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Category: Economics

  • MIL-OSI Economics: 4th Trade for Peace Week opens with high-level session on private sector’s role in stability

    Source: World Trade Organization

    The opening session, titled “Building Resilience through Trade: Private Sector Engagement for Sustainable Peace”, highlighted the private sector’s capacity to drive post-conflict economic recovery and long-term stability.

    WTO Director-General Ngozi Okonjo-Iweala delivered the opening remarks via video message , highlighting the significance of trade in advancing peace, especially in light of increasing global uncertainty. “Promoting peace and prosperity through trade was a founding goal of the multilateral trading system 80 years ago,” she stated. “For trade to deliver tangible dividends for peace in conflict-affected regions, we need partnerships that bridge trade, peace and development. That is what the Trade for Peace Programme is about.”

    A key highlight of the session was Somalia’s reaffirmation of its commitment to leveraging trade for stability, coinciding with the country’s first Working Party meeting on WTO accession. Salah Ahmed Jama, Deputy Prime Minister of the Federal Republic of Somalia, emphasized Somalia’s vision for trade-driven peace. “Somalia’s WTO accession is more than an economic milestone — it is a strategic move towards sustainable peace,” he said. “By fostering an inclusive and rules-based trade system, we are not only integrating into the global economy but also creating opportunities that reduce conflict drivers.”

    Moderated by Itonde Kakoma, President of Interpeace (an international organization that prevents violence and builds lasting peace), the high-level session convened representatives from international organizations, policymakers and private sector leaders.

    Speakers included Idris Abdul Rahman Al Khanjari, Ambassador of Oman to the United Nations Office in Geneva, Vepa Hajiyev, Ambassador of Turkmenistan to the United Nations Office in Geneva, Dorothy Tembo, Deputy Executive Director of the International Trade Centre (ITC), Andrew Wilson, Deputy Secretary-General of the International Chamber of Commerce (ICC), and  Frank Clary, Vice-President of Sustainability at Agility (a global leader in supply chain services, infrastructure and innovation and a pioneer in emerging markets). Their interventions highlighted innovative strategies for bridging trade and peacebuilding, emphasizing how responsible investment and market-driven solutions can contribute to long-term stability.

    The T4P Week will feature interactive sessions, panel discussions and strategic dialogues, bringing together key stakeholders in the field of trade and peace. A major highlight of the week will be the High-Level Book Launch, “Pathways to Sustainable Trade and Peace”, on 20 February, where experts and contributors will present research findings on how trade can serve as a tool for economic resilience and peacebuilding in fragile regions.

    The Trade for Peace Research and Knowledge Database, a comprehensive platform that compiles research studies and other resources on the linkages between trade and peace, will also be launched during the week. The database serves as a practical tool to assist governments, policymakers and researchers in data analysis, policymaking and informed decision-making.

    With over ten dedicated sessions bringing together policy experts, business leaders and peace practitioners, the T4P Week provides an opportunity to explore the synergies between trade and peace. Participants are encouraged to join the discussions, share insights and engage with experts shaping the future of trade and peace.

    For more information see: WTO Trade for Peace.

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    MIL OSI Economics –

  • MIL-OSI Economics: Joint Statement by the Saudi Finance Minister and IMF Managing Director at the conclusion of the Inaugural Al Ula Economic Conference for Emerging Market Economies

    Source: International Monetary Fund

    February 17, 2025

    Al Ula, Saudi Arabia – February 17, 2025: A two-day inaugural annual global Conference on Emerging Market Economies was held in Al Ula, Saudi Arabia from February 16-17, co-hosted by the Saudi Finance Ministry and the International Monetary Fund (IMF). Mohammed Aljadaan, Finance Minister of Saudi Arabia, and Kristalina Georgieva, Managing Director of the IMF, made the following statement at the end of the conference:

    “We would like to thank Emerging Markets policymakers, academics, and representatives of the regional and international financial institutions for joining us and helping to make this first-ever Al Ula Economic Conference for Emerging Market Economies a successful forum for building greater collaboration and discussing the specific challenges facing emerging markets (EMs).

    “Over the past two days, we have discussed how emerging economies can navigate the risks and, importantly how they can embrace the opportunities ahead. One common emerging theme is the importance of unity of purpose and the need to continue working together to sustain EM economies’ resilience to shocks and sustain growth. Three takeaways to highlight:

     “First, this is a time of sweeping transformations—from technology to trade, or climate to capital flows. And these changes are reshaping the global economy. How all these changes will unfold remains to be seen. But we know that in a more uncertain and shock-prone world, building resilience through sound macroeconomic and financial policies must continue to be a priority.

    “Second, emerging markets are seizing these transformations to make their economies stronger. With widespread digitalization and ambitious policies, the prospects for harnessing the benefits of AI are promising. Tapping the potential of AI would enhance Emerging Market Economies’ productivity and resilience, but it will require reforms to boost investments in digital infrastructure and human capital. Deeper regional trade and financial integration would also be important.

    “Third, while these transformations offer great opportunities, we must work together to help avoid the very real risk of some countries falling behind. The first line of defense will of course be strong domestic policies and reforms to help seize these opportunities. But the international community can also support countries and reduce the risk of growing divergence.

    “We are proud to have co-hosted the first global forum that is focused solely on the economic prospects for Emerging Market Economies and we look forward to continuing the discussions in the year ahead and at the second Al Ula conference next year.”

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Wafa Amr

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    MIL OSI Economics –

  • MIL-OSI Economics: Eddie Yue: Navigating new growth corridors in Asia-Pacific

    Source: Bank for International Settlements

    Ladies and Gentlemen, good morning.

    Let me first thank ASIFMA for inviting me here today, and also for hosting this flagship conference in Hong Kong again.

    The theme of this year’s conference, “Navigating New Growth Corridors in Asia-Pacific”, is very timely. The region is undergoing profound transformation, driven by a host of factors including the realignment of global supply chains, shifting economic landscapes, changing investment and consumption patterns, etc.  These factors have resulted in more frequent economic interaction among some of its key economies, particularly between China and ASEAN.  Over the last couple of years, we have often heard the catchy term “corridor business” or “network business”, which describes the commercial opportunities that could arise from such interaction.  What I hope to do today is to share with you what I see are the fundamental forces underpinning these corridors or networks, how Hong Kong has been positioning itself for the resulting opportunities, and what more needs to be done.

    The New Growth Corridors

    Let me start with the forces that are reshaping cross-border commerce and business in the region.

    First is the changing pattern of trades. Part of that and also the headline-grabbing part is driven by changes in geopolitical dynamics and trade policies in the west.  But there are longer term economic considerations too.  Asia is no longer just the world’s factory or a source of low-cost labour.  It has emerged as a powerhouse of innovation and consumption, with China leading the way.  Policies also play a part.  Trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) are facilitating the flow of goods and services in the region.

    The result of these is a stronger trade relationship between China and ASEAN. By 2024, ASEAN has become China’s largest export destination and import source, accounting for 16.4% of China’s exports and 15.3% of imports in 2024.

    Arguably more important is that we are seeing deeper integration of supply chains in the region. In 2023, close to 10% of ASEAN exports were value added sourced from China, almost doubling the share in 2017.  This reflects how China and ASEAN are more tightly wedded together to form an integral part of the global supply chain.

    The second factor is the growth of cross-border investment. This is the most notable in foreign direct investment.  In 2023, China’s FDI to ASEAN reached USD 25 billion, an increase by over one-third in just one year.  As of July 2024, the cumulative bilateral investment between China and ASEAN surpassed USD 400 billion.  Chinese investments cover not only manufacturing sectors, but also increasingly in emerging fields such as the digital economy and the green economy.  On financial investments, China’s investment in ASEAN securities has also seen rapid growth in recent years, hitting USD 18.5 billion as of June 2024, with a yearly growth of over 20%.

    Hong Kong’s Unique Role

    Now, what is Hong Kong’s role as we see the rapid growth of the China-ASEAN corridor?

    As a leading international financial centre in Asia, Hong Kong has always been a key provider of efficient cross-border payments and financing services to support the region’s trade and investment. Of the roughly USD 50 billion outstanding trade finance loans offered by banks in Hong Kong, around 40% were used to finance merchandise trade not touching Hong Kong, reflecting Hong Kong’s role in financing trades in the broader region.

    In fact, our role in trade finance is becoming more significant as RMB gains recognition as an international currency. Data from SWIFT shows that RMB’s share in the global trade finance reached 6.4% in November 2024, ranking second just after the US dollar.  As the world’s largest offshore RMB hub, Hong Kong handles approximately 75% of all offshore RMB transactions, particularly those related to cross-border trade payment and settlement.  This strong position in RMB business, together with our extensive offshore RMB liquidity pool, allow us to provide the most cost-effective RMB trade finance solutions, so that ASEAN exporters and importers can settle their transactions with China conveniently in offshore RMB.

    Let’s turn to our role in cross border investment. Hong Kong has always been the key intermediary for investment going into and out of the Mainland, handling about two-third of such flows in the past few decades. 

    And we do much more than just passing money from one hand to another. Hong Kong’s capital market has been a key venue for raising capital by firms across the region.  Our equity market has continued to be one of the world’s most liquid and resilient, even with the challenging macro environment.  With improved investor sentiment, our market is rebounding and our IPO market returned to the fourth place globally in 2024.  Less visible but no less important is our bond market.  According to our internal analysis, over USD 130 billion of Asian international bonds were arranged in Hong Kong in 2024, with a yearly growth of more than 50%, making Hong Kong the largest bond arranging hub in the region.  As in the case of trade financing, RMB’s share of investment and fundraising activities in the region has also been on the rise.  In the first three quarters of last year, dim sum bond issuance in Hong Kong totalled over RMB 770 billion, increasing by 35% over 2023.

    Enhancing the Trade and Financial Corridors

    All this is good. But what do we need to do next to strengthen our role in enhancing this important growth corridor?  Naturally, as the region’s trade, economic and investment landscapes continue to shift, Hong Kong would have to broaden and adapt our offerings to maintain our leading position.

    Part of this involves building on our traditional strengths. For example, the HKEX introduced a new listing route in 2023 to facilitate the listing of specialist technology companies, which aims at further supporting companies in accessing capital to fund their innovative ideas and drive growth.  For the bond market too, the HKMA and the SFC have jointly established a task force with market participants to explore ways to further promote Hong Kong’s status as a premier fixed income and currency hub.

    With RMB taking up an increasingly larger share of cross-border trade and investment, we have also been beefing up our RMB offerings. On liquidity for example, just last week, we launched the offshore RMB repo business using Northbound Bond Connect bonds as collateral; and HKEX will also soon allow the use of these bonds as margin collateral at OTC Clearing Hong Kong.  To further support trade financing, the HKMA will introduce the RMB Trade Financing Liquidity Facility next week.  The facility will provide banks in Hong Kong with up to RMB 100 billion in liquidity for up to six months, and that will help reinforce Hong Kong’s position as the global leader in offshore RMB business.

    We are also making systematic efforts to look at what more needs to be done to ensure that Hong Kong continues to stay at the forefront. As announced by the Chief Executive in last year’s Policy Address, the HKMA has established a working group to study future supply chain shifts and develop policy recommendations to enhance Hong Kong’s capacity for the related financial services.  The Hong Kong Association of Banks is also setting up a new committee on corridor business. 

    While this is probably not the right occasion to discuss in details the findings of such groups, I would just like to outline three themes emerging from the study as key to capturing the opportunities from the new business corridors in the region.

    First is the importance of digitalisation and innovation, in order to reduce cost, enhance efficiency, and enhance security and reliability. Trade finance is an area ripe for “digital disruption”.  Over the years there have been attempts within the industry to go “electronic” in trade documentation and in obtaining trade financing.  But there is still a lot more that we collectively can help improve.  For instance, we are experimenting with tokenisation use cases in the area of trade and supply chain finance through our Project Ensemble Sandbox.

    The second key theme is sustainability. If you just look at the news headlines, it is hard to shake the impression that sustainability is on the retreat.  To us at the HKMA though, our commitment to an orderly and inclusive transition is as firm as ever.  Last October, we launched the Sustainable Finance Action Agenda, setting out our vision to further consolidate Hong Kong’s position as the sustainable finance hub in the region and support the sustainable development of Asia and beyond.  This commitment is underpinned by two beliefs.  First, our moral obligations, particularly given that the region is the world’s biggest emitter and many of the region’s emerging markets would be badly affected by climate change.  Hong Kong, as the region’s financial centre, has the duty and capability to help. 

    But our commitment is also underpinned by our belief that sustainability is a good business. Hong Kong is Asia’s largest location for issuing international green and sustainable bonds, with over USD 40 billion of these bonds issued here in 2024, capturing 45% of the regional market.  If we include green and sustainability loans as well, total green and sustainable credits issued in Hong Kong exceeded USD 80 billion.  Despite the news headlines, sustainability initiatives across the world, from disclosure standards and climate risk management practices, are coming into force.  They would bring new opportunities to those that are prepared, and we want to make sure that Hong Kong is at the centre of it.

    The third key theme is engagement. Hong Kong has always been the “China gateway”.  But to continue to effectively perform this role at a time when many Mainland corporations and investors are looking abroad, and when businesses in many Asian markets are looking to do business with China, Hong Kong must also get to know these markets, and to tell them our strength.  To really get to know each of these markets, engagement is critical.  Over the past two years, the HKMA has visited various countries in the region to pursue collaborative initiatives with central banks and have welcomed delegations to Hong Kong.  Some of such interaction are being converted into tangible work.  For example, last October, the HKMA and the Bank of Thailand announced the collaboration on Project Ensemble and Project San. Together, we will explore Payment versus Payment (PvP) and Delivery versus Payment (DvP) tokenisation use cases, including trade payments and carbon credits.  The objective of such central bank collaboration is to lay a foundation for the private sector to build on and turn into concrete businesses.  That should be the focus going forward.

    Conclusion

    To conclude, I would just say that the China-ASEAN corridor is definitely expanding at a rapid pace, and Hong Kong is right in the middle. In performing our role as an international financial centre, apart from leveraging on our traditional strengths in banking services and capital markets, we need to focus more on three things: digitalisation, sustainability, and engagement.  I hope this introduction will help set the scene for your discussions through the day, and I wish you all a very successful conference.

    MIL OSI Economics –

  • MIL-OSI Economics: Fabio Panetta: The global economy – navigating uncertainty and change

    Source: Bank for International Settlements

    1. The international economy

    In the advanced economies, inflation is declining and nearing central banks’ targets, leading them to gradually ease monetary tightening. The exception is Japan, where rising inflation has led the central bank to raise official interest rates to 0.5 per cent, the highest level in 17 years.

    Compared with the past, disinflation has been faster and less harmful to economic activity. This is thanks to the rapid unwinding of the shocks that had pushed up consumer prices – such as high energy costs – and to monetary policy, which has kept inflation expectations anchored.

    In the United States, where inflation is falling unevenly amid robust growth, the Federal Reserve is easing monetary conditions more gradually than expected. Its decisions are also being influenced by the recent change in administration, whose new fiscal and trade policies could significantly impact the economy and inflation, with implications for monetary policy. In the midst of this, longer-term yields have risen since the beginning of December, despite the drop in short-term interest rates, spurring an appreciation of the dollar (Figure A.1).

    In the emerging economies, the inflation scenario varies from country to country.

    In China, consumer price inflation is practically nil, while producer price inflation has been negative for two years, exposing the economy to the risk of deflation. Repeated monetary and fiscal interventions have supported financial markets, but their effectiveness in restoring price stability is uncertain.

    By contrast, inflation remains high in Brazil, Türkiye and Argentina, forcing central banks to maintain tight monetary conditions.

    MIL OSI Economics –

  • MIL-OSI Economics: Christodoulos Patsalides: The Central Bank of Cyprus agenda – strategic vision and priorities

    Source: Bank for International Settlements

    Introduction – Strategic Vision Statement and Elaboration

    Distinguished guests, esteemed colleagues,

    I would like to extend my sincere thanks to the organizers of the 12th Banking Forum and Fintech Expo for bringing us together for this important exchange of ideas and insights.

    It is my privilege to have today the opportunity to present the strategic vision and priorities of the Central Bank of Cyprus. In an ever-evolving global and digital economy, we are committed to leading the way in fostering a resilient, innovative, and sustainable financial sector for Cyprus. Our agenda focuses on embracing digital transformation, ensuring robust governance, addressing societal and environmental challenges, and safeguarding financial stability.

    Today, I will outline our key priorities, including advancements in the digital economy, the evolving role of digital payments, the potential introduction of a digital euro, and the regulatory frameworks that ensure responsible governance and societal considerations in our financial systems. Through these efforts, we aim to strengthen Cyprus’ position as a dynamic player within the European financial landscape.

    Cyprus Economy

    To ground our strategic vision, we must first examine the economic landscape in which the Cyprus economy operates. With its key sectors-ICT (Information Communication Technology), tourism, trade, shipping, and construction-, the economy has demonstrated resilience and adaptability despite the consecutive significant geopolitical challenges, including the ongoing conflicts in Ukraine and the Middle East. In recent years, Cyprus has achieved robust growth rate well above the EU average and maintained a strong fiscal position, consistently posting surpluses that have bolstered public finances. As a result, international rating agencies have upgraded their ratings well within the investment grade, highlighting our sound economic management, fiscal discipline, and reforms in the banking sector.

    Banking Sector in Cyprus

    Building on the strength of our economy is the Cypriot banking sector, which has built up remarkable resilience and robustness despite a series of unprecedented and successive crises in recent years. The sector’s solvency, as indicated by the Common Equity Tier 1 (CET1) ratio, rose to 23,5% in the third quarter of 2024, achieving its highest level on record and significantly surpassing the European average of 16,0%. Additionally, the Liquidity Coverage Ratio (LCR)-a key indicator of credit institutions’ capacity to withstand severe liquidity stress-reached 336% in September 2024. This level exceeds the regulatory minimum of 100% by more than threefold and stands well above the European average of 161,4%. The non-performing loan (NPL) ratio fell to 6,5% in the third quarter of 2024, marking its lowest level since 2014, when the NPL definition was standardized across the European Union.

    However, there is no room for complacency as macroeconomic uncertainty, geopolitical risks, and emerging threats like cyber and climate risks grow. Banks must adapt quickly to identify and address these evolving challenges effectively. Moreover, technological advancements bring about a new landscape in which banks are called upon to compete. The pursuit of an appropriate business model is key.

    Digital Economy and Global Digital Trends

    As we look toward the future, the digital economy emerges as a defining feature of global trends. Technology has the ability to sustain and improve our standards of living and the long-term productivity of our economy. Examples of innovative technologies used in financial services (usually referred to as FinTech) include artificial intelligence, cloud computing, digital wallets, big data analytics and biometrics. These technologies have been applied to improve customer service, automate payments, reengineer business processes, detect suspicious activity, and assist with customer profiling and digital onboarding. However, we are yet to see the realization of potential in other promising new technologies such as distributed ledger technology (DLT), smart contracts and tokenization.

    As technology becomes more widespread in our evolving digital economy, cyber risk and data security continue to be by far the most prominent driver of operational risk for banks. Technological advances with increased sophistication, growing reliance on digital solutions, but also growing capabilities of cyber offenders, have all resulted in enhanced risk exposure for banks, including vulnerability to sophisticated cyber-attacks. Cyber risk is often driven by geopolitical risk, thus raising overall risk to a much higher level. Supervising these risks remains one of our priorities.

    To take full advantage of the potential of innovative technologies responsibly while managing risks, common supervisory and regulatory approaches are essential. The EU has introduced key legislation such as DORA, PSD3, FiDA, MiCAR, and the AI Act, which aim to strengthen financial sector resilience and boost consumer and investor confidence by guiding responsible innovation. Recognizing the evolving market dynamics, the Central Bank of Cyprus has established an Innovation Hub to foster dialogue with fintech stakeholders and support domestic financial innovation.

    Digital Payments in Cyprus

    A key element of the digital economy is the rapid rise of digital payments. We find ourselves in an era where digital transformation is reshaping economies, and Cyprus is no exception. One of the most prominent trends is the proliferation of digital payments, which now capture around 96% of cashless payments. At the same time, preference for cash payments is shrinking, as evidenced by a remarkable decline of 11% since 2022 that placed Cyprus at the top of euro area countries. Cypriots use cards 1,3 times more frequently than their European peers, while our contactless card payments capture more than half of all card payments consistently since 2022. This reflects the readiness of local businesses to accept cards and to opt for terminals that embed Near-Field-Technology. 

    In the same vein, e-commerce exhibits gradual expansion, manifested by online purchases via cards almost doubling over a six-year period to 28% of the total of card payments. It is indeed remarkable that the use of mobile phones for online purchases has almost reached one quarter of the total, outperforming the EU average which stands at 16%.

    As of the 9th of January of this year, instant payments have become a reality for all banking participants. This signifies that account-to-account payments can be effected at the speed that people demand in the digital and social media age: transmission within 10 seconds, with immediate access to funds on a 24/7/365 basis, as opposed to the current 1-2 days waiting time. Consumers and businesses will reap the benefits in the months to come. 

    Electronic Money Institutions & Payments Institutions

    E-money payments are gaining traction, driven by opportunities in fintech, e-commerce, and digital payments. Having licensed 4 electronic money institutions this year, the Central Bank of Cyprus now supervises 27 electronic money institutions and 11 payment institutions. 

    As part of our broader strategic agenda, we are committed to drawing on international experience in supporting the Central Bank of Cyprus in refining its approach for regulating, licencing and supervising Electronic Money Institutions (EMIs) and Payment Institutions (PIs) in Cyprus.

    In December, the CBC, announced the establishment of a comprehensive licensing and supervisory strategy for the sector of these institutions.

    For the development of this strategy, the CBC appointed an international consultancy firm whose experts, in collaboration with CBC staff, conducted an analysis of the sector and its inherent risks.

    The objective of the new strategy is to pursue the prudent and sustainable growth of the sector. Among other measures, the strategy includes:

    • The enhancing and enriching of the licensing processes for institutions applying to participate in the sector.
    • The Strengthening of the supervision of institutions by implementing a risk-based supervisory approach for each institution and enriching supervisory tools. 
    • And the adoption of best practices for the operation of the sector.

    To achieve these objectives, a Division for the Supervision of Electronic Money and Payment Institutions is being established, which will henceforth undertake the prudential supervision of the sector.

    Digital Euro

    Moving on to the digital euro, I will give a brief status update from last year’s forum. As legislative negotiations continue in Brussels, the Eurosystem is progressing through the first part of the preparation phase for the digital euro, focusing on calibrating the holding limits without compromising financial stability or bank intermediation as the banks will retain their role vis-à-vis their customers. The ECB continues to rapport with the market, with specific holding entitlements to be defined later. The rulebook formulation, developed with stakeholder input, will set standards for future digital euro distributors, leveraging existing frameworks for cost efficiency and allowing flexibility for innovation. Consumers and businesses prioritize functionalities like conditional payments and effortless bill-splitting, guiding expectations for future services.

    Moving on to the platform and infrastructure preparations, the ECB is now selecting candidates from its recent application process and plans to enhance engagement with distributors to ensure readiness for the potential issuance and successful distribution of the digital euro, if and when the decision to issue is made.

    Allow me to take a moment to refer to our efforts at raising awareness within our market through various communication channels, targeting the general public, the business community, and financial institutions. Aside from articles that we regularly publish in the press and on professional social networking platforms, we invite various stakeholder groups to the CBC premises. Last July we gave a press conference with Mr Piero Cipollone, member of the Executive Board of the European Central Bank, as keynote speaker. In November we held a focus session with business associations and their members, and in December we presented a thorough status update of the project to the members of our National Payments Committee. Last but not least, the Central Bank of Cyprus participates in panel discussions and presents the digital euro project at various local and international conferences.

    ESG Regulatory Landscape: Governance, Society, and Climate Change

    A. Governance

    As we embrace these innovations, we remain steadfast in our commitment to strong governance. Governance, a core pillar of ESG, is crucial in enhancing transparency, accountability, and ethical standards in financial institutions. Strong governance enables sound lending decisions, reduces conflicts of interest, and ensures compliance with regulations including the updated Directive on Corporate Sustainability and ESG provisions in the recently enacted CRD 6, protecting institutional reputation and minimizing financial risks.

    B. Encompassing Society Considerations in Business Activity: Financial Conduct

    Social factors, including diversity, labour practices, community engagement, and adherence to human rights standards, are also vital for modern credit institutions. Embedding diversity in governance and fair pricing in operations fosters trust among stakeholders, promotes financial inclusion, and enhances institutional resilience, strengthening reputation and market standing.

    C. Climate Change – CBC Initiatives

    The Central Bank of Cyprus actively engages in thematic reviews, stress tests, and in-depth analyses led by the European Central Bank to assess institutions’ preparedness on climate risk and its integration into their strategy, governance, risk management and disclosures. This supervision helps ensure credit institutions speed up their preparations to manage ESG risks while meeting necessary sustainability and resilience standards. Additionally, the smaller institutions, directly supervised by us, were requested to develop implementation plans, with specific milestones, in order to advance the management of climate related risks, in line with the ECB’s 13 supervisory expectations which stipulate how banks should integrate climate and environment risks into their business models and strategies, governance and risk appetite.

    Beyond what is expected from the supervised institutions, the Central Bank of Cyprus has set up internally a Sustainability Team, aiming to support the CBC in addressing climate change in line with its mandate to maintain price stability, safeguard financial stability, supervise banks and support the general economic policy of the State, while also contributing to the target of net zero carbon emissions, and the continuation of strong governance. The recent visit of Mr Frank Elderson, member of the ECB’s Executive Board and Co-Chair of the Task Force on Climate-related Financial Risks of the Basel Committee on Banking Supervision touched upon these issues as well.

    Concluding remarks

    Let me now conclude: the strategic vision of the Central Bank of Cyprus is built on the pursuit of price stability and financial stability in its capacity as the macroprudential authority of the country. By embracing the digital economy, ensuring robust governance, and addressing climate change, we are positioning Cyprus as a forward-looking financial hub in Europe. Together, we will navigate the challenges and opportunities of the future, ensuring stability and prosperity for all.

    MIL OSI Economics –

  • MIL-OSI Economics: Christodoulos Patsalides: Cyprus and the euro area – navigating growth, stability, and opportunities

    Source: Bank for International Settlements

    I would like to thank the Cyprus Shipping Chamber for giving me the opportunity to address this meeting today and discuss key economic developments. My remarks will begin with an overview of Cyprus’ economic performance. I will then discuss the notable progress achieved in the banking sector and underscore the critical role of the shipping industry in driving export revenues. Following this, I will turn to the broader economic outlook for the Euro Area, concluding with insights into the European Central Bank’s latest monetary policy decision on achieving price stability.

    Domestic economic outlook

    The Cypriot economy continues to exhibit robust growth, despite facing persistent external challenges in a turbulent and uncertain global environment. Geopolitical risks, such as the ongoing war in Ukraine, conflicts in the Middle East, and rising international tensions, have elevated economic uncertainty.

    Amidst these conditions, the Cypriot economy has consistently demonstrated remarkable resilience and flexibility. This is clearly reflected in its recent upgrades by credit rating agencies to the “A” category, further cementing its reputation in international financial markets. These upgrades underscore the growing confidence in Cyprus’s fiscal policies and the solid outlook for its economic and banking systems.

    Improved fiscal performance has been a cornerstone of these positive developments. Public debt has been reduced significantly, declining from 114% of GDP in 2020 to 74% in 2023, highlighting disciplined financial management. Projections from the Ministry of Finance indicate that this downward trajectory will continue, with public debt expected to fall below 50% of GDP by 2028. This progress strengthens fiscal sustainability and enhances the country’s ability to respond to future challenges, reflecting a strong commitment to long-term economic stability.

    According to the December 2024 projections of the Central Bank of Cyprus (CBC), economic growth for 2024 is expected to reach 3.7%, significantly higher than the projected Eurozone average of 0.7%. The expansion of productive sectors such as technology, trade, tourism, financial and professional services, shipping, and construction-particularly large private sector infrastructure projects-has been a key driver of growth.

    For the period 2025-2027, GDP is expected to grow by approximately 3% annually, driven primarily by a projected increase in domestic demand and, to a lesser extent, external demand. Domestic demand is expected to be supported by a rise in private consumption due to the increase in real disposable household income and the continued resilience of the labour market. Additionally, domestic demand will benefit from ongoing large-scale private non-residential investments, infrastructure projects aimed at supporting digital and green development, and other reform projects under the Recovery and Resilience Plan.

    Regarding the shipping sector in particular, our small island has a maritime history spanning hundreds of years, and it is rightly is considered as one of the main pillars of the Cypriot economy. The country’s maritime industry considerably contributes directly and indirectly to the country’s GDP. Based on 2023 data, the shipping sector ranks third with a share of 17.2% to the total value of exports of services, after the Information and Communication Technology sector, the financial services and the tourism sectors, with shares of 30.2%, 20.3% and 11,5% respectively. In view of the aforementioned figures, it is evident that the sector managed to stay focused and strong despite the unprecedented challenges faced in the last few years, namely the covid pandemic, the wars in Ukraine and Gaza as well as the tensions in the Red Sea. 

    The strength of the labour market further reinforces this positive narrative. Unemployment has declined to 5% in the first nine months of 2024, compared to 5.8% in 2023. It is projected to remain at 5% for the full year and to fall further to 4.6% by 2027, approaching levels indicative of full employment. These figures compare favourably to the euro area, where unemployment is forecast to stabilize at 6.1% by 2027.

    On the prices front, inflationary pressures have eased significantly, with inflation dropping to 2.2% in the first eleven months of 2024, compared to 4.1% in the same period of 2023. According to the CBC’s December 2024 projections, inflation is expected to stabilize near the 2% medium-term target, reaching 1.9% in 2025, 2.1% in 2026, and 2.0% in 2027.

    The Cyprus banking sector

    The Cyprus banking sector has demonstrated tangible progress and resilience, with key financial metrics reflecting a strong and sound performance. A primary indicator of this strength is the solid improvement in terms of solvency, with the Common Equity Tier 1 (CET1) ratio increasing from 21.5% in December 2023 to 23.5% in September 2024. This increase marks the highest CET1 ratio in the Union, surpassing the EU average of 16.0%.

    Despite the challenges posed by consecutive crises, no tangible signs of credit quality deterioration are observed up to this point. In fact, the Non-Performing Loans (NPL) ratio has continued its positive downward trend. As of September 2024, the NPL ratio stands at 6.5%, a marked improvement from 7.9% in December 2023. This reduction reflects the sector’s ongoing commitment to addressing legacy issues, bolstering the financial health of the asset side of its balance sheet, and reinforcing its capacity to support economic recovery. Yet, there is still some way to go, particularly considering that the average NPL ratio of the EU sector stands as of September 2024 at 1.9%. Furthermore, the improvement within the Cyprus banking sector has not been homogeneous across all institutions, with certain banks lagging behind. These institutions must therefore accelerate their efforts to align with the sector-wide advancements.

    Profitability metrics have been robust, with the Return on Equity (RoE) reaching 23.2% in September 2024 as opposed of 11,1% of the EU average. Operational efficiency has improved as the cost-to-income ratio declined to 35.5%, a notable reduction from previous years and lower than the EU average of 53%.

    Cyprus banks also exhibit some of the highest liquidity standings in the EU, reinforcing their ability to meet potential liquidity demands. The Liquidity Coverage Ratio (LCR), a measure of a bank’s ability to withstand large liquidity outflows under a stressed period, stands as of September 2024 at 336%, compared to the EU average of 161% and minimum requirement of 100%. Furthermore, the Net Stable Funding Ratio (NSFR), which assesses the stability of a bank’s funding base, stands also high at 187%, surpassing both the EU average of 127% and the minimum regulatory requirement of 100%. The Cypriot banking sector is thus well-positioned to face potential market disruptions and continue driving economic stability.

    Through the first 11 months of 2024, Cypriot banks granted €3.3 billion in new loans to households and non-financial corporations (NFCs), surpassing the already high €2.9 billion provided during the same period in 2023. A negative side effect of a strongly liquid banking sector in a small country is the slow adjustment of interest rates in response to ECB monetary policy actions. Banks must exhibit responsible pricing policies in the face of reputation risk and the need to support the competitiveness of the economy.

    Looking to the future, the banking sector faces challenges such as adapting to AI, mitigating cyber risks, addressing geopolitical uncertainties, and transitioning to a greener economy. Tackling these priorities is essential for sustaining the sector’s positive trajectory and remains central to our supervisory agenda.

    Economic Developments in the Euro Area

    The risks to economic growth continue to lean towards the downside. Increased disruptions in global trade may hinder euro area growth by suppressing exports and slowing the global economy. Additionally, reduced confidence could delay the recovery of consumption and investment beyond current expectations. The ECB’s December projections estimate economic growth of 0.7% in 2024, 1.1% in 2025, 1.4% in 2026, and 1.3% in 2027. This recovery is expected to be driven primarily by rising real incomes, which should enable households to boost consumption, alongside increased investment by firms.

    On the price front, euro area inflation rose to 2.4%, in December 2024, up from 2.2% in November, primarily driven by increased energy costs but this was expected due to energy-related upward base effects.

    Despite the upticks in recent months, the disinflation process is well on track. ECB Staff see headline inflation averaging 2.4 per cent in 2024, 2.1 per cent in 2025, 1.9 per cent in 2026 and 2.1 per cent in 2027 when the expanded EU Emissions Trading System becomes operational. Services inflation continues to be sticky at around 4%, largely stemming from the delayed catch-up adjustment of certain services prices to past inflation surges and ongoing wage pressures. At the same time, recent signals point to continued moderation in wage pressures and to the buffering role of profits.

    Inflation is expected to fluctuate around its current level in the near term. It should then settle sustainably at around the two per cent medium-term target. Easing labour cost pressures and the continuing impact of past monetary policy tightening on consumer prices should help this process. Most measures of longer-term inflation expectations continue to stand at around 2 per cent.

    ECB Monetary Policy

    Based on our updated assessment of the inflation outlook, underlying inflation dynamics, and the effectiveness of monetary policy transmission, we decided at our January Governing Council meeting to further reduce the three key ECB interest rates by 25 basis points. This adjustment brought the deposit facility rate-the primary tool for steering our monetary policy stance-to 2.75%

    Overall, the euro area’s economic environment remains intricate, with the risks to economic growth tilted to the downside and with both upside and downside risks to inflation present. The ECB continues to navigate these challenges through measured, careful adjustments in its monetary policy stance. Growth is a factor influencing inflation dynamics. It is crucial to ensure that the economy does not grow too slowly, as this could lead to inflation stabilizing below the target. As we move forward, in the current environment of elevated uncertainty stemming from potential global trade frictions and geopolitical tensions, the ECB’s prudent data-dependent meeting by meeting approach shall continue to be important in addressing the evolving economic conditions within the euro area to ensure the timely return to the inflation target in a sustainable manner. The ECB is not pre-committing to a particular rate path.

    Conclusion

    Let me now conclude: the Cypriot economy has shown resilience and adaptability, supported by strong performance, prudent fiscal policies, and a stable financial system, with key contributions from banking and shipping. As one of the pillars of our economy, the shipping sector continues to demonstrate global competitiveness and innovation, further strengthening Cyprus’s position as a leading maritime hub. Looking ahead, challenges like climate change and geopolitical risks demand strategic foresight, but Cyprus is well-prepared to sustain growth.

    At the Euro Area level, the economic outlook balances risks and opportunities, with the ECB ensuring price stability and sustainable growth through proactive, data-driven policies. By remaining data-driven and proactive, we can ensure that the monetary framework across the region remains resilient and responsive to evolving global dynamics.

    Thank you.

    MIL OSI Economics –

  • MIL-OSI Economics: Ida Wolden Bache: Economic perspectives

    Source: Bank for International Settlements

    Data accompanying the speech

    “Some of the richest countries in the world are small. They are also outward looking.”

    So starts the first chapter of Victor Norman’s textbook on a small open economy. This is also an apt description of our country. Openness and trade have been essential to our prosperity.

    Victor Norman passed away last year, and with that Norway lost a leading researcher and an outstanding communicator. The first edition of Victor Norman’s book was published in 1983. The quotation I just cited is taken from the expanded edition released ten years later. That was more than 30 years ago, but the book bears its age well. The insights it provides are no less relevant today.

    The framework conditions for international cooperation and trade are in play. There is war in Europe, and the governments of many countries see a need for rearmament. In today’s world, emphasis must be placed on national security and preparedness considerations.

    But the gains from trade with other countries are still there in full, especially for a small economy like ours. Norman points out that small countries often have a narrow resource base as they tend to cover a small part of the earth’s crust. Norway, for example, is abundant in energy resources, but poor in arable land and the crop season is short. Norman posits in his textbook that if we shut ourselves out, such a resource base would have left us sitting hungry in overly heated homes. Trade with other countries allows us to decouple consumption from production. Small countries also have small markets, which means that the cost of producing some things domestically is higher than importing them. International trade expands markets. We can sell aluminium and buy aircraft.

    But as Norman writes: “Open economies are not without their problems. Small countries must (almost by definition) take the world as it is – with minimal possibility of influencing international developments.” This is something we have experienced, most recently during the pandemic and the subsequent global surge in inflation.

    MIL OSI Economics –

  • MIL-OSI Economics: Samsung Wallet Expands Digital Key Support for Select Volvo Cars and Polestar Vehicles

    Source: Samsung

     
    Samsung Electronics today announced Digital Key compatibility with select Volvo Cars1 and Polestar2 vehicles through Samsung Wallet, offering more drivers a seamless way to use their Galaxy smartphone to unlock, lock and start their vehicle.
     
    “Expanding Samsung Digital Key access is an important part of our commitment to offering connected, secure experiences within the Galaxy ecosystem,” said Woncheol Chai, EVP and Head of the Digital Wallet Team, Mobile eXperience Business at Samsung Electronics. “Our partnership with automakers such as Volvo Cars and Polestar marks another exciting step forward in making everyday activities like driving hassle-free for more Galaxy users worldwide.”
     

     
    ▲ Volvo EX90
     
    ▲ Polestar 3
     
    Built directly into Galaxy devices, Digital Key3 lets users lock, unlock and start the paired vehicle without a physical key. Digital Key offers three ways to control the car: Ultra-wideband (UWB)4 for hands-free access, Near Field Communication (NFC) for tap-to-unlock and start, and Bluetooth low energy (BLE) control via Samsung Wallet. Users can also share Digital Keys with friends and family across OEM devices, managing access as needed.
     
    Samsung Digital Key meets EAL6+5 certification standards, the top-level security for smart devices, to protect against unauthorized access by ensuring secure embedding within the device. UWB technologies, a standardized communication protocol set by the Car Connectivity Consortium (CCC), further reduce the risk of unauthorized vehicle access with precise and reliable functionality. If a device containing a Samsung Digital Key is lost or stolen, users can remotely lock or delete their Digital Key via Samsung Find. Biometric and PIN-based user authentication on Samsung Wallet ensures that every interaction remains secure and private.
     
    Launched in June 2022, Samsung Wallet is a versatile platform that allows Galaxy users to organize Digital Keys, payment methods, identification cards and more in one secure application. Protected by defense-grade security from Samsung Knox and integrated across the Galaxy ecosystem, Samsung Wallet provides seamless connectivity and enhanced security for users in their everyday lives.
     
     
    Availability
    Samsung Digital Key functionality for select Volvo Cars vehicles will roll out starting this month in Europe, North America, Latin America and Asia.6 Samsung Digital Key functionality for select Polestar vehicles will roll out starting this month in Europe, North America and Asia.7
     
     
    About Volvo Car Group
    Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected car brands in the world with sales to customers in more than 100 countries. Volvo Cars is listed on the Nasdaq Stockholm exchange, where it is traded under the ticker “VOLCAR B”.
     
    “For life. To give people the freedom to move in a personal, sustainable and safe way.” This purpose is reflected in Volvo Cars’ ambition to become a fully electric car maker and in its commitment to an ongoing reduction of its carbon footprint, with the ambition to achieve net-zero greenhouse gas emissions by 2040.
     
    As of December 2024, Volvo Cars employed approximately 42,600 full-time employees. Volvo Cars’ head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars’ production plants are located in Gothenburg, Ghent (Belgium), South Carolina (US), Chengdu, Daqing and Taizhou (China). The company also has R&D and design centres in Gothenburg and Shanghai (China).
     
    About Polestar
    Polestar (Nasdaq: PSNY) is the Swedish electric performance car brand with a focus on uncompromised design and innovation, and the ambition to accelerate the change towards a sustainable future. Headquartered in Gothenburg, Sweden, its cars are available in 27 markets globally across North America, Europe and Asia Pacific.
     
    Polestar has three models in its line-up: Polestar 2, Polestar 3 and Polestar 4. Planned models include the Polestar 5 four-door GT (to be introduced in 2025), the Polestar 6 roadster and the Polestar 7 compact SUV. With its vehicles currently manufactured on two continents, North America and Asia, Polestar plans to diversify its manufacturing footprint further, with production of Polestar 7 planned in Europe.
     
    Polestar has an unwavering commitment to sustainability and has set an ambitious roadmap to reach its climate targets: halve greenhouse gas emissions by 2030 per-vehicle-sold and become climate-neutral across its value chain by 2040. Polestar’s comprehensive sustainability strategy covers the four areas of Climate, Transparency, Circularity and Inclusion.
     
     

    1 Volvo vehicles supporting Digital Key include: Volvo EX90. More vehicles will follow.2 Polestar vehicles supporting Digital Key include: Polestar 3. More vehicles will follow.3 Samsung Wallet Digital Key support is available on select devices, including: Galaxy S20 Ultra/S20+/S20, S21 Ultra/S21+/S21/S21 FE, S22 Ultra/S22+/S22, S23 Ultra/S23+/S23/S23 FE, S24 Ultra/S24+/S24/S24 FE, S25 Ultra/S25+/S25, Note20 Ultra/Note20, Z Fold2, Z Fold3, Z Fold4, Z Fold5, Z Fold6, Z Flip 5G, Z Flip3, Z Flip4, Z Flip5, Z Flip6.4 UWB support is available on select devices, including: Galaxy S21 Ultra/S21+, S22 Ultra/S22+, S23 Ultra/S23+, S24 Ultra/S24+, S25 Ultra/S25+, Note20 Ultra, Z Fold2, Z Fold3, Z Fold4, Z Fold5, Z Fold6.5 Evaluation Assurance Level 6 Augmented (EAL6+) is one of the highest security certifications within Common Criteria, an internationally recognized standard for computer security certification.6 Digital Key rollout for Volvo in Asia begins in Australia, Malaysia and Thailand.7 Digital Key rollout for Polestar in Asia begins in Australia, New Zealand, Hong Kong and Singapore.

    MIL OSI Economics –

  • MIL-OSI Economics: Joachim Nagel: Financing the transition to greenhouse gas neutrality – how much and with which instruments?

    Source: Bank for International Settlements

    Check against delivery 

    1 Introduction

    Ladies and gentlemen, 

    I am delighted to be here with you today. What better place than Glasgow to discuss the economic impacts of climate change and the green transition! And not just because it played host to the 2021 United Nations Climate Change Conference.

    Glasgow is also where Adam Smith, the father of modern economics, studied and taught as a professor. Have you ever wondered what he would have thought of climate change? As a famed free-market economist, he might not be the first person you would think of. But even Adam Smith acknowledged that the invisible hand can sometimes lead to suboptimal outcomes.

    Climate change is a prime example of this: market prices do not reflect the negative side effects of greenhouse gas emissions. Fortunately, it is now widely acknowledged that governments need to intervene and encourage individuals and companies to reduce their emissions. 

    Switching to a net-zero emissions economy is a major task. It requires changes in behaviour, innovation and significant investment to rebuild our capital stock. And this transition requires significant financing. 

    In my speech, I will explore what financing the transition to a greenhouse gas-neutral economy could look like. More specifically, I will focus on two key issues. First, how much investment is needed to achieve greenhouse gas neutrality, and how much of this investment is “additional”? Second, what could the financing mix to fund this investment look like?

    I know that answering these questions seems like a tough challenge – a taughy fleece tae scoor. But I will do my best to illustrate my points with clear, practical examples. Along the way, I will discuss electric cars and heating systems to help us understand the issues. 

    My remarks will focus on the European Union (EU), borrowing some detailed insights from Germany. Unfortunately, these data do not cover the United Kingdom (UK). But I will do my best to infer some insights for the UK as well.

    2 How much needs to be invested?

    Let me start with the question of how much the EU needs to invest to achieve greenhouse gas neutrality. The EU’s Fit for 55 package aims to reduce greenhouse gas emissions by at least 55 per cent by 2030. These reductions are benchmarked against 1990 emission levels. This is an intermediate step towards full greenhouse gas neutrality, for which the EU still needs to pass legislation.

    From 2021 to 2030, the European Commission estimates that EU countries need to invest over €1.2 trillion annually.1 This amounts to nearly 8 per cent of the EU’s GDP. The private sector must take on the bulk of these investments. The investment needs are significantly more than the actual annual investment of €760 billion in the previous decade. 

    The European Commission defines the difference between the investment required and the actual investment as the “additional” investment need. This additional investment need amounts to €480 billion, or around 3 per cent of GDP.

    This definition of “additional” investment is very useful from an accounting perspective. It gives a clear picture of how much more the EU needs to invest to meet its climate goals. However, from a financing perspective, it helps to define additional investment differently.

    There are two types of investment needed to achieve greenhouse gas neutrality. The first type is investment that would not happen without the goal of reducing greenhouse gas emissions. A prime example of this type of investment is technology to capture and store carbon dioxide. This technology will play a crucial role in sectors that are difficult to decarbonise. These investments need economic resources and financing beyond what an economy spends just to maintain its capital stock.

    The second type is investment where a greenhouse gas-neutral alternative replaces a fossil fuel-based technology. To illustrate this point, imagine two households buying a new car. The Jones family spend €45,000 on a new combustion engine car. From a technical perspective, the Jones family are making a replacement investment. No additional financing is needed. Meanwhile, the Smith family decide to switch from a combustion engine car to an electric vehicle. Let us say a comparable electric car costs €50,000. Of this amount, €45,000 is a replacement investment. Only the remaining €5,000 requires additional financing.

    Contrast this with how the European Commission defines additional investment: They subtract the annual average value of electric cars bought in the past from the value of electric vehicles needed to meet the EU’s intermediate greenhouse gas reduction goals. Past registrations of electric vehicles fell significantly short of what is needed. Accordingly, the additional investments, as defined by the European Commission’s accounting perspective, are presumably much higher than the additional financing needs. 

    How great could the additional financing needs be? While we do not yet have specific figures for the EU, there are some numbers for Germany. A recent study estimates that Germany needs to invest around €390 billion annually from 2021 to 2030 to reduce emissions by 65 per cent compared to 1990.2 They measure this absolute sum in 2020 prices. Relative to GDP, the investment amounts to 11 per cent. 

    This is fairly close to the 8 per cent investment needs calculated by the European Commission for the EU.3 However, only around 30 per cent of this investment requires additional financing. In absolute terms, this amounts to about €120 billion. 

    Let me pause for a moment to summarise the two key takeaways from my remarks so far. First, the transition to greenhouse gas neutrality calls for significant investment. However, in many cases, we are replacing fossil-based technologies with greenhouse gas-neutral alternatives. Accordingly, the additional financing needs are much smaller and seem manageable.

    Second, we can minimise the additional financing needs by replacing already largely depreciated capital stock. By contrast, replacing relatively new capital stock that has barely depreciated would increase the economic and financial costs. Let me illustrate this point with a brief anecdote. 

    On 1 January 2024, the German government introduced a new law governing heating systems. In German, it is known by the beautiful name “Gebäudeenergiegesetz“. This law mandates that heating systems use around two-thirds renewable energy. In anticipation of this new law, many households replaced their old gas heating systems with new ones. These heating systems can run for around 25 years, so they depreciate over a long period. 

    Bad luck if you just installed a new gas heating system and live in the German city of Mannheim. Here, the local gas provider has said it intends to stop its services in 2035. This means that a long-term investment will become unviable when little more than half of it has depreciated: A waste of both financial and economic resources.

    This anecdote highlights one key point: to avoid wasting money, we need a clear and reliable path to greenhouse gas neutrality. With a clear path mapped out, people can confidently invest in the transition. 

    3 What could the financing mix look like?

    Now, let us explore what the potential financing mix could look like. To achieve a greenhouse gas-neutral economy, households, firms and the public sector all need to invest. They can fund these investments using both internal and external sources.

    As the name would suggest, internal financing comes from within. Like the Smith family putting aside some of their income to pay for their new car. Or think of a firm that sells its products and saves some of the profits. That is internal financing, too. External financing, on the other hand, comes from outside sources such as banks or investors. 

    Regarding their financing mix, households, non-financial firms and the public sector differ considerably. Households tend to save significantly and mainly use bank loans as a source of external finance. The public sector, on the other hand, raises most of its funds from external sources by issuing debt securities. Only firms have a more diversified financing mix. Equity and bank loans play prominent roles here. Note that these observations hold for the EU, the UK and Germany alike. 

    So, what might the financing mix for the transition to a greenhouse gas-neutral economy look like? To estimate these figures, we need two key components: First, the respective shares of households, firms and the public sector in total investment. According to rough estimates by Bundesbank staff for Germany, households might have to cover about one-third of the investment, the public sector around 20 per cent, and firms just under half.4

    Second, estimates for the future financing structure of the sectors. We assume that future financing structures will remain unchanged from today.5 This implies that past financing structures are suitable for future climate investment. If this were not the case, perhaps due to the need for innovative financing instruments, the financing structure may differ. 

    What result do we get when we combine the two components? For Germany, we estimate that about 20 per cent of the financing mix could come from internal financing, primarily household savings. In terms of external financing, bank loans might play the largest role. They account for over one-quarter of the estimated financing mix. Households in particular obtain almost all their external financing from banks.

    The second-largest external financing source could be debt securities, accounting for around 20 per cent. The public sector plays a prominent role here, with funding coming almost exclusively from bonds. Finally, the third-largest external financing source could be equity financing, comprising around one-sixth. Firms are the only users of this financing source, as households and the public sector do not issue equity. Different instruments, like loans from non-bank financial intermediaries, might cover the final sixth of the overall investment needs. 

    So, what does this mean for the EU and the UK? Can the findings for Germany be generalised? Fortunately, the financing structures of households, firms and governments are largely comparable across these regions.6 Therefore, one of the two components in the calculations is roughly equal.

    The second component – the sectoral investment needs – is less certain. I am not aware of any studies for the EU or the UK that divide the investment needs across households, firms and the public sector.7 Without a better alternative, the findings for Germany may provide a reasonable initial estimate for both the EU and the UK.

    4 Concluding remarks

    Let me summarise and conclude. I have three main takeaways to share.

    First, “additional” investment needs to become greenhouse gas-neutral can also be defined from a financing perspective. In many cases, we are replacing fossil fuel-based technologies with greenhouse gas-neutral alternatives. And this requires additional financing only if greenhouse gas-neutral technologies are more expensive or if the capital stock being replaced is not yet fully depreciated. The additional financing needs are significantly smaller than the total investment required. Accordingly, I am confident that our financial system can mobilise the necessary financing. 

    Second, banks may play a larger role in financing the climate transition than is commonly anticipated. The main reason for this conclusion is that a substantial portion of climate investments falls on households. They need to make their homes more energy-efficient and replace fossil-fuelled heating systems with greenhouse gas-neutral alternatives. And households simply do not have many viable alternatives to bank loans.

    Accordingly, a robust banking system is essential for achieving greenhouse gas neutrality. That is why we at the Bundesbank are committed to completing the European banking union. However, we also need to improve access to alternative financing sources. Non-financial firms, in particular, would greatly benefit from better capital market financing. That is why we at the Bundesbank are dedicated to creating a European capital markets union. 

    Third, legislators can minimise the additional financing needs by ensuring that the path to greenhouse gas neutrality is planned stringently and for the long term. Why? Because it provides incentives to avoid investments in fossil fuel technologies that may not be fully depreciated before they become non-viable. 

    MIL OSI Economics –

  • MIL-OSI Economics: SimCorp: BaFin warns about identity fraud

    Source: Bundesanstalt für Finanzdienstleistungsaufsicht – In English

    The financial supervisory authority BaFin warns against investment offers, in particular via WhatsApp, which allegedly originate from SimCorp GmbH, Bad Homburg, or another company of the SimCorp Group. According to their findings, unknown persons using unauthorised names and photos of members of the SimCorp Group are providing financial and investment services without permission. In particular, they offer the brokerage of pre-IPO shares in connection with upcoming IPOs. This is a case of identity fraud.

    Anyone providing financial or investment services in Germany may do so only with authorisation from BaFin. However, some companies offer these services without the necessary authorisation

    The information provided by BaFin is based on section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG)..

    Please be aware:

    BaFin, the German Federal Criminal Police Office (Bundeskriminalamt – BKA) and the German state criminal police offices (Landeskriminalämter) recommend that consumers seeking to invest money online should exercise the utmost caution and do the necessary research beforehand in order to identify fraud attempts at an early stage.

    MIL OSI Economics –

  • MIL-OSI Economics: Earning Points for Lufthansa Group frequent flyer status now also possible on ITA Airways flights

    Source: Lufthansa Group

    The integration of ITA Airways into the Lufthansa Group is making further progress: Miles & More members can now also earn Points for their frequent flyer status on ITA Airways flights in addition to miles. By Points, Qualifying Points and – in Business Class – HON Circle Points, they will have even more opportunities to obtain or achieve Lufthansa Group frequent flyer status in future. The number of Points is awarded on ITA Airways flights according to the same system as for the other Lufthansa Group airlines and the co-issuing Miles & More airline partners.

    ITA Airways has been a member of the Lufthansa Group since January 17, 2025, offering passengers additional benefits and improvements. Miles & More members already have the opportunity to earn and redeem miles on ITA Airways flights. In addition, members of Volare, the frequent flyer program of ITA Airways, can also earn and redeem Volare Points on Lufthansa, SWISS, Austrian Airlines and Brussels Airlines. The offer to qualify for Lufthansa Group status on flights with ITA Airways with immediate effect is another important step in the collaboration.

    “It is great to see how quickly the integration of ITA Airways into the Lufthansa Group is progressing,” says Dieter Vranckx, Chief Commercial Officer of the Lufthansa Group. “This is a significant strategic step as loyalty is a key success factor of this integration, since we can offer seamless benefits and an even more comprehensive offering to our loyal passengers.”

    “I am delighted for the most loyal customers of the Lufthansa Group airlines, which now also includes ITA Airways. For them, the new opportunity to earn Points for Lufthansa Group frequent flyer status is a great benefit,” says Caroline Drischel, Senior Vice President Customer Journey Lufthansa Group. “This gives our frequent flyers more opportunities to achieve or maintain their status – and thus enjoy exclusive benefits.”

     

    Welcome promotion for members: earn up to 6,000 additional miles

    To welcome the Italian airline to the Lufthansa Group, Miles & More members will benefit from a special welcome offer: Anyone flying with ITA Airways between March 1 and April 15, 2025 will earn 2,000 additional miles for two continental flights and 4,000 additional miles for two intercontinental flights, regardless of the travel class. To do so, participants simply activate the offer by March 31, 2025 at https://www.miles-and-more.com/row/en/earn/ita-airways/partner/airlines/ita-airways/earn/promotional-offer/2503_earn_promotion_launchpromotion.html

     

    Next steps already planned

    The addition of ITA Airways flights to the Lufthansa Group airlines route network will give customers greater choice and more flexibility. Starting with the summer flight schedule on March 30, more than 100 flight connections will initially share their flight numbers and can thus be combined more easily. Also from March 30, ITA Airways passengers will also be able to visit and use the approximately 130 lounges of the Lufthansa Group and its partners during their travels. The lounges of ITA Airways will also be open to Lufthansa Group passengers from this date. ITA Airways is scheduled to officially join the Star Alliance in the first half of 2026.

    MIL OSI Economics –

  • MIL-OSI Economics: RBI imposes monetary penalty on Shree Balaji Urban Co-operative Bank Ltd., Satna, Madhya Pradesh

    Source: Reserve Bank of India

    The Reserve Bank of India (RBl) has, by an order dated February 13, 2025, imposed a monetary penalty of ₹1.10 lakh (Rupees One Lakh Ten Thousand only) on Shree Balaji Urban Co-operative Bank Ltd., Satna, Madhya Pradesh (the bank), for non-compliance with certain directions issued by RBI on ‘Priority Sector Lending (PSL) – Targets and Classification’ and specific directions issued by RBI on making contribution to Micro and Small Enterprises (MSE) Refinance Fund due to shortfall in achievement of PSL. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

    The bank was directed by RBI through specific direction to deposit a certain amount in the MSE Refinance Fund administered by Small Industries Development Bank of India (SIDBI) against the shortfall in achievement of PSL target for the Financial Year (FY) 2022-23. On failure to deposit the specified amount, a cautionary letter was issued by RBI advising the bank to deposit the specified amount, but the bank failed to deposit the same. Based on the above-mentioned non-compliance and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the RBI directions. After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by it, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty:

    The bank had failed to deposit the prescribed amount in the MSE Refinance Fund maintained with SIDBI against the shortfall in achievement of PSL target for FY 2022-23, even after the issuance of cautionary letter, within the prescribed time.

    This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

    (Puneet Pancholy)  
    Chief General Manager

    Press Release: 2024-2025/2187

    MIL OSI Economics –

  • MIL-OSI Economics: RBI imposes monetary penalty on Pinnacle Capital Solutions Pvt. Ltd., Jharkhand

    Source: Reserve Bank of India

    The Reserve Bank of India (RBl) has, by an order dated February 11, 2025, imposed a monetary penalty of ₹2.00 lakh (Rupees Two Lakh only) on Pinnacle Capital Solutions Pvt. Ltd., Jharkhand (the company) for non-compliance with certain directions issued by RBI on ‘Credit Card and Debit Card – Issuance and Conduct Directions’ and ‘Digital Lending’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 58G(1)(b) read with Section 58B(5)(aa) of the Reserve Bank of India Act, 1934.

    The onsite scrutiny of the company with regard to its digital lending operations was conducted by RBI. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the company was sustained, warranting imposition of monetary penalty:

    The company had:

    1. issued credit line in the nature of credit card to certain borrowers, without prior approval from RBI; and

    2. disbursed loans to borrowers through a pass-through account of a third party.

    This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.

    (Puneet Pancholy)  
    Chief General Manager

    Press Release: 2024-2025/2182

    MIL OSI Economics –

  • MIL-OSI Economics: RBI imposes monetary penalty on The Muzzafarpur Central Co-operative Bank Ltd

    Source: Reserve Bank of India

    The Reserve Bank of India (RBI) has, by an order dated February 11, 2025, imposed a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on The Muzzafarpur Central Co-operative Bank Ltd. (the bank) for non-compliance with the certain directions issued by RBI on ‘Know Your Customer’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

    The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2024. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty:

    The bank had not conducted periodic updation of KYC of its customers.

    This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

    (Puneet Pancholy)  
    Chief General Manager

    Press Release: 2024-2025/2183

    MIL OSI Economics –

  • MIL-OSI Economics: Japan e-commerce payments to surpass $200 billion 2025, forecasts GlobalData

    Source: GlobalData

    Japan e-commerce payments to surpass $200 billion 2025, forecasts GlobalData

    Posted in Banking

    The e-commerce market in Japan is poised for 7.7% growth in 2025, reaching JPY29 trillion ($206.8 billion). This surge is driven by shifting consumer preferences towards online shopping and strong mobile penetration, reveals GlobalData, a leading data and analytics company.

    GlobalData’s latest report, “Japan Cards and Payments – Opportunities and Risks to 2028,” reveals that Japanese e-commerce market registered 8.4% growth in 2024 to reach JPY26.9 trillion ($191.9 billion).

    Shivani Gupta, Senior Banking and Payments Analyst at GlobalData, comments: “Japan is among the leading e-commerce markets in the Asia-Pacific region, trailing just behind China. This is supported by high mobile and online penetration, as well as a strong preference for online shopping due to its ease and time-saving benefits. Furthermore, the popularity of online shopping events such as Black Friday, Cyber Monday, and Singles’ Day has further fuelled the expansion of e-commerce.”

    To capitalize on the growth potential in the e-commerce sector, international brands are also venturing into this space. For instance, Chinese digital commerce group Alibaba launched a new cross-border e-commerce application “TAO” in October 2024 to compete with rivals such as Amazon and Rakuten.

    TAO provides a wide array of around three million products across various categories and incorporates a range of features, including dedicated customer service, reliable delivery and return policies, multiple payment options, and personalized product recommendations, tailored to Japanese customers. The platform also supports various payment methods such as PayPay, the leading digital wallet in Japan, as well as credit cards and convenience store payments.

    Payment cards remain the preferred payment method for online purchases. According to the GlobalData’s 2024 Financial Services Consumer Survey* credit cards alone accounted for over 50%. This can be attributed to the added benefits they offer, such as interest-free instalment payment options, reward programs, cashback, and discounts.

    Alternative payment solutions are the second most preferred payment method. PayPay remains the most preferred alternative payment option, with international brands such as Amazon Pay and PayPal also making their presence felt.

    Gupta concludes: “The upward trajectory of e-commerce sales is expected to persist in the coming years, driven by evolving consumer preferences, the growing popularity of online shopping festivals, and the emergence of new e-commerce companies in the market. Consequently, the e-commerce market is anticipated to increase at a CAGR of 6.1% between 2025 and 2029 to reach JPY36.7 trillion ($261.8 billion) in 2029.”

    *GlobalData’s 2024 Financial Services Consumer Survey was carried out in Q2 2024. Approximately 67,292 respondents aged 18+ were surveyed across 41 countries.

    MIL OSI Economics –

  • MIL-OSI Economics: Digital health adoption in China to accelerate with rapidly evolving AI landscape, says GlobalData

    Source: GlobalData

    Digital health adoption in China to accelerate with rapidly evolving AI landscape, says GlobalData

    Posted in Medical Devices

    The artificial intelligence (AI) sector in China is undergoing swift evolution, positioning it as a key driver for the expansion of the country’s digital health market. Accordingly, the digital health market in China is forecasted to grow at a compound annual growth rate (CAGR) of approximately 30% between 2024 and 2033, according to GlobalData, a leading data and analytics company.

    GlobalData’s report, “China Digital Health Market Outlook and Forecast to 2033 – Electronic Health Records, Regulatory Approved Apps and Telehealth,” reveals that in 2024, China accounted for approximately 20% of the digital health market in the Asia-Pacific (APAC) region. The considerable market share highlights the growing investments in AI-powered solutions and their increasing implementation in the healthcare industry.

    Pratibha Thammanabhatla, Medical Devices Analyst at GlobalData, comments, “The shift towards digital health represents a substantial advancement in conventional healthcare practices. These latest solutions possess the potential to improve convenience and accessibility for patients, especially in remote and resource-constrained environments. The increasing focus on preventive care and continuous health monitoring is anticipated to catalyze widespread adoption of these models.”

    Chinese firms such as DeepSeek, Panoptic AI, Tencent, and Alibaba are substantially investing in AI technologies. In the face of intensifying competition within China’s AI industry, Baidu has announced that its artificial intelligence chatbot, Ernie Bot, featuring an enhanced search function, would be accessible free of charge starting in April of this year. Given the availability of choices, the selection of a suitable model is imperative in healthcare applications to ensure that patients benefit from enhanced disease diagnosis and personalized treatment recommendations.

    Thammanabhatla concludes: “The growing utilization of digital health applications among the Chinese consumers, combined with significant investments from both private and public sectors including the latest National AI Industry Investment Fund, is anticipated to further propel innovations in the forthcoming years. This trend also suggests the possibility of considerable investment opportunities within China’s digital health industry.”

    MIL OSI Economics –

  • MIL-OSI Economics: AI-driven virtual care innovations will continue to gain traction to navigate workforce challenges, says GlobalData

    Source: GlobalData

    AI-driven virtual care innovations will continue to gain traction to navigate workforce challenges, says GlobalData

    Posted in Medical Devices

    With healthcare facilities facing staff shortages and increased patient loads, innovative AI-driven solutions are becoming a necessity. Solutions from companies like Vitalacy, Current Health, and Care.ai, are leveraging artificial intelligence (AI), sensor technology, and real-time monitoring to enhance patient safety and optimize hospital efficiency. As such, AI-driven healthcare innovations will continue to gain traction, helping providers navigate workforce challenges while delivering improved outcomes, according to GlobalData, a leading data and analytics company.

    GlobalData’s latest report, “AI in Healthcare: A Strategic Imperative to Enhance Efficiency and Patient Care”, reveals that approximately 30% of global data is generated in hospitals, of which a staggering 90% remains unused. The report highlights the growing reliance on AI-powered solutions to address critical healthcare challenges, including fall prevention, patient elopement, and staff burnout.

    Vitalacy’s newest AI-powered Virtual Care system is revolutionizing patient monitoring by minimizing fall hazards and easing the burden on caregivers. It leverages advanced AI, stereo cameras, and real-time monitoring to enhance patient safety.

    Kamilla Kan, Senior Data Scientist at GlobalData SKU Team, comments: “Vitalacy’s Virtual Care platform integrates AI learning with stereo camera depth perception to significantly reduce false alerts and allow timely interventions. This advanced approach enhances accuracy, making it a game-changer for patient monitoring.”

    According to GlobalData forecasts, the Remote Patient Monitoring (RPM) market will reach $760 million by 2030, up from $548.9 million in 2020 with a compound annual growth rate (CAGR) of 3.3% over the period.

    Kan continues: “As AI continues to revolutionize healthcare, virtual care solutions from companies like Vitalacy, Care.ai, and Current Health are setting new standards for efficiency, safety, and patient-centric care. These advancements reflect a broader industry trend towards automation and real-time intervention capabilities.”

    MIL OSI Economics –

  • MIL-OSI Economics: Heineken leads EMEA alcoholic beverage sector in sponsorship activity and spending in 2024, reveals GlobalData

    Source: GlobalData

    Heineken leads EMEA alcoholic beverage sector in sponsorship activity and spending in 2024, reveals GlobalData

    Posted in Sport

    Heineken is the most active and second-largest spender in sports sponsorship within the EMEA region for 2024 with 41 deals. Its major partnership is with UEFA, covering multiple club competitions through the 2026-27 season. This deal, valued at $70 million annually, underscores the Dutch brewing giant’s strategic commitment to leveraging soccer’s global reach, particularly through the UEFA Champions League, reveals GlobalData, a leading data and analytics company.

    Reportedly, Heineken’s three-year agreement with UEFA encompasses the Champions League, Europa Conference League, Super Cup, and Europa League competitions.

    GlobalData’s latest report, “Sponsorship Sector Report – Alcoholic Beverages EMEA 2024,” reveals that soccer holds the premier position in sponsorship revenue and deal volume within the alcoholic beverages sector across the EMEA region. Europe-based alcoholic beverage brands are the top spenders in the region.

    Olivia Snooks, Sport Analyst at GlobalData, comments: “Heineken has been a long-standing partner of the UEFA Champions League since 1994, with the partnership extending through 2027. As Europe’s premier club competition and the world’s most watched, the UEFA Champions League offers Heineken unparalleled global exposure.”

    The most significant deal in the alcoholic beverages sector across the EMEA region, in terms of annual value, is the partnership between the 2024 Paris Olympic Games and Paris-based luxury fashion giant LVMH. This collaboration includes Moët Hennessy, a distinguished division of LVMH, supplying its wines and spirits for the Games’ hospitality initiatives. The reported annual value of this agreement stands at $166.40 million.

    Snooks continues: “It is important to note that, as the primary arrangement was established with LVMH, the stated value, which is considerably large, does not exclusively represent Moët Hennessy’s individual partnership with the Olympic Games.”

    Despite securing just seven deals across the EMEA region, Guinness ranks as the third-largest spender in 2024. Notably, the Diageo-owned brand has partnered with the Premier League, becoming the official beer of the league starting the 2024/25 season. This agreement is valued at an annual $17.19 million.

    Snooks concludes: “For years, Guinness has been associated with rugby in the UK. However, 2024 sees the beer brand embarking on a new chapter by partnering with the English Premier League. This agreement marks the Guinness’ foray into soccer sponsorship, with the brand aiming to replicate the success it has enjoyed with rugby.”

    MIL OSI Economics –

  • MIL-OSI Economics: Government securities transactions between a Primary Member (PM) of NDS-OM and its own Gilt Account Holder (GAH) or between two GAHs of the same PM

    Source: Reserve Bank of India

    RBI/2024-25/115
    FMRD.MIOD.No.15/11.01.051/2024-25

    February 17, 2025

    To

    All participants in Government Securities market

    Madam/Sir,

    Government securities transactions between a Primary Member (PM) of NDS-OM and its own Gilt Account Holder (GAH) or between two GAHs of the same PM

    Transactions in Government securities in the Over the Counter (OTC) market are currently undertaken either on Negotiated Dealing System – Order Matching (NDS-OM) platform or are bilaterally negotiated outside the system and subsequently reported on NDS-OM. All transactions matched on NDS-OM platform are cleared and settled through the Clearing Corporation of India Limited (CCIL), which acts as a Central Counter Party (CCP) for transactions in Government securities.

    2. At present, transactions between a Primary Member (PM) and its own Gilt Account Holder (GAH) and between two GAHs of the same PM are not permitted to be matched on NDS-OM and are also not cleared and settled through CCIL. On a review and based on the feedback received, it has been decided to:

    1. Permit matching of transactions between a PM and its own GAH or between two GAHs of the same PM on both the anonymous Order Matching segment and the Request for Quote (RFQ) segment of NDS-OM. Transactions matched on NDS-OM shall be cleared and settled through CCIL.

    2. Extend the facility of clearing and settlement through CCIL to transactions between a PM and its own GAH or between two GAHs of the same PM which are bilaterally negotiated and reported to NDS-OM, on an optional basis.

    3. Any failure in the settlement of these transactions shall be treated as an instance of ‘SGL bouncing’ in terms of RBI circular “Government securities Act, 2006, Section 27 and 30 – Imposition of penalty for bouncing of SGL forms” dated July 14, 2010, as amended from time to time, and will be subjected to the applicable penal provisions, as specified therein.

    4. Detailed operational guidelines in this regard will be issued by CCIL.

    5. The Directions contained in this circular have been issued under Section 45W of Chapter IIID of the Reserve Bank of India Act, 1934 and are without prejudice to permissions/ approvals, if any, required under any other law.

    Yours faithfully,

    (Dimple Bhandia)
    Chief General Manager

    MIL OSI Economics –

  • MIL-OSI Economics: Samsung’s AI-Driven and Sustainable Signage Solutions Earn Top Awards at ISE 2025

    Source: Samsung

    As Europe’s largest display exhibition, Integrated Systems Europe (ISE) always highlights the best of the best in digital signage. This year was no different with Samsung Electronics and other industry-leading companies setting the stage for the future by pushing the boundaries of innovation.
     
    ▲ Samsung received a total of 12 awards, including five Best of Show awards at ISE 2025.
     
    Samsung’s booth entrance featured The Wall, drawing in visitors with an immersive anamorphic experience powered by cutting-edge MICRO LED technology. Throughout the booth, attendees caught a glimpse of the various environments being transformed by Samsung’s next-generation signage solutions — from corporate offices and classrooms to hotels and museums.
     
    ▲ Thousands of attendees made their way through Samsung’s engaging and expansive booth.
     
    Samsung Newsroom captured some of the standout products showcased at ISE 2025 that demonstrate Samsung’s leadership in commercial display technology.
     

    Samsung Color E-Paper: Ultra-Bright, Ultra-Light and Ultra-Efficient
    HoloDisplay: Bringing Signage to Life With 3D Innovation
    Transparent MICRO LED: Blending Reality and Digital Content
    Interactive Display: A Smarter, More Interactive Classroom Experience
    The Wall: Optimizing Command and Control Rooms With High-Resolution Displays
    The Wall for Virtual Production: A Seamless, Cost-Effective LED Stage Solution for Filmmakers
    SmartThings Pro: Expanding Partnerships and Enhancing IoT Automation
    Another Record-Breaking Year for Samsung at ISE 2025

     
     
    Samsung Color E-Paper: Ultra-Bright, Ultra-Light and Ultra-Efficient
    ▲ (From left) Jungsuk Han, Jonghwa Bae and Kwangju Kim stand with ISE 2025 Best of Show trophies for Samsung Color E-Paper, which delivers vivid, high-intensity color in a remarkable form factor.
     
    Launched at ISE 2025, the energy-efficient Samsung Color E-Paper (EMDX model) stunned visitors with its vibrant digital ink technology and slim, lightweight design. This innovative signage solution is ideal for locations where content remains the same for a week or longer — such as retail or grocery stores and outdoor spaces such as bus stops. The display uses 0.00W1 of power when showing a static image and can easily be managed through a dedicated app2 or with Samsung VXT (Visual eXperience Transformation), a cloud-based content management solution (CMS) platform.
     
    Samsung Color E-Paper received numerous Best of Show awards at ISE 2025 from trade publications — including AV Technology, Digital Signage and Installation.
     
     
    HoloDisplay: Bringing Signage to Life With 3D Innovation
    ▲ A visitor reaches out to try and touch the 3D projected image in the innovative HoloDisplay, which creates a ‘floating object’ effect for an immersive experience
     
    Following its debut at CES 2025, the HoloDisplay captivated attendees with its anti-distortion technology that forms a floating image in midair and its brighter and sharper picture quality. The HoloDisplay also earned the Best of Show award at ISE 2025 from Installation.
     

    Transparent MICRO LED: Blending Reality and Digital Content
    ▲ The Transparent MICRO LED attracted visitors’ attention with its crystal-clear, glass-like display.
     
    The Transparent MICRO LED display brought a new viewing experience to attendees. With its crystal-clear, glass-like design and high resolution, the display earned industry recognition including this year’s Digital Signage Innovation of the Year award from AV News.
     

    Interactive Display: A Smarter, More Interactive Classroom Experience
    ▲ 2025 Interactive Display with Samsung AI Assistant
     
    Samsung showcased its 2025 Interactive Display with Samsung AI Assistant — a new educational solution designed to provide an interactive experience to students. Attendees explored the new AI capabilities now supported, such as Circle to Search.
     
    The 2025 Interactive Display earned the Best of Show award at ISE 2025 from the trade publication Tech & Learning, further solidifying its reputation as a cutting-edge educational solution.
     
     
    The Wall: Optimizing Command and Control Rooms With High-Resolution Displays
    ▲ A Traffic command and control demonstration at ISE 2025 (left) and NASCAR’s new remote race control room (right)
     
    Samsung showcased how The Wall can help businesses make fast and informed decisions. At the booth, attendees witnessed how the display can be used in settings such as control rooms to provide a large, dynamic canvas for real-time monitoring and decision-making.
     
    In the United States, NASCAR’s new remote race control room now utilizes The Wall enhanced race officiating. Officials can review comprehensive, real-time video, audio and data from the track and remotely oversee races on an impressive 32-foot-wide, 9-foot-tall screen.
     
     
    The Wall for Virtual Production: A Seamless, Cost-Effective LED Stage Solution for Filmmakers
    ▲ The Wall for Virtual Production in the corporate broadcast section in Samsung’s booth at ISE 2025
     
    Samsung hosted a live demonstration at Samsung Corporate Broadcast Studio inside the ISE 2025 venue to showcase the seamless integration of The Wall for Virtual Production (IVC model) with Arnold & Richter Cine Technik (ARRI) cameras and lighting fixtures as well as Realtime Department’s digital experience solution. The combination of these technologies created ready-to-shoot LED backgrounds for virtual production — ensuring exceptional image quality and ease of use for corporate, broadcast and media environments.
     
    “The collaboration with Samsung and Realtime Department has significantly lowered the entry barrier to LED production for filmmakers,” said Andre Rittner, Business Development Manager of EMEAI (Europe, the Middle East, Africa and India) at ARRI. “This partnership has brought ARRI’s award-winning equipment to a suite of studio production tools and reduced production costs without compromising quality.”
     
     
    SmartThings Pro: Expanding Partnerships and Enhancing IoT Automation
    ▲ The SmartThings Pro wall
     
    Samsung showcased how device ecosystems can be managed with SmartThings Pro — the company’s hyper-connected B2B platform featuring enterprise-level encryption to safeguard sensitive data across IoT connections.
     
    Several new partnerships enhance the functionality of SmartThings Pro in business settings.
     
    Meeting rooms: Cisco video conference cameras and dashboards connect with 105-inch 21:9 Smart signage for crystal clear video conferencing and intuitive control. The AMX Muse Automation Controller streamlines operation of The Wall without compromising security.
    Retail stores: Five Nexmosphere sensors expand SmartThings Pro’s capabilities in retail settings — a presence sensor, radio-frequency identification (RFID) sensor, lidar sensor, ambient lighting sensor and an NFC reader.
    Hotels: ABB devices integrate with NetX management systems and SmartThings Pro to create new guest experiences.
     
     
    Another Record-Breaking Year for Samsung at ISE 2025
    Samsung’s leadership in digital signage was recognized at ISE 2025 with 12 awards from various organizations and trade publications — surpassing the impressive nine awards won in 2024.
     
    Best of Show Awards from Future
    AV Technology: Samsung Color E-Paper
    Digital Signage: Samsung Color E-Paper
    Installation: Samsung Color E-Paper and HoloDisplay
    Tech & Learning: 2025 Interactive Display
     
    AV News Awards
    AV Project of the Year (Commercial) Award: Samsung for using the Outdoor LED Signage XHB series (P8) at Shinsegae Department Store in Seoul, South Korea
    Digital Signage Innovation of the Year Award: Transparent MICRO LED
     
    Inavation Awards
    Applied Technology Award: Samsung for using Onyx Led screens at Pathé Palace in Paris, France
     
    ▲ Employees from Samsung France receive the Applied Technology Award.
     
    Top New Technologies (TNT) Awards from Commercial Integrator
    All-Weather Display: OHDX Outdoor Signage 46”and 55”
    TVs: 2024 HBU8000 Hospitality TV
    Video Monitors: QHFX 115” Smart Signage
     
    ISE Stand Design Awards from EXHIBITOR Magazine
    Sustainability Recognition XL (250 m2 or more): Samsung
     
    ▲ The Sustainability Recognition XL award recognizes the eco-conscious design of Samsung’s ISE 2025 booth.
     
    ISE 2025 illustrated how quickly digital signage is evolving. Samsung is revolutionizing the industry with energy-efficient, AI-driven innovations — setting new standards with its award-winning lineups at ISE 2025 and beyond.
     
     
    1 The power measurement is based on IEC62301 standards from the International Electrotechnical Commission. According to the standards, the average power below 0.005W is indicated as 0.00W.2 Samsung Color E-Paper mobile app supports Android 10 and above, and iOS 15 and above. Availability may vary by device, software version and region.

    MIL OSI Economics –

  • MIL-OSI Economics: Inflation increased to 2.5 percent in January 2025

    Source: Bank of Botswana

    Headline inflation increased from 1.7 percent in December 2024 to 2.5 percent in January 2025, remaining below the lower bound of the medium-term objective range of 3 – 6 percent, and was lower than the 3.9 percent recorded in January 2024. The increase in inflation between December 2024 and January 2025 was mainly due to the base effects associated with the downward adjustment in domestic fuel prices on 21 December 2023, which reduced headline inflation by 0.42 percentage points in January 2024. Furthermore, inflation rose on account of the acceleration in the rate of annual price changes of some categories of goods and services, including Education, Food & Non-Alcoholic Beverages and Alcoholic Beverages & Tobacco. Inflation for domestic tradeables increased from 4.3 percent to 4.6 percent between December 2024 and January 2025. Similarly, inflation for imported tradeables increased significantly from 0.1 percent to 1.6 percent over the same period, mainly on account of base effects associated with the adjustment of domestic fuel prices. As a result, all tradeables inflation rose from 1.2 percent in December 2024 to 2.4 percent in January 2025. Meanwhile, inflation for non-tradeables increased marginally from 2.4 percent to 2.5 percent over the same period.

    Similarly, the 16 percent trimmed mean inflation and inflation excluding administered prices increased from 1.7 percent and 3.3 percent to 2.2 percent and 3.5 percent, respectively, between December 2024 and January 2025.

    MIL OSI Economics –

  • MIL-OSI Economics: Joint Statement by the Saudi Finance Minister and IMF Managing Director on Supporting Recovery in the Middle East’s Conflict-Affected Economies

    Source: International Monetary Fund

    February 17, 2025

    Al Ula, Saudi Arabia, – February 16, 2025: On the sidelines of the inaugural annual global Conference on Emerging Market Economies in Al Ula, Saudi Arabia (February 16-17), the Saudi Finance Ministry and the International Monetary Fund (IMF) co-hosted a high-level roundtable on “Working Together to Support Recovery in the Middle East’s Conflict-Affected Economies”, bringing together finance ministers of countries in the region, the Foreign Affairs Minister of Syria, representatives from the World Bank, and heads of other International Financial Institutions and the Arab Coordination Group.

    Following the meeting, Kristalina Georgieva, Managing Director of the IMF, and Mohammed Aljadaan, Finance Minister of Saudi Arabia, made the following statement:

    “This important meeting brought together representatives from the Middle East and key economic and development partners to discuss how we can work together to support recovery in the Middle East’s conflict-affected economies.”

    “We thank all participants for recognizing the urgency and importance of this task, as well as for their commitment to work together to ensure that the conflict-affected countries can start addressing their humanitarian needs. This would help them start rebuilding their economies in an efficient, swift, and durable way for the benefit of their people.”

    “Participants welcomed the meeting as an opportunity to discuss recent developments and build a common understanding of the challenges facing conflict-affected countries. They emphasized the importance of strengthening coordination to support the recovery of these countries as the spillovers would impact all. Particular attention was paid to the situation in Syria.”

    Participants agreed on the following priorities to support conflict-affected countries:

    • A Continuous Diagnosticof the challenges and economic and social context facing each conflict-affected country, including an assessment of humanitarian and reconstruction needs. Such a diagnostic should identify institution-building priorities, gaps in policies, and financing needs.
    • Enhanced Capacity Development (CD) aimed at rapidly scaling up IMF and World Bank CD initiatives to help strengthen and, as needed, build new institutions. Support would need to be tailored to strengthen essential functions of fiscal, monetary and banking institutions.
    • Mobilization of financial assistance from the international community . Financial support—coordinated with international and regional development partners—will be needed to fund comprehensive reform programs, including reconstruction and humanitarian aid.

    “Participants underscored their readiness to work together and complement each other’s efforts while focusing on their institutional mandates. They will continue to work closely and with other partners to further support the international response to the recovery of conflict-affected economies in the Middle East region.”

    They agreed to establish an informal coordination group to support these efforts. Discussions will be continued at the upcoming IMF/World Bank Spring Meetings on April 21-26 in Washington, D.C.”

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Wafa Amr

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    MIL OSI Economics –

  • MIL-OSI Economics: Qatar 1812km: Preview TOYOTA GAZOO Racing starts WEC season with Qatar challenge

    Source: Toyota

    Headline: Qatar 1812km: Preview
    TOYOTA GAZOO Racing starts WEC season with Qatar challenge

    TOYOTA GAZOO Racing will continue its mission to make ever-better motorsports-bred cars and put smiles on the faces of fans across the globe by competing with two GR010 HYBRID race cars in the 2025 FIA World Endurance Championship, starting on Friday 28 February in Qatar.

    MIL OSI Economics –

  • MIL-OSI Economics: Result of the 4-day Variable Rate Repo (VRR) auction held on February 17, 2025

    Source: Reserve Bank of India

    Tenor 4-day
    Notified Amount (in ₹ crore) 75,000
    Total amount of bids received (in ₹ crore) 57,413
    Amount allotted (in ₹ crore) 57,413
    Cut off Rate (%) 6.26
    Weighted Average Rate (%) 6.27
    Partial Allotment Percentage of bids received at cut off rate (%) N.A.

    Ajit Prasad          
    Deputy General Manager
    (Communications)    

    Press Release: 2024-2025/2179

    MIL OSI Economics –

  • MIL-OSI Economics: ASEAN Connectivity Coordinating Committee convenes first meeting under Malaysia’s Chairmanship

    Source: ASEAN

    The ASEAN Connectivity Coordinating Committee (ACCC) convened its first meeting for the year, today at the ASEAN Headquarters/ASEAN Secretariat, with the participation of all ASEAN Member States, Timor-Leste as Observer, and the ASEAN Secretariat. The ACCC discussed key connectivity priorities and deliverables for 2025 under Malaysia’s chairmanship, including advancing the implementation of the Master Plan on ASEAN Connectivity (MPAC) 2025, and discussing the development of the ASEAN Connectivity Strategic Plan, the successor to the MPAC 2025.

    The ACCC coordinates, monitors and guides the implementation of the MPAC 2025, working in close collaboration with Sectoral Bodies across all three ASEAN Community Pillars to foster seamless connectivity and sustainable development in ASEAN.

    The post ASEAN Connectivity Coordinating Committee convenes first meeting under Malaysia’s Chairmanship appeared first on ASEAN Main Portal.

    MIL OSI Economics –

  • MIL-OSI Economics: Result of the Daily Variable Rate Repo (VRR) auction held on February 17, 2025

    Source: Reserve Bank of India

    Tenor 1-day
    Notified Amount (in ₹ crore) 1,00,000
    Total amount of bids received (in ₹ crore) 1,34,675
    Amount allotted (in ₹ crore) 1,00,014
    Cut off Rate (%) 6.26
    Weighted Average Rate (%) 6.27
    Partial Allotment Percentage of bids received at cut off rate (%) 43.37

    Ajit Prasad          
    Deputy General Manager
    (Communications)    

    Press Release: 2024-2025/2176

    MIL OSI Economics –

  • MIL-OSI Economics: Africa’s risk premium: a costly myth holding back a continent

    Source: African Development Bank Group
    To their cost, many global investors are getting Africa wrong.
    This was the stark message delivered by African leaders and business executives at the World Governments Summit in Dubai this week, where they challenged persistent misconceptions about investment risk on the continent.

    MIL OSI Economics –

  • MIL-OSI Economics: Côte d’Ivoire: Canada Strengthens Partnership with the African Development Bank During High-Level Meeting

    Source: African Development Bank Group
    The African Development Bank welcomed Andrew Smith, Director General for the Pan-African Bureau at Global Affairs Canada, to Côte d’Ivoire on Friday, 7 February. This marked a significant step forward in the partnership between Canada and the African Development Bank Group.

    MIL OSI Economics –

  • MIL-OSI Economics: Al Ula conference for Emerging Market Economies

    Source: International Monetary Fund

    THE MANAGING DIRECTOR’S OPENING REMARKS
    Sunday, February 16, 2025, 9:30-9:45 a.m.
    Maraya Conference Hall, Al Ula, Saudi Arabia

    February 16, 2025

    Al salam Alaikum! Hello everyone and welcome!

    Let me start by thanking Minister Aljadaan and the Kingdom of Saudi Arabia for hosting us in beautiful Al Ula. I also want to express my deep appreciation for Minister Aljadaan’s role as chair of the International Monetary and Financial Committee (IMFC), where his leadership is critical to the work and effectiveness of  our institution.

    Minister Aljadaan not only identified a gap in terms of space for emerging markets to discuss policy issues of common interest but decided to close it — and I am delighted that the IMF’s new Regional Office in Riyadh, supported by Saudi Arabia, has played a very important role in turning Minister Aljadaan’s vision into a reality. Here we see an impressive gathering of representatives from all around the world, with one objective: to identify issues that emerging markets face and how they can best address them.

    Now is a time of sweeping transformations in the global economy, in terms of technology, demography and geopolitics, creating a more challenging and uncertain environment for policymakers everywhere, with some specificities in terms of both risks and opportunities for emerging economies.

    We know, for instance, that trade is no longer the engine of growth that it used to be—unlike the decades of the 1990s and 2000s when global trade grew much faster than global GDP, the two are now growing at roughly the same rate (and trade even lags behind). When global trade slows down, opportunities for regional and cross-regional trade become more important.

    We also know that governments around the world are shifting policy priorities: the new US administration has been clear that it intends to take action in the areas of trade, tax and spending, deregulation, immigration, and digital assets.

    And the technology revolution—especially AI—is upon us, set to transform the way we live and work, with massive impact on jobs as early as the next five years.

    What does it all mean for emerging markets? These economies have weathered the shocks of the past few years remarkably well. And your economies have delivered two thirds of global growth.

    But the recipes of the past may no longer provide the path to prosperity. Emerging economies will need to be agile, adaptable and resilient—these will be the ingredients for future success.

    Looking into the next years, I will highlight three areas to watch.

    First, inflation is expected to go back to target levels faster in advanced economies than in most emerging markets. A stronger US dollar could trigger capital outflows. This makes monetary policy more complicated for emerging economies.

    Second, like in advanced economies, many emerging economies are dealing with high debt, limited fiscal resources, and mounting spending pressures—a challenging triple threat. Too often, countries use fiscal stimulus to boost short-term domestic demand. While this “sugar rush” provides temporary growth, it often fuels inflation and financial turbulence.  In the current environment, stepping on the gas pedal is not the solution — instead we need to focus on the efficiency of the engine.

    This takes me to my third point — the critical importance of structural reforms to improve competitiveness, increase productivity and enhance growth prospects.     

    At the IMF, we are known for our dedication to macroeconomic and financial stability.  Yes, it must be preserved or restored to enable growth.  But it also must be utilized to pursue reforms, especially those that can boost productivity. Slow productivity growth accounts for more than half the global growth slowdown in recent decades.

    Just think: If countries narrow their overall productivity gaps with the United States by just 15 percent, that would add 1.2 percentage points to global growth.

    Transformational reforms to improve the business environment will be essential: cutting red tape, increasing competition, and encouraging entrepreneurship.

    All of this can help countries create jobs and harness the benefits of promising technologies such as AI. Why is this so important? Because only when we achieve higher productivity growth can we meet the aspirations of people everywhere for better lives for themselves and their children.

    So it is clear: we need to double down on policies that we know can lift productivity.

    But we also need to redouble our search for promising new ideas.

    And this is what we intend to do during this conference. Together, we can look for new ways to jumpstart growth in emerging markets.

    At the IMF, we recognize our responsibility in this regard. We are putting together our own IMF Advisory Council on growth and entrepreneurship. I want to thank Minister Sturzenegger of Argentina for agreeing to serve on it. We count on deep engagement with this new Council to find ways in which economies can be stronger for their people.

    But we also know that there is huge value in countries working together.

    As you said recently, Minister Aljadaan, “Working together to fix our global economic ship so it benefits more people is not a charitable act; it is a wise investment in our common future.”

    I couldn’t agree more! And we are seeing a new force for cooperation—sometimes based on areas of common interest, sometimes based on geography—that are crucially important. So we have to be determined and we have to be engaged, but most importantly, we must remain positive.

    Together we can do well for our member countries and for their people.

    Shukran!

    MIL OSI Economics –

  • MIL-Evening Report: China deal ‘complements, not replaces’ NZ relationship, says Cook Islands PM

    By Caleb Fotheringham, RNZ Pacific journalist

    Cook Islands Prime Minister Mark Brown says the deal with China “complements, not replaces” the relationship with New Zealand after signing it yesterday.

    Brown said “The Action Plan for Comprehensive Strategic Partnership (CSP) 2025-2030” provides a structured framework for engagement between the Cook Islands and China.

    “Our relationship and engagement with China complements, not replaces, our long-standing relationships with New Zealand and our various other bilateral, regional and multilateral partners — in the same way that China, New Zealand and all other states cultivate relations with a wide range of partners,” Brown said in a statement.

    The statement said the agreement would be made available “in the coming days” on the Ministry of Foreign Affairs and Immigration online platforms.

    Brown said his government continued to make strategic decisions in the best long-term interests of the country.

    He said China had been “steadfast in its support” for the past 28 years.

    “It has been respectful of Cook Islands sovereignty and supportive of our sustained and concerted efforts to secure economic resilience for our people amidst our various vulnerabilities and the many global challenges of our time including climate change and access to development finance.”

    Priority areas
    The statement said priority areas of the agreement include trade and investment, tourism, ocean science, aquaculture, agriculture, infrastructure including transport, climate resilience, disaster preparedness, creative industries, technology and innovation, education and scholarships, and people-to-people exchanges.

    At the signing was China’s Premier Li Qiang and the minister of Natural Resources Guan Zhi’ou.

    On the Cook Islands side, was Prime Minister Mark Brown and Associate Minister of Foreign Affairs and Immigration Tukaka Ama.

    Meanwhile, a spokesperson for New Zealand Minister for Foreign Affairs Winston Peters released a statement earlier on Saturday, saying New Zealand would consider the agreements closely, in light of New Zealand and the Cook Islands’ mutual constitutional responsibilities.

    “We know that the content of these agreements will be of keen interest to the people of the Cook Islands,” the statement said.

    “We note that Prime Minister Mark Brown has publicly committed to publishing the text of the agreements that he agrees in China.

    “We are unable to respond until Prime Minister Brown releases them upon his return to the Cook Islands.”

    This article is republished under a community partnership agreement with RNZ.

    MIL OSI Analysis – EveningReport.nz –