samchain/econo-pairs-v1 huggingface dataset:
Digitalisation is an ambivalent process in that it also offers banks tools to control these risks. For example, artificial intelligence is a valuable tool in the prevention of money laundering and terrorist financing, as it can be used to analyse large volumes of data quickly in order to spot unusual transactions more swiftly. 1.2 Vulnerabilities in relation to the transition to a sustainable economy [SLIDE 3]  The other structural challenge, namely the green transition, exposes banks to a number of vulnerabilities. The exposure of banks to climate-related risks is now well established, in part thanks to work by the Network of Central Banks and Supervisors for Greening the Financial System, or NGFS. In particular, banks may be exposed to physical risks and transition risks. Physical risks stem from the rise of extreme weather events such as droughts, flooding and storms. These events can weaken the businesses and households to which banks are exposed, potentially generating losses. Transition risks are related to the measures that are taken by public authorities or the private sector to support the move to a low-carbon production model, which oblige economic participants to restructure their activities and cause some assets to become impaired. Coal mines, for instance, are destined to become stranded assets. Since transition risks materialise over a longer time horizon and are less visible, they are challenging to identify and model. In addition to climate risk, the financial system is also affected by the risks linked to ecosystem disruption, such as biodiversity loss.

Denis Beau: What role should banks play in the twin digital and climate revolution? Speech by Mr Denis Beau, First Deputy Governor of the Bank of France, at the conference at the Jean Monnet University, Saint-Etienne, 15 April 2022. * * * Accompanying slides can be found on the Bank of France website. [SLIDE 1] Students, faculty, ladies and gentlemen, We now have sufficient distance to say that, if the health crisis unleashed by Covid-19 was not compounded by a financial crisis, this was in part because our prudential framework has made banks considerably more resilient. The new framework, coupled with the exceptional support measures introduced by governments and the European Central Bank (ECB), enabled banks to continue financing businesses during the health crisis. Today, it is enabling them to cope with the economic and financial impacts linked to the war in Ukraine. That being said, for this new architecture to be consolidated, the Basel III Accord still needs to be fully implemented in a manner that is fair, reasonable and definitive. Yet this strengthened abilities to withstand shocks cyclical crises must not blind us to more structural vulnerabilities, which the health crisis has helped to amplify, I am thinking in particular of digitalisation and the transition to a sustainable economy.
The unprecedented high international oil prices, the unfavourable security situation due to heightened terrorist activity, the unforeseen investment needs in the post tsunami reconstruction, the ending of the debt moratorium that was granted in the wake of the Tsunami and the intense export competition arising from the elimination of textile quotas, all left its mark on the economy in 2006. While each of these challenges were very serious, let me briefly deal with the special challenge arising from the uncertain security situation as a result of terrorist attacks launched by the LTTE from early January 2006. In face of these attacks, even reluctantly, this threat had to be faced head-on and the terrible attacks had to be repulsed by the Government. Such efforts obviously required the appropriation of a significant amount of resources, a part of which could have been otherwise available for more productive activity. Nevertheless, no responsible government could ignore persistent and delibarate attacks against the country’s integrity, defence, economic centers and public, and hence, as has been done in many countries across the world, the key economic centers and the public has to be safeguarded from the terrorist attacks through the implementation of the necessary anti-terrorism initiatives. In that context, the governmental interventions to protect the interests of the country, and its economic infrastructure should be clearly recognised as a basic imperative in the overall defence as well as macroeconomic plan of the nation.

We must also remember that our external environment may not always and necessarily be ideal. But we would do well to remember that ours has been and is a resilient economy. We have shown that we can grow even in the face of highly adverse circumstances and scenarios. In that context, we would be wise, if we do not develop our economic plans on the overriding assumption of a totally terrorism free environment. Of course, if the peace process is successful and a early political solution is found to the on-going conflict, it would be highly desirable. But at the same time, if we consciously develop our plans and frameworks on less than perfect conditions, we could still find ways and means to succeed and deliver the planned results. We owe that to our people, who cannot and should not have to wait until everything falls in to place. Therefore, our future strategies should be aimed at moving ahead even in the face of threats of terrorism and other adversities without setting out as a pre-condition, the achievement of a permanent peace or ideal conditions to embark on our development projects and programmes. We are also working today on the basis that all our strategies would be of no avail, if we are not sufficiently committed to achieving those plans. We know we are serious in our efforts. We also have to show we are serious.
Today, we can look back on a period of more than three years in which the ECB has successfully pursued a stability-oriented single monetary policy serving more than 300 million citizens. And we all have the tangible proof of Monetary Union in our pockets, following a highly successful cash changeover process which represents another historic milestone in the process of European monetary integration. Indeed, already now the level of cash payments in euro is close to 100% in all the countries of the euro area. This means that the cash changeover can be considered as good as complete, i.e. well before 28 February, after which date the legacy currencies of the euro will no longer be legal tender in any euro area country. Together with the Treaties founding the European Communities, the Maastricht Treaty is one of the most important and visionary legal texts in the history of the European integration process. With the euro, the Treaty offered tangible proof of what the vision of European Union is about, namely bringing the people of Europe closer together and ultimately facilitating their lives. Having been instrumental in laying the foundations for the euro, the Maastricht Treaty will remain vital and indispensable for the successful functioning of EMU. The medium-term macroeconomic policy framework laid down in the Maastricht Treaty has contributed to a stable macroeconomic environment, and will continue to do so. In addition, the Treaty provides for a clear allocation of responsibilities between EU institutions and Member States, as well as clear mandates for all involved.

At the same time, supervisors will benefit from easier exchange of information. And the framework offers the flexibility to incorporate future modifications with lower costs. Overall, these positive effects should lead to higher quality in the information flows generated. I should say at this point that neither of these projects has been easy. If you consider that the European Union is currently made up of 25 countries, you can well imagine that the starting situation was complex, with each country requiring its banks to submit different information. In fact, the differences were not limited to the definitions used by each Member State, but also related to the reporting systems, and the technologies and formats used. But I would argue that it has been a very worthwhile initiative, and one that will reap benefits for years to come. 3  Increased reliance on business information  Let me turn now to the third element that I believe is important for success. I believe that regulators should put increased reliance on information generated and used by institutions within their own business. Let me set the context for this remark. I don’t think it is an exaggeration to say that, over recent years, the Basel II initiative has driven a paradigm shift in regulatory attitudes. Regulation used to be something that was rather imposed on institutions “to be complied with”, and seen by them as completely separate from their own internal business processes, and therefore an additional cost.
But we can likely manage these risks by designing the retail CBDC with sensible safeguards, such as stock and flow caps on the amount of digital Singapore dollars that anyone is allowed to place with MAS. On balance, the case for a retail CBDC in Singapore is not urgent. • For a subject that has attracted much attention, there are neither strong reasons for or against a retail CBDC in Singapore. Why do I say that? • Physical cash is likely to be with us for quite some time more and so the need for a digital version of cash is moot at this point. • The financial inclusion benefits of a digital Singapore dollar are not compelling. A high proportion of Singaporeans have bank accounts and electronic payments in Singapore are pervasive, highly efficient, and competitive. • Possible currency substitution by foreign digital currencies is a remote tail risk at this point. The issuance of a retail CBDC is ultimately a socio-economic rather than a monetary consideration. Moving to a fully cashless society with all money in the form of bank deposits will not make a significant difference to the conduct of monetary policy. The question is whether the public is comfortable with holding only bank deposits and whether there is public demand for a state-issued currency that is as safe as cash but in digital form. So for now, there is no strong case for a retail CBDC.

We, at the Banque de France are very attentive to those issues because our institution has been entrusted by law to support financial inclusion. Our contributions in that area are today quite diverse and are a major part of our mission to provide services to the public, in the line with three major objectives: improving fair access, preventing inequalities of treatment and improving financial literacy. As regards fair access, one good example is the Banque de France’s involvement in the “right to an account” procedure set up by French law. If banks refuse to open a bank account for a client, he or she can make a request to us and we will designate a bank within 24 hours. This specific bank account will provide basic services free of charge. In 2019, 51,000 people made use of that right. As regards the second objective to help preventing inequalities of treatment, the Banque de France is involved in preventing and addressing households’ overindebtedness issues. Along with other stakeholders, we help them find solutions to their financial difficulties. In 2019, more than 150,000 such situations were examined. The Banque de France also chairs the observatory for banking inclusion, which is in charge of promoting financial inclusion and especially of monitoring the banking industry’s commitment to cap payment incident fees for all financially vulnerable customers. Lastly, the Banque de France promotes financial literacy, through its role of national coordinator of involved stakeholders, by providing specific tools, resources and training for social workers. II.
Further, so as to reinforce the investor protection function, we should also explore the possibility of incorporating into the new framework a reinforced system for resolving conflicts between BIS central bankers’ speeches  5  financial institutions and their customers – the current claims systems – that would provide for the issuing of binding rulings for the institutions concerned. Final remarks Ultimately and unquestionably, notable steps have been taken to adjust the organisation of financial supervision in Spain to the new demands of the regulatory and institutional environment in Europe. That said, drawing on the reforms successfully applied in other jurisdictions akin to ours, it would be worth reflecting on additional changes that contribute to facilitating the preservation of financial stability, suitably protecting investors in and users of all types of financial services, ensuring the proper functioning of markets and providing for the effective management of financial crises with the minimum possible cost to taxpayers. In that connection, the right choice must be made in assigning specific objectives and instruments to the different agencies so that potential conflicts of interest may be mitigated while maintaining an appropriate level of institutional efficiency and ensuring the functional and economic independence of the supervisory bodies. I believe that the costly financial crisis we have just experienced is the best possible motivation for undertaking this reform when circumstances so allow it. 6  BIS central bankers’ speeches

Thus, it is not surprising that Puerto Rico did not see the sharp spike in loan delinquencies that many areas saw from late 2007 to early 2009. Instead, Puerto Rico’s delinquencies on household debt – that is, the proportion of debt where payments are 90 or more days late – have risen gradually as the recession has persisted. In 2005, households were behind on about 5 percent of the total debt. As of 2010, they were delinquent on about 9 percent of the debt, about the same as the national average – reflecting the stress imposed on many families by the deep and long recession. The outlook and exports Looking ahead to the rest of 2011, I see grounds for cautious optimism. In particular, exports, which have been so important to the economic recovery on the mainland, have the potential to contribute to growth here in Puerto Rico as well. Currently, Puerto Rico runs a sizeable trade surplus, selling more products to the world than it buys. In 2009, the latest year for which full-year data are reported, the value of exports was roughly $ billion compared with roughly $ billion of imports. Based on data through November, exports grew briskly, by about 10 percent, in 2010. What does Puerto Rico export? Pharmaceuticals are by far the island’s largest export. In addition, Puerto Rico is a successful exporter of medical equipment, computer and electronic products, and electrical equipment.
The financial crisis has followed a familiar pattern Our actions during a financial crisis are very important, but the main task in our work on financial stability must be to prevent crises. History has shown that financial crises arise when financial imbalances have built up over a long period. Our most important task is therefore to contain the build-up of imbalances and secure a robust financial system. No two financial crises are alike. However, similar features can often be identified in the runup to the crises. This slide illustrates three features. These elements were also prominent in the unfolding of the most recent global financial crisis.   The first feature is often a sharp and persistent rise in property and other asset prices.   The second, strong debt growth, is closely linked to the first. Rising debt and increasing property prices is a mutually reinforcing dynamic. Higher property prices lead to higher collateral values for loans. With easier access to credit, purchasing power increases.   Debt growth exceeds growth in bank deposits and banks must increasingly resort to market-based funding to finance the rise in lending. They become ever more reliant on market funding, which is often short term. When this cycle is allowed to continue for a period, the financial system becomes vulnerable.   Banks accumulate large loans secured on inflated collateral values.   Borrowers’ debt-servicing capacity becomes vulnerable to income loss.

  Banks become dependent on optimal market functioning at all times and on the confidence of market participants. BIS central bankers’ speeches  1  If this process goes too far, an external shock could turn a situation of vulnerability into a crisis. This is what is referred to as systemic risk – the risk that shocks will weaken the functioning of the financial system, rendering it unable to provide funding, execute payments or redistribute risk effectively. Systemic risk can build up over time through a rapid rise in asset prices and debt and in the form of increasing interdependence among institutions. Or systemic risk can build up when many institutions are exposed to the same risk factor, for example on the funding side. Vulnerability also in Norway A financial crisis can be triggered by domestic conditions or it can be triggered by external factors. This time, the crisis came to Norway through external channels. International funding channels dried up, creating a liquidity crisis in the Norwegian banking sector. We can never fully insulate the financial system from shocks. But we can increase our resilience. One of the ways we can do this is by keeping our own house in order – by preventing major imbalances from building up in the economy or in the financial system, and by ensuring that the financial system in general is robust. We will then also be capable of withstanding disturbances generated by external conditions.
There will also, eventually, need to be a way to scale back the extraordinary levels of liquidity support provided by central banks during the crisis. The Bank of England has lent, and continues to lend, over £ billion pounds through our repo operations and the Special Liquidity Scheme. And a backstop of further liquidity support is still available if the system  BIS Review 32/2009  7  requires it through our discount window. The Federal Reserve has lent more than $ billion dollars, and the ECB around € Relative to GDP, the balance sheet of the three central banks has broadly doubled during the crisis. But in providing this support, central banks cannot offer long-term funding and should not offer support against assets that are unlikely to have a viable future in the absence of official intervention. At some point central bank balance sheets will need to contract. Finally, although I have stressed the need to take time to think through carefully the long run reforms required, we need to commit now, while the political will exists, to a process for decisions on long-term reforms in key areas such as bank regulation, reform of the international monetary system and the governance of international financial institutions. Conclusions Why did no one see this crisis coming? In fact, most of the underlying causes of the crisis attracted attention from economists, central banks, international financial institutions and regulators. But the difficulty of overcoming coordination or collective action problems meant that nothing was done.

This evening, it is my honor to share with you my thoughts on the recent economic developments and the way forward for the Thai economy, which I believe is at the heart of Japanese businesses in Thailand, as much as it is at the heart of us at the Bank of Thailand. In the first part of my talk, I would like to recap the current global market developments and highlight Thailand’s financial strength as we venture through the world of volatility. Second, I will share the Bank of Thailand’s view on the country’s current economic conditions and outlook. I will then turn to discuss key initiatives and factors to drive the Thai economy forward, in particular how Thailand is working towards becoming a regional connector for trade and financial services. Let me start by talking about global volatility Ladies and gentlemen, The year 2016 started off with growing concerns about the global financial markets, with significant spillovers to stock markets, exchange rates and commodity prices across emerging economies. What brought about heightened volatility in the global markets? I would like to highlight three key sources at play. The first factor is inevitably China. Large fluctuations in its financial markets reflected investors’ concerns on slowing Chinese economic growth and policy responses. More importantly, China’s economic restructuring, with transitions from investment to consumption, and from manufacturing to services, has altered growth pattern and created enormous uncertainty to the world economic recovery as well as the global financial markets.
This is essential if we are to avoid distortions in the convergence of competitiveness and therefore prevent a reemergence of the problem of growth moving towards certain parts of the eurozone to the detriment of others. In structural terms a decisive move in this direction was the agreement on banking union which will break the negative feedback loop between banks and sovereigns and will ensure the efficiency of the single monetary policy. Last but not least there was the new concept developed by the ECB saying it was determined to do whatever it took to ensure the stability of the euro. The concept of the OMT has the merit of making it difficult for the market to fight the central bank once it has expressed a determination to do whatever it takes to achieve a certain goal. On the other hand, the OMT is also credible because of the conditionality. It’s not a case of simply endlessly signing cheque after cheque. It is framed within the context policies which are geared towards sustainability. Finally, of course there is the permanent backstop of the ESM. So I think that when we look at all these decisions they amount to a very comprehensive package which addresses all the doubts and questions which have been raised since the start of the sovereign debt crisis. Therefore it is quite natural that 2012 is considered by market participants to have been a landmark in the creation of a new era for the eurozone.

Even so, in 2020 as a whole, GDP in Latin America contracted by an unprecedented 7.4% according to the International Monetary Fund (IMF). The adverse effects of the pandemic have been uneven across the region’s economies, largely reflecting the stringency of the restrictions adopted by the authorities in each country. Likewise, the characteristics of the productive structure in the region, broadly  3  speaking, and in the different countries, in particular, have shaped the pandemic’s impact.5 For instance, some economies have strong trade links with China (e.g. Chile and Peru) or the United States (Mexico); their recovery in external demand therefore differs as a result of the distinct recovery trajectories followed by those global economies. Exports of transport and tourism services, two of the sectors hardest hit by the health situation, account for a notably large share of the region’s trade (13% in the case of tourism). Furthermore, the price dynamics of commodities, which make up a considerable portion of exports, are influencing the recovery in some countries. Economic policy support has been crucial in mitigating the impact of the health crisis. The authorities very swiftly and forcefully adopted highly expansionary fiscal and monetary policies thanks to the institutional credibility gains made in recent decades. For instance, the governments of Brazil, Chile, Colombia and Peru introduced fiscal measures aligned with those adopted by the advanced economies.