samchain/econo-pairs-v1 huggingface dataset:
16 Carney (2014), Inclusive capitalism: creating a sense of the systemic. 17 They have also, over the centuries, been beset by poor behaviour, as shown by the FMSB’s comprehensive review of misconduct over the past two centuries. The history of financial fraud has rhymed all too frequently. See FMSB Annual Report (2017). 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5  Repeated episodes of misconduct – such as the Libor and FX scandals – called into question the social licence that markets need to innovate and grow.18 Rather than being professional and open, markets became informal and clubby. Rather than competing on merit, participants colluded online. Rather than everyone taking responsibility for their actions, few were held to account. The crisis reminded us that real markets don’t just happen; they depend on the quality of market infrastructure for their effectiveness, resilience and fairness. Robust market infrastructure is a public good in constant danger of under-provision, not least because the best markets innovate continually. This risk can only be overcome if all market actors, public and private, recognise their responsibilities for the system as a whole. III. TRUE FINANCE So this time is no different. Markets don’t always clear. And we can suffer from their amorality. What to do with such knowledge? And how to retain it? To resist the siren calls of the three lies of finance, policymakers and market participants must bind themselves to the mast.

Third, the Bank takes a countercyclical approach. The UK deploys a Counter Cyclical Capital Buffer (CCyB) through which capital is accrued in the good times for release in the bad. Two years ago, amid heightened uncertainty following the Referendum, we cut the CCyB by £ billion, releasing £ billion of additional lending capacity. As the immediate uncertainty receded, we then required banks to rebuild it. Today their capital buffers are twice as high, meaning the FPC could unlock over £ billion of lending capacity, if required. Fourth, the FPC has identified the major cross-border risks to financial services that could arise in a cliffedge Brexit. 13  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  13  The biggest risks relate to contract continuity. 16 million insurance policyholders in the UK and 38 million in the EEA have policies that firms might lose the permission to perform in a no deal scenario. Around £ trillion of cross-border derivative contracts could be disrupted by the loss of the regulatory permissions required to service them and loss of recognitions for CCPs. The Bank has been working with the relevant parties over the past two years to ensure they have contingency plans for the worst case scenario. In some cases, particularly in insurance, UK financial companies are restructuring so they can continue to serve their EU customers. If all current plans are delivered successfully, the number of EU policyholders at risk will fall to 9 million.
Supervisory follow-up Let me now outline the next steps that the ECB plans to take to follow up on the results of our assessment of banks’ C&E disclosures. We have sent individual feedback letters to all banks under our direct supervision, setting out the key gaps in their disclosures and conveying our explicit expectation that they will take decisive action to address these gaps. In doing so, banks will ultimately ensure that their risk profile is transparently and comprehensively reflected in the information they disclose to the public. Addressing such gaps will also mean banks are well prepared to meet impending technical requirements. As I mentioned, the consequences of non-compliance with minimum transparency standards are only going to increase for banks, as legal and reputational risks are starting to materialise for banks which fail to step up the quality of their disclosures. More and more, clients, investors and other market participants want meaningful, comprehensive information on the climate-related actions of their banks. That way, they can make conscious, informed decisions about where their money goes. Moreover, failing to disclose exposure to risks, including C&E risks, constitutes a breach of the Capital Requirements Regulation. As such, we stand ready to use the full array of supervisory tools at our disposal to ensure banks’ C&E disclosures are up to our standards, and ultimately that eligible banks are prepared for the new regulatory requirements.

There were signs of that last week when the minutes from April showed that I had not voted with the Board’s majority. But as observers and market players become more accustomed to how we operate, such differences of opinion are likely to attract less attention. Still, monetary policy signalling clearly cannot be arranged in quite the same way as before and in this respect we will presumably become more like the ECB and the Bundesbank, where individual statements do not automatically constitute a collective signal from the central bank. For those who are interested in following us and our assessments, however, we strive to provide a good foundation by publishing — at intervals of approximately six weeks — either an Inflation Report or a lengthy press notice on the majority view of inflation prospects. Fiscal policies in the euro area Let me now turn to the conduct of fiscal policy in the euro area. A judicious monetary policy is not sufficient to ensure that the monetary union functions properly. The single currency will make the national economies more interconnected than before. The formation of fiscal policy in one country will affect the overall picture of economic prospects and thereby monetary policy. In the Maastricht Treaty the countries accordingly agreed on certain common rules for economic policy and these have been fleshed out with additional legislation and political agreements. Besides fixed and binding undertakings for each country, there are regular common processes for producing more general guidelines and standards for economic policy.
In August 2011, we added a particular type of forward guidance to our policy, first saying we would likely keep rates low until mid-2013 and then, in January, indicating that sub-par economic performance would likely warrant exceptionally low rates until at least late 2014. Working to complement these efforts and to improve FOMC communications more generally, we also added two major communications initiatives: A statement of our monetary goals and long-run strategies, and publication of FOMC participants’ projections for the federal funds rate. 1  Krugman (1998). 2  See, for example, Bernanke, Reinhart and Sack (2004) and Eggertsson and Woodford (2003). BIS central bankers’ speeches  1  I have strongly supported each of these developments, believing that they improved transparency and also provided welcome further monetary accommodation for the U.S. economy. However, as I have been talking about in public for some time, I think there are additional tools we could use to deliver more effective policy accommodation. In particular, I would like to see our forward guidance take a different form – one that explicitly ties liftoff in the funds rate to observable economic outcomes (You can think of this as a Ulysses-type forward guidance: We tie ourselves to the mast to avoid the siren calls of premature tightening.)

As I will talk about shortly, I believe such policy could provide more clarity about our attitudes toward providing monetary accommodation – and would be more in line with a structure I would have preferred to have seen in our August 2011 and January 2012 actions. This policy also can be structured in a way that would represent a balanced risk-management approach to achieving the dual goals of maximum employment and stable prices that the United States Congress has mandated to the Federal Reserve. Communications enhancements First, though, I’d like to discuss the Fed’s latest initiatives to enhance communications. As an accountable central bank in a democratic society, the Federal Reserve has an obligation to clearly articulate what it is trying to achieve with monetary policy. I believe that our latest communications efforts are an important step in further increasing such accountability to the public, as they reaffirm our commitment to both legs of the dual mandate and describe the ways in which we will seek to achieve those objectives. The framework statement Let’s start with the framework statement of our policy goals and long-run strategy. The framework clarifies how the FOMC interprets our statutory responsibilities for facilitating maximum employment and price stability in terms of measurable and achievable economic goals that we aim for over the longer run. We say that the Committee sees a rate of inflation of 2 percent over the long run as being consistent with the price stability leg.
Later on, merchants invented payment instruments, including promissory notes and cheques; and, in the 17th century, the first privately issued banknotes emerged in Europe. 3 These innovations significantly reduced the transport costs involved in making payments and simultaneously improved security. On my slide, this is the second phase: the transition from coins with intrinsic value to promissory notes, cheques and privately issued banknotes. 1 2 3  As reproduced in Rudolf Richter (1990), Geldtheorie – Vorlesung auf der Grundlage der Allgemeinen Gleichgewichtstheorie und der Institutionenökonomik, Berlin, pp. 120 et seq. Specifically: electrum, a naturally occurring alloy of gold and silver. The existence of paper money in China dates back to the 10th century. In Europe, the first banknotes were issued in 1661 in Stockholm. In Switzerland, the first banknote was put into circulation in Berne in 1826. Page 3/9  Central banks play a fundamental role in payment systems Now, it is important to remember that neither the promissory notes nor the cheques – nor even the banknotes – of this era were actual money, but merely a claim on money. Such instruments could not be used to settle payment obligations with finality. There was always a risk that the borrower would not have enough precious metal to honour the payment obligation on the due date. The use of payment promises in trade thus entailed substantial credit and liquidity risk. These risks could undermine confidence in payment instruments, bringing trade to a standstill. And this, ladies and gentlemen, is where central banks enter the equation.

Central banks can reduce payment-related risks very effectively. By establishing security and confidence, they contribute decisively to the efficiency of the payment system. Today, money changes hands mainly via transfers or direct debits, with payments being booked directly to the commercial banks’ accounts at the central bank. Settling in electronic central bank money is equivalent to settling in cash; it is final and irrevocable. This approach reduces credit risk and inspires confidence – both in the payment system and in money itself. On the slide, this is the third phase: the transition from private promises to pay to central bank money – in other words, to today’s banknotes and the electronic sight deposits that commercial banks hold with their central bank. RTGS systems – a milestone in the evolution of cashless payments Let us now turn to Switzerland. For many years, the postal cheque service of Swiss Post was at the heart of the cashless payment system. This area only began to become attractive for banks as well from the middle of the 20th century. Around this time, so-called ‘bank clearing’ – Switzerland’s first interbank payment system – came into existence. This was an important step in the development of the cashless payment system. However, the predominantly manual nature of the system made it cumbersome. It could take up to four days to execute a payment, making efficient liquidity management virtually impossible for the participating banks. Furthermore, in the ‘bank clearing’ system, payments were settled on a net basis.
Therefore, the strengthening of the ruble that we saw in the first quarter of 2017 can in large part be attributed to inflows of foreign currency through foreign trade channels, and in small part to other factors, such as carry trade operations. Statistics show that the total volume of capital inflow is not huge, however in some markets the share held by non-residents has recently increased. Such markets include the OFZ market, information about the share of non-residents in that market is regularly published on our website. According to these statistics, the share of non-residents investing in the OFZ market rose 2 percentage points from October 2016, reaching 29% by 6 April 2017. This is hardly a substantial increase. The yield of OFZ has remained fairly constant since October 2016, despite the fact that the volume of net borrowing by the Ministry of Finance in this period has been quite large. This is indicative of the fact that the main players in this market are Russian banks, and that competition with foreign investors allows the yield of OFZ to be kept from growing, despite increase in supply. In our opinion, based on the experience of recent years, a significant portion of the inflows of 2/6  BIS central bankers' speeches  foreign capital to the OFZ market can be considered to be quite stable. This is connected to the beginning of Russia’s economic recovery and an increase in the level of trust investors have in the policies which are in place.

So, in this short presentation I have tried to present you with our understanding of the current situation in the Russian market from the point of view of financial stability. My colleagues will take some of these issues up in more detail. We are ready to answer any questions you may have. 6/6  BIS central bankers' speeches
Another cause for optimism is the attention compliance now receives in law schools and other graduate programs. Two examples are NYU Law School’s Program on Corporate Compliance and Enforcement, and Fordham Law School’s LLM program in Corporate Compliance. These programs engage key leaders in the field in important public discussions, and train students who, in terms of their understanding of corporate governance, are well ahead of where many of us were when we began our careers. These programs will contribute to a bright future for the compliance profession. Compliance, enforcement, and accountability I also want to say a few words about enforcement and accountability. I believe, of course, that past misconduct should be punished. I also believe that we who play a role in bringing wrongdoers to account should also require forward-looking reforms under the mantra of “Never again.” For those forward-looking reforms to be successful, firms and enforcement attorneys need to pay attention to root causes of misconduct. There is a vigorous and important debate in academic and regulatory circles about the prosecution of individuals in cases of corporate misconduct. Virtually everyone agrees that individual prosecutions can have deterrent effect on future misconduct if people believe they will get caught. I follow the debate with great interest. Suffice it to say, I agree that individuals must be held accountable for misconduct. If the misconduct is criminal, criminal prosecution is warranted.

In response to these developments, the international community adopted in 2009, under the impetus of the G20, an ambitious reform programme including Basel III, which is a key element for the banking sector. Indeed, a banking system that is more robust as a whole and capable of absorbing major shocks is vital to avoid the repetition of such chain reactions in the future. In this respect, despite the delay in the reform agenda in the United States, Europe must clearly press forward: the credibility of our banks and our economies is at stake. Basel III is naturally based on Basel II which establishes the current capital adequacy rules. However, Basel III goes further than merely changing and updating the existing rules. –  Basel III indeed considerably strengthens the capital requirements that banks must meet, but this reform is more extensive in that it significantly enhances the prudential framework: in addition to capital requirements, it establishes liquidity requirements, and a leverage ratio is set to be introduced in the medium term. From this point of view, Basel III is a far-reaching reform of banking regulation. BIS central bankers’ speeches  1  –  Furthermore, and most importantly, I believe that Basel III is a major step forward in that it leads to a much closer interaction than has been the case to date between the individual supervision of banks, known as microprudential supervision, and the overall supervision of the banking and financial system, or macroprudential supervision.
Reasons behind this behaviour are understandable and related to the fact that the majority of the society acquires information circumstantially, hoping that the actual failure becomes a lesson for the future. One way to eradicate circumstantial learning is the introduction of financial reading at an early stage of education. In this view, I would proudly say that, the Bank of Albania has provided an outstanding contribution. Allow me to briefly make an résumé of our work in this aspect. The first strategic station of financial education provided by the Bank of Albania was needs assessment and identification of training priorities. From this point of view, we assessed that it was indispensable to open the Bank “de facto” to the public. More frequent communications with the market and its important participants, as well as periodic explanations of monetary policy decision-making and risks balance related to inflation and financial stability, are some initiatives that we consider as a very effective education process. I am proud to say that now we have:   A public opinion that builds up expectation as regards our decision-making;    A media sector, which has admirably enhanced understanding, interpretation and expectations related to our decision-making;    A banking sector, which reads accurately and responds with high flexibility to the direction oriented by us;    A qualified public critique, where Bank of Albania finds a mirror of alternative opinions on its adopted decisions and practices.

The Committee has also published for consultation a proposal on the setting of further restrictions on the use of internal models to measure credit risk. These restrictions would consist in limiting modelling of the so-called “low-default portfolios” for which there is an insufficient history of default to be able to use advanced models. This would be the case, for example, of portfolios of banks, specialised lending or large corporations. In addition, in portfolios deemed suitable for modelling, minimum levels would be established for parameters (for example, probability of default and loss given default) so as to rule out abnormally low estimated values. Lastly, the Basel Committee has also published for consultation the possibility of setting a floor or minimum values for RWAs resulting from internal models. Not only the advisability of this is being discussed, but also, if approved, the design and calibration of these minimum values. Essentially, it would be a question of limiting to a certain percentage the maximum capital saving that institutions may obtain by modelling risk on their own account, rather than measuring it using the standardised approach. Conceptually, and provided it is correctly designed and calibrated, a floor of this kind can be a useful tool in the aim to reduce unwarranted and unwanted variation in RWAs: it would set for all institutions the same maximum level of saving obtainable using models, and it would help to ensure a minimum desired level of capital for a specific level of risk, and all without relinquishing risk sensitivity.
Public inquiry required for a decision It is clear just from this short review that the introduction of an e-krona could have major consequences for both monetary policy and society as a whole. On the other hand, as I have also pointed out, it would involve a major change in a historical perspective if the Riksbank no longer issued any state-backed means of payment that can be held by the general public. Considering how economically important the issue is, the Riksbank cannot take the decision on its own as to whether an e-krona should be introduced and, if so, in what form. It is a decision that must have substantial political support and where parallels can be drawn with the changes in the payment system in 1809 and 1904 that I mentioned earlier. 26 Some economists see a more negative interest rate as the best solution to create room for manoeuvre for monetary policy in a world of very low neutral interest rates, like today – better than, for example, increasing central bank inflation targets. This, it is thought, could work even if there is still physical cash by creating an exchange rate between physical cash and e-money and steering it, see for instance Rogoff (2017) and Lilley and Rogoff (2019). 13 [21]  In May this year, the Riksbank therefore submitted a petition to the Riksdag on the need for a public inquiry into the future payment market.

Krugman, Paul (2014), “Inflation Targets Reconsidered”, essay presented at the ECB Sintra conference, May. Lilley, Andrew and Kenneth Rogoff (2019), “The Case for Implementing Effective Negative Interest Rate Policy”, essay presented at “Strategies For Monetary Policy: A Policy Conference”, The Hoover Institution, Stanford University, May 4, 2019. Lindbeck Assar, Per Molander, Torsten Persson, Olof Petersson, Agnar Sandmo, Birgitta Swedenborg and Niels Thygesen (1994), Turning Sweden Around, MIT Press. Nyberg, Lars (2005), House price developments and monetary policy. Speech at Evli Bank, Stockholm, 19 December. Sveriges Riksbank. Petri, Gunnar (2017), Hans Järta – En biografi [Hans Järta – A biography] (In Swedish) Historiska Media, Lund. Quarles, Randal K. (2019), “Monetary policy and financial stability,” remarks at “Developments in Empirical Macroeconomics”, a research conference sponsored by the Federal Reserve Board and the Federal Reserve Bank of New York, Washington, D.C. Rogoff, Kenneth (2017), “Dealing with Monetary Paralysis at the Zero Bound”, Journal of Economic Perspectives 31(3), pp. 47-66. Rosengren, Eric S. (2015), “Changing economic relationships: Implications for monetary policy and simple monetary policy rules”, speech on 16 April, Federal Reserve Bank of Boston. 17 [21]  Svensson, Lars E. O. (2017), “Cost-benefit analysis of leaning against the wind”, Journal of Monetary Economics 90, pp. 193-213. Sveriges Riksbank (2017), “The Riksbank’s e-krona project”, Report 1, September 2017. Sveriges Riksbank (2018a), “Account of monetary policy 2018”, Sveriges Riksbank. Sveriges Riksbank (2018b), “The Riksbank’s e-krona project”, Report 2, October 2018. Sveriges Riksdag (1897) Riksdag minutes, Second Chamber, No. 30, Saturday 24 April.