samchain/econo-pairs-v1 huggingface dataset:
But here, too, there are clear signs of an increase in high LTV mortgage products on offer. Towards the end of last year, the FPC announced measures to reduce the stimulus previously provided, for instance from the Bank’s Funding for Lending Scheme, and outlined further instruments it had available to mitigate potential risks to financial stability from the housing market. Given the increasing momentum, the FPC stated its clear intention to be vigilant to emerging vulnerabilities and to take further proportionate and graduated action if warranted. Also, the FCA has undertaken, from next month, as part of the implementation of the Mortgage Market Review to work to maintain stronger underwriting standards – I say “maintain” deliberately because we observe evidence of a welcome strengthening by the industry of such standards. The FPC, for its part, has recommended that it should in future be able to give guidance on appropriate interest rates to be used by banks in their affordability tests. The FCA is putting this new arrangement into effect. In its latest statement, the FPC made clear that it had discussed the appropriate scenario for this year’s bank stress testing exercise. Like all stress tests, this scenario will not represent the FPC’s central expectation of what is likely to happen, but rather act as a coherent representation of risks in the tail of the distribution of possible future outcomes against which the resilience of banks can be tested.

The one thing you can be reasonably sure of as you look ahead to 2020 is that you will be confronted with a continuing challenge to keep ahead of the competition in your existing industries and that you will need to be able to respond to changing demands and embrace new activities to replace those where your present comparative advantage becomes impossible to sustain - as is unfortunately bound to happen in some cases. So my first point is that the market economy is with us to stay, with all that that implies. We've also learned that one of the conditions that are necessary if a market economy is to function effectively is a framework of macro-economic stability. For much of the post-war period macro-economic policy - not just in this country, but including in this country - focussed heavily on the short-term management of aggregate demand in the economy. It paid too little attention to the underlying, supply-side, capacity of the economy to meet that demand. Faced with slow growth and rising unemployment both fiscal and monetary policy were used, in combination, to stimulate demand until accelerating inflation and a worsening balance of payments threatened to run out of hand, when the brakes were slammed on and everything went into reverse. The go-stop policy cycle in other words produced the familiar boom-bust business cycle. Over time this experience induced a pervasive short-termism in economic decision-making on the part of both businesses and consumers.
For instance, when embedding artificial intelligence in financial solutions, the risk grows higher of a “black box”, where it is more and more difficult to trace and understand outcomes. Discrimination bias may occur and leave out customers, without even being detected as such. And big data never forgets: yet, financial inclusion means being sometimes able to overcome past conditions and give customers a “second chance”. In addition, digitalization of our economies also brings about a risk of digital divide between those who are at ease in a digital world and those who don’t understand it or don’t have access to it. This is a major issue for financial inclusion. When a bank or an insurer prioritizes access to its services via digital devices, those who don’t use those devices can be left out and become “second-class” clients. We must not overlook this. 3/ Fintech and financial inclusion: moving forward Faced by the new ways, the new challenges and the new risks that Fintechs are bringing to financial inclusion, how do we, at the Banque de France, adapt to the digital age and leverage digital tools, to further improve our policies and actions in favour of financial inclusion? The first way is by developing our understanding and use of new technologies: in addition to our Fintech unit at ACPR which I’ve mentioned, Banque de France has launched in June 2017 “Le Lab”.

Denis Beau: Financial inclusion in the digital age - how to make a difference? Panel opening talk by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Singapore Fintech Festival 2019, Singapore, 13 November 2019. * * * Good afternoon Ladies and Gentlemen, I am very happy to be here with you today to introduce this session on financial inclusion and I would like to thank the MAS for offering me the opportunity to contribute to this conference. Inclusion is an essential topic for the financial sector, and more broadly for society as a whole. It’s essential because it’s about making sure everyone can have access to financial services. Because without this access, there is no or only limited ways for people to take part in the formal economy, to build up capital, to buy goods and services, to develop an entrepreneurial project. It is essential because it’s not just about more growth for the financial sector or  even for the economy as a whole, it’s also about reducing inequalities and making sure that more fragile populations,households and businesses, are not left out of economic development. Of course, Fintechs have a huge role to play in financial inclusion. They can provide new solutions, but they also raise new challenges, with new players entering the financial world and new ways of looking at customer relationships.
Today I would like to look at the effect fintech innovations could have on a key element of the financial system, namely the financial market infrastructure. The financial market infrastructure, FMI for short, comprises trading platforms, securities settlement systems and payment systems via which financial transactions are conducted electronically. The FMI is generally not in the spotlight. Nevertheless, both the financial sector and the Swiss economy as a whole depend on a secure and efficient FMI. The SNB monitors developments in this area very closely given that facilitating and securing the operation of cashless payment systems is one of its statutory tasks. In this speech I will be discussing the significance of fintech for the financial market infrastructure. First, I will address DLT’s potential in the FMI. Second, I will be talking about the tried-and-tested division of roles between the central bank and commercial banks. I will look at how this two-tier system paves the way for harnessing fintech innovations that could enhance efficiency, while ensuring that this is not to the detriment of either safety or reliability. Third, using the example of retail payments, I will show that there is a lot more to fintech than just DLT, and that private sector players are much better suited to providing timely solutions and flexibly addressing the needs of customers in this area.

We don’t see many positive effects from the ECB’s policy in other ways either: economic growth is fragile at 1.5%, unemployment stands at 10%, with youth unemployment as high as over 20%. You can’t really give the ECB good marks for that? If the ECB had not taken the measures that it did, we would be in a depression; I’m convinced of that. And a depression would be much worse than what we are experiencing today and worse than what we went through over the past decade. Let me recall: after the banking crisis, we had a severe recession in 2009 and the economy then recovered in 2010 and 2011. This was followed by the debt crisis – centring on the sovereign debt of several European countries – which plunged the European economy into another recession. This recession was not as deep as the one in 2009 but it did last longer, because it took us two years to get over it. Economic growth picked up again somewhat at the end of 2013 and in 2014, but as of the spring of 2014 we saw another slowdown in growth and were at risk of running into a third recession. In January 2015, ECB President Mario Draghi announced that the ECB would pursue a policy of quantitative easing: we now print money and pump it into the economy in order to help ease credit conditions. Were it not for the monetary policy of recent years, we would certainly have landed in a deep recession.
Let me therefore pose another question: has the use of these credit risk transfer mechanism helped to distribute risks, making the financial environment a safer place? On the plus side, credit transfer mechanisms can “redistribute” risks, as default losses would be absorbed by a larger number of investors than otherwise. Some of the losses may be borne by sophisticated players (such as hedge funds or some institutional investors) who are well diversified and can better bear the losses. Credit transfer mechanisms also allow banks (via credit derivatives) to improve their own risk management and enable them to diversify their risk profiles. However, the use or risk transfer mechanisms can contribute to opacity in the distribution of risks, especially once risks are transferred to unregulated entities (i.e. non-banks). This could lead to bunching of risks in particular areas. Additionally, the use and constant innovation of credit risk transfer mechanisms has allowed risk to take on more complex forms, making risk less traceable. My final point will be on the resulting challenges to central banks of small open economies. Central banks need to understand how globalization affects three main objectives: (1) the domestic inflation process, (2) the transmission mechanism of monetary policy, and (3) financial stability. Let me point out at the outset that empirically, there is still some disagreement to the extent of each effect. First of all, it has been argued that the domestic inflation process has been largely changed by trade globalization.

Thirdly, similar investment strategies employed by hedge funds and other funds could  BIS Review 74/2007  1  lead to momentum trading and herd movements, both in terms of inflows and outflows. Any shocks that trigger a change in these strategies could result in large movements of capital. In any case, whether owing to the changes in risk appetite or not, we must remind ourselves that the current pricing of risk is based on the expectation that strong growth and contained inflation will continue to prevail. Any unexpected deterioration of the macroeconomic environment, however, could trigger a rapid turnaround in sentiment. This leads me to my next point, which I had raised earlier, of whether the increase in capital flows to emerging markets was likely to result in an increase in risks? This seems the likely case. For example, local investors do not usually provide counter-trade to hedge funds but rather take similar positions, hence increasing the overall risks. In addition, investment of hedge funds in a particular country is usually only a small fraction of their whole portfolios, and inflows reversals may take place easily. Individual risk management can also collectively induce systemic risks, and central banks may be required to resolve such problems to avoid adverse impacts from sudden reversal of capital flows. This leads us to the question of whether we are underestimating the inherent risks of these capital flows? Let me explain why this may be the case. First of all, net capital flows are small.
Very high growth in demand for oil is one of the factors behind record high oil prices. In the first half of this year, the price of Brent Blend fluctuated for the most part between USD 45 and USD 55 per barrel. Oil prices rose further this summer, exceeding USD 60 per barrel in August and September. Oil futures have also increased. 4/7  Little excess production capacity in OPEC countries, combined with the prospect of lower production in non-OPEC countries, has probably influenced oil prices. At the same time, there are prospects of continued strong demand growth in important oil-importing countries, such as China and some other emerging economies. Rising or persistently high oil prices may gradually dampen growth among our most important trading partners. The slowdown may occur gradually and may not be particularly marked, but there are now growing concerns that high oil prices may have a stronger impact on inflation and inflation expectations. Monetary policy easing in response to this may then trigger a more pronounced downturn. High oil prices have a different impact in Norway than in oil-importing countries. A rise in oil prices improves our terms of trade. Other countries perceive this as an externally imposed tax. As a result of persistently high oil prices and expectations that oil prices will remain high, investment in the petroleum sector may reach record levels this year. The investment intentions survey for the petroleum sector points to very high growth.

Nothing is settled, and the French presidency will need to deepen and strengthen the main avenues that are currently the subject of global consensus. This is already a huge task. But the greatest responsibility that I see for the future presidency is the correction of large external imbalances at the global level; such a correction is crucial if we are to avoid another major crisis in the future. And in Seoul the G20 explicitly asked the French presidency to work on criteria for measuring these external deficits and surpluses. The financial crisis is over, but its effects can now be felt in terms of the economy. Do you believe that all the necessary lessons have been learned in order to avoid a new global crisis when one sees measures here and there that are perceived as protectionist, in particular in the United States and China? We are in the midst of reflecting at the international level on the lessons to be learned from the crisis. This is a considerable task and it is being undertaken by the whole of the international community, including emerging market economies. It will take some time. For example, in order to make the global financial system much less vulnerable, much more robust, the measures proposed by the Basel Committee and adopted by the G20 will necessarily take time to implement, given their scale. This applies in particular to a very considerable increase in banks’ capital requirements at the global level.
The choice of a horizon over which to bring inflation back to target is equivalent to choosing a point on this volatility trade off. The striking change, however, is the remarkable improvement in the trade-off that followed the introduction of inflation targeting, as can be seen in chart 6. The volatility of both inflation and output growth were much lower than in earlier periods. Part of the improvement may lie in the pattern of shocks over the past decade, although the world economy has hardly contributed to that stability. So the challenge ahead is that if a shock, larger than we have experienced recently but not large relative to historical experience, were to move inflation significantly away from target, then inflation expectations might become dislodged from the target. The behaviour of expectations and so the economy as a whole would change. So far there is little sign that the shocks we have experienced have detached inflation expectations from the target, and that is a source of comfort. But the MPC will continue to pay particular attention to the evidence on inflation expectations. Many of the problems of the past resulted from the failure to take action before expectations had started to drift upwards, and the cost of that inaction proved to be high.

The story of monetary policy in Britain during the intervening period is told by the Mais Lectures. The first Mais Lecture was delivered by my predecessor, Lord Richardson, in 1978, at a point when monetary policy was emerging as the main tool to deal with inflation. Not before time, you might think, since only two years earlier inflation had reached 27%. In 1981 the Chancellor of the Exchequer, Geoffrey Howe, chose as the title of his Mais Lecture: “The Fight Against Inflation”. As he said then, with inflation still in double figures, "squeezing inflation out from an economy which has become accustomed to higher rates over a period of years cannot be an easy or painless task. … the inflationary mentality must be eradicated. … When we have done that we will find that low inflation or even price stability need not be painful". The conquest of inflation was to prove harder than expected. In the decade that followed Geoffrey Howe’s lecture, inflation averaged over 7% a year. Only since 1992 has inflation fallen to levels that could be described as price stability. In retrospect, two Mais Lectures seem to have been of particular significance: those by Nigel Lawson in 1984 and by Tony Blair, then Leader of the Opposition, ten years ago this month. Despite clear differences of view, what stand out from those two lectures are their similarities. Both emphasised the need for a medium-term framework for monetary and fiscal policy.
About a year and a half ago I stopped carrying a wallet with room for cash– all I needed on a daily basis was a debit card and my phone. I am not alone. And is this shift is not exclusive to London – from 2017 to 2019 the number of people using cash just once a month or less in the UK more than doubled to 7.4 million.1 The result has been a marked increase in digital payments, particularly card payments, and a steady decline in the use of cash for retail transactions. In mid-2016 cards overtook cash for the first time as the most frequently-used payment in the UK. And the trend hasn’t looked back. This doesn’t mean that cash is not still important for some. There are important inclusion implications that I won’t do justice to here but that deserve a mention – while UK Finance estimates that 98 percent of people in the UK had a debit card in 2019, there are still groups that continue to rely on cash, with this reliance relating  1  See UK Finance Press Release: Cards used for half of payments for first time last year. https://www.ukfinance.org.uk/press/pressreleases/cards-used-half-payments-first-time-last-year 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  to factors spanning age, income, disability and geography. The UK government has said that the UK is committed to ensuring that those who rely on cash will continue to be able to access it, and the Bank of England supports this important agenda.

5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  But of course innovation won’t be sustained if it’s unsafe or detrimental for financial stability. Clear, transparent regulatory expectations are critical to ensure that uncertain rules of the game don’t hold innovation back. This poses several challenges for regulators – I’m going to focus on the two that are most important for financial stability. We need payments to be secure and reliable. Problem 1 for central banks is that robust and reliable ways to pay are essential to financial stability. Well-functioning and resilient payment chains allow payments to be made on time, with confidence, even in periods of economic uncertainty. Think – receipt of your salary, benefits and pensions, direct debit bill payments ability to tap and ride the tube home or leave the restaurant after a meal. The reliability and resilience of payments is so important to our economy that the UK Financial Policy Committee, tasked with identifying, monitoring and reducing systemic risks, lists avoiding serious interruptions in the provision of payment and settlement services as one of the very purposes of preserving financial stability. If a stablecoin were to significantly replace current systemic payments chains as a way to pay – logic follows that they would pose the same risks to the economy as current payments chains and should be regulated to the same standards. This is relatively straightforward: regulation should be technology neutral: based on the activity conducted and the risks posed, not the technology used or the entity’s legal form.
BIS Review 52/2008  5  Within the next couple of weeks, the banks will report their results for the first quarter of 2008. I have no information on what they will show. I can only say that the strong performance of their core business in the last quarter of 2007 allows one to anticipate a relatively good performance also in the first quarter of this year. In addition, given the composition of their balance sheet, they will all have profited from the depreciation of the Icelandic króna in the first quarter of the year as well as from the increase in the rate of inflation as they hold more price indexed assets on their balance sheet than indexed debt. You are of course familiar with the regulatory and supervisory framework in Iceland. It is based on best international practice and has received high marks from foreign observers. The Supervisory Authority and the Central Bank cooperate closely on their respective roles in the area of financial stability. Developments over the last few months have increased the intensity of the cooperation and monitoring of developments in the institutions’ respective fields of responsibility and experience. This is as it should be and in line what has been done elsewhere. Like many other central banks, the Central Bank of Iceland has somewhat relaxed its rules on eligible collaterals under its regular liquidity facilities. These are broadly based on ECB rules, but ours are probably still somewhat more restrictive than the ECB’s.

Christian Noyer: The role of inflation - indexed bonds in the process of setting monetary policy: a central banker’s perspective Speech by Mr Christian Noyer, Governor of the Bank of France, at the Morgan Stanley seminar on indexed bonds, Paris, 9 June 2004. *  *  *  Ladies and Gentlemen, [Dear Friends], It is a great pleasure for me to address you here in the context of the first “Séminaire de Paris” on inflation-linked securities organised by Morgan Stanley. Today, I will focus more specifically on “The role of inflation - indexed bonds in the process of setting monetary policy” from a central banker’s perspective, based on my own experience as the former Vice-President of the ECB and the current Governor of the Banque de France. Throughout my presentation, I will occasionally refer to the monetary policy strategy framework implemented by the Eurosystem in which asset prices, in particular inflation-indexed government bonds, can play a role in the context of our economic analysis. Having said this, I will neither elaborate further on the ECB’s framework nor comment on the last Governing Council’s monetary policy decision. Price indexation of financial contracts is not a new phenomenon. According to Robert Shiller1, the world’s first known inflation-indexed bonds were issued by the Commonwealth of Massachusetts in 1780 during the Revolutionary War. These bonds, the so-called “depreciation notes”, were issued to US Soldiers as deferred compensation for their services. They were mainly designed to deal with severe wartime inflation.