exchange rate United States Euro zone Japan China Rest of Asia Latin America Commodity exporters Trading partners  2007  2008 (e)  2009 (f) Report Jan.09  2010 (f)  Report Report May 09 Jan.09  Report May 09  2.9  3.8  5.2  3.2  1.2  T -1.2  3.3  T  2.1  2.4 3.1 2.2 1.5 10.0 5.5 2.7 2.7 3.0  2.9 2.5 1.9 1.6 9.4 4.8 3.0 3.1 3.1  3.8 2.0 2.7 2.4 13.0 5.9 5.7 3.2 5.0  2.2 1.1 0.9 -0.6 9.0 3.0 4.2 1.0 3.0  -0.3 -1.8 -1.9 -2.4 7.5 1.2 1.2 0.2 0.4  T -2.3 T -3.0 T -3.5 T -7.2 T 6.5 T -1.9 T -2.0 T -1.7 T -1.5  2.3 2.0 1.0 1.2 8.0 3.2 2.7 1.8 2.7  T T T T T T T T T  1.4 0.5 0.4 0.9 7.5 1.4 1.5 0.9 2.0  (*) Regional growth rates weighted by share in world GDP at PPP as published by the IMF's World Economic Outlook (WEO, April 2009). (e) Estimate; (f) Projection. Source: Central Bank of Chile based on a sample of investment banks, Consensus Forecasts and International Monetary Fund.
Current supporters control balance sheets totalling $ trillion and include the world’s top banks, asset managers, pension funds, insurers, credit rating agencies, accounting firms and shareholder advisory services.4 The supply of disclosure is responding, with four fifths of the top 1100 G20 companies now disclosing climate-related financial risks in line with some of the TCFD recommendations.5 On every recommended metric in TCFD, disclosures have been steadily increasing, rising from an average of 2.8 to 3.6 over the past three years. Three quarters of investors are now using TCFD disclosures when investing and the same percentage report a marked improvement in the quality of climate disclosures.6 Japanese TCFD supporters increased from 9 to 199 in just over a year and now have a market cap of almost $ trillion. Japanese government support through the Implementation Study Group and the TCFD Consortium has catalysed action and created a blueprint for other countries in “how-to-TCFD”. 4  Full list of current TCFD supporters available at: https://www.fsb-tcfd.org/tcfd-supporters/. The TCFD’s June 2019 Status Report assessed, using artificial intelligence, 1100 companies reports over three years from 2016 to 2018 inclusive. Full report available at: https://www.fsb-tcfd.org/wp-content/uploads/2019/06/2019-TCFD-Status-Report-FINAL053119.pdf. 6 TCFD Status Report (2019) 5  3  All speeches are available online at www.bankofengland.co.uk/news/speeches  3  Chart 2: Changes in TCFD disclosures by recommendation 2016 – 2018  As the volume of disclosures has increased, so has their sophistication. Companies, financial firms and policymakers increasingly recognise that disclosures must go beyond the static to the strategic.

But even with a growth rate of just over 3%, the Swedish economy would be expanding more rapidly than we believe it is capable of in the longer run. Econometric estimates of the output gap. Per cent of potential GDP 4  4  2  2  0  0  -2  -2  PF HP UC  -4  -4  -6 -8 1980  -6 -8 1984  1988  1992  1996  2000 Source: The Riksbank  Let me conclude by underscoring what I mentioned initially, namely that forecasting inflation proved difficult in the 1990s, in Sweden as well as elsewhere. There have been substantial changes in our economies, partly because policy now focuses on stability and competition has become stronger in various ways. Inflation in Sweden has been a positive surprise in recent years even though activity has been rising strongly, so further positive surprises should naturally not be ruled out. Still, there are now many indications that resource utilisation is relatively high and will go on rising. That implies that, little by little, inflationary pressure will grow. We will be presenting a comprehensive assessment of inflation prospects in the December Inflation Report. In that context we will also be deciding the repo rate. Recent developments have not altered the picture I formed in October. Although it is still too early to specify when, there will presumably be grounds for increasing the repo rate in the future. BIS Review 107/2000  6
Since the summer of last year we have cut our policy rates into negative territory, launched a credit easing package and begun purchasing private and public sector securities under the asset purchase programme (APP). A large body of evidence has accrued in that time that our instruments are powerful. And that evidence has allowed us to refine further our understanding of the amount of stimulus required to bring inflation back to 2% without undue delay. For example, since we launched our credit easing package in June 2014, composite lending rates for firms have declined by more than 80 basis points for the euro area as a whole, and by between 110-140 basis points in stressed economies. That is a formidable pass-through. ECB staff estimates suggest that we would have needed to reduce the standard policy rates by around 100 basis points in June 2014 to achieve a similar effect on bank lending rates. Improving financing conditions have also fed into improving macroeconomic conditions. According to Eurosystem staff assessments, our measures will add almost 1% to GDP between 2015 and 2017. And we are seeing an effect even on smaller firms that are typically harder for monetary policy to reach. In our most recent survey on smaller firms in the euro area, for instance, we saw for the first time since 2009 that the net percentage of small firms registering an improvement in business activity has turned positive, for all size sub-groups. Crucially, our measures are also gradually feeding through into inflation.

But falls in oil and commodity prices can have a more lasting impact on inflation – and hence become relevant for monetary policy – if they feed into core inflation. That can happen under two circumstances. The first is if price falls are symptomatic of weakening global demand, rather than a boost to global supply. Then, lower oil prices might be accompanied by declining net exports, which could in turn cause firms to cut back on investment and drag down core inflation. This blunts the growth-bolstering effect of lower commodity prices. Imported inflation might also be depressed as foreign producers cut prices in reaction to weakening global growth. The second circumstance is if there is a succession of supply shocks that keep inflation low for a long period and cause firms and households to revise down their inflation expectations. In that situation, low oil and commodity prices can have “second round effects” as lower expectations feed into wage bargaining and price setting, thereby affecting core inflation. Then, the effect of supply shocks becomes more similar to demand shocks. In both cases, central banks end up facing a situation not of a benign supply shock, but rather of an adverse demand shock that, if left unaddressed, could derail price stability over the medium-term. That would call for a more forceful monetary policy response. Importantly, there were signs in the past that such circumstances were present in the euro area.
Improve access to loanable funds among local entrepreneurs and thereby enable them to partner with foreign investors. This should enhance their economic inclusiveness or participation in the development of the country. Ladies and gentlemen As I conclude, allow me to remind you of the plight of so many of our people living in rural districts. Despite the high economic and business potential in these areas, financial services are non-existant. This means that income earning citizens in the informal sector such as fishermen, bee-keepers, handcraft makers and farmers cannot deposit their earnings in a safe savings account due to the absence of bank branches. In addition, those with good business ideas cannot access loans to actualize their projects and create wealth. These people have to devise unconventional means of keeping their money such as hiding it in their homes, burying or indeed moving with the money where ever they go. Furthermore, civil servants and other citizens in formal employment have to travel long distances and in some instances for a number of days before they can access their salaries. A number of them end up losing their hard earned income in thefts and other calamities. This has to change, and banks working in partnership with the Government can make this happen. I therefore, wish to challenge Commercial banks including First commercial Bank (Z) Ltd to consider opening branches, in the unbanked districts.

As I understand, First Capital Bank has plans to increase its foot prints in Zambia and I hope that the bank will open up branches in other districts of BIS central bankers’ speeches  1  Zambia. This will enable it to enhance financial inclusion, which is among the country’s key priorities. Chairperson I have been informed that FCB has initiated the process of acquiring new state of the art banking software, and is in the process of introducing a full range of IT related products like internet banking, mobile banking and visa card. This demonstrates the bank’s strong and longterm commitment to becoming an important player in the development of our financial sector. This is no doubt driven by the confidence FCB has in the Zambian economy. Ladies and gentleman Zambia’s economy has continued to show resilience in the midst of a slowdown in the global economy as a result of the on-going Euro zone debt crisis and the sluggish growth in the United States of America and some leading emerging market countries including the BRICS. Economic performance has been strong with GDP growth in 2012 at 7.3%. Inflation has continued to be in single digits and was 6.9% in October this year. Although the exchange rate of the Kwacha against major international currencies has been under pressure, it has remained relatively stable, while the country has maintained a positive account balance over the last four years.
In this respect, the implementation of robust and consistent group-wide risk management, and a strong risk culture, is critical to mitigate risks of group contagion. Another critical element is the investment in talent development – both in industry and in the regulatory community – to provide a strong pipeline of skilled individuals required for the management of a more integrated financial sector. Sufficient resources and attention is needed to develop and implement strategies to attract and retain the right talent. The demand for talent particularly in the area of risk management and compliance continues to rise in the aftermath of the global financial crisis as financial institutions adjust to implement regulatory reform measures. Similarly, training and development programmes must be continuously enhanced to ensure that skill sets within the financial institution are kept current and relevant. Regional training institutions such as the Asian Institute of Chartered Bankers and the Asian Banking School and the South East Asian Central Banks Research and Training Centre, or SEACEN, amongst others, will play an essential role in meeting the demand for new talent with the necessary skill sets and experience. Concluding remarks The success of financial integration in ASEAN will be critical to support the on-going transformation of ASEAN economies in the coming decades. No doubt there are risks, challenges and setbacks even. But benefits and risks are two sides of the same coin. We should be confident enough, ASEAN is more than 40 years old now, as we chart our progress towards a more integrated economy as a group.

The banking system remains sound, a fact that also attributes to the effective carrying out of the regulatory and supervisory function of the Bank of Albania. In what follows I would like to elaborate more on these aspects. 2.1  Banking system performance  The Albanian banking system’s total assets increased in 2009, but at a rate about twice lower than in 2008. This decrease reflects fully the lower expansion of lending. Our banking system continues to be mainly financed by public deposits and be concentrated on business lending. The banking system’s deposits and loans grew but at a lower rate than in the previous years. Loans to total deposits increased by nearly 3 percentage points, from 62 to 65 percent. On the other hand, the increase of deposits as a result of the restored public confidence has improved the liquidity situation in the banking system. Non-performing loans increased in 2009 owing to the economic slowdown and the exchange rate depreciation. Loan portfolio quality index expressed as “non-performing loans to total outstanding loans” rose to 10.48 percent as at end 2009 from 6.64 percent at the end of 2008. On net basis, that is deducting total provision fund, the same figure is only 6.3 percent. The Bank of Albania has monitored the situation closely being aware of the pro-cyclical effects that these developments may have on the loan portfolio. Despite the loan portfolio deterioration, capital adequacy and quality, to carry out the banking operations, to extend and expand lending, have remained almost intact.
Figure 8 Interest rates on Central Bank of Chile documents (percent)  9  9  7  7 BCP-10  5  5 BCP-5  3  3  1  1 05  06  07  08  09  10  11  12  13  14  15  16  Source: Central Bank of Chile. BIS central bankers’ speeches  11  Figure 9 MPR and expectations (percent)  6  6 MPR Financial asset prices in Dec. 2015 Report  5  5  4  EES  FBS 3  4  3 Financial asset prices in March 2016 Report  2  2 11  12  13  14  15  16  17  18  Source: Central Bank of Chile. Figure 10 Latin America: Nominal and real MPR (*) (percent)  9  15 8  Brazil (right axis)  Brazil  8  Colombia Chile  6  12 5  5  Peru  Colombia  3  9 Mexico  0  6 13  14  15  16  2  Indonesia New Zealand Peru Mexico Chile  -1 Australia  2  -1  (*) Calculated as the current MPR minus expected inflation one year out. Sources: Central Bank of Chile and of respective countries. 12  BIS central bankers’ speeches

One possible explanation is that, in an economy based heavily on the production of services, firms have been putting their teams to work on marketing and sales to drum up business against a backdrop of weak overall demand. Those teams may well be working hard. In that case, it may not feel to managers, when filling in surveys, as if they have lots of spare capacity, But, as I have described it, those staff would be working on inputs rather than outputs – making productivity across the economy as a whole look weak. Nor does labour hoarding square obviously with relatively healthy growth in private sector employment over 2010 and the first half of 2011, before the recent slowing. In our internal debates, I have posited that this could be a symptom of the economy’s necessary rebalancing. Firms facing expanding markets and demand may be hiring. Whereas, against a backdrop of a very low policy rate and some forbearance by banks, individual firms in contracting sectors could be holding out, either not recognising that their market is contracting or believing and hoping that it will be their competitors rather than themselves that end up cutting capacity or closing. It can be argued against that that rising employment, and weakness in productivity, is spread fairly evenly across the private sector. But I suspect that we have to dive down into the data to get a more disaggregated picture than we, as macroeconomic policymakers, usually need.