samchain/econo-pairs-v1 huggingface dataset:
31 March 2022  Governor’s speech at the 61st Annual Meeting of the Central Bank of Iceland, 31 March 2022 Madame Prime Minister, other Ministers, Chairman of the Supervisory Board, and other honoured guests: This is my third Annual Meeting as Governor of the Central Bank, but the first one that has taken place in the presence of guests. At the first two meetings, fewer than ten people were present and there was nothing on the tables to quench their thirst but hand sanitiser. Yes, I have twice delivered Annual Meeting speeches to an audience comprising the Prime Minister and the Supervisory Board Chairman and very few others. They are a wonderful audience, to be sure, but it is undeniably more fun to address a full auditorium. But I will take the liberty of saying that I believe those speeches delivered their message effectively. Both of them focused on the COVID-19 pandemic and its implications, and the merger of the Financial Supervisory Authority and the Central Bank. It is hardly surprising that these two topics should have dominated the Bank’s work over the past two years. In addition, the Central Bank turned 60 in 2021, but we were unable to celebrate that milestone because of the pandemic. The pandemic delivered a massive shock to the economy when Iceland’s largest export sector evaporated more or less overnight and unemployment soared to nearly 12%.

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And their co-existence within the Bank of England makes co-ordination of these policies substantially more straightforward. Having supervisors close at hand can also help in the decisions around the provision of lender of last resort facilities. In such a situation, a central bank should not lend to an institution which is insolvent. This means that the Bank will need to make a judgement as to whether or not the entity it is lending to has a viable medium term future, or that the Bank has a credible exit strategy. In practice, distinguishing between illiquidity and insolvency can be difficult. A close understanding of a firm is invaluable in providing the information needed to judge the long term viability of its business model, and in providing short term assessments of its liquidity position. Supervisors are well placed to provide such information and their knowledge of institutions, coupled with our risk managers’ assessment of the collateral made available, greatly enhances our ability to make these judgements. The free flow of such information is of course possible when there is an institutional separation between supervision and the lender of last resort. But my early experience is that having them under one roof greatly enhances our ability to co-ordinate and optimise policy in the public interest. 8  Initially in the form of strengthened FSA liquidity requirements, subsequently the implementation of the Basel III Liquidity Coverage Ratio, which will in turn be supplemented by the Net Stable Funding Ratio. BIS central bankers’ speeches  5  6.

This takes place through bilateral meetings, group discussions, and phone calls, supplemented by all of the screens and data analysis on our modern trading floor. But compared to the time of the “Senior Broker”, the coverage of Market Intelligence has expanded dramatically. The markets in which the Bank operates (i.e. short term money, fixed income and currency markets) continue to provide the natural starting point for our Market Intelligence. But in recognition of the fact that threats to the Bank’s ability to achieve its core purposes can have their origins anywhere, coverage has now expanded to 23 different markets as far afield as structured products and emerging markets, covered by 80 analysts across the Bank for whom MI is a significant part of their job. This first-hand information differs from what can be gathered from our Bloomberg screens, analyst reports, and research – and it provides an important perspective on both short-term moves and long-term trends. It permeates every part of the organisation: every morning the Governors get together to receive an in depth briefing on financial markets from Chris Salmon, the Executive Director for Markets, and part of my job is to brief the MPC on recent market developments and its implications for monetary policy. MI also feeds into more strategic issues and the policy decisions of the Committees.
This expansion reflects the policy adopted by the SNB to combat the rapid and excessive appreciation of the Swiss franc. A number of measures were taken in 2009 and 2010 to counter this appreciation, and these have left their mark on the SNB’s balance sheet. The most important of the recent measures was the introduction of a minimum exchange rate of CHF 1.20 against the euro on 6 September 2011. This exceptional measure was designed to mitigate the risk of deflation  BIS central bankers’ speeches  1  that threatens the Swiss economy. We are convinced that this policy is effective, and we shall continue to pursue it with the utmost determination. Note also that even the role of foreign exchange reserves has changed since the onset of the financial crisis. Until 2008, the aim of foreign exchange reserves was to ensure that the SNB was able to implement its monetary policy unhindered and at all times. At that time, foreign exchange market intervention was virtually non-existent, and discussion focused more on whether to hold foreign exchange reserves or not. Today, given the level of foreign exchange reserves, this question is less pertinent. Instead, the SNB has had to adjust its policy on foreign exchange reserve management, in order to take account of the large amounts involved since 2008. For this purpose, it has amended its investment instructions, and I would like to briefly describe these to you now.

The profitability of about two-thirds of the investments has been evaluated. The calculations capture time saved and reduced costs related to accidents and the environment. Investment costs and future operating costs are deducted. The projects show a total loss of NOK 20 billion. There seems to be few road projects that are economically profitable. A rare example is the Finnfast tunnel project that connects the mainland to the beautiful island group here in Ryfylke. When projects cannot be expected to increase the future revenue base in society, it is important that the investments are financed from current government revenues within a long-term and sustainable framework. Alternatively, projects that involve a large number of users can be financed by user fees. A road, infrastructure or research reports for that matter can provide benefits and satisfaction over time, but they are not liquid and do not generate a flow of returns that can be used for spending. If the investments are made at the expense of the savings plan for the sovereign wealth fund, future generations will have to bear the cost. 6  Professor Thore Johnsen has brought to my attention that the government discount rate is calculated using an arithmetic mean, while the return on the oil fund is measured as a geometric mean. If the fund’s return had been calculated using arithmetic mean, the return would have been about 0.7 percentage point higher for the period 1998–2009.
We have witnessed many brand names that had disappeared because they have not changed and have not been sensitive to the ever changing operating environment surrounding their businesses. The message is simple, if we do not change, do not transform ourselves and we remain static, we will be left behind and eventually perished. And the rapidly changing economic and operating environment shall ensure this eventuality if we remain static. Despite the many structural changes over the last 3 decades, one principle will always remain, TRUST. The Malaysian insurance and takaful industry can make a difference by building a strong brand in trust and a firm conviction that the industry’s existence is to serve for the betterment of society. A policyholder buys a policy predicated on one sole reason, the trust he places on the industry’s ability to protect his financial interest. Building trust is not an option, it is a cardinal rule. Tonight, I would like to share with you seven points which I believe would increase the level of trust in the industry. Continue to strengthen capacity to fulfil objectives The industry today has achieved many milestones as a result of capacity building measures undertaken ever since the Bank took over as the regulator for the industry. The capacity of the industry has improved significantly. However, many issues still plague the industry today. Issues such as fraud, theft, lingering claims in court and delay in settlement of claims are some issues we need to tackled.

Instead, the industry must continuously evolve to meet the needs and preferences of its consumers which are rapidly changing. It must proactively and strategically position itself to offer products via diverse and innovative delivery channels to reach out to different segments of the population with varying levels of financial knowledge. In this regard, under the LIFE Framework, the Bank envisions the market share of regular premiums/ contribution products sold/ marketed via non-agency channels to exceed 30%. Currently the ratio is 14%, and this statistic provides compelling evidence that the industry must double its effort to reach the target of 30%. Similarly, for us to expand the penetration rate to reach 75% by 2020, the industry must add and expand the reach of its non-agency channels. Throughout the world today, financial inclusion has been identified as an important area of focus to achieve a more balanced and sustainable economic growth. Societies that are adequately empowered and supported by suitable financial tools can assist in helping them cope during temporary period of emergencies. Empirical evidence showed that microinsurance customers can be as valuable as a company’s any other customers. This is where the industry can play a major role to develop suitable microinsurance/ takaful products that would enhance the social safety net of this underserved segment enabling them to get back on their feet and become financially independent even after experiencing an adverse event. Yet many in the industry appears uninterested in microinsurance/ takaful for reason that it is a loss making venture and uneconomical to pursue.
As Asia makes further progress in financial reform and toward more flexible exchange rate regimes, it will be in a better position both to deal with the inevitable challenges that come with economic and financial integration, and to make the necessary transition to stronger domestic demand led-growth, which will prove a more sustainable foundation for future improvements in living standards. Thank you. 4  BIS Review 65/2007

The reason for this is that a significant part of firm-specific variation in productivity is absorbed by firms in their profits or reflected in their prices. The reason is that firms’ profits and prices absorb a significant part of firm-specific variation in productivity. Many of the workers in the more productive tail of firms are being underpaid relative to their average productivity, which results in frontier firms making a larger profit share. The opposite is the case at the other end of the productivity distribution. 55  For example, Furman and Orszag (2016) There is time series evidence to suggest a strong historical relationship between aggregate productivity and real wages. For example, Castle and Hendry, Blundell et al (2013) and Disney et al (2013). 56  17  All speeches are available online at www.bankofengland.co.uk/speeches  17  57  This analysis focusses on differences in pay across firms. But what about pay within firms? We can  examine this by tracking differences between the average pay in each company and the pay of their highest paid director. Chart 28 plots the median across firms of these series over time, while Chart 29 compares the variance of each series as well as the gap between average pay and the highest paid director. Since 1998, the variance in average pay and director pay has increased across firms, although it has fallen notably since the financial crisis. The median gap between average pay and director pay has followed a similar pattern.
Introductory Speech by Prof. Edward Scicluna Governor of the Central Bank of Malta The Institute of Financial Services annual’s seminar: “The ESG Journey: a Pulse Check for the Maltese Economy”. St Julian’s, Malta 11 November 2022 Ladies and Gentlemen, good morning I would like to thank the Institute of Financial Services and in particular its President Kenneth Micallef, for their kind invitation to address this distinguished audience. It is becoming increasing apparent that climate change is one of the greatest, and most immediate, threats faced by mankind. So I do not need many explanations why today I shall put the emphasis on the “E” of ESG, namely on the environment and on the fundamental transformations that lie in front of us. This is not to underestimate the role of the Social and the Governance  elements: matters of inclusiveness, labour relations, equality and the conduct of public and private institutions are proof that sustainability extends well beyond the environmental question. But Global temperatures are rising – 2010s was the warmest decade on record and extreme weather events have doubled compared to forty years ago. Decades of scientific research have established that greenhouse emissions associated with human activity are behind climate change. 1  Only a coordinated international endeavour can deliver the necessary shift away from fossil fuels. This urgency led 196 parties to sign the 2015 Paris Agreement to limit the increase in global temperatures.

It will also affect industries like construction, which rely on outdoor work. Lower income countries are particularly vulnerable to global warming, while coastal states are vulnerable to rising sea levels. These shocks to output cannot but have significant implications for prices. Climate change will impact how the economy operates and will exert a substantial influence on price dynamics. Indeed, given the Eurosystem’s primary objective is price stability, it is important for monetary policy makers to be aware of these effects as they set the policy stance. Monetary policy is going to be affected by climate change, as well by the measures taken by governments to address it. First, climate change will affect the structural parameters of the economy. One key parameter is the natural rate of interest. The natural rate of interest is fundamental notion of central banking. When interest rates lie below the natural rate, monetary policy is accommodative, and vice-versa. In turn, the monetary policy stance has an impact on the price level. There is uncertainty over the direction of the impact of climate change on the natural rate- our r star: climate factors could contribute to the secular decline of natural rates in line with prevailing structural trends such as demography. Conversely, higher investment to combat emissions could lead to a rise in productivity which may push up r-star. 3  Second, climate change will alter the transmission mechanism of monetary policy. The value of assets posted as collateral by financial intermediaries could decline due to the higher frequency of extreme weather events.
There remain significant challenges in tracing how nature loss transmits to the economy and financial sector. Knowledge, data, methods, and models in this area are still largely evolving, even compared to that of climate risks. This report is therefore exploratory, and is meant to contribute towards building a deeper understanding of risks and opportunities in this complex and intricate area. We remain some way from being in a position to develop more explicit supervisory and regulatory expectations – but we believe this work makes an important contribution to our thinking and approach to managing climate and nature-related risks in a coherent manner. Importantly, the financial sector needs to come to grips with the reality that like climate, nature-related risks are already presenting a significant threat to our economies and society that can no longer be ignored. The findings of this report lend impetus to the need to strengthen capacity in this area. The scientific community continues to issue the ‘code red for humanity,’ and with recent events, including the pandemic, floods and bushfires, the message could not be clearer. Ecosystem and planetary health matters to economic and financial stability. While the primary responsibility for addressing these priorities rests with governments, the financial industry and authorities have a critical interest in deepening our understanding and appreciation of the interactions between climate and nature-related risks – because how these risks evolve both affect and are affected by the actions of financial institutions.

Biodiversity, which is the variety of life on Earth, is declining faster than at any other time, in human history. One-quarter of species globally are threatened, and around one million animal and plant species face extinction.1 Many of the natural ecosystems that provide us with clean water, fresh air, and food are in decline. This poses significant risks to economic activities, as it is estimated that more than half of the world’s GDP is moderately or highly dependent on nature.2 There are major challenges to achieving the Sustainable Development Goals, with over two billion hectares of land on earth degraded, affecting the lives and livelihoods of some 3.2 billion people.3 For example, the SDG goals of decent work and economic growth4, as well as good health and well-being5, cannot be achieved if the degradation of life on land and life below water,6 are not addressed. The NGFS7 Study Group on Biodiversity and Financial Stability, of which the Bank is a member, has investigated growing evidence that biodiversity loss has implications on the economy and financial stability. Exploratory studies have also been conducted in the Netherlands, France, Brazil, Mexico – and now Malaysia – to understand the dependencies and impacts of the financial sector on biodiversity. This growing body of knowledge around climate and environmental risks, highlights the fact that climate change and the loss of nature are inseparable concerns. Nature loss compounds the effects of climate change, and climate change drives nature loss.
Most retail deposits can be withdrawn overnight and are remunerated at very low short-term rates. Nevertheless, in practice, they are a sticky or stable form of funding, unless there is a banking crisis. These features allow banks to offer loans with longer maturities and keep only a fraction of the face value of deposits created in this way in central bank “reserves”. This is the basis of fractional-reserve banking. 15. Individual banks can respond to outflows in a number of ways in the short term, for instance by (i) using the bank’s existing central bank excess reserves that it holds on its balance sheet, thus reducing its holding of excess reserves; (ii) acquiring reserves from other banks in the interbank market, by either selling assets or borrowing, which can be secured or unsecured and of different maturities; and (iii) obtaining more reserves from the central bank by either selling assets or using them as collateral for secured borrowing. 16. An individual holding limit is the maximum amount of a retail CBDC that can be held by each end user. See the digital euro glossary. 17. A retail CBDC remuneration rate is an interest rate applicable to retail CBDC holdings. Remuneration is considered tiered if interest rates applicable to holdings are differentiated across holding buckets defined using thresholds. See the digital euro glossary. 18. The design of a digital euro would likely include a combination of tools, even if not all are necessarily activated at the time of issuance. 19.

[6] The entire monetary and financial sector would be deprived of its anchor – central bank money – and would be exposed to potential instability. [7]  It is also conceivable that non-European digital payment solutions and technologies operated abroad might dominate our payments market, as we are already seeing in some segments like cards and online payments. This risk would be exacerbated by the expansion of means of payment offered by big techs, which could use their very large customer base to their advantage. This would raise questions about our autonomy and privacy in payments. It could even endanger European sovereignty. [8] Moreover, the international monetary system may see the emergence of central bank digital currencies (CBDCs) in large economies. Such CBDCs would offer benefits in terms of efficiency, scalability, liquidity and safety that would support their attractiveness internationally. And they would have the potential to facilitate cross-border payments, which may enhance their role as a global payment unit. [9] In such a context, not issuing a digital euro could undermine the international role of the euro and create additional risks to sovereignty. This scenario is not imminent, but it could potentially materialise in the future if we do not start acting today. And if we don’t act, we will also see increasing confusion about digital money. Crypto-assets are a case in point. [10] Unbacked crypto-assets, for example, cannot perform the functions of money. They are neither stable nor scalable. Transactions are slow and costly.