samchain/econo-pairs-v1 huggingface dataset:
Providing these poor people a dignified standard of living would require doubling their rate of energy consumption. According to the International Energy Agency (IEA), the energy transition to achieve netzero is doable but difficult. First, even when the world achieves net-zero emissions, fossil fuels will be with u s . Energy demand in Asia is expected to double by 2030 on the back of strong economic growth, rising affluence, and urbanisation. Even if overall global energy use falls in the net zero scenario, it will increase in many of the poorest countries. Fossil fuels will continue to play an important role in meeting the energy demands of Asia and Africa. Coal is unlikely to have a role in a net zero world but oil and gas will. The IEA has projected that if the world reached net zero by 4/9  BIS central bankers' speeches  2050, it would still be using nearly half as much natural gas as today and about one-quarter as much oil. Second, solar and wind power will need to be the largest energy source. The cost of solar and wind energy has fallen dramatically over the past decade and the amount of power generated through these renewables is rapidly catching up to that generated by coal. The IEA has projected photovoltaic capacity jumping twenty-fold between now and mid-century. This is no mean task – it implies by 2030 installing every day the generation capacity of what is currently the world’s biggest solar farm.

Based on current policies, global temperatures are expected to rise by 2.7 degrees Celsius above preindustrial levels by 2100. Even according to the most optimistic estimates of emission cut pledges made at COP-26, the world is on course to heat up by 1.8 degrees Celsius. According to the IPCC, to fall back below the 1.5 degrees Celsius target, it would be necessary to remove from the atmosphere a decade or two of carbon emissions. If the current emissions trajectory continues, the world will likely experience climate 1/9  BIS central bankers' speeches  catastrophe. In his book, Hothouse Earth, Bill McGuire, emeritus professor of geophysical and climate hazards at University College London, argues that there is now no chance of the world avoiding a pervasive climate breakdown. When temperatures rise beyond 1.5 degrees Celsius within the next 10 years, we can expect a world plagued by intense summer heat, extreme drought, devastating floods, reduced crop yields and food supplies, higher incidence of vectorborne diseases, rapidly melting ice sheets, and surging sea levels. Many parts of the world will become less hospitable for human habitation. By some estimates, climate change may force more than one billion people to migrate by 2050. THE CHALLENGE OF DECARBONISATION 2020 to 2030 is the critical decade for climate action. Net zero commitments for 2050 are fine and good but a credible trajectory towards that goal will be substantially determined by 2030. While a growing number of countries and companies have set net-zero targets, very few have credible plans to meet them.
The government therefore controls banks that account for about 50% of bank lending in Norway. The stake in the two largest commercial banks is to be reduced to a third. State ownership of banks constitutes, in my opinion, a structural weakness in the Norwegian financial system. There is a risk that the ownership function is not exercised actively enough. A lack of control on the part of active owners may give the board and management excessive influence in these banks. In the long run this could lead to less efficient operations and lower profitability. Private owners with lower capital stakes may also wield a disproportionately high level of influence if the state as owner is too passive. The political parties widely disagree on the issue of government bank ownership. This may be a disadvantage when decisions on mergers and other structural measures are to be taken. When there is a profitable basis for growth, which requires increases in capital, the state-owned banks must pose the following question: is it possible to gain political support? They cannot merely ask: will investors find this profitable? It is important to reach political consensus on the question of state ownership. One example of a case where the political parties reached agreement on structure and ownership in the 1980s is the petroleum sector.

Monetary and fiscal policy must be complementary in order to curb cyclical fluctuations. BIS Review 20/1999  16  Fiscal policy must be credible in the long term. The welfare society is dependent on solid government finances. The authorities must exercise caution in establishing fixed long-term priorities in the government budget. Measures aimed at countering an increase in unemployment must not be irreversible and undermine long-term credibility. The conditions for addressing the challenges are favourable. Employment is high and the population is well educated. However, our economy is also exposed and vulnerable. In recent years fiscal policy has been too expansionary. This year the fiscal stance is appropriate. A continued tight fiscal policy can contribute to restoring credibility and confidence so that interest rates can gradually be reduced. Let this be my hope for future developments. 17  BIS Review 20/1999
The explanation lies primarily in the fiscal situation, to which the financial sector and related problems had made a substantial contribution - enlarging the budget deficit by perhaps as much as 6% of GDP at the time. On top of this, the krona was depressed for a long time by the repayment of foreign loans. The financial problems did not have a major impact on economic developments from 1993 onwards. Once the important decisions concerning the financial sector had been taken, it was not long before the financial aspect of the crisis had disappeared from the headlines. And the banks were already recovering in late 1993 - just a year after the peak of the crisis. This in itself was obviously a great achievement and it may be worth briefly stating some of the more important lessons that, in my opinion, can be drawn from this episode of financial crisis management: 1. Confidence needs to be restored rapidly. This was achieved in Sweden as far as the financial sector was concerned. If confidence returns fairly soon, the real effects on the economy need not be large. But if, on the other hand, the lack of domestic and/or external confidence were to persist, this could act as a drag on economic development for a long period. It is also my experience from other countries that the longer the period with a lack of confidence, the more drastic the measures that will be needed to restore credibility.

Before the onset of the crisis, all the banks fulfilled or surpassed the 8 per cent Basle requirement for capital. So, although nonperforming and other impaired loans amounted to 15 per cent of GDP in Sweden (a figure that is rather similar to recent estimates for Korea), the original cost to the government of rescuing the banking system amounted to only some 4 per cent of GDP; since then, moreover, most of this has in fact been recovered. •  Sweden applied restrictive rules to central bank involvement in the banks. Only liquidity support was provided, inter alia in the form of foreign currency deposits to stem the outflow from the banks and to reduce the risk of a credit crunch. This did not involve the Riksbank in any risks because the State guarantee for banks’ repayments also applied to us as a lender. 3. Triggers Now, let me turn to the actual crisis. It is well known that the event (or events) triggering a crisis is often different from the crisis’ underlying causes. In the absence of a triggering factor, countries with substantial underlying problems from time to time have also been able to avoid an acute crisis. The event triggering a crisis is sometimes rather dramatic, such as the assassination of a politician - as in the Mexican case - or a sudden loss of confidence, e.g. due to the presentation of a disappointingly weak fiscal budget.
If the central bank fails to do this, the market will certainly come up 3/4  BIS central bankers' speeches  with some alternatives for this purpose. In this connection, you are no doubt aware that the HKMA has just launched the Faster Payment System a few days ago. Once the system goes live on 30 September, people in Hong Kong will be able to enjoy almost instantaneous P2P payments, making use of either mobile phone number or email address, free of charge to the users. While the Distributed Ledger Technology used in crypto-assets creates many issues, the technology has shown great potential in many other applications. For example, the HKMA and the banks in Hong Kong will soon launch a digital trade (d) finance platform using DLT. We are also in the process of developing a DLT interface that can link the domestic trade finance platform with those of other trading partners, such as Singapore, on a bilateral basis. This new interface is expected to be launched sometime next year. Despite some improvements made in the past few years, cross-border payments, especially retail or small value, remain inefficient and costly. This is unsatisfactory as it is not conducive to financial inclusion in relation to remittances by SMEs or (e) individuals. In this connection, I am pleased to note that progress is being made recently, as some banks and non-bank e-wallet operators are now developing new cross-border payment channels, making use of DLT in some instances, that would result in faster and cheaper services for users.

Basically the FSB considers that while crypto-assets do not pose a material risk to global financial stability at this time, given the relatively small size of this market, vigilant monitoring is (a) necessary in view of the speed of developments and data gaps. The FSB has developed a framework, in collaboration with the Committee on Payments and Market Infrastructures, to monitor the financial stability implications of the developments in crypto asset markets. Noting that crypto assets raise a host of other issues that I will explain shortly, the FSB also considers that further international coordination is warranted. Illicit activities risk: As many of these crypto-assets are so designed that anonymous email accounts can be used for trading and transfers without a central clearing agent, they effectively bypass the existing regime in combatting money laundering, terrorist financing and other illicit activities. The ease with which crypto-assets can be transferred across national borders has made it even more attractive to criminals in (b) laundering their proceeds and income. For the banks and other regulated financial institutions, it is proving difficult, if not impossible, for them to comply with the statutory or supervisory requirements in respect of know-your-customer (KYC) or ascertaining the source of funds. This was why the HKMA issued a circular in 2014 to banks in Hong Kong advising them to be mindful of the need to comply with all relevant KYC and anti-money laundering (AML) requirements in their dealings with crypto-assets.
I shall not go into this work in any great depth here. Instead, I will discuss some factors that could contribute to strengthening movements on the financial markets in an unhealthy manner, and where we need to find other solutions to improve the functioning of the markets. These factors can also be more directly connected with mutual fund investment. Short-term evaluation and “follow the leader” behaviour The first thing that comes to mind here is the way many of the operations on the financial markets are evaluated. All too often the focus is on the short-term result. This applies in particular to the evaluation of various securities funds. Although many of you manage long-term savings that people intend to live on after retirement, you are nevertheless evaluated on the results you have achieved over the past year, the past few months or even the past few days. We have all seen the newspaper headlines declaring the winners and losers in mutual fund investment. Media coverage of developments on the financial markets certainly plays an important role for the transparency of these markets, but the focus on short-term results can create a vicious circle where investors and companies are constantly chasing the best possible result in the short term, despite the fact that this is not a good long-term strategy. Such behaviour can reinforce financial crises; for instance, through a fund manager not being given scope to wait until the crisis has abated, which could be rational in a long-term perspective.

When one distributes one's savings across a number of funds with different allocation, for instance to various industrial sectors, there is less risk, as one would not suffer such great losses if one fund were to show a poor development. However, the financial markets also offer other opportunities for risk management. It is possible to pay someone else to take over a financial risk. This can be done with the aid of various types of derivative. For example, in export deals it is not unusual for payments to be made some time after the goods have been delivered. To avoid negative effects of a change in the exchange rate, the exporter can enter into a futures contract that establishes the rate at which the future income will be exchanged to the exporter's own currency. These opportunities for risk management have crucial economic importance. Without them, many economic projects would be perceived as too risky and would never be realised. And this would lead to a slower development of the economy. Deregulation and the rapid developments in technology and finance have made it possible to transfer these roles to the international stage on a much larger scale than before. Thus, the financial markets' capacity to contribute to increased global growth has been strengthened. Countries importing capital can increase their rate of investment and gain access to more modern technology, while the countries exporting capital can obtain a higher yield on it.
I am thinking particularly of the injunction to smile and whistle through all difficulties. Certainly I am sometimes tempted, when asked to explain the state of opinion in London, to take refuge in a cheery smile, and to begin to whistle a mournful tune (not easy to do at the same time, you will find). Fortunately, it is not my responsibility to discuss the politics of EMU in the United Kingdom. Another good reason for me not to do so is that I would like to keep my job. As a humble central banker, a mere technician, it is more appropriate for me to focus on the economic dimension of EMU and to say something, also, about the financial market implications which concern us, particularly given the Bank of England’s position at the heart of the City of London. In both these areas - economic and financial - the Boy Scout motto is particularly apposite today. Let me explain why. At the Bank of England we have always held the view that Economic and Monetary Union is a momentous enterprise, with huge consequences for European economies. The act of irrevocably fixing exchange rates, between economies which have in many cases been managed separately for centuries, is not a step to be undertaken lightly. It is an exciting venture, almost too exciting for some, perhaps.

Those who have operated for decades with a regime of low inflation, interest rates set by a strong independent central bank, and a strong and appreciating currency, may rightly think they have little to fear from the disciplines implied by EMU. Others will find EMU more bracing, particularly those whose inflation record has been poor, whose currency has undergone successive devaluations, and whose fiscal position is less than robust. For those countries, the EMU mission is potentially dangerous. Joining EMU would for them be to embark on a stiff mountain ascent, in weather which might be colder and less forgiving than one is used to. In those circumstances, the Boy Scout ensures that he is well prepared. He equips himself with waterproofs in the event of rain, with thick pullovers for the cold, with stout boots and, probably, a Swiss army knife in case it should prove necessary, at some point on the journey, to extract a stone from a horse’s hoof. He would also, I think, wish to ensure that he was fit, and had undertaken some strenuous rambles BIS Review 1/1997  -2-  in the foothills before making an assault on the mountain range. At this point you may be tired of hearing about Boy Scouts, and be ready to accuse me of the typical British trick of hiding behind down-home metaphors, and reducing topics of high seriousness to wry jokes. So let me be entirely clear about what I mean. We fully appreciate the great potential advantages of EMU for Europe’s economies.
Since this time last year 10-year government bond yields in the major markets - with the notable exception of Japan - have all risen by over 100 basis points. And with credit spreads widening during much of the summer, the rates that corporate borrowers have faced have shown even greater increases. Despite this, however, it has been another very active year for you all. Over the past few years a notable feature of the international bond markets is that each subsequent year has set a new record in terms of volume, and 1999 has certainly been no exception to this. What is of particular note about issuance in 1999 though is the scale of this increase: up by almost a half from the level of 1998 - a pretty remarkable performance. I think that there are two major reasons for this increase: First, and most obvious, is the successful introduction of the euro. I can best demonstrate this with the fact that international issuance in the euro in 1999 was more than double that of the level that legacy currency issuance reached in 1998. This is a clear indication that the euro has established itself as a currency for international finance in its first year of existence. Not only did the volume of issuance rise, but perhaps even more strikingly, the diversity of issuers increased too.

10  All speeches are available online at www.bankofengland.co.uk/news/speeches  10  FIGURE 4: Haircut schedule for LIBOR-linked collateral  This graduated approach reflects the clear feedback we received from firms on our discussion paper last year. It is intended to give firms the incentives, certainty and time they need to prepare for LIBOR transition, replacing LIBOR-linked collateral with risk free rate alternatives and maintaining drawing capacity throughout. Careful analysis suggests that this should be a manageable task in the time available, but we will monitor this closely and continue to work with impacted firms on their plans. Concluding remarks  I began my remarks by comparing LIBOR transition to a motor race. For some, I know it may have felt at times more like a Le Mans endurance race than a Grand Prix. But dawn is at last approaching – and the finish line is drawing nearer. For sterling markets in particular, 2020 is a critical year. The announcements we have made today, coupled with the huge efforts going on right across the private and public sectors, demonstrate I hope that, working together, we can keep sterling markets at the forefront of LIBOR transition. Thank you. 11  All speeches are available online at www.bankofengland.co.uk/news/speeches  11
It is in this group that, for example, many of the decisions were taken so that monetary union could start on time. The budget policies of the Member States have also been monitored here and this will continue under the Stability Pact. Moreover, Ecofin draws up an annual “budget statement”, the Broad Economic Policy Guidelines, containing the principles for economic policy in the EU area. BIS Review 50/1998  -6-  •  Most of the matters on the Ecofin agenda have been prepared by the Monetary Committee, which besides representatives for each of the fifteen Member States (normally an under-secretary of state or a deputy central bank governor) includes representatives for the Commission and, more recently, for the EMI. When monetary union starts, the name of the Monetary Committee will be changed to Economic and Financial Committee but at present it seems that its composition will be unchanged apart from the EMI being replaced by the ECB. Work on monetary union has been a heavy burden for these bodies in recent years. Meetings have been protracted and business has ranged from major issues like the Stability and Growth Pact, the new European exchange rate system (ERM2) and legislation for monetary union to matters such as the design of the European coinage. Some of the structure is now changing with the advent of monetary union but not its basic features. The preparatory work is over, as is a good deal of the work connected with ERM.

How are the dialogue and decisions likely to develop in the next few years? These are some of the questions that I shall be considering today. 1. Convergence A natural starting-point for a discussion of the current economic situation in Europe is the convergence reports that the Commission and the European Monetary Institute (EMI) presented at the end of March. •  The price trend for the EU area in recent years is impressive. The disparities in the rate of price increases have diminished and in January this year inflation was below 2 per cent in all the Member States except Greece. This development is fundamentally a consequence of the monetary policy focus on price stability, backed up by economic policy in general. Other factors have been increased international competition and low oil prices. •  The picture of government finances in the EU countries has also brightened. Progress has been made in the process of financial consolidation. However, a number of countries are only just below or at 3 per cent and have qualified thanks to measures of a temporary nature. •  A high degree of exchange rate stability now prevails in most EU countries and tensions in the exchange rate mechanism (ERM) have been moderate. •  The notable convergence of long-term interest rates is another indication of the stable situation and EMU expectations. BIS Review 50/1998  -2-  All in all, the reports from the Commission and the EMI show that convergence in the Maastricht sense has come a long way.