samchain/econo-pairs-v1 huggingface dataset:
But in reforming our pension system, it is important to separate two issues. First, how should we pay for the cost of present pension commitments? Second, what is the right structure for our pension system: which risks should be borne individually and which collectively? A debate is needed over whether present arrangements imply too much or too little sharing of risk. We should remember also that insurance is based on ignorance - ignorance of the outcomes facing each individual. But knowledge can turn risk into certainty. The advent of genetic testing could undermine a private market in insurance against longevity and illhealth. Even if insurance companies could not require testing as a condition of insurance, the fact that tests were available could increase even further the degree of adverse selection in such insurance markets. Pooling risks caused by unequal genetic inheritance might no longer be feasible. Insurance would become instead a question about redistribution, and hence a matter for public policy. 6. Conclusions  In this lecture I have stressed that most public policy decisions are a matter of the balance of risks. There is no certainty. Indeed, it is the illusion of certainty that undermines much public debate. As Bertrand Russell said, “The whole problem of the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts”. Recognising and modelling risks means understanding the limits to our present knowledge. Communicating risk is about transparency.

As banks expand their risk taking activities, both on balance sheet and off balance sheet, some banks have become much larger and more complex, thereby rendering themselves “too big to fail”. 10. On the other hand, the proponents of universal banking note that diversification can be beneficial for banks and banking stability. If one area of business underperforms, others can make up for it – making the “whole” more resilient. It can also be argued that banks that are diversified in terms of businesses or geographical operations are better positioned to offer customers the depth and breadth of services these customers require, particularly as 2  BIS central bankers’ speeches  economic activities become ever more specialised and global. Broadening customer access to financial products enables increased flows of savings through the system, facilitating efficient investment and economic growth. These advantages are not to be dismissed lightly. 11. The HKMA takes a balanced and pragmatic view on this issue. Rather than mandating the dismantling of banks’ business structure to deal with the potential problems arising from proprietary trading and overly aggressive risk taking by banks, our preferred response is to ensure the proper risk capture and management of those parts of the operations that benefit from low cost funding and yet cause a disproportionate amount of risk. As part of our on-going supervision we need to critically assess whether banks really understand what sort of risks they are taking on and seek to ensure that such risks are managed properly in order to safeguard depositors’ interests.
Philipp M Hildebrand: The role of central banks in fostering economic development Speech by Mr Philipp M Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Inaugural Meeting of the Africa Emerging Markets Forum, Gerzensee, 1 October 2007. The speaker gratefully acknowledges the valuable assistance provided by Raphael Auer, Martin Brown and Werner Hermann in preparing this speech. * 1. *  *  Introduction  On behalf of my Governing Board colleagues, let me warmly welcome you to the SNB Study Center Gerzensee! It is an honour and a privilege for the Swiss National Bank to host the Inaugural Meeting of the Emerging Markets Forum for Africa. I trust you are well rested this morning. By now, you will have noted that the Study Center Gerzensee is not a five star hotel. Compared to other conference centres, the service provided here is modest. We like to think that we emphasise substance rather than style. We try to create an atmosphere conducive to learning. The Center serves multiple purposes. It is here, for example, that we organise advanced courses for selected central bank professionals from all over the world. According to the traditional policy of the Center, only one participant per country is allowed in each Central Bankers Course. In the 25 years since the creation of the Center, more than 300 participants from African central banks have attended these courses.

It also had an adverse effect on households, partly because a large proportion of household debt is indexed to inflation. It is certainly a welcome achievement for the Icelandic economy to have triumphed over inflation. However, I cannot avoid mentioning here that I think many people take inflation rather too lightly and feel that too much emphasis is given to constraining it. I would caution against this view. I am certain that the same principles apply to Iceland as other industrialised countries, to which we tend to compare ourselves, namely that a low rate of inflation is one of the cornerstones of economic growth and public welfare and the Central Bank should therefore continue to have price stability as its main goal, as stipulated in current legislation. In addition, the other factors, such as fiscal policy and wage decisions, have a considerable impact on how tight the monetary stance needs to be. The new monetary framework implied that a policy of stable exchange rate was abandoned, allowing the external value of the króna to be determined by market forces. No one doubts for a moment that the exchange rate of the króna is crucial for the economy. The exchange rate has a major effect on prices and profitability in the traded goods sector. Recently there has been a great deal of discussion about the exchange rate and the Central Bank has frequently come under fire. A widespread misunderstanding seems to prevail that the Central Bank can control the exchange rate.
On the other hand, not doing so may lead to greater contingent liabilities for the government and higher costs of doing business in Thailand. One key challenge with the current SOE system lies in its complex governing structure that is prone to conflicts of interest. This is because government agencies or senior government officials involved with SOEs often assume multiple, and at time, conflicting roles – namely, the roles of policymaker, regulator, operator, and owner. The bill on the governance of the State-Owned Enterprises aims to tackle this problem head on; it sets forth principles that dismantle these roles into separate governing entities. Going 3  forward, operation of the SOEs will be supervised by the State Enterprise Policy Committee, who will also set the SOEs’ five-year strategic plans. A separate entity – the holding corporation – will be established to act as the owner of incorporated SOEs to ensure long-term competitiveness and financial viability. Furthermore, operation of SOEs will become more transparent with a better check and balance system. The bottom line is, this new law will lay a path for structural changes in the governance, the management, and hence the performance of the SOEs going forward. The new governing structure will also be more immune to political intervention. Note that, while this new legislation on SOEs is expected to be effective in the coming year, some SOE reform initiatives have already taken place.

Among other things, this provides advice on the characteristics of financial transactions that may arouse suspicion, particularly when one or more of the parties is known or suspected to be a terrorist or terrorist organisation. Even if there is no evidence of a direct terrorist connection, a transaction should still be reported to the JFIU if it looks suspicious for other reasons. This obviously applies to remittances as well as the opening of an account. It may subsequently emerge that there is a terrorist link. Thus, success in the fight against terrorist financing depends in large measure on the overall quality of AIs’ controls against money laundering - in particular, their ability to detect suspicious transactions. 2  BIS Review 47/2002  The customer due diligence process This in turn depends on an institution’s knowledge of its customers and what is a normal pattern of account activity for a particular customer. It is crucial therefore for AIs’ to have effective systems for customer due diligence. The main essentials are already there in the HKMA’s guideline, which requires AIs to make reasonable efforts to determine the customer’s true identity. But the process may need to be articulated more clearly so that AIs are in no doubt about what they should be doing.
In July 20227 the ECB decided to include climate change considerations in the corporate bond purchases in its monetary policy portfolios, tilting these holdings towards issuers with better climate performance. Moreover, it decided to include these climate considerations in the assets it accepts as collateral in its provision of liquidity to credit institutions. Requirements on the disclosure of information on private sector assets have also been set in place as an additional criterion for accepting collateral assets. 7  See the ECB press release of 21 July 2022: “ECB takes further steps to incorporate climate change into its monetary policy Operations”. https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220704~4f48a72462.en.html  Own portfolios Second, I would like to highlight that central banks are working to incorporate sustainability principles into their own portfolio management. A significant number of NGFS members8 are either planning or have already begun to consider the adoption of sustainable and responsible investment practices in the management of the portfolios in which they are directly involved, such as, for instance, their own portfolios. A growing number of central banks are implementing green bond investment strategies, often with specific purchasing targets.

In addition to the European Commission’s green bonds, these instruments have also been issued by both governments and the private sector. Overall, green bonds worth $ billion were issued worldwide in 2022. Added to the issuances of social bonds $ billion), sustainable bonds $ billion) and sustainability-linked bonds3 $ billion), this takes the total to $ billion.4 This is 23% down on the 2021 figure, since the geopolitical context – together with the economic and financial uncertainties – has had an impact on both sustainable finance markets and on the overall volume of issuances. If we also consider financing channels other than issuances, such as sustainable lending, the overall volume of funding in 2022 was down on the previous year. Nonetheless, Spain again set a new record, with a total of € million, representing a 9% increase thanks to the growth in bank financing, which offset the fall in bond-based financing.5  2  Up to the deadline of 19 October 2022. 3  Sustainability bonds are issues whose proceeds are used to finance a combination of green and social projects. Sustainability-linked bonds are instruments whose financial and/or structural characteristics can vary according to whether the issuer achieves a pre-defined sustainability objective. 4  Source: “OFISO Annual Report. Sustainable Finance in Spain in 2022”, based on data from Environmental Finance. 5  Source: “OFISO Annual Report. Sustainable Finance in Spain in 2022”, based on data from Environmental Finance.
CIX will draw on technologies such as satellite monitoring, artificial intelligence, and blockchain to distill key data on emission reduction and removal projects to verify the quality of the credits that they generate. Singapore as a Carbon Services and Trading Hub Singapore is a good place for CIX to realise its vision to be a global carbon exchange and marketplace. We have a sound infrastructure, good governance, and a premium on trust – critical ingredients for a marketplace. Singapore is located at the heart of Southeast Asia which is fertile ground to harness the potential of nature-based solutions. Southeast Asia holds more than one-third of the world’s mangroves. It has about 120 million hectares of land suitable for re-forestation. If we are able to harness the potential of nature-based solutions in Southeast Asia, we can move the needle on carbon sequestration efforts. Proximity to Southeast Asia will enable CIX and its ecosystem partners to work closely with project developers to procure a supply of high quality carbon credits. Singapore is well-positioned to be a carbon services and trading hub. We are strengthening the carbon credit value-chain. This includes growing capabilities to develop projects, conduct certification and validation of project design, and monitor and verify project outcomes. We are also a trusted international centre for financial services, professional services, and commodities trading. As a country, Singapore is committed to sustainable development and our aspirations are reflected in the Singapore Green Plan 2030.

I am pleased to say that January’s report points to some firming in manufacturing and a pickup in hiring – a big improvement from late last year, when this survey consistently signaled little or no growth. Nonetheless, ongoing weakness in the housing market, coupled with a sluggish jobs recovery has increased financial pressures on families. Attendees at previous press briefings may recall that at the New York Fed we have a special consumer credit panel that allows us to track these trends closely.3 Since the beginning of 2008, many regional households have been reducing their per-person debt for mortgages, credit cards and auto loans quite consistently. However, the last three to four quarters show signs that households may have reached the end of this deleveraging process. Debt levels have been flat to slightly increasing in both New York and New Jersey – as they have also been for the United States as a whole. Only in Puerto Rico have debt levels continued to decline, suggesting that households on the island may not be finished with their deleveraging. The picture for debt delinquencies is similar. Although still quite high by historical standards, as of the third quarter of 2011, delinquencies were subsiding in New York and New Jersey, as they were for the nation as a whole. Unfortunately, Puerto Rican households stand out as now having a higher delinquency rate than the mainland, New York and New Jersey – and one that is continuing to rise.
In the case of the present crisis, those developments included: low long-term real interest rates associated with high savings rates in emerging market economies; an unusually stable macroeconomic environment, with an associated apparent reduction in risk; and financial innovation which purported to distribute risk more widely rather than leaving it concentrated in the banking system. With hindsight, we now know that much of that financial innovation in fact left risk concentrated in the banking sector; it was in effect simply shifting maturity transformation off balance sheet, where it was not subject to the same regulatory requirements. To that must be added: the underestimation of risk, coupled with inadequate risk management; distorted incentives facing the originators of US sub-prime mortgages and the ratings agencies  1  See page 48 of our August 2008 Inflation Report. 2  One forecasting organisation in the sample was consistently more pessimistic than others throughout the latter part of the sample. Though that organisation therefore did better at forecasting the Great Contraction when it came, it only did so by systematically underestimating growth in the years preceding the crisis. 2  BIS Review 142/2010  responsible for assessing complex structured finance assets. Finally, the complexity of those products and the high degree of interconnectedness between financial institutions meant that the financial system, instead of becoming more stable, had in fact become more vulnerable to failure.

Eddie Yue: Opening keynote - "Scaling up sustainable finance in Asia" conference Opening keynote by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the ASIFMA "Scaling up Sustainable Finance in Asia" conference, Hong Kong, 17 March 2023. *** Alice, Diana, distinguished guests, ladies and gentlemen, Good Morning, Let me start by thanking ASIFMA for inviting me to this Sustainable Finance Conference. It is my great pleasure to share with you Hong Kong's vision and the concrete steps being taken to strengthen our leading role in green and sustainable finance. As we come into Spring after a colder-than-usual winter, this is a good time to talk about the advances that happen when the right ecosystem is combined with the right opportunities. In the financial world, green and sustainable finance brings extraordinary opportunities. And if we are looking for the best ecosystem for these opportunities to flourish, Hong Kong is the place. The climate challenge to Asia is huge, and urgent. Meeting this challenge will require substantial investment – some $ trillion over the next three decades based on market estimates. China alone will require more than 100 trillion yuan. The multi-trillion-dollar funding need can hardly be met by the public sector alone, and climate finance plays a crucial role here. It helps the public sector raise funding from the market to finance climate projects and initiatives. It also mobilises private capital to directly fund climate actions.
Total premiums to GDP increased from 4.1 percent to 4.5 percent over the same period. Structural reforms undertaken has also transitioned the industry towards more market-based pricing mechanisms in key market segments, improved efficiencies in the insurance eco-system, and a strengthened framework for consumer protection. These trends have also been reinforced by liberalisation measures which aim to support and catalyse the further development of the industry. A proposed new legislation for our financial sector is also now well advanced and will provide a solid foundation for the insurance industry going forward. This event is taking place at a time of significant change and in a period of transition into a new era for the financial services industry. We can reflect on these developments in the industry and take the opportunity to learn from the different experiences in the region. While we face different challenges and priorities, the insurance industry in the East Asian economies share three important common goals – sustaining growth and performance under more challenging economic and financial conditions, strengthening the capacity to support and drive economic transformation, and building resilience to withstand future shocks and economic cycles. As we turn our minds to these goals, the question before us is: how should the insurance industry in East Asia, in the period ahead, respond to these demands?

On this note, Ladies and Gentlemen, I have great pleasure in declaring open the Payment Systems Forum and Exhibition 2005. Thank you. BIS Review 84/2005  3
Consequently an increase in the value of a bank’s equity resulting from, say, a rise in the value of its (risky) assets will lead it to expand its debt (through deposit or wholesale funding) and a corresponding increase in its assets, either through extending new loans or acquiring additional securities. So as looser monetary policy boosts asset prices, it encourages an expansion in banks’ balance sheets, putting further upward pressure on asset prices. Leverage targets therefore act as an amplification mechanism. But the number of relatively safe borrowers/projects is limited. So the extension in the volume of loans is also likely to involve moving along the risk spectrum towards more risky borrowers. Looser monetary policy is not the only factor operating through these channels. Two other macroeconomic factors are potentially relevant. First, a number of authors have focussed on the role of international payments flows in the crisis, with capital flowing “uphill” from emerging economies, such as China, into the United States and some other advanced BIS Review 111/2010  3  economies (see, for instance, Obstfeld and Rogoff, 2009, and the references therein). Bernanke (2005) attributes this to a “savings glut” in the surplus countries. Possible drivers include: an inadequate household safety net and restricted capital market access for enterprises in China; the accumulation of precautionary holdings of international reserves by emerging economies following the Asia crisis; and rational savings of the windfall gains from higher oil prices on the part of oil producers.

Corporate bond yields also fell, with investment-grade bonds declining 70 basis points and non-investment grade bonds declining 150 basis points, while the sterling exchange rate depreciated by about 4 per cent. For the United States, Gagnon et al. (2010) adopt a similar approach. They find that, across the relevant set of eight announcements, the Federal Reserve’s purchases of Treasuries and Agency debt/MBS resulted in total falls of 90 basis points in the 10-year Treasury yield, 160 points in the 10-year agency debt yield and 110 basis points in the agency MBS yield. Baa corporate bond yields also fell, by a total of 70 basis points. The size of these effects is broadly comparable to those found for the United Kingdom by Joyce et al. Neely (2010) provides some further evidence, this time relating to the international impact of the Federal Reserve’s large scale asset purchases. He finds that yields on Australian, Canadian, German, Japanese and UK 10-year bonds fell by an average of 45 basis points over the same set of announcements, while the dollar depreciated by 5 per cent. That points to considerable international spillovers from such asset purchases. The bottom line from these studies is the clear indication that asset purchases can be an effective monetary instrument. But should such unconventional policies also be part of the regular central bank toolkit in normal times? At first blush, there seems no reason why they should not.