samchain/econo-pairs-v1 huggingface dataset:
Whereas in previous years it barely registered as a risk, now close to a third of global CEOs are ‘extremely concerned’ about the threat climate change poses to their organisation’s growth prospects. 4  A transition in action So how far is this transition in thinking translating into action? First, governments. In reaching agreement in Paris, global leaders took political action to mitigate the catastrophic impact of climate change. They committed to curbing carbon emissions to limit the rise in global average temperatures relative to those in the pre-industrial world to 2°C, and to pursue additional efforts to limit the temperature increase to 1.5°C. Governments are taking some of the necessary policy actions. For example, in the UK, the Government published its Clean Growth Strategy last year, including policies to make homes, businesses and transport more energy efficient, and to lower the carbon intensity of the UK’s energy supply. EU Emissions Trading Scheme (ETS) reforms agreed last year, and due to come into effect from 2021, have driven carbon prices above € per tonne for the first time in six years. Even so, the national determined contributions towards meeting the Paris goals, summed to no more than 2.7°C, making it clear climate policy will need to tighten further if the Paris commitments are to be achieved. 3  It also sees $ trillion of investment in clean energy technologies and energy efficiency – and the share of oil and coal in power generation falls to 6%, which is burned with accompanying carbon capture and storage technology.

A Transition in Thinking and Action  Remarks given by Mark Carney, Governor of the Bank of England  International Climate Risk Conference for Supervisors, De Nederlandsche Bank, Amsterdam 6 April 2018  I am grateful to Alice Carr, Edd Denbee, Tanveer Hussain, Carsten Jung, Krish Kistnassamy, Alex Michie, Alex Ntelekos, Dimitris Papachristou and Matt Scott for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/speeches  It is a great pleasure to be here in Amsterdam, at the International Climate Risk Conference for Supervisors, jointly organised by the De Nederlandsche Bank, the Banque de France and the Bank of England. In my remarks, I will take stock of the progress made in addressing climate-related financial risks since the Paris Agreement of late 2015. In particular, I will consider how far there has been a transition in thinking and action. As we’ve heard today, the thinking has coalesced around three channels through which climate risk affects financial stability: -  the physical risks that arise from the increased frequency and severity of climate- and weatherrelated events that damage property and disrupt trade;  -  the liability risks stemming from parties who have suffered loss from the effects of climate change seeking compensation from those they hold responsible; and  -  the transition risks that can arise through a sudden and disorderly adjustment to a low carbon economy. The last risk is the most challenging.
BIS central bankers’ speeches  9  Table 1  International baseline scenario assumptions 2009  2010 (e) 2011 (f) 2012 (f) 2013 (f) Sep. Dec. Sep. Dec. Sep. Dec. 2011 2011 2011 2011 2011 2011 Report Report Report Report Report Report  Terms of trade Trading partners' GDP World GDP at PPP World GDP at market exchange rates External prices (in $  4.6 -0.4 -0.7 -2.3 -6.2  23.8 6.1 5.0 3.9 5.8  LME copper price $ WTI oil price $ Gasoline parity price $ Libor $ (nominal, 90 days, %)  234 62 471 0.7  342 79 598 0.3  (annual change, percent) -1.8 -2.9 -5.3 -6.7 4.2 4.2 4.3 3.8 3.9 3.8 4.0 3.5 3.0 2.8 3.3 2.7 9.8 9.8 2.9 1.3 (levels) 415 401 370 350 93 95 89 100 816 804 797 784 0.3 0.3 0.3 0.3  -2.6 4.6 4.5 3.7 2.1  -3.5 4.2 4.1 3.2 2.1  350 91 774 0.3  340 96 748 0.3  (e) Estimate. (f) Forecast. Sources: Central Bank of Chile based on sample of investment banks, Consensus Forecasts, IMF, and statistics bureaus of respective countries.

Our challenge in the coming years will be to consolidate this Board, in order to enhance our assessment of risks threatening the stability of the Chilean financial system. Lesson number two is that, in the face of threats to financial stability, preventive actions work best, seeking to anticipate the problems. The costs of a crisis of this nature are high and long-lasting, so even at the risk of being mistaken, we’ll rather be safe than sorry. Still, the interest rate as an instrument is neither sufficient nor necessarily effective in preventing financial imbalances to develop. More focused instruments are needed – ranging from financial regulation to given the market clear signals of the risks –, which permit to take direct action on the problem. Given the nature of the regulation and supervision framework of the Chilean financial system, every now and then this policy will call for close coordination between the Central Bank and the Superintendences. Lesson number three is that, during episodes of financial stress, the Central Bank also requires using a battery of instruments – aside from the short-term interest rate – to help stabilize the economy. During the crisis of 2008–2009, the Central Bank of Chile introduced new tools to inject liquidity into the economy and enhance the effectiveness of its monetary policy making. Also, in 2008 and 2011, we intervened in the forex market, obeying both to a prudential motivation (i.e., accumulating more international liquidity) and to a conjunctural one: the evolution of the real exchange rate.
As the world progresses toward increasingly integrated financial and goods markets, other things being equal, we would expect to see an increase in the number of countries with surpluses or deficits, and larger surpluses and deficits, as flows of both assets and goods work to equalize desired saving and investment around the world. If we were confident that the imbalances we observe simply reflected a more efficient allocation of the world’s stock of saving to its most productive uses, if relative prices adjusted freely in response to changing fundamentals, and if economies were flexible and agile in adapting to those changes, then we might also reasonably expect these imbalances to rise and fall through smooth and gradual adjustments in relative prices and flows of goods and services. Of course, this is not quite the world we live in today. The fact that we’re discussing the issue of the sustainability at all reflects concern that the pattern of global capital flows we see today in unlikely to be consistent with the likely evolution of economic fundamentals over time. This suggests that it is worth focusing attention on the sustainability of the forces behind these capital flows rather than simply concluding from the favorable assessment of underlying risk and return in today’s financial prices that these imbalances can persist for a protracted period of time.

In a few moments the HKMA will be signing a Memorandum of Understanding with each of them to formalize the framework of cooperation. 4. Now I would like to report on the latest progress of four major fintech projects launched by the FFO earlier. First, following my announcement of the launch of the Cybersecurity Fortification Initiative (CFI) in May, the FFO has been making very good progress in developing the three pillars of the CFI. A three month industry consultation of the first pillar of CFI, the Cybersecurity Resilience Assessment Programme, was completed in August, with positive responses from the banking sector. Taking into account the comments received, the FFO is finalising the Assessment Programme and will announce the detailed framework next month for implementation by banks in Hong Kong. Regarding the second pillar of the CFI, the Cybersecurity Intelligence Sharing Platform, again good progress is being made. The computer platform will be in operation and available to the banking sector next month as planned. The last pillar of the CFI is the Professional Development Programme, a training and certification programme for the cybersecurity professionals. A six-week consultation with the cybersecurity professionals and industry associations was conducted in the summer. The industry in general welcomes the programme and has suggested the need to recognise certain equivalent qualifications in the market for conducting the cybersecurity assessment and testing. We agree with this suggestion, and have already formed an industry expert panel with the task of identifying equivalent qualifications and working out the implementation details.
Which digital challenges can the interested parties manage on their own? And where might shared solutions be beneficial for all concerned? Ultimately, we have a common goal: to maintain confidence in our currency. Against this backdrop, an efficient and secure payment system will be as critical as ever in the years ahead. Conclusion Ladies and gentlemen, the SNB has a mandate to facilitate and secure the operation of cashless payment systems. It fulfils this task by acting as commissioning party for the SIC system, and guiding the latter’s ongoing development in conjunction with the banks. In so doing, it creates the conditions at the infrastructure level for efficient, secure and future-proof Swiss franc payments. The SNB acts in the interests of all stakeholders in cashless payment systems in Swiss francs. To this end, we are engaged in active dialogue with both banks and non-banks. This evening, we have given you the perspective of the central bank, however it is important to hear other perspectives, too. So I am particularly looking forward to our panel discussion. The noted economist and author Jürg Müller will act as moderator. After the discussion, our panellists, Thomas Moser and I will be happy to take questions from the audience. I hope we can all continue these conversations during the drinks reception.

The second challenge thrown up by digitalisation is the unbundling of the value chain. In the past, the value chain – from payment initiation, through authorisation and clearing to complaints processing – was largely concentrated in the hands of a single entity. Thanks to technical innovations, however, payment service providers are now unbundling and reconfiguring the value chain. For instance, they are taking the products of specialised providers – e.g. relating to FX transactions, payment guarantees or ‘mobile wallets’ – and combining them. Established providers of payment services are having to adapt to this unbundling. They are having to cooperate with new players, invest in their value chains and simultaneously satisfy demand for ever faster and easier payment methods. The central banks, too, face a challenge: they need to develop the core payment infrastructure in such a way that the unbundling of the value chain can be successfully navigated – without new risks being created. As a result, we are seeing many central banks adapting their RTGS systems. For example, retail payments are increasingly being settled via RTGS systems (something which for a long time was unique to Switzerland), longer operating times are being introduced and settlement times are being shortened. These are major international trends, and we in Switzerland will have to think about how we wish to position ourselves. There is also the question of how to integrate the new players – the fintechs – into the payments infrastructure.
From the Bank’s perspective, we believe that the way forward to propel the Islamic finance industry to the next level of growth ─ if I may, a ‘game changer’ ─ should give equal weight to both economic value creation and upholding ethical values. That is why we have embarked on VBI, which is a holistic approach for our industry players to deliver the intended outcomes of Shariah that generate positive and sustainable impact to the economy, community and environment. While VBI shares similarities with concepts such as Ethical Finance, ESG (Environmental, Social and Corporate Governance) and SRI, the distinguishing factor is the central position of Shariah in determining Islamic finance’s underlying values, moral compass and priorities. There are four underpinning thrusts of VBI ─ entrepreneurial mindset; community empowerment; good self-governance; and best conduct. Through the embodiment of these principles in the business strategies of Islamic banks, there would be greater appreciation on the need to create a positive impact on stakeholders, as called for by Shariah and Islam itself. The adoption of VBI is expected to further strengthen the element of self-discipline within Islamic banks. A common moral outlook for the ultimate good leads to greater accountability and integrity, resulting in strong consideration on the impact of any decisions made. Islamic banks would be driven to continuously improve their offerings and treatments toward customers and employees, which include fair and transparent disclosure.

I am glad to say, looking back on 10 years as chief executive, the Hong Kong banking community can take pride in honouring its commitments and deserving society’s trust. Conclusion 52. Ladies and gentlemen, we at the HKMA – and all of you in the banking industry – have been through a great deal in the last 10 years. I have mentioned just a few of our many challenges, and our achievements. 53. As I said at the start, Hong Kong’s monetary and financial system is probably as secure as it has ever been – even though the infrastructure and markets are far more complex than ever. The Hong Kong banking industry is world-class in terms of its skills and people, in its dedication to inclusion, its preparation for technological change, and its awareness of the need for integrity and values. 54. But we must all be very clear that maintaining the quality of the industry is a never-ending task. Looking back, I am proud of what we have done collectively – but I know there will be much more to do in future. 55. Hong Kong at the moment is going through some troubles. But experience and history show us that Hong Kong overcomes problems, pulls together and moves on to the next stage of its development and success. I know that the banking industry will make a major contribution to that process. 56. The opportunities for our banking sector are opportunities for the whole of Hong Kong.
Until fairly recently, it took at least two generations to double the standard of living, but in China, for instance, the standard of living is now being doubled every ten years. The average length of life in developing countries amounted to 65 years at the beginning of the 21st century, compared with just under 40 years in 1950. Even in Africa south of the Sahara the average length of life increased from 35 to 50 years before the spread of HIV/AIDS caused some decline. The ability to read has also increased dramatically since 1950,  BIS Review 60/2004  3  from 40 per cent to just over 70 per cent of the population. The corresponding figures for Africa south of the Sahara were from 17 per cent to 56 per cent, which is more than trebled. Another positive effect of increased wealth is that more people are expressing demands for democracy and human rights. According to Freedom House, the percentage of countries with some form of democratic government rose from 28 per cent in 1974 to 65 per cent in 2003. Another important aspect that should be highlighted is the environment. Studies show that higher growth initially leads to some deterioration in the environment, but that this phase is soon followed by clear improvements when increasingly wealthy countries can afford to safeguard their natural resources and invest in environmentally-friendly technology and production. The turning point appears to be when GDP per capita reaches approximately USD 5,000 a year.

Here, both the African countries themselves and we in the industrialised world can make important contributions. Some historical reflections on globalisation and technological changes Despite all the talk of the “new” global economy, the present international economic integration is actually no new phenomenon. During the fifty years prior to the First World War, there was considerable cross-border mobility for both goods and capital. Then, as now, the increased globalisation was driven by trade liberalisation and major technological advances, thanks to the development of railways, steam engines and electricity. In some respects the integration was even more extensive at the beginning of the 20th century than it is today. For instance, foreign direct investment was a much greater percentage of GDP, labour was much more mobile across national borders and even agriculture was more liberalised. However, in other respects it can reasonably be claimed that the world economy is more interlaced now than it was a hundred years ago. The first difference is that a much larger percentage of the countries in the world now participate in the global economy, after opening up their borders to trade and investment and adopting liberal market reforms. Another aspect that should be highlighted is that although the net flows of international capital are lower than prior to the First World War, the total financial flows are much greater today.
Large institutions  The implicit subsidy to banks that are perceived as “too important to fail” can be important to banks of any size but is usually seen as bigger for large institutions for which existing bank resolution procedures either do or could not apply. Moreover, most large complex financial institutions are global – at least in life if not in death. So a major international effort is underway to try to work out how best to deal with such institutions, initiated by heads of government at the G-20 Summit in Pittsburgh in 2009. Much of this work is being led by the Financial Stability Board. Ideas agreed in principle or under consideration include an addition to the Basel III capital requirement of an extra layer of either equity or other loss-absorbing capital, a special resolution regime for large institutions that would allow losses to be shared among creditors as well as equity-holders, and tentative steps towards international harmonisation of resolution procedures on which my colleague Paul Tucker and others are engaged. Some countries have already started down the road of augmenting the Basel calibration with additional requirements of their own for large banks. Earlier this month the Swiss authorities announced just such a requirement for their two current systemically important banks – UBS  BIS Review 140/2010  7  and Credit Suisse.

There was an inability to see through the veil of modern finance to the fact that the balance sheets of too many banks were an accident waiting to happen, with levels of leverage on a scale that could not resist even the slightest tremor to confidence about the uncertain value of bank assets. For all the clever innovation in the financial system, its Achilles heel was, and remains, simply the extraordinary – indeed absurd – levels of leverage represented by a heavy reliance on shortterm debt. Modern financiers are now invoking other dubious claims to resist reforms that might limit the public subsidies they have enjoyed in the past. No one should blame them for that – indeed, we should not expect anything else. They are responding to incentives. Some claim that reducing leverage and holding more equity capital would be expensive. But, as economists, such as my colleague David Miles (2010) and Anat Admati and her colleagues (Admati et. al., 2010), have argued, the cost of capital overall is much less sensitive to changes in the amount of debt in a bank’s balance sheet than many bankers claim – a proposition demonstrated forcefully by Professors Modigliani and Miller over fifty years ago (Modigliani and Miller, 1958). And the benefits to society, most obviously through greater financial stability, but also through factors such as higher tax revenue, are likely to swamp any change in the private costs faced by banks. What does reduce the cost of capital is the ability to borrow short to lend long.
As such, FSB reforms would amount to little if they did not represent the best collective judgement of our members on how to deliver efficient resilience. But because they are the product of the authority, expertise and shared objectives of its members, the FSB reforms create the foundations for an open, global financial system. We now have agreed common minimum standards that are being consistently and transparently implemented. The playing field for cross border activities is being levelled. Opportunities for regulatory arbitrage are being reduced. In short, a platform is being created for deference to each other’s approaches when they achieve similar outcomes. To seize this opportunity and to build responsible financial globalisation, authorities also need to share relevant information and work together to manage cross border challenges to financial stability. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  The FSB and Basel Committee have developed a number of information sharing guidelines to help foster trust and cooperation between international regulators. These include supervisory colleges and crisis management groups. One of the most critical elements of supervisory cooperation is understanding how each other will behave when things go wrong. In this regard, operationalising new “gone concern” regimes is critical. Best practice is captured by the FSB’s Key Attributes and involves resolvability assessments and regular crisis management group meetings for systemic firms.

And output has risen in every single quarter since the middle of 1992, something that is true of no other G7 economy. Why were the 1990s so successful? And can that success continue? Four features of our economy lie behind this improved performance. First, the new monetary framework - based on an explicit target for inflation, a high degree of transparency, and, since 1997, independence of the Bank of England made it clear to everyone that monetary policy was, and would continue to be, targeted on maintaining low and stable inflation. Second, a substantial fiscal consolidation turned a deficit of 8% of GDP in 1993 into a sustainable position for the public finances based on a set of clear rules for government debt. Third, a continuing programme of supply-side reforms, over a period of 20 years, made it possible to reduce unemployment without generating higher inflation. Fourth, although the unexpected twists and turns of the world economy did pose real challenges to monetary policy, especially in the latter half of the decade, those shocks tended to average out over time rather than cumulate in either an upward or downward spiral. In other words, the economic surprises alternated between good one year and bad the next, rather than adding up to “one damn thing after another”. In that sense, Lady Luck smiled on us. Of course, we were not alone in enjoying the 1990s.