samchain/econo-pairs-v1 huggingface dataset:
In this sense, the effect of asset purchases on exchange rates is not fundamentally different from that of conventional interest rate policy. Today I would like to build on this previous contribution and provide further insights into the channels through which central bank asset purchase programmes are likely to affect the exchange rate. I will provide suggestive evidence that challenges the widely held view in the event-study literature that policy-induced portfolio rebalancing does not affect the exchange rate.3 My remarks therefore confirm that portfolio rebalancing is a major transmission channel of central bank asset purchase programmes and provide some tentative support to theories of exchange rate determination in imperfect financial markets, which give a first-order role to capital flows.4 Unlike private portfolio rebalancing, however, central bank asset purchase programmes can be anticipated by investors. This means that exchange rates should adjust in a way that clears the expected future supply of and demand for currency resulting from anticipated cross-border capital flows. The implication is that asset purchase programmes may, at times, break the link between future expected short-term rates and the exchange rate. Before developing this argument in more detail, allow me to reiterate at this point that the exchange rate is not a policy target for the ECB. It is one channel of transmission through which our monetary policy actions achieve price stability in the medium term, in both conventional and unconventional times.

This should have caused the US dollar to appreciate, at least on the basis of past behaviour. The dollar defied upward pressure, however. It continued to depreciate persistently, despite the marked widening in future expected interest rates. One reason why this might have been the case is that the signalling and the portfolio rebalancing channels of asset purchases might have worked in opposite directions. In imperfect markets, investors may give different weights to conflicting information. What I mean by this is that, despite expectations of a significant increase in policy rates, the Federal Reserve’s very gradual slowdown of its pace of Treasury and mortgage-backed securities purchases – which caught many investors on the wrong foot after the “taper tantrum” – possibly fuelled expectations that long-term rates, and hence also foreign demand for USdenominated interest-bearing assets, would remain contained for a considerable period. This interpretation is consistent with at least four observations: first, term premia on US bonds fell notably after the Federal Reserve started tapering in December 2013, pointing to a correction of the sharp uptick in term premia after the “taper tantrum”.9 Second, investors did not expect the US dollar to appreciate. CFTC data show that they continued to hold net short speculative positions in the US dollar well into 2014. Third, capital inflows into the US Treasury market did indeed decelerate somewhat during the first half of 2014, validating earlier expectations.
Preparing for the New Accord Let me get into more detail now on what both banks and supervisors will need to do to prepare for the Accord, by describing what we are doing in the United States. I am sure our experience will have parallels in the UK and elsewhere. Challenges for banks To begin with, we have looked to get our arms around where the major firms actually stand in preparing for Basel II, and to pinpoint the major challenges that lie ahead for them as they look towards implementing the advanced approaches to credit and operational risk. Importantly, our dialogue with the banks has focused on where they stand in meeting the minimum standards for entry to, and on-going use of, the IRB approach. Our strong sense is that banks have both the desire and the commitment to continue to develop their internal ratings systems in a manner consistent with the requirements of the IRB framework. The discussions with the industry have, however, highlighted various areas where banks may need to expand their efforts in preparing for implementation. I will offer comments on four areas where more work is needed: a.  the design and structure of rating systems;  b.  the necessary controls to ensure that ratings are accurate and up to date;  2  BIS Review 15/2003  c.  the availability and quality of credit data; and, finally  d.  the overall corporate governance approach  a.

The primary criteria of the AMA could be summarized as falling into three broad areas: first, the development of strong corporate operational risk governance and management structures - structures that include business line integration into a firm-wide process; second, the incorporation of qualitative factors such as control self-assessments into the overall capital measurement process; and finally, loss data quantification, which includes scenario analysis. Our review of those major U.S. banks that intend to adopt the AMA indicates they are clearly in various stages of preparation. However, most of these institutions already have in place, or are well along towards establishing, a corporate level operational risk management function, with firm-wide policies for managing and assessing this risk. Moreover, many firms already have in place good, and improving, firm-wide control self-assessment methodologies. Finally, an increasing number of banks are now turning their attention to collecting internal loss data in a consistent manner across the firm. Some have already been collecting such data for a year or two and some have been particularly effective at mining their existing historical loss experience for certain risk types. A few leading institutions have made real progress in pulling all this together - by piloting operational risk quantification methodologies that combine the quantitative and qualitative elements of the AMA into an overall economic capital assessment for operational risk.
Against that backdrop, an important policy decision regarding the Federal Reserve’s portfolio was made at the August FOMC meeting, when the Committee decided to halt this run-off and instead hold the size of the SOMA portfolio steady. To achieve this, the FOMC directed the Desk to purchase longer-term Treasury securities as needed to offset any principal payments realized on our holdings of agency debt and agency MBS. 1 That was not just a symbolic policy decision, but instead involved a meaningful shift in the path of the balance sheet. At the time of the meeting, the Desk was projecting that about $ billion of the Federal Reserve’s MBS holdings would be paid down from that time to the end of 2011. In addition, another $ billion of agency debt holdings would mature over that period. Thus, the total portfolio was expected to shrink by nearly $ billion by the end of 2011. The reinvestment decision therefore amounted to a sizable program to purchase longer-term Treasury securities. The effect of asset purchases on the economy remains a point of ongoing debate, with some uncertainty about the channels through which such purchases operate and the magnitude of those effects. My own perspective is aligned with the view expressed by Chairman Bernanke in Jackson Hole – that the effects arise primarily through a portfolio balance channel. 2 Under that view, our asset holdings keep longer-term interest rates lower than otherwise by reducing the aggregate amount of risk that the private markets have to bear.

As rates declined in response to a weakening of the economy, the Federal Reserve’s MBS holdings would decline more rapidly, effectively adding to the supply of duration held by the market. 4 This increase in the duration held by the market would tend to damp the decline in yields. With the change in strategy at its August meeting, the FOMC no longer lets its aggregate duration holdings flow back into the market. This approach allows long-term interest rates to adjust fully to a weakening of the economy, which should act to better stabilize the economy. Implementing the reinvestment policy So far, I have focused on the FOMC’s August policy decision; however, you may also be interested in the details of how the Desk has actually implemented the reinvestment policy. The instructions from the FOMC to the Desk, from both the August FOMC statement and the directive that was adopted at that meeting, were to keep the total face value of domestic securities held in the SOMA portfolio near their level at that time. The published size of the securities portfolio just ahead of the August meeting was $ trillion, so the Desk adopted this level as the target for the portfolio. This is a notable development by itself, as the directive from the FOMC now involved two targeted variables – the target range for the federal funds rate, and the target size for its asset holdings. To implement this directive, the Desk has been purchasing Treasury securities on a monthly schedule.
Providers can compete freely for customers through various apps and interfaces. Future payment infrastructure Norway was one of the first countries to modernise its payment system and still ranks at the top of international comparisons of payment system efficiency. However, some countries have caught up with us and have taken the lead in some areas. With regard to providing real-time payments, we have lagged behind our neighbours. Real-time payments, or instant payments, provide immediate payment into the recipient’s account. Instant payment is now available through the Vipps system and from many online banks. This is a positive step, but banks are still exposed to settlement risk, and the solution cannot be used for all types of payments. It is particularly problematic that the current instant payment solution is not very suitable for corporate transactions. Norges Bank has played a catalyst role in bringing about improvements. Just over two years ago, the Bank expressed the opinion that it was necessary to step up efforts to establish a real-time payments infrastructure without settlement risk. The financial industry and Norges Bank agreed on a joint initiative called BRO, Betalinger med Raskere Oppgjør [payments with faster settlement]. BRO was scheduled to be in place by the end of 2019. In February 2018, seven large Nordic banks announced their intention to establish a pan-Nordic payment infrastructure, P27. The aim is to replace existing domestic clearing and instant payment infrastructures in the Nordic countries with one common system.

According to Sweden’s central bank, the Riksbank, settlement of instant payments in SEK may be made available on the TIPS platform. If so, this would mean that at least some Swedish real-time payments will not be cleared through P27, which could affect the profitability of the project. Norges Bank is aware that the industry is also assessing other possible Norwegian solutions for better real-time payments in Norway. In its letter sent in October to Finance Norway and the P27 banks in Norway, Norges Bank called upon the banks to continue this work. The objective must 2/5  BIS central bankers' speeches  be to make the necessary adjustments to the Norwegian infrastructure as quickly as possible to give both businesses and private individuals in Norway access to modern real-time payments on a 24/7/365 basis. The technological set-up should be adapted to customers’ needs, particularly businesses, while also eliminating interbank settlement risk. As far as possible, the set-up should also be suitable for use in future solutions, such as P27, including a system for control of reserve cover at Norges Bank. Reusing a technological set-up will keep total costs down. Establishing a satisfactory Norwegian solution for instant payments will also decouple P27 work from any deadlines for the system in Norway, which in time may increase the chances of success for the P27 initiative. A common infrastructure for all payments has given Norway an important competitive advantage, provided economies of scale and facilitated interaction across the banking sector.
The void that Microsoft could have filled was soon captured by the Android operating system. Bill Gates termed it as his “greatest mistake ever” which cost Microsoft $ billion. So, by focusing on the five key battles – customer loyalty, value, efficiency, resilience and talent – the banking industry can transform itself for the future and avoid the fate of Kodak. 3-The Role of Enabling Stakeholders We have seen the importance of customers, technology and data for the future of banking. But it is important to recognize that this is not a journey that banks can take alone. Rather, they need the support of key stakeholders; otherwise they will only succeed in making minor, superficial changes rather than achieving a genuine transformation. The role of two key stakeholders is worth highlighting; educational institutions and regulators. i. Educational Institutions  Central Bank of Kuwait - Public ‫ عام‬- ‫بنك الكويت المركزي‬  - 15 -  Let us consider first the critical role of educational institutions. They need to ensure that they are preparing graduates for future jobs in the banking industry, jobs that not only require traditional studies of finance, economics and business, but also encompass new skills around financial and technological innovation. It is increasingly evident that jobs in the future will be fundamentally different from jobs today.

Friedman (1957) as well as Modigliani and Brumberg (1954)). In other words, their consumption level would remain more or less steady throughout. In reality, income at certain stages of life does not suffice to cover this hypothetical consumption level. This is true mostly in younger years and in old age. Taking out a loan enables a household to overcome financial bottlenecks in certain phases of life and to make use of their income at a time when they derive the greatest benefit from it. Page 4/16  diversification of investment risk. For society as a whole, it means that accrued savings are made widely available and thus put to better use. Let me give you an example. An entrepreneur is faced with the question of what use to make of his assets. There is no major purchase to be made at the moment. Neither is there a profitable project at his own company in the pipeline. Do you remember our university graduate with her brilliant idea for a product? The entrepreneur could lend her some of his assets against interest and so generate a return. 7 By extending a loan to the young graduate, he is also diversifying his investments. As the proverb has it, he is not putting all his eggs in one basket. Overall, we can conclude that an effective credit system represents an essential basis for a thriving economy. It allows borrowers to put their income to the best-possible use over time.
They include the SLIPS system which is also owned and operated by LankaClear and the $ clearing system operated by a commercial bank. Mr Anura de Silva, General Manager LankaClear will give you the technical details of the CIT System including some of the glitches that have surfaced in implementing the cheque imaging project. Let me now deal with the institutional and legal arrangements and the impact of payment reforms very briefly. The focus will be on (i) the market arrangements for payment services (ii) the legal and regulatory framework; (iii) the coordination of oversight of the payment system and regulation affecting the system; and (iv) mechanisms for consultation with stakeholders. The RTGS and SSS systems speedily transfer funds and make settlements of banks, primary dealers, financial institutions, investors, customers, the government and the public. These two systems bring about financial discipline among these stakeholders as they have to maintain adequate cash and reserves in their accounts to meet payment obligations. This also improves the liquidity management by banks as treasurers and fund managers have to produce accurate estimates of their daily liquidity requirements. More importantly, the users of the RTGS and SSS systems can use Central Bank funds throughout the day for settlement purposes and return them at the end of the day. Subject to the availability of acceptable collateral, the banks and primary dealers are provided with intra day liquidity by the Central Bank.

The RTGS was implemented in September 2003 and the system facilitates large value and time critical fund transfers and settlements electronically and on real time. In February 2004, the SSSS module was integrated to the RTGS System. To facilitate the operations of these systems, government securities are issued in scripless form and the system facilitates simultaneous transfer of government securities and settlement of funds through the RTGS on a Delivery versus Payment basis. The Central Bank continues to upgrade and enhance facilities to these two systems and in December 2005, the internet based facility called LankaSecureNet which enables the account holders of the Scripless Securities Depository System to obtain up to date details of their investments through the internet was introduced. While eliminating the systemic risks that was involved in the high value and time critical transactions, the Central Bank became the owner and operator of both the RTGS and SSS systems. The service provider of the retail payment system is LankaClear (Pvt) Ltd which is owned jointly by the Central Bank and the commercial banks. Two weeks ago, LankaClear (Pvt) Ltd introduced the Cheque Imaging and Truncation System to ensure that cheques deposited in any part of the country is cleared and settled within two days except in uncleared areas. The cheque imaging system eliminates regional disparities in cheque clearing and establishes a common clearing schedule. In addition to these two systemically important payment systems, there are other small scale payments and settlements arrangements.
[3] Chart: Regulation on Monetary Policy So there are good reasons that low and stable inflation is a monetary policy objective. The operational target of monetary policy in Norway is consumer price inflation of close to 2 percent over time. We measure consumer prices using the consumer price index (CPI). The CPI seeks to measure the rise in prices facing households. The index is widely used and well known. Virtually all inflationtargeting countries have chosen to stabilise CPI inflation. The CPI is associated with considerable short-term volatility. In practice, we therefore use different underlying inflation indicators, for example the CPI adjusted for tax changes and excluding energy products (CPI-ATE). [4] Chart: Both domestic and imported inflation sources of inflation The extent to which monetary policy should respond to changes in individual prices does not depend on its ability to influence the source of the price change. The response depends on how long the disturbances are expected to last and the extent to which they fuel inflation via spillover effects on other prices and wages. The recent surge in inflation is to a large extent ascribable to factors beyond Norges Bank’s control. There is not much we can do to reduce energy and commodity prices, or to relieve bottlenecks in global markets. But by dampening the level of economic activity, we can help to counter spillover effects of increases in individual prices on other prices and wages. Furthermore, even though Norges Bank cannot influence global prices in foreign currency, we can influence the krone exchange rate.

And so measures are taken by emerging markets in financial sector development to enhance and eventually liberalise the international mobility of investors and borrowers, and their funds, and the international mobility of financial instruments and financial institutions; in other words, they embrace financial globalisation. As we all know, there are risks to monetary and financial stability associated with such mobility, and events in the past two decades have indicated clearly that these risks are considerable. Many have pointed out that financial openness has to be supported by prudent  2  BIS Review 106/2009  macroeconomic policies and so financial openness serves also to impose needed discipline on policy making in emerging markets. I fear, however, that this is true only to a certain degree, in that the discipline imposed by capital mobility on emerging markets seems to be a lot tougher than that imposed on developed markets. The small size of emerging markets relative to the pool of international capital may be one reason behind this. The greater volatility of international capital relative to domestic capital is perhaps another. Also of concern is the willingness of some emerging market jurisdictions, in a perhaps doubtful attempt to attract the household names in international finance to set up shop as part of their strategies to develop their financial systems, to promulgate rules that may be unsuitable for their domestic circumstances.
Given the improved economic performance, it has become necessary to re-align and configure our currency in line with macroeconomic fundamentals. The currency rebasing exercise will have implications on businesses in the economy including changes to accounting software, tax aspects, ATMs, cash registers, etc. The success of the currency rebasing exercise will largely depend on our partnership with the commercial banks. Ladies and gentlemen, as you will note all these measures are aimed at improving efficiency conduct of business in our economy and commercial banks have a very crucial role to play in all these. The expectation is that all of you represented here will support the central bank to ensure that collectively, we build a financial sector that is modern and responsive to the needs of our economy. Chairperson, as a central bank, we will continue to foster an environment where dialogue between all key stakeholders can be promoted both at individual bank level as well as at Industry level. Despite the policy changes embarked on, there remains a lot to be done in the areas of financial inclusion, financial education and consumer protection in the banking  2  BIS central bankers’ speeches  industry. In this regard, the Bank of Zambia has developed branchless banking frameworks and a national strategy for financial education in partnership with other stakeholders. As a regulator, we are committed to ensure an open and competitive banking environment.

In a separate press release, the committee explains how the formulations may be interpreted. The Federal Reserve does not publish a traditional inflation report like the Bank of England’s with projections of future developments. However, in connection with the Chairman’s semi-annual testimony to Congress, estimates are given of probable ranges for GDP growth, consumer price inflation and unemployment. The minutes of Committee meetings are published after six weeks, and disclose the way individual members have voted. A complete transcript of proceedings is released after five years. Members express individual views on monetary policy. Norges Bank analyses the inflation outlook in separate inflation reports which are published three times a year. Further assessments regarding the inflation outlook are presented every six weeks in connection with the monetary policy meetings at which the Executive Board sets interest rates. Central aspects of the modelling tools and our view of the functioning of the economy are examined in detail in the Inflation Report and in articles in the journal Penger og Kreditt and its English counterpart Economic Bulletin. The minutes of monetary policy meetings are not published. The Executive Board functions as a unified group in relation to the public. In Canada and New Zealand, responsibility lies with the central bank governor, and therefore only one view is expressed. In the ECB, Australia, Switzerland and Norway, the decision-making body speaks to the public with one voice. Like Norway, Australia includes external members in the body that makes decisions regarding the interest rate.