samchain/econo-pairs-v1 huggingface dataset:
Historically, those two functions have been in conflict; …Broadly speaking, the money expanders have been debtors and the money restricters have been creditors.” As my last speech here at the OMFIF was motivated by the anniversary of the Bretton Woods collapse, I am particularly fond of this observation: “Over history, creditors have tended to impose systems that control the supply of money – the gold standard, the Bretton Woods system of fixed exchange rates, the euro – that prevent borrowers from repaying their debts in debased currencies. The strain of keeping up this discipline is intense in democracies where more people are debtors. The gold standard broke down in the 1930s, Bretton Woods in the 1970s and the euro is struggling today, as is what might be called the post-Bretton Woods system of independent central banks and inflation targets.” 4. And now a few humble observations of my own:  BIS central bankers’ speeches  1  a. Beginning with the fiscal solutions story, this crisis is a deep crisis of the market economy and of financial systems as managed, regulated, and supervised in just a minority of market economies, most of which can now be found in the EU. The USA might have contained the source of the fire, but for three years it has not played a major role in the eurozone and its main role has turned out to be a stabilizing one.

I wonder whether the ECB’s behavior has been limited much more by its status than by the country in which it is headquartered. I suspect even more that Germany’s insistence on strict observance of ECB rules stems from a fear that any lenient interpretation will lead sooner rather than later to the total subordination of minority interests in the eurozone, i.e., the interests of savers, i.e., German interests. i. Anyway, I am afraid that the ability of economic-based reasoning to influence events is gradually declining. Future events will be influenced more and more by decisionmakers’ communications and gestures or by accidents unplanned by anybody. As an example of the latter, consider how Greece’s tourism income might develop this year and the next if its major electricity supplier occasionally switches off supplies due to payment problems, thereby shutting down air conditioning in hotels. j. But now I am straying away from the topic of imbalances, so I’d better pause to venture one final observation. Germany is currently under financial stress and is full of middle-class savers who are angered by the perceived failure of their state. This situation, I believe, has never been in the interests of my country or in the interests of Europe. Some of us may like to contemplate this a bit. Possible questions for the panelists (as I have already spoken enough I will reserve myself for the second round of Q+As): a. How has the financial crisis modified the world-wide pattern of creditor-debtor countries? b.
SPEECH  Climate change and financial integration Keynote speech by Luis de Guindos, Vice-President of the ECB, at the joint ECB and European Commission conference on “European Financial Integration and Stability” Frankfurt am Main, 27 May 2021  Introduction For Europe, financial integration and stability are two sides of the same coin – a symbiotic relationship where greater integration aids stability, and stability underpins greater integration. Equally, financial fragmentation can exacerbate instability, as the global financial crisis clearly showed. Climate change – the topic of this afternoon’s session – poses an emerging threat to financial stability. Yet, as I will discuss in my remarks today, it also presents us with an opportunity to forge deeper integration in order to tackle this common challenge. Policies that foster stronger and more resilient financial integration within the euro area are needed more urgently than ever. Financial integration in the euro area Let me begin with a quick recap of why financial integration matters. [1] When a negative shock hits the whole euro area, monetary policy can act to mitigate the impact on output and inflation. But when a shock hits an individual country or region – known as an asymmetric shock – other mechanisms are required. In this situation, financial integration can help mitigate the impact through improved public and private risksharing. Lower economic activity following the shock typically reduces the profitability of local banks and stymies credit creation.

To banks, we urge you to embrace fintech, and join the CDI platform. To data providers, we invite you to contribute meaningful data, such as logistics data and procurement data between buyers and suppliers, to enrich the types of data available. To SME owners, we encourage you to contact your bank and understand more about CDI. Together, we can take Hong Kong’s data ecosystem to new heights, and ultimately contribute to bridging the global trade financing gap. 15. The benefits of a more digitally integrated trade finance system are plentiful, that much is certain; and the HKMA strives to help bring about an enhanced system in collaboration with different stakeholders. We look forward to working with the International Chamber of Commerce (ICC) and the Fung Group in this regard so that the needs of the underserved segments can be better catered for. 16. Before I close, I’d like to take this opportunity to offer you a glimpse of the HKMA’s vision of digitalising cross-border trade. For those of you who have been following our CBDC developments closely, you will know that we are working on a project called mBridge. We have already developed a trial CBDC platform, and it has proven ability to speed up crossborder payments from multiple days to near real-time. 17. We are now exploring the feasibility of connecting eTradeConnect, CDI, and mBridge to strengthen the synergy between the three and further digitalise the cross-border trade process.
18 Autorité de Contrôle Prudentiel et de Résolution (ACPR) publication ‘Climate change : which risks for banks and insurers’, 04/10/19 19 Australian Prudential Regulation Authority (APRA) letter to firms on ‘Understanding and managing the financial risks of climate change’, 24/02/20 20 Reply to Parliamentary Question on including climate change-related risk in the Monetary Authority of Singapore’s (MAS) annual industry-wide stress test, 04/02/20 21 Speech by Luis de Guindos, Vice-President of the ECB, at the European Savings and Retail Banking Group Conference, ‘Creating sustainable financial structures by putting citizens first’, 21/11/19 17  7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  The scenarios will look ahead decades, not the next three to five years. They require firms to understand how their real economy customers are exposed to these risks and the actions they would take to manage the risks. That will in turn prompt conversations about stewardship to net-zero and what opportunities an orderly transition might bring. At the heart of this is scenario analysis. Most firms have significant gaps in their climate scenario analysis capabilities. That is not surprising given it is a relatively new field.

Role of the Bank of England  That brings me to the role of the Bank. Our work is focused on building resiliency to the risks from climate change into the financial system, so that it can steward the real economy to an orderly transition to net-zero. Being resilient means pro-actively managing climate risks and pre-emptively reducing them. This is central to the Bank’s mission. Indeed earlier this year climate change was made one of the Bank’s strategic priorities.8 I became the Executive Sponsor for the Bank’s work on climate change in 2016, at a time when there was only a handful of people at a handful of central banks working on climate-related issues. But since then the scope and depth of our work and that of other central banks has expanded significantly. We are working domestically and internationally with key stakeholders including government, industry, investors, regulators, and climate scientists to further this critical agenda. 8  Bank of England Annual Report 2020 4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  Climate action at the Micro-level: Disclosure and Risk Management  So what are we asking financial firms to do? Put simply, they need to make financial decisions that take the risks and opportunities from climate change into account. The first step in achieving that is to have the right information. That is why the Bank has been making the case for some time for consistent, comparable, and comprehensive climate disclosures.
In case of global tightening of the financial conditions in the context of tightening of the US monetary policy or a “surprise” tapering by ECB, many countries in the region may face challenges as the external financial exposure of the region is relatively high, despite the recent declining trend. This, in particular holds for the government sector as the process of fiscal consolidation is very gradual and the public debt continues to increase.

By 2050, it is estimated that climate change losses could cost Asia more than a quarter (25.6%) of 2019 GDP.2 4 Insurers are important partners in helping governments and businesses manage physical and transition risks. The FM Global Centre's testing and research on how properties can be impacted by fire, floods and natural hazards at varying levels of intensity, can provide valuable data insights. These data insights can support the development of ex-ante climate risk insurance solutions for businesses in the region. It goes to the heart of insurance solutions – which should increasingly focus on ex-ante risk reduction and loss prevention, beyond just ex-post risk financing. The Centre will also provide hands-on loss prevention education to businesses and individuals, through interactive simulation labs and learning areas. 1/3  BIS - Central bankers' speeches  5 The insurance industry can also play an important role in empowering the development of the green economy in Asia. Singapore, for instance, as part of our energy decarbonisation, aims to quadruple solar energy deployment by 2025. This shift towards renewable energy means that traditional insurance solutions for fossil fuel-based power generation need to adapt to meet the risk financing needs of renewables, or a hybrid energy mix of renewables and fossil-fuel based energy generation. We see more insurers in Singapore, including FM Global, offering insurance covers for solar, onshore wind power generation and batteries, protecting against the risk of fire, natural hazards, and machinery breakdown.
Averagesize farms continue to be relatively small, thus restricting the development and growth of average productivity, or differently known as “the economies of scale”. There are many reasons behind this. We can mention the inheritance of the communist system and the separation of land after its collapse. As it was stated above, the lack of a normal land market also due to ownership problems, naturally plays an important role in establishing larger farms and, consequently, more competitive ones. These problems also affect the agricultural sector-bank relationship and the lending activity at home. The recent data show that lending to the agricultural sector accounts for 1.25% of total lending to businesses, on average. It is a considerably low figure, which should raise our concern, considering that this sector contributes by one/fifth to the gross domestic product. I believe that there are two reasons driving the banking system to be reluctant to finance different projects in this sector. First, risk classification and categorisation for credit to agricultural sector is a commitment different from the other activities. The lack of formalisation, even for matters such as regular maintenance of information and statistics  BIS central bankers’ speeches  3  about ownership, and financial statistics, damage the farmers’ credibility from the early steps of lending. I find that there is room for prudential intervention by public institutions, not to condemn farmers, but to better prepare them and assist them in formalising their business.

This number accounts for 16% of total farms in the country, providing the highest share of income from the sale of agricultural products, and about 20% of Albania’s total income. Related to livestock, Fier, and mainly Lushnja district, have a considerable share in livestock products. As a district, Fier produces 20% of total livestock production (milk), whereas Lushnja produces 9%. The above setting witnesses private efforts and entrepreneurship to develop this sector. In order for this process to go ahead at a more accelerated pace, the policy-makers should identify the advantages and problems this sector encounters, in order to address them quickly. In 2012, the Oxford University published a book focused on economic growth in SouthEastern European region. This book elaborates on a number of structural problems and challenges facing the Albanian economy, in its efforts to develop further. Agriculture has significant share in this analysis. Some of these problems are acknowledged and frequently mentioned, such as the important infrastructure-related issues that include the road, watering, draining, storage and processing systems. Problems with land ownership and the transformation of its function for other activities continue to remain a major obstacle for the country’s normal development, and raise ongoing concerns relating to the price and use of this important factor of production, and further on, to the normal functioning of product markets and other land-related factors. Agriculture is affected by other structural problems that need a long-term solution.
To be realistic, a simple recommendation is all that is in order: those who buy equities bear the price risk themselves. People who, out of greed and carelessness, buy and sell in such a way that they cannot survive a brutal crash have only themselves to blame. They must bear the consequences alone, even if it means their economic ruin. Second, there is also an argument that price stability as the relevant goal of monetary policy should be defined more broadly and measured in such a way as to include the development of important asset  7  BIS Review 35/2000  prices.4 The demand that monetary policy, in its use of the concept of monetary conditions, should not only take account of interest rates and foreign exchange rates but also of equity prices does not go quite as far. On a technical level, such an expansion of the price index would not be a trivial undertaking, but certainly doable. There are some serious economic concerns, however, which are mainly due to the ambivalent nature of equity price fluctuations. Equity prices may rise in anticipation of a pick-up in total demand, which - if anything - would indicate some restrictive monetary policy correction. If the stock market expects business activity to pick up, the central bank will, in assessing the situation, hopefully realise this as well. It is for that purpose not necessary to expand the price index or the monetary conditions index as has been suggested.

For example, in recent years, the UK’s central counterparty for derivatives, London Clearing House (LCH) Limited merged with Clearnet SA, while the Euroclear Group acquired CREST, the securities settlement system for the UK and Ireland. The Euroclear Group currently provides domestic securities settlement services in 5 European countries as well as international settlement services. Such tie-ups are of course an international extension of the microeconomics of infrastructure provision outlined above, exploiting economies of scale and network externalities. But, at the same time, they introduce common business risks and cross-border dependence on core systems, thus providing another channel for problems to spill across borders. Such cross-border linkages consequently add a layer of complexity to supervisory arrangements, making international coordination among the public authorities essential. Linkages arising at the user level are again important here. As banks operate in multiple markets, there is increasing scope for shocks to propagate across borders. That may arise from the increased centralisation of banks’ liquidity risk management. To the extent that banks use the foreign exchange markets to recycle surplus liquidity in one system to meet a shortfall in another, or else take advantage of settlement links between securities settlement systems to transfer collateral across borders, liquidity risk may be reduced. But, to the extent that banks respond to the availability of mechanisms for reallocating liquidity between systems by reducing their aggregate holdings, a bank may be more vulnerable to simultaneous liquidity demands across markets or to operational disruption to such mechanisms.
We cannot write a rule to take care of every situation that may occur, and as a forward looking supervisor we are applying judgement in conditions of uncertainty about the future. How firms deal with the uncertainty of the future will also shape their culture. I firmly believe that what we can best do in this area is to provide a clear sense of direction and guidance through open communication starting with those of us at the top, in which we are clear on what we expect of firms. Open and transparent communication of this sort should then be supplemented by the clear understanding that we will all stick to the script. Trust is important. Consumers need to be confident in the firms that they choose to use, and inevitably trust is an important part of that confidence. Likewise, as supervisors, our judgements are inevitably conditioned on whether we can trust the people with whom we deal. Good culture is a product of trust and it matters a lot for both prudential and conduct regulators. Culture is everywhere and nowhere in firms; everywhere in the sense that it is shaped and determined by all the features of the firm – its people, organisation, reward structures etc; and nowhere because culture is not a tangible thing sitting on a shelf that can be prodded and changed of itself.

We insist that remuneration is structured to ensure that individuals have skin in the game, namely that a meaningful amount of past remuneration is  BIS central bankers’ speeches  1  retained or deferred and for senior people is at risk should problems then emerge. We require that risk management and internal audit in firms are effective and act to root out poor incentives and weak controls. All of this is important and central to what we do as regulators, but let me reinforce the point that culture begins and lives, and I am afraid dies, at home, with firms. It is not for us as regulators to prescribe culture, that would not work. Firms and their management have to want good culture. But we can have a lot of influence here. In the last few months we have taken a very important step here by introducing for banks the Senior Managers and Certification Regime, as proposed by the Parliamentary Commission on Banking Standards. It replaces the Approved Persons Regime, and in time it will be implemented across the regulated financial services sector. There is, let me be clear, no magic bullet to change culture, but the new regime is a big step forward in my view. This is because at its heart it embeds the notion of personal responsibility for the affairs of the firm at the level of senior management. The Approved Persons Regime did not do this, and in practice it focused on a notion of culpability not responsibility.
But many EMEs also recovered quickly because they had the capacity and credibility to pursue countercyclical policies in response to large external shocks to aggregate demand for the first time. On many fiscal metrics, some economies in the emerging world now look in better shape than many of those in the advanced world. This challenges the traditional distinction between developed country and emerging market sovereign creditworthiness. Where the developed world still stands apart is in the quality of its institutions, legal and policy frameworks, and the sophistication of its technologies and markets. But even here the gap is narrowing. The story of the EMEs has generally been an extraordinarily positive one for the world as hundreds of millions of people have lifted themselves out of poverty. Nevertheless, even before the crisis, it was evident that the relationship between developed and emerging economies was becoming strained and needed to be adjusted; the status quo would clearly be unsustainable. Consider, for example, the economic relationships between the United States and China that prevailed over the past decade or so. Some experts have summarized the arrangements as follows. The United States bought Chinese exports at low prices, which bolstered U.S. living standards and held down U.S. inflation. The United States did not take extreme steps to try to force China to revalue the renminbi upward against the dollar, and China, in turn, invested its trade surplus and capital  2  2  Figures are real GDP-weighted indexes for each group. BRICs include Brazil, Russia, India and China.

The rapid spread of the pandemic in March 2020 also led to wide, abrupt swings in financial markets. The global composite equity index fell by 20 percent in 22 days. However, markets recovered rapidly, and by the second quarter the GPFG had posted one of its best ever quarterly results. For the year as a whole, the GPFG’s investments posted an overall return of 10.9 percent before management costs. The return was 0.27 percentage point higher than the return on the benchmark index the GPFG’s performance is measured against. The Executive Board is pleased that a solid excess return was achieved in a turbulent year. The positive trend has continued, and the return on the GPFG in the first quarter of 2021 was 4 percent. The GPFG’s performance must be assessed over time. The Executive Board is satisfied that the return over time has also been good. The substantial market fluctuations in 2020 nevertheless serve as a reminder that the return on the GPFG may vary considerably. The GPFG’s equity allocation is the decision that has the greatest impact on the volatility of the fund’s return. The equity allocation is not specifically assessed in this year’s report to the Storting, but the Ministry has proposed a number of changes in the equities selected to be included in the benchmark index. Norges Bank has provided analyses and advice when requested by the Ministry.