samchain/econo-pairs-v1 huggingface dataset:
It is not the same to have reached an inflation goal of less than 2% for one year as for ten years. One of the benefits that the “peripheral countries” could reap from participating in the first wave of monetary union is to achieve the level of interest rate of the most credible currencies without having yet built up a very long track record. I would like to underline that in Europe, we are not converging towards a kind of average of the market interest rates of the potential euro area. One has to understand that the philosophy of EMU is to organize the convergence of the European countries towards the best possible level of monetary credibility and therefore towards the benchmarks in terms of interest rates. As Mr. Trichet recently stated, “convergence is a benchmarking concept”, not an averaging process. Convergence does not mean that the “core” currencies’ interest rates should go up towards irrelevant “average levels”, but that the interest rates of more “peripheral” countries should progressively converge towards the benchmark level. This benchmark level is currently given by the intervention rates of the Bundesbank and of the Banque de France, both at 3.3%. But of course the benchmark level one year from now could be different from 3.3%. 2. OPERATIONAL ISSUES How will the ESCB operate? As you know, central banks implement their policies through the creation and destruction of central bank reserves, of which they are monopoly BIS Review 112/1997  -5-  suppliers.

In my description of operational issues within the context of the single monetary policy, I have made numerous and concrete allusions to this reliance of the ECB on the national central banks, in the areas of monetary policy, payment systems and foreign exchange operations. This organisation scheme of the ESCB is in line with the principle of subsidiarity laid down in the Maastricht Treaty. According to this principle, the ESCB shall have recourse to the national central banks to carry out its operations, to the extent deemed possible and appropriate. Consistently with this principle of decentralisation in the execution of the ESCB’s operations, the counterparties (credit institutions) will keep their accounts with the NCBs. Operational decentralisation within the ESCB will be in the very interest of the System. In this regard, let me quote the President of the EMI, Mr. Duisenberg: “Reliance on the infrastructure and operational experience built up by the national central banks will prove a valuable asset. Given that the ESCB needs to be cognisant of differences between financial market participants and structures in the EU, operating through the national central banks will ensure that it has the best possible knowledge of market conditions throughout the euro area”.8 The credibility of the ECB as the decision-making centre will by no means be undermined by this decentralised scheme. It will not depend on the technicalities in the execution of operations.
Hence, the enactment of the legislation by our country’s legislature is welcomed by all of us who value stable economies and peaceful societies. Due to the scale and magnitude of the heightened global interest in Money Laundering and Terrorist Financing, international obligations too, required many countries to introduce  BIS Review 9/2007  1  legislation. In fact, in terms of their international obligations the legislative approach pursued by many countries, including Sri Lanka, has been in the context of Security Council Resolution 1373 dealing, inter alia, with financing of terrorism and the International Convention on the suppression of financing of terrorism. These agreements have, to a great extent, unified the world in its fight to meet this challenge and, I dare say, the closing of ranks among the countries of the world, would have certainly helped to curtail terrorism which may otherwise have reached unimaginable levels, thereby threatening world peace in general and the world economy in particular. Let me now say a few words about our own efforts in this sphere of activity. The initial phase of establishing a comprehensive framework for anti money laundering and combating financial terrorism in Sri Lanka was focused on the preparation of the draft legislation. With the passage of legislation, our efforts were then directed towards setting up of the infrastructure for the Financial Intelligence Unit (FIU). We now have a fully operational FIU established in the Central Bank, the apex institution in the financial system in Sri Lanka, to meet both its local and international obligations.

For example, we have seen difficulties from banks in arranging promotion of risk culture and cascading the “tone from the top” to different levels of staff, simply because of the lack of F2F interactions. This has tremendously reduced the opportunities for staff to build rapport and foster a common culture, which is an important element in the culture promotion efforts. 5. Secondly, the pandemic disruptions have effectively put bank culture under stress test. Against the new mode of banking operation with significantly reduced F2F interactions, both amongst banking staff and between banks and their customers, there are signs of increasing hurdles in maintaining a sound bank culture. 6. On one hand, there are challenges in ensuring robust controls in a non-F2F environment. 1/4  BIS central bankers' speeches  Reduced physical oversights of staff activities by supervisors could greatly reduce the effectiveness of conventional control mechanisms and practices that worked well in the past, and thereby increased the risk of poor customer outcomes. 7. At the same time, the pandemic is driving changes in customer behavior. Customers have tried to avoid visiting bank branches in person as much as they can. If we look deeper at the statistics, the customer behavior of investment activities registered a significant change in the past two years. The proportion of online investment transactions out of all channels of retail banks has increased from 37% in the first half of 2019 to over 50% in the first half of this year.
On Banco de España estimates,3 a hypothetical suspension of energy imports from Russia would have an impact on the EU economy of between 2.5% and 4.2% of GDP in the first year, depending on the assumptions as to European economies’ ability to replace Russian 1  See V. Gunnella, V. Jarvis, R. Morris and M. Tóth (2022), Natural gas dependence and risks to euro area activity, ECB Economic Bulletin, Issue 1/2022. 2  The fact that natural gas can adapt to fluctuations in energy demand makes it a key marginal energy resource in electricity generation. See M. Pacce, I. Sánchez and M. Suárez-Varela (2021), Recent developments in Spanish retail electricity prices: the role played by the cost of CO2 emission allowances and higher gas prices, Banco de España Occasional Paper No 2120. 3  See J. Quintana (2022), “Economic consequences of a hypothetical suspension of Russia-EU trade”, Analytical Articles, Economic Bulletin 2/2022, Banco de España. 1  energy imports. By country, the estimated impact is between 1.9% and 3.4% for Germany, between 1.2% and 2% for France, and between 2.3% and 3.9% for Italy. The estimated impact on the Spanish economy is between 0.8% and 1.4% of GDP. These should be considered short-term impacts, which will lessen as the ability to replace Russian energy imports increases. The latest euro area indicators flag a clear economic worsening, as the effects of the full economic reopening fade These recessionary forces are not yet reflected in the euro area economic data for the first half of the year.

Under this scenario, inflation will be even higher than under the baseline: 6.9% in 2023 and 2.7% in 2024. This highly uncertain setting is also reflected in the dispersion among experts in the oneyear economic outlook for the euro area. This dispersion is very high in the case of GDP – close to the levels observed in the 2008 financial crisis – and stands at all-time highs in the case of the one-year inflation outlook. The ECB continues its monetary policy normalisation, which it began in December 2021 in response to the inflationary episode In view of the growth in inflation, in late 2021 the ECB’s Governing Council embarked on monetary policy normalisation, with the gradual withdrawal of the extraordinary monetary stimulus measures implemented during the pandemic, once these had succeeded in countering the adverse impact of the pandemic on the projected medium-term inflation path. The speed and intensity of this normalisation has been conditioned by the assessment made at each time by the ECB’s Governing Council on the inflation outlook and risks. 4  The measures taken by the ECB in this period are part of the new monetary policy strategy approved in 2021, which established a symmetric medium-term inflation target of 2%. Later I will return to the medium-term orientation and to what it means in practice.
It is therefore important for our banks to continue the enhancement of the quality of the asset side of their balance sheets, bridging the gap with our European peers. European Banks are also facing emerging risks beyond the traditional business model risks I just mentioned. I will focus on the three I consider as the most prominent ones. The first one is the exposure to climate-related and environmental risks, which will be one of the main concerns for both supervisors and banks in the years to come. The transition to a green economy comes at a cost and this will affect the banks through various channels, the most prominent one being their exposure to businesses that produce high carbon emissions. It is therefore of paramount importance for banks to develop appropriate strategies and risk management practises to alleviate the longterm, direct and indirect, effects of climate change. From the regulatory perspective, we are conducting for the first time a climate related stress test for the Significant EU bank Institutions and we are also planning to carry out both on site and off site inspections to assess the readiness of the banks to deal with this type of risks. Let me be clear; both banks and supervisors are still on the learning curve with regard to climate-related and environmental risks. However, we both need to adapt and we need to adapt as soon as possible. The second emerging risk, is the IT and cybersecurity risk.

15,2% as at October 2021. Although this has been drastically reduced from the peak of 48% back in 2014, it is still well above the EU average of 2,1%. Therefore the efforts for further deleveraging must be continued. The liquidity position has also improved. The level of deposits is currently at the highest level ever recorded since 2014, amounting to 51,5b Euros with the reliance on domestic depositors climbing to 82% as opposed to 70% in 2014. This adds to the resilience of the deposits base since these depositors are associated with a more predictable and stable behaviour. The Liquidity Coverage Ratio, indicating the availability of liquid funds against deposit outflows over a 30 day stressed period, stood at the level of 313% in December 2021 which is more than 3 times higher than the minimum requirement of 100%, placing Cyprus amongst the most liquid banking sectors in the Union, where the average LCR amounts to 175%. At the European level, including Cyprus of course, the banking sector faces a number of challenges. The profitability prospects of banking both in Cyprus as well as across the EU remain challenging. But why is profitability an area of interest for regulators? A sustainably profitable banking sector is necessary to build buffers to absorb unexpected losses, like the ones we have seen recently due to the pandemic. It also enhances further the ability to provide viable lending to businesses and households alike, contributing to the efficient functioning of the real economy.
SPEECH  Paradise lost? How crypto failed to deliver on its promises and what to do about it Speech by Fabio Panetta, Member of the Executive Board of the ECB, at a panel on the future of crypto at the 22nd BIS Annual Conference, 23 June 2023 Basel, 23 June 2023  Introduction Some 15 years ago, software developers using the pseudonym Satoshi Nakamoto created the source code of what they thought could be decentralised digital cash. [1] Since then, crypto has relied on constantly creating new narratives to attract new investors, revealing incompatible views of what cryptoassets are or ought to be. The vision of digital cash – of a decentralised payment infrastructure based on cryptography – went awry when blockchain networks became congested in 2017, resulting in soaring transaction fees. [2] Subsequently, the narrative of digital gold gained momentum, sparking a “crypto rush” that led to one in five adults in the United States and one in ten in Europe speculating on crypto, with a peak market capitalisation of € trillion. [3] However, this illusion of crypto-assets serving as easy money and a robust store of value dissipated with the onset of the crypto winter in November 2021. The fall in the price of cryptos (Chart 1) led to a decrease of around € trillion worth of crypto assets within less than a year. This caught millions of investors unprepared. [4] An estimated three-quarters of bitcoin users suffered losses on their initial investments at this time.

In the primary market, government’s demand for funding is reflected in the increased yields of government securities. However, the trajectory of yields retained its trend, showing low inflation expectations by market agents. As regards the economy’s performance outlook, our projections and assessments suggest a continuation of economic growth, in terms relative to those of the first quarter. Composition of aggregate demand is expected to be different to the one of the first half of the year: private sector of the economy is expected to be more vivacious in the second half, while the contribution of the public and external sectors are expected to be more moderate. Size and speed of the private sector recovery shall define the stability of economic growth in the future. In spite of assessments for increased aggregate demand, economic activity in Albania is expected to remain below its potential, thus conditioning the continuation of spare  2  BIS central bankers’ speeches  capacities in the economy in the period ahead. Subsequently, inflationary pressures originating from the aggregate demand are expected to be contained. In addition, foreign prices effect is expected to be more moderate in the upcoming months while inflation expectations of economic agents continue to be within the target band. Consumer price inflation is expected to continue its downward trend in the next months, gradually approaching the Bank of Albania target. Taking into consideration the information above, the Supervisory Council concluded that inflationary pressures in the medium term are contained.
Here, the challenge lies in selecting a set of indicators that can condition a timely policy choice, given the discrete nature of the instruments. To this end, we have put in place a macro-surveillance system to  2  BIS Review 141/2010  monitor vulnerabilities in seven key areas; namely, property market, stock market, banking sector, non-financial corporate sector, household sector, government sector, and external sector. Indicators are used to evaluate the build-up of vulnerabilities and imbalances in these sectors and the need for macroprudential measures is then assessed. This ultimately boils down to a judgement call. For us, integrating macroprudential measures in the overall macroeconomic modelling exercise to ensure a consistent and timely policy outcome remains a key priority. Finally, I want to come back to the point I raised earlier about the global nature of capital flows and the national orientation of policy. This is an important point and applies both to emerging markets and advanced economies. Simply put, the current cycle of capital flows has a strong international dimension as a key driving force of capital flows is the exceptionally low interest rates in the major economies. Hence, policy response by emerging markets is made more demanding if the problems at the source remain. Therefore, given the potential destabilizing influence that capital inflows may have on emerging markets, a question that must be asked is whether there are gains to be had for the global economy as a whole in moving away from exclusively domestic-oriented policies?

William C Dudley: Higher education - financing, costs and returns Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Conference on “Higher Education Financing and Costs and Returns of Higher Education”, Federal Reserve Bank of New York, New York City, 7 December 2017. * * * Good morning. It is my pleasure to welcome you to the New York Fed for today’s conference on the costs and returns of higher education and higher education financing. I am delighted to see such broad interest and attention from the academic community on this topic. The role of education and education financing in today’s labor market and economy has never been more important. It is a topic that I have spoken about frequently during my tenure here at the New York Fed, especially with regard to education’s importance for economic mobility. Understanding educational investment decisions and their macroeconomic implications requires rigorous analysis from top academic researchers like you. Let me briefly discuss some developments that I find particularly significant and worthy of investigation. As always, what I say represents my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System.1 As has been well documented by Raj Chetty and his co-authors, income inequality has increased in recent decades, while economic mobility has stagnated. Meanwhile, absolute mobility appears to have fallen, indicated by the declining share of children who earn more than their parents.
The rate of price increases for services has diminished in recent years and currently stands at roughly 2 per cent. So this does not appear at first sight to be a contributory factor to the low CPI inflation. It is important to remember, though, that productivity growth in the services sector is normally assumed to be somewhat lower than in the goods sector. Given an inflation target of 2 per cent, therefore, services prices should, on average, be increasing slightly more than 2 per cent and goods prices by somewhat less. With the exception of short periods this has also been the case since 1995, as services prices have risen on average by 2.5 per cent and goods prices by 0.6 per cent. So, developments in services prices have also contributed, at least in the most recent period, to the low inflation. The chief remaining explanation for the low CPI inflation appears, however, to be found in the developments in goods prices. Falling goods prices contributing to the low inflation When it comes to goods prices it is natural to distinguish between price developments for domestically produced goods and goods that are imported from other countries. Prices of imported consumer goods have dropped since the middle of 2003. But inflation for domestically produced goods has also been low, with prices even falling during the second half of last year (Chart 3). Consumer prices for both domestically produced and imported goods depend on many factors, e.g.

oil, energy and mortgage interest)  5  4  4  3  3  2  2  1  1  0  0  -1  -1  -2  -2  Goods  Services  -3  -3  -4  -4  jan-95 Jan 95  jan-96 jan-00 jan-01 jan-02 jan-05 Jan 96 jan-97 Jan 97 jan-98 Jan 98 jan-99 Jan 99 Jan 00 Jan 01 Jan jan-03 02 Janjan-04 03 Jan 04 Jan 05  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s new method. Source: The Riksbank  3. Consumer goods 6  6  4  4  2  2  0  0  -2  -2 Importerade varor Imported goods  Inhemska varor Domestic goods  -4  -4  jan-95 jan-96 Jan 95 Jan 96  jan-97 Jan 97  jan-98 jan-03 Jan 98 jan-99 Jan 99 jan-00 Jan 00jan-01 Jan 01jan-02 Jan 02 Jan jan-04 03 Janjan-05 04 Jan 05  Note. 12-month changes in per cent. Inflation measures computed according to Statistics Sweden’s new method. Source: The Riksbank  8  BIS Review 25/2005  4.
Moreover, risks that operators seem to be managing well individually may prove to be a considerable strain on the financial system as a whole. As a response to this, a new macroprudential surveillance framework is now in the making. 4  BIS central bankers’ speeches  Norway, which is in a surplus and net asset position, faces some particular challenges. As investor and manager of the Government Pension Fund Global, we have seen that prices and yields can react strongly to uncertainty about the future. New steps in the management of financial wealth Norway invests a large proportion of its petroleum revenues in international equity, bond and real estate markets via the Government Pension Fund Global. The fund is fully integrated with the government budget, and the same priorities are imposed on spending from the Fund as on any other government spending. Today, the value of the Fund is around NOK 3.5 trillion, or about 170 percent of mainland GDP. Chart 5  The Fund should be invested with a view to maximising future purchasing power. At the same time, investments must be diversified in order to reduce the risk of losses also during periods when markets are shrouded in fear and uncertainty. BIS central bankers’ speeches  5  Chart 6  The world’s economic geography is changing. While growth in advanced economies has been weak and is slowing, growth is robust in Latin America and Asia. Several countries in Africa are now catching up. The Fund has considerable ownership interests in Europe.

Many Emerging Market Economies (EMEs) have had a wealth of experience in the mismanagement in their macroeconomic, fiscal and monetary policies, and all of them had paid a heavy price for their past mistakes. The fact that the latest series of crises erupted in the developed world does not mean EMEs are immune from the spillover effects. More fundamentally, the Emerging Market Economies, including Hong Kong where household debt to GDP ratio saw a record high, must learn from the latest mistakes of the developed world and take extra care in not getting into the mind-set or habit of spending beyond our means, whether at the household, corporate or government level. Hong Kong should in particular guard against the temptation of “collective irresponsibility” by pushing for or condoning public policies that entail spending that cannot be sustained in the medium to longer run, or else we would be mortgaging the future of our children and grandchildren. This again is easier said than done, and requires considerable wisdom of Hong Kong people and the courage and skills of our leaders to resist increasing pressure and temptations for unrestrained public spending. Hong Kong’s population is aging, and aging fast. At present, the elderly  BIS central bankers’ speeches  5  dependency ratio of Hong Kong is 5:1. This means that Hong Kong now has 5 persons within the age group of 15–64 supporting each person over the age of 65.