samchain/econo-pairs-v1 huggingface dataset:
Your Excellency, distinguished guests, it is indeed an occasion for all stakeholders of the Bank – the Government, Civil Society and the public at large – to be updated on the progress of the Bank, its diverse contributions to the economic and social development of Sierra Leone and the challenges that lie ahead. This is also a fitting occasion to re-dedicate ourselves to the original mandate that the founding fathers adopted at the inception of the Bank in 1964 namely; to achieve and maintain monetary stability and, without prejudice, to maintain a sound, vibrant and stable financial system. In this regard, I will be speaking on the theme “Repositioning the Bank of Sierra Leone to Meet the Challenges of the Financial Sector”. As part of the global economic and financial system, Sierra Leone has not been entirely insulated from the shocks of the crisis and as the global economy reevaluates and repositions itself to achieve full recovery, it is but fitting, especially as our nation marks its 50th independence anniversary, that the Bank spearheads efforts to ensure that the financial system is robust enough to withstand any future shocks. In doing so, let us recall the developments on the global, regional and sub regional levels before examining the initiatives to reposition the Bank. Global financial developments Your Excellency, distinguished guests, as mentioned in my speech last year, the global economy is recovering, though at a slower and unbalanced pace.

Pay and benefits structures have been adjusted in line with practices of sister institutions to enable the Bank attract high calibre staff. We have also developed a new staff evaluation system which rewards competence and performance. More importantly, the staff and management have, on their own, adopted a set of core values following international standards by developing a Code of Conduct. 8  BIS central bankers’ speeches  Framework for financial stability analysis Your Excellency, Distinguished Ladies and Gentlemen, even though the Bank, in its response to the global financial crisis, has sought to address numerous issues of concern to the stability of the financial system, many more challenges remain to be addressed. The adoption of a financial stability analysis framework through which potential vulnerabilities in the system can be identified and gauged, is key to safeguarding the long-term stability of the financial system. The Bank is aware of these requirements, and has set up a unit in the Research Department to monitor and periodically report on financial stability. Efforts are still at a transitory stage but going forward, the Bank is seeking to develop a full-fledged financial stability framework. As part of the risk assessment drive, the Bank, with technical assistance from the IMF, plans to undertake stress assessment of the banking system to determine the resilience of their portfolios to various shocks. This exercise will be conducted in 2011.
Structural and balance sheet weaknesses, inappropriate exchange rate regimes as well as inconsistent macroeconomic policies must be addressed openly, and without hesitation or delay, to avoid market reaction. In some cases, a loss of confidence may fuel a snowballing effect that can easily lead to fullblown capital account crises with high economic and social costs and serious risks of a contagion. By changing the rules, globalization forced the international community to change the framework of surveillance itself. This came under the general heading of reforming the architecture of the financial system. It is an ongoing, very ambitious project with many ramifications. Switzerland strongly supports it as well as all the related initiatives. I think we can safely say that a lot has already been achieved. The structure of the international financial system is today more robust and in a better position to withstand future challenges. Part of this project was to provide more information about countries and their policies to help investors make the right judgments. A number of standards and codes were  2  BIS Review 69/2004  defined to include data dissemination, fiscal transparency, and monetary and financial policy transparency. Another aspect of the reform was strengthening Fund surveillance through its renewed focus on financial markets. Much more attention is today paid to the structure of national financial systems and the institutional preconditions that have to be in place for countries to fully benefit from capital account liberalization.

In a globalized world, it is even more imperative for the Fund to focus on promoting stability as a global public commodity. We have enough experience to know how costly it can be if things go wrong. Saying that Switzerland treasures a stable international environment is in many respects an understatement. Given the openness of our economy and the fact that we host an important financial centre, international financial stability for us has all the connotations of a vital national interest. To put things into the right perspective, allow me to mention a few figures that show how interconnected our economic well-being is with global developments. In 2003, Swiss exports of goods and services amounted to 44 percent of GDP. The GDP contribution of our heavily internationally oriented financial sector reached 10 percent. This figure rises to 14 percent if we also include the insurance sector. Swiss banks occupy a leading international position, particularly in the area of wealth management. The value of total assets managed in domestic banks as at the end of 2003 amounted to $ 2.7 trillion. According to various estimates, this corresponds to about one-third of the world’s total private wealth managed abroad. Last, but not least, the banking and the insurance sectors combined employ approximately 185,000 people, the equivalent of 6 percent of total Swiss employment, whereas the fiscal contribution of the banking sector alone amounts to about 13 percent of total tax revenues.
And the inability of the money supply to vary in response to demand would likely cause greater volatility in prices and real activity. 17 As the Italian philosopher George Santayana famously observed. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  In the short run, the fixed supply of Bitcoin has fed a global speculative mania that has encouraged a proliferation of new cryptocurrencies. As my colleague Agustin Carstens has argued, this surge of competitors and the “forking” of Bitcoin echoes the debasement of private monies in the past. 18  Inefficient Media of Exchange The most fundamental reason to be sceptical about the longer term value of cryptocurrencies is that it is not clear the extent to which they will ever become effective media of exchange. Currently, no major high street or online retailer accepts Bitcoin as payment in the UK, and only a handful of the top 500 US online retailers do. For those who can find someone willing to accept payment for goods and services in cryptocurrencies, the speed and cost of the transaction varies but it is generally slower and more expensive than payments in sterling. That’s because the more heavily used cryptocurrencies face severe capacity constraints compared with other payment systems. For example, Visa can process up to 65,000 transactions per second globally against just 7 per second for Bitcoin. And if you use a debit or credit card in the UK, the transaction is completed in seconds and without exchange rate risk.

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
The notion that the welfare of a country boils down to the short-run profits of a few foreign exchange dealers is of course narrow minded. The reality offers a completely different picture. Switzerland has always suffered from external monetary turbulences and always wished for a stable monetary order. For example, the various crises of the European Monetary System in the 1990s, with a dramatic drop of the Italian lira, have led to the complete removal of the traditional textile industry from our economic geography. Such structural adjustment could arguably have occurred anyway, but the decisive factor at the time was of monetary origin. The purpose of the creation of the common currency was not only to concentrate the monetary power in the hands of the European Central Bank, but also to promote the conditions for transparency and competitiveness that would in turn foster trade, investment and growth in the single European market. Price comparisons are indeed easier today, and trade and liquidity management are much simplified, although it is still too early to numerically assess the impact of these effects on growth. Simplifying trade and investments benefits all members of the European monetary zone, and it also helps anyone interested in being active in the European market. Switzerland, with its high degree of  BIS Review 70/2004  1  integration in the euro zone, reaps large benefits from this stable situation. Thus, it is clear that on those aspects, the introduction of the euro was very good news for the Swiss economy. 2.

Areas where a conflict of interest might be apparent include the following: i. Financial reporting and auditing. The directors may try to disguise the true financial performance of their company by “dressing up” the published accounts and giving less than honest statements;  8  BIS Review 99/2008  ii. Director’s remuneration. Directors may reward themselves with huge salaries and other rewards, such as bonuses, a generous pension scheme, share options and other benefits with little regard to the needs of the shareholders and the company; and  iii. Risk taking. Directors of companies might take decisions intended to increase profits without regard to the changing risk profile of their existing businesses. •  Under the Companies Act, directors are liable for breaches of fiduciary duties and obligations. For instance, directors are liable for any loss suffered as a result of their acting outside their authority or for failure to exercise the degree of care, skill and diligence expected of them in the circumstances. The BFSA complements the provisions of the Companies Act by placing more duties and obligations on directors of banks and financial institutions. Chapter III, Parts III and IV of the BFSA deals with the boards of directors of banks and financial institutions. Under these parts: i. Every bank or financial institution is expected to have a board of directors in which shall vest all the powers of management and control and which shall be responsible for the formulation of policies of the bank or financial institution (Section 30(1);  ii.
Indeed, there are some estimates that currently modelled losses could be undervalued by as much as 50% if recent weather trends were to prove representative of the new normal. 18 In addition, climate change could prompt increased morbidity and mortality from disease or pandemics. Such developments have the potential to shift the balance between premiums and claims significantly, and render currently lucrative business non-viable. Absent actions to mitigate climate change, policyholders will also feel the impact as pricing adjusts and cover is withdrawn. 19 Insurers’ rational responses to physical risks can have very real consequences and pose acute public policy problems. In some extreme cases, householders in the Caribbean have found storm patterns render them unable to get private cover, prompting mortgage lending to dry up, values to collapse and neighbourhoods to become abandoned. Thankfully these cases are rare. But the recognition of the potential impact of such risks has prompted a publicly-backed scheme in the UK – Flood Re – to ensure access to affordable flood insurance for half a million homes now considered to be at the highest risk of devastating flooding. This example underlines a wider point. While the insurance industry is well placed to adapt to a changing climate in the short-term, their response could pose wider issues for society, including whether to nationalise risk. The passage of time may also reveal risks that even the most advanced models are not able to predict, such as third party liability risks.

Forward-looking regulators consider not just the here and now, but emerging vulnerabilities and their impact on business models. That is why the PRA has worked with regulated firms, many of them represented here tonight, to produce for the Department for Environment, Food and Rural Affairs a review – published today – into the impact of climate change on British insurers. The Report concludes that insurers stand exposed to each of the three types of risk climate change poses to finance; and while the sector is well-placed to respond in the near-term you  4  BIS central bankers’ speeches  should not assume your ability to manage risks today means the future is secure. Longer term risks could have severe impacts on you and your policyholders. The insurance response to climate change It stands to reason that general insurers are the most directly exposed to such losses. Potential increases in the frequency or severity of extreme weather events driven by climate change could mean longer and stronger heat waves; the intensification of droughts; and a greater number of severe storms. Despite winter 2014 being England’s wettest since the time of King George III; forecasts suggest we can expect at least a further 10% increase in rainfall during future winters. 14 A prospect guaranteed to dampen the spirits and shoes of those who equate climate change with global warming. While the attribution of increases in claims to specific factors is complex, the direct costs of climate change are already affecting insurers’ underwriting strategies and accounts.
But the possibility to carve up the business and sell it in parts could in some cases prove more profitable. In certain cases a reconstruction of the bank may be the most appropriate solution. If it were to take too long to find a buyer, it might be necessary for the state to take over the bank temporarily. This was what was ultimately necessary in the case of Northern Rock. There is a risk in similar situations that the state could be exposed to blackmail. To minimise the costs to taxpayers, it is therefore necessary in my opinion that the state has sufficient strength to negotiate with existing and presumptive shareholders. For instance, there must be legal possibilities for the state to redeem the shares at a price corresponding to the value of the bank if there are no state aid measures. It is also particularly important to avoid situations where a bank ends up in a no man’s land regarding ownership. An essential condition for a well-functioning system is that one can attain a balance between all of the interested parties who come forward when a bank is in distress. The various interests include society’s interest in financial stability and the depositors’ interest in good consumer protection. But there are also the creditors’ interest in good protection and fair treatment, the taxpayers’ and the fee-paying institutions’ interest in the cost of the deposit guarantee system being as low as possible.

Let’s not think of how we can reform, but how we can design. Let’s create a system that can better withstand the unforeseeable and the unpredictable. Conclusion These are difficult, complicated issues. But complexity doesn’t need to get in the way of getting back to principles or impede necessary action. Look no further to what we just accomplished with LIBOR. On January 1st, we are taking a giant leap in moving to a post-LIBOR world. That’s a monumental feat for financial market reform—and it was made possible by a significant, prolonged, and coordinated effort by the private and official sectors across the globe. With Treasury market reform, we must take the same approach of bringing together the best ideas from the public and private sectors. Three episodes of market dysfunction over the past decade are too many. Let’s work together to build a system that is truly resilient and can withstand the challenges of our time—and of the future. Thank you. 1 Recent Disruptions and Potential Reforms in the U.S. Treasury Market: A Staff Progress Report, Inter-Agency  Working Group for Treasury Market Surveillance, November 8, 2021. 2 For a history of the Desk statement on repo operations during that period, see Repo and Reverse Repo  Operations: Statements and Operating Policies. Details on the parameters of the repo operations during this 3/4  BIS central bankers' speeches  period can be found at Historical Repurchase Agreement Operational Details.
Typically, long and deep economic and social crisis have become the breeding ground of new philosophies of economic thinking, which, in turn, have encouraged significant policy changes and opened the road to economic prosperity. Adam Smith, John Keynes, Milton Friedman, and their economic thinking have emerged in the dusk of big crisis. Unfortunately, we are still waiting for a new philosophy; so the question arises: where is our philosopher? We clearly need a new way of thinking, a new approach to economic policy, a lot of new ideas. These new ideas are not easily discovered. They do not pop up themselves; they hide in the layers of economic and financial data, history of economic developments and economic thought, and philosophy of social interaction in the macro and microeconomic scale. It is not surprising that economists and politicians have started to challenge some beliefs that are regarded as universal economic truths. For example, GDP and growth are challenged as the best measure of happiness and prosperity, globalization is challenged for its externalities in the labour market and inequality, inequality itself is under investigation as a potential culprit of economic slowdown. Economic research must broaden its scope to consider all these areas in their work.

Therefore, it is important for us to take care of financial system stability as well when we conduct  2  BIS central bankers’ speeches  monetary policy. The Bank of Thailand has been closely monitoring the expansion of private sector’s loans and assessing ability of debt repayment of the private sectors, especially the middle and the low income groups. Second, on exchange rate policy, the main challenge is that the Thai baht has been on an appreciating trend due to various factors, including capital inflows surge into the region, structural change in the world economy, growth differential between advanced and emerging economies as well as accommodative monetary policy in advanced economies. Generally, allowing the exchange rate to be determined by the market can serve as an automatic stabilizer in the short-term and as an important price signal and catalyst for structural change in the long term. So, as the first line of defense, the exchange rate should be determined by market mechanism and from both the market and our own assessment, the Thai baht still remains broadly in line with economic fundamentals. However, the BOT stands ready to use policy instruments at our disposal to prevent and manage dysfunctional market conditions, excessive speculation or exchange rate overshooting. It should be noted also that, the baht appreciation at this juncture provides an opportunity for businesses to upgrade their technology and productivity.
According to the IMF, this effect is estimated to have contributed 1.5-2.0 percentage points per annum to inflation for EU countries catching up on productivity. The recent statistics available for the United States also confirm that wage and salary differentials within the euro area are by no means atypical in a monetary union: for example, in 2000, in the US the average weekly earnings in the non-durable goods sector stood at USD 546 at the national level, while standing at USD 437 in Mississippi and USD 644 in New Jersey. I am convinced that we can be reasonably confident in the increasing integration of European countries, and in the fact that economic developments are becoming more and more correlated in the area. It has been highlighted, in the academic field, by several empirical investigations that business cycles are becoming more synchronous across Europe. Secondly it has often been questioned whether EMU can be a success without some form of enhanced political union. Certainly, for EMU to function well, all Member States must be aware of the spill-over effects of all their national policies, especially their budgetary policies. In this regard, we are in favour of strong co-ordination between economic policies, while strictly respecting the independence of the Eurosystem. This co-ordination is contained in the Treaty itself, which obliges Member States to treat national economic policies “as a matter of common interest” and subjects them to a multilateral procedure.

Other objections raised were the absence of instruments to respond to any asymmetric shocks, and the European economies’ lack of flexibility and real mobility in the labour force. The conclusion was that the euro would never exist! The facts have disproved this conclusion. But the very same arguments are sometimes deployed to suggest that the euro-area economy contains some inconsistencies that could endanger its prosperity. What can we say, from an economic standpoint, on this very important question? Firstly, that monetary union per se, and wherever it takes place, does not necessarily imply that, at any given point in time, all the participating countries will experience the same rate of inflation or of growth, even though the move to the euro was based on the successful completion of a convergence process. Let us focus, for example, on inflation. Present differentials do not appear to be very large, in comparison with the experience of the United States, a long-established monetary union of comparable size. Data on major cities of the US shows that inflation differentials have been at times very substantial, with divergences of 7 percentage points being recorded in the early 1980s. In the euro area, long-term convergence to a common level of prices gives naturally rise to differences in inflation rates across EMU countries. The convergence of productivity and living standards creates a trend towards price convergence, as a consequence of the commonly known Balassa-Samuelson effect.