samchain/econo-pairs-v1 huggingface dataset:
And there’s the breadth of issues the FPC covers. It’s not easy to build models that can incorporate banks, insurers, investment funds, households, corporates and all the markets they operate in. But we are working towards more joint analysis and models. We look at measures of ‘GDP at risk’[28] to help judge future risks of financial instability and help measure our progress[29]. In addition, Bank staff have developed some early ‘system-wide’ models[30] to think about how stress might propagate between different parts of the financial system. This is an area where we plan to do more and push our capabilities forward. We’re also exploring how we can more formally model some of the interactions between monetary policy and financial stability, and how these may vary in different states of the world and in response to different types of shocks. My hope is that we can eventually create tools that will help both committees think about issues which span both objectives. As well as aggregate supply, aggregate demand, inflation and interest rates, our models would more richly cover the impact on the economy of developments in the financial system, including the FPC’s actions to build the financial resilience needed to avoid crises. In this way, our analysis would cover not just the central case but tail risks too. This is potentially complicated stuff – it seems to me like moving policy making from lines to planes. But it is necessary if we are to maintain and build on our coordinated approach.

The UK’s success in financial services has been built on the ability to innovate, adapt to 3  new developments and allow a suitable rough-and-tumble of financial services firms entering and exiting the market – we should take this further in the years ahead. 2 See: https://www.gov.uk/government/consultations/future-regulatory-framework-frf-review-consultation 3 The PRA’s and Bank’s leading work on FinTech and climate related financial risks are prime examples. 3  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  3  There is no free lunch here, in that none of these three elements is free. Strong regulation is not cheap. Openness exposes us to risks from elsewhere. And dynamism means some businesses and investments inevitably fail. But together, this trio can make a big contribution to our economy. I want to focus today on the third – dynamism – where both we and the government are now taking concrete steps to move forward. Dynamic plumbing  Now, the most important thing that has happened recently to improve dynamism has attracted very little comment at all – other than from a select band of enthusiasts for regulatory plumbing, buried deep within the PRA and the Bank. On 23 June, the Treasury published a document snappily named “Prudential standards in the Financial Services Bill: June Update – Policy statement”. This provided an update on the government’s approach to implementing Basel 3.1 and a UK version of the second Capital Requirements Regulation (CRRII).
Caleb M Fundanga: The Bank of Zambia’s management development programme for managers Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the opening of the Management Development Programme for Managers, Livingstone, 4-15 December 2006. *  *  *  • Director – Human Resources • Assistant Director – Organisation Development • The Consultants • Participants • Ladies and Gentlemen I welcome you all to this Management Development Programme. Management development programmes are crucial not only to Staff development but also to the realisation of the Bank of Zambia vision. As you are aware, our vision is “To be a world class central bank”. Our vision can only be realised if the performance of our employees measures up to world class standards, because it is employees who make an institution what it is. In other words, we can not have a world class central bank without world class employees. Ladies and Gentlemen: I would like to refer you to our strategic plan document. You will note that in its values statement, the Bank states that employees of the Bank of Zambia shall at all times endeavor to direct their efforts towards the achievement of the mission of the Bank by consistently following the values encapsulated in the BoZ Way. You will also note that the Bank has, in turn, undertaken to support employees by, inter-alia, continuously enhancing the capacity of the Bank through the development of all staff.

This reflects the realisation by the Bank that without world-class employees, its aspiration to be a world class central bank as stated in its vision statement cannot be attained. For the Bank therefore, this programme is important because it is a step taken towards enhancing the skills of our staff to world class standards and is a commitment to attaining our vision. The programme you have come to participate in is unique in two respects. First, this programme is tailor-made or specifically designed for Bank of Zambia staff. Second, it focuses on middle management which is a reflection of the importance that the Bank places on the role that its middle managers play in helping it achieve its vision and mission. The programme has been designed to impart general management knowledge and skills to you our middle managers which will enhance your leadership and managerial abilities. The programme is designed to provide you with the tools that will enable you to contribute effectively towards the management of the Bank and also to prepare you for succession as and when opportunities arise. The first module you will learn is on the Functions of the Board of the Bank of Zambia. This was included to provide you with an understanding of the relevance of the Board to our strategic plan management process and ultimately to your job. Second, you will have a module on good corporate governance.
In more concrete terms, the first reason on the back of low lending rate is related to the high risk – both real and perceived – that investment in agriculture bears. However, I think this risk is being reduced. On the one hand, the improved support to agricultural production, the improved roots network and the consolidated trade chain for the supply of the inputs in the market, drive to the improvement of this sector’s business. On the other hand, promoting agritourism and supporting agribusiness, grow the value added chain and profitability of investment in agriculture. In this context, I would like to greet the Albania Agribusiness and Tourism Support Facility 1/2  BIS central bankers' speeches  (AATSF), which includes the joint contribution of the Albanian Government and the European Bank for Reconstruction and Development (EBRD). This facility provides a significant contribution, around EUR 150 million, in both forms: direct loans and supportive guarantee for lending. To this end, by seeing the positive reaction that banking sector is displaying towards this scheme, with four banks already becoming part of it, I would like to encourage the other banks to adopt a more positive approach towards this sector. Also, I would like to emphasise that global experience suggests the promotion of private insurance schemes to address risk reduction in agricultural. In future these schemes should become an integral part of this equation. The second reason on the back of low lending rate in agriculture is related to the fragmentation of agricultural land.

In Europe, the Stoxx 600 lost around 9% over the same period. Various factors contributed to the weak performance of European stocks. Economic momentum has weakened of late and corporate earnings growth remained below expectations in the third quarter overall. Moreover, currency turmoil in Turkey and the budget dispute between Italy and the EU weighed on Europe’s stock exchanges. In Switzerland, the SMI has managed to gain around 1% since mid-year. This  Page 1/5  Berne, 13 December 2018 Andréa M. Maechler  News conference  above-average showing was predominantly due to a strong performance in July, which in turn was mainly driven by positive corporate news in the pharmaceutical sector. On the interest rate markets the picture initially remained mixed due to uneven growth momentum in the major economic regions since mid-2018 (cf. chart 3). In the US, the Federal Reserve confirmed that it intended to maintain its policy of gradual interest rate rises. Against this backdrop, yields in the US continued to rise and the yield on 10-year US Treasuries hit a multi-year high at the beginning of November. This rise in yields receded again in response to another dip in risk sentiment at the beginning of December. Most recently, the yield on 10-year US Treasuries stood at almost 2.9% – close to the level recorded at the end of June. In Europe, on the other hand, yields have been more stable. Yield differentials between US and European government bonds thus also reached a multi-year high in November.
Diamond and Dybvig’s analysis consciously omitted the fact that, in reality, banks’ assets are risky. And not only are banks’ assets risky, but banks are highly leveraged institutions. This leaves them heavily exposed – with very high debt-equity ratios, small movements in asset valuations are enough to wipe out their equity and leave banks insolvent. That means the distinction between illiquidity and solvency can be difficult in practice – the difference in timing might be just a few days. If a crisis is in fact one of insolvency, brought on by excessive leverage and risk, then central bank liquidity provision cannot provide the answer. Central banks can offer liquidity insurance only to solvent institutions or as a bridge to a more permanent solution. It is this structure, in which risky long-term assets are funded by short-term deposits, that makes banks so hazardous. Yet many treat loans to banks as if they were riskless. In isolation, this would be akin to a belief in alchemy – risk-free deposits can never be supported by long-term risky investments in isolation. To work, financial alchemy requires the implicit support of the tax payer. When all the functions of the financial system are heavily interconnected, any problems that arise can end up playing havoc with services vital to the functioning of the economy – the payments system, the services of money and the provision of working capital to industry. If such services are materially threatened, governments will never be able to sit idly by.

Resolution would naturally go hand-inhand with a greater reliance on instruments such as contingent capital. And there would be enormous challenges in resolving global banks that span countries with different legal jurisdictions. Extending resolution procedures to large institutions is a necessary but not sufficient condition for stability of the banking system. 7. More radical reforms  All of these potential reforms would be steps in the right direction. They would all help to put more of the costs of maturity mismatch on the shoulders of those who reap the benefits. But taxes, the Basel capital requirements, special arrangements for systemically important financial institutions and enhanced resolution procedures all have drawbacks and are unlikely to do the job perfectly. So, if we cannot rely solely on these types of measures, are there more fundamental directions in which we could move that would align costs and benefits more effectively? One simple solution, advocated by my colleague David Miles, would be to move to very much higher levels of capital requirements – several orders of magnitude higher. A related proposal is to ensure there are large amounts of contingent capital in a bank’s liability structure. Much more loss-absorbing capital – actual or contingent – can substantially reduce the size of costs that might be borne outside of a financial firm. But unless complete, capital requirements will never be able to guarantee that costs will not spill over elsewhere.
The growing importance of these funds to the UK and global economies demands that we keep up to ensure they can continue to serve the economy whatever challenges lay ahead. So we’ll report on our progress in our regular Financial Stability Reports. 14  See page 18 of the Record of the Financial Policy Committee Meeting on 3 October 2018. See speech by Mark Carney (June 2019) ‘Push, Pull, Pipes: Sustainable Capital Flows for a New World Order’. See report by the Financial Stability Board (2017): ‘Policy Recommendations to Address Structural Vulnerabilities from Asset Management Activities‘. 15 16  9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  Opportunity  All this talk of stability may sound all a bit prudent and pessimistic. But it’s really not, because the pursuit of stability can unlock new opportunity. Look back to 2006. Banks were weak and prone to failure but there was no way to deal safely with them when they did. So markets assumed that banks which were important to the economy would be bailed out; that they were too big to fail. That meant those banks could take risks and finance themselves cheaply. The bigger and more important they became, the cheaper it became for them to take risks. There was every incentive to grow. So the system became concentrated. Concentrated in banks, which provided 60% of debt financing. And concentrated in a few big banks. Because the playing field was tilted, competition was driven out.

11 In particular, according to Met Office (2018), by 2100, in parts of the UK sea levels could rise by up to 70cm in a ‘low emissions scenario’, and by up to 115cm in a ‘high emissions scenario’, relative to their 1981–2000 levels. See Box 6 in PRA report (2018): ‘Transition in thinking: The impact of climate change on the UK banking sector’ for more detail on the impact of flood risk on residential mortgage portfolios. 12 See announcement. 13 See IEA and IRENA (2017), ‘Perspectives for the Energy Transition’. The estimates are for a scenario compatible with limiting the rise in global mean temperature to 2°C by 2100 with a probability of 66%, as a way of contributing to the ‘well below 2°C’ target of the Paris Agreement. 9  6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Financial companies will need to continue to adapt if they are to be able to serve in this new environment. Their business decisions will need increasingly to reflect the risks. So we’re testing their ability to do this. We’re going to stress test individual firms and the financial system for resilience to climate risks. Our stress test will be the first of its kind to integrate fully climate scenarios with macroeconomic and financial system models. The Network – of central banks and supervisors – for Greening the Financial System is currently working to develop a set of climate scenarios for regulators to use.
The MPC therefore decided to cut the policy rate to provide as insurance to the economy in the face of greater downside risks to growth. With firmly anchored inflation expectations, the Bank of Thailand can today give weight to stabilizing economic developments when setting the interest rate. However, should the outlook for inflation, growth, or financial stability change in the future period, there will be room for maneuver to counteract such developments through monetary policy, as well as other policy tools in an appropriate mix deemed most suitable for achieving the overall macroeconomic stability. Limitations of monetary policy Let me now turn to a topic that I would like to highlight today, that is, the limits to what monetary policy can achieve. The global financial crisis has placed far greater demands on monetary policy around the world. In major economies where other macroeconomic policy tools are being impaired, monetary policy was under enormous pressure to support the economy. Central banks responded by expanding dramatically their traditional role as lenders of last resort and came up with innovative, unconventional ways to stretch beyond what monetary policy can normally do. In emerging markets, given large crisis repercussions in terms of excessive capital flows, monetary policy was at times expected to respond to external developments in dealing with global spillovers. Overall, monetary policy has been pushed into situations and actions that were previously unimaginable. Efforts by many central banks to overstretch its normal capacity may have led the public to expect too much from monetary policy.

But monetary policy cannot solve deeper structural problems or lift growth potential of the economy. That needs to come from real progresses that increase productivity and relax supply-side constraints. Sure, demand stimulating can buy time by cushioning the economy from short-term economic shocks. But this may possibly delay necessary adjustments of the economy to longer-term challenges. For example, keeping interest rate too low for too long and keeping exchange rate undervalued, beside encouraging risk taking and storing up financial instability problems for the future, may also temper incentives for businesses to improve efficiencies, and may slow the reallocation of capital and labor to more productive uses. In the context of Thailand, one of the most important structural issues facing the Thai economy at the moment is that of the labor shortage. Through our business contact and recent surveys, the labor shortage has scored one of the top concerns by both domestic and foreign businesses operating in Thailand. Underlying causes of labor shortage include the demographic change and education and skill mismatch. Clearly, there is little monetary policy can do to solve this supply bottleneck. It can help foster macroeconomic stability conducive to business investment, but most of the efforts to address supply-side impediments still need to come from a broader and more balanced set of economic policies including fiscal, industrial, technology, and labor market policies.
This proved not to be the case and these days we present the entire cohesive forecast for the inflation target, wages, GDP and its components, the repo rate and so on. I believe that by doing this we have increased the public’s understanding of monetary policy and reduced the drama surrounding the entire monetary policy process. Assessing economic activity entails reviewing material that is in a constant state of flux, and when we change our monetary policy these changes can be concretely related to changes in real-economic conditions. I would also like to add that the quantified forecasts are of course interesting, but the associated analyses of the driving forces behind different courses of development are at least as interesting. How do we make our forecasts? Developments abroad play an important role For a small open economy like the Swedish economy, the international outlook is the point of departure for the forecast. We cannot influence events abroad, but what happens there has a major impact on developments here at home. Here I would like to highlight some of the special aspects relating to the forecast of developments abroad. 1  Apart from the fact that it is considered desirable to stabilise resource utilisation, resource utilisation is also an important inflation indicator. Resource utilisation is thus an important factor that plays several roles in the monetary policy analysis and there is an almost constant discussion of what measures of resource utilisation are the most relevant.

We were unable to take in the complexity of the financial system and the contagion that this entailed. Although it was extremely difficult to make forecasts, the Riksbank did not stop making them. However, the forecasts were unusually uncertain and we were prepared to revise them significantly, which is what subsequently happened. The forecast for GDP was revised so much that we ended up far outside the uncertainty bands that surrounded the forecast before the crisis (see Figure 1). At a later stage, we also underestimated the strength of the recovery. 4  For a more detailed discussion of the role of assessments in relation to alternative scenarios see the speech “Flexible inflation targeting in theory and practice” that Stefan Ingves held on 12 May 2011. BIS central bankers’ speeches  5  Figure 1 GDP and forecasts for GDP at different times Annual percentage change, seasonally-adjusted data 8  8  6  6  4  4  2  2  0  0 90% 75%  -2  -2  50% Outcome  -4  -4  September 2008 September 2009 September 2010  -6  -6  April 2011  -8  -8 06  07  08  09  10  11  12  13  Note: All forecasts entail a degree of uncertainty but to preserve the graphic profile only uncertainty bands for the September 2008 forecast are shown. Sources: Statistics Sweden and the Riksbank.
The sea and the coastal landscape are still a resource that generates jobs – albeit of a different kind today. Chart: The 500-krone banknote (reverse) The sea proved to have even more to offer the Norwegian nation. A new turning-point in our history was reached when the first barrel of oil was pumped up in 1971. In the years that have followed, the oil and gas industry has been a fundamental mainstay of the economy. Chart: From shipbuilding to platform construction For Norwegian manufacturing, the discovery of North Sea oil came at a convenient time. The shipping industry was being hard hit by the international tanker crisis. At one point, a quarter of the Norwegian tanker fleet in terms of tonnage was laid up. New shipbuilding orders ground to a halt, and workers were laid off. But shipping industry labour and real capital in the form of docks, machinery and equipment were easily adapted to the production of oil platforms and other goods and services needed in the offshore oil sector. The Norwegian business sector has made good use of the opportunities provided by the discovery of oil. The extraction of oil at extreme ocean depths required the development of new technology. The specialised expertise that has been built up has secured contracts – and not just off the shores of Norway. Offshore activity has had substantial spillover effects on other industries. An advanced oil service industry has emerged, and small local communities have been able to broaden their economic base.

In other words, quality data are invaluable for sound policy decisions. For example, to enhance comparability across time and across countries, debt compilers must be guided by certain principles. I will proceed to highlight a few of them, mindful of the fact that the expert team of resource persons will provide deeper insights into these and other issues during the course. The major principles include residence criterion, ownership (i.e. time of recording), accrued interest liability, treatment of arrears and valuation. Residence Debt liabilities of residents must be owed to non-residents for such liabilities to be classified and included in an economy’s gross external debt position. Debt liabilities of residents owed to residents are excluded. Hence the definition of residence is central to the definition of external debt. A resident of an economy is an entity such as a household, corporation, government agency, etc that is capable, in its own right, of owning assets, incurring liabilities, and engaging in economic activities and in transactions with other entities. Residence is defined as a country’s “economic territory” which consists of a geographical territory administered by a government and includes, for maritime countries, any islands subject to the same fiscal and monetary authorities as the mainland. However, international (multilateral) organizations are not considered residents of any national economy in which the organizations are located, although employees of those bodies are residents of the national economy. In the same vein, the residence of offshore enterprises is attributed to the economies in which they are located.