samchain/econo-pairs-v1 huggingface dataset:
The consultation we conducted indicated that there was quite widespead support for such an agency, although having said that it is fair to say that there was quite a diversity of opinion on various aspects. The working group will investigate this further and try to arrive at a recommended way forward. But we hope that something can be done in this area, as most seem to agree that such an agency would be beneficial. 10. So that brings me to the end of what I see as the three main initiatives, but let me also comment on a few other outstanding matters. First is the vexed question of the approval of managers. I must confess we have been a little taken aback by some of the reaction to this proposal, which seems to question our motives for seeking such a power. All I can say is that we have no ulterior motives. We simply feel that if individuals are to fill important positions in banks then steps should be taken to ensure that they are fit and proper for the position. Clearly it is the banks’ responsibility to select individuals and satisfy themselves as to their credentials, and you can be assured that we have absolutely no desire to second-guess these decisions. However, it is a fact that we may, on occasion, have access to information on an individual which the bank does not have. We would see ourselves, therefore, as acting as very much a second line of defence – and only in exceptional cases.

I have not said anything on the bankruptcy laws or tax issues, which were two issues I was asked to addresss, but I don’t think there is much I can say on these areas except that we appreciate the banks’ views and will reflect these to the appropriate authorities as appropriate. Certainly we are aware of the rising trend in personal bankruptcies and the possible impact of this on delinquencies, and this is something we are watching closely. We are also in dialogue with the Privacy Commissioner and other parties to try to get the scope of the credit data that can be released to credit agencies increased, which would perhaps help in this area. 14. I hope these comments have been of interest to you all. Let me end on a positive note. We are all part of a highly successful industry here in Hong Kong. As banking regulator, it is the HKMA’s objective to promote a safe and stable banking system. To achieve this we need the banking industry to be successful, profitable, competitive, innovative, and responsive to change, and this surely is your objective too. So let’s continue to work together on initiatives such as those I have discussed today so as to ensure the continued prosperity of our industry. 15. Thank you. BIS Review 3/2001  3
François Villeroy de Galhau: Technological innovations in payments and beyond Opening speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Bank of France and CNPS (French Payments Committee) conference "Technological innovations in payments and beyond", Paris, 6 January 2017. * * * Ladies and gentlemen, I am very pleased to welcome you all to Paris, for this conference on technological innovations in payments and, more generally, in the financial system. Representatives from a wide range of stakeholders, from market to regulatory spheres, are here today and I have no doubt that this variety of backgrounds will make the discussions fruitful. Before leaving the floor to the speakers and panellists, I would like to share with you a few thoughts on three challenges raised by digitalisation, from the perspective of a central banker. 1. Technological innovations are opening up new opportunities for payments, which can provide benefits to the whole economy Payments are often viewed as a very technical and incidental activity, and sometimes even just as a matter of “plumbing”. And yet they are crucial for our economy and for central banks. For the Banque de France, payments are of the essence in all our three missions – what we call the “3 Ss”: monetary strategy, financial stability and economic services. First, monetary strategy: what is at stake with payments is the future of money.

Against this background of uncertainty and shocks, and in order to reap all the benefits of the fantastic process of economic and financial globalisation, we are still facing two main challenges: First, we observe persistent financial instability of which the ICT and equity bubble is a striking example. What are the factors behind such developments and which avenues should we explore in order to mitigate financial instability? Second, we had to cope with repeated financial crises in emerging market economies since the early 80s. Our challenge is how to prevent such crises and, if they occur, how to ensure that effective and predictable methods for crisis resolution are available, and enforced. In my view, the new international financial architecture (understood broadly) should provide appropriate policy responses to both types of challenges. Of course, they are interlinked in many ways. For the sake of clarity, I will address these two types of issues separately. •  First, I would like to show that some by-products of financial integration may have had adverse effects on the stability and efficiency of the financial systems;  •  I will then try to put into perspective recent crises in emerging market economies. *  1. Some by-products of financial integration may have had adverse effects on the stability of mature financial systems  1.1.
The liquidity of banks, as measured by the ratio of their most liquid assets (central bank reserves, gilts and Treasury bills) relative to total assets, was a fraction of what had been  BIS Review 100/2010  3  normal twenty years earlier and a tiny fraction of what had been normal before the 1970’s (Chart 3). And banks had also become larger. Their assets, relative to the size of the economy, had grown very sharply. Relative to GDP, they had roughly doubled in the 10 years up to 2007 (Chart 4). The UK banking sector had low capital, illiquid assets and was very large when fears about the value of its assets increased. The combination of those things accounts for the scale of the damage that ensued. Chart 4 UK monetary and financial institutions, assets as % of nominal GDP 600  500  400  300  200  100  0 1987  1990  1993  1996  1999  2002  2005  2008  Note: Monetary and financial institutions do not include insurance companies, pension funds and other financial intermediaries. Source: Bank of England, Monetary and Financial Statistics. There are many different proposals to build a more robust banking sector. Some of these involve using conventional monetary policy, that is interest rates. But most proposals are about changes to the way banks do business.

While it is too early to draw definitive conclusions from the current episode, it is nevertheless apparent that progress needs to be made by credit institutions, for example in the management of credit risk, market risk, liquidity risk, the risks associated with certain activities such as asset management and risks linked to the valuation methods used for some financial instruments. Regarding credit risk: –  It is important to check that banks’ internal rating systems, along with the estimation of the different risk parameters they use, are updated in order to reflect the increase in default risk and losses in the wake of the current turmoil. It is indeed vital that these systems do not lead to risk being underestimated. This update appears all the more necessary at the present time given that in the case of real estate loan portfolios, estimates of risk parameters have perhaps not been sufficiently rigorously tailored by all banks to the specific features of some risky forms of credit such as US subprime mortgages. The same thing may have happened in other countries.
In fact, capital markets and other non-bank sources of external finance have been growing relative to banks.5 This growth should improve firms’ access to funding, and ensure that any losses are dispersed more widely. Low bank profitability The overbanking in Europe, highlighted in the ASC’s report, is also a factor in the currently low 1/4  BIS Central Banker's Speeches  level of bank profitability. A number of reasons have been mooted as the causes of this low profitability, including low interest rates. Long-term real interest rates have been falling in the major advanced economies for two decades. Technological change, demographics, income inequality and safe asset scarcity are just a few of the factors exerting downward pressure on long-term real rates.6 Accommodative monetary policy by the European Central Bank and other major central banks, acting in accordance with their price stability mandates, has also contributed to low interest rates. Low interest rates tend to squeeze net interest margins owing to downward rigidity in banks’ deposit rates.7 But overbanking is also a factor in the current low level of bank profitability. Overcapacity in some national banking sectors, and the ensuing intensity of competition, exacerbates this squeeze on margins. Such over-capacity also means the sector does not operate at the efficient frontier, which is one reason why cost-to-income ratios remain high in some countries. At the same time, banks benefit from revaluations in their fixed income portfolios.

(2016), “Assessing the implications of negative interest rates”, speech at the Yale Financial Crisis  Forum, Yale School of Management, July. 9 These challenges are set out in more detail in an ESRB report on the macroprudential issues arising from low  interest rates and structural change in the EU financial system. 10 European Systemic Risk Board (2016), “Macroprudential policy beyond banking: an ESRB strategy paper”, July. 11 European Systemic Risk Board (2016), “EU Shadow Banking Monitor”, July. The methodological background to  the ESRB’s EU Shadow Banking Monitor is described in: L. Grillet-Aubert, J. Haquin, C. Jackson, N. Killeen and C. Weistroffer (2016), “Assessing shadow banking – non-bank financial intermediation in Europe”, ESRB Occasional Paper no.10. 12 European Systemic Risk Board (2012), “Recommendation on money market funds”, December. Further  analysis of money market funds’ systemic importance is provided in J. Ansidei, E. Bengtsson, D. Frison and G. Ward (2012), “Money market funds in Europe and financial stability”, ESRB Occasional Paper no. 1. 13 Abad, J., I. Aldasoro, C. Aymanns, M. D’Errico, L. Fache Rousová, P. Hoffmann, S. Langfield, M. Neychev, and T.  Roukny (2016), “Shedding light on dark markets: First insights from the new EU-wide derivatives dataset”, ESRB Occasional Paper no. 11. 14 European Systemic Risk Board (2015), “Report on the efficiency of margining requirements to limit pro-cyclicality  and the need to define additional intervention capacity in this area”, July.
Rising affluence and a strong savings culture, coupled with increasing financial sophistication, will mean more Asians moving away from speculation in property and stocks, towards more systematic planning for wealth enhancement through a globally diversified portfolio of assets. 34. There are now more high net worth individuals in the Asia Pacific than in Europe. And they are younger – 41% of the high net worth individuals in the Asia Pacific are aged 45 years and below, compared to only 10% in North America. They have a longer time span for wealth accumulation, and a more global outlook in their investment strategies. At the same time, Asians are living longer and more Asian countries are seeing the need for welldesigned pension systems to provide adequate retirement incomes for their people. These pension funds will require professional management. 35. In the same vein, I expect the demand from the official sector for Asian financial assets to grow. Central banks and sovereign wealth funds will likely look to allocate more funds to Asian markets, both to diversify risk and to enhance returns. Speaking for the MAS, we have always invested our official foreign reserves in a highly diversified global portfolio. As Asian markets develop in depth and sophistication, our allocation to emerging markets, especially in Asia, will grow. 36. To be sure, asset management in Asia is not a one-way bet. Asian markets are more fragmented and harder to operate in, compared to the advanced economies.

Ravi Menon: Forces driving the global economic outlook Keynote address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Investment Management Association of Singapore 13th Annual Conference, Singapore, 14 March 2012. *  *  *  Mr Lester Gray, Chairman of IMAS, Distinguished guests, ladies and gentlemen, good morning. A. Fragile equilibrium  1. The world economy appears to have found a fragile equilibrium. There are weaknesses in key economies balanced by pockets of growth elsewhere. More notably, the worst fears of the last three months of 2011 have not materialised. The last six weeks in particular have shown signs that the global economy has avoided imminent disaster. 2. In the Eurozone, the threat of a major crisis has receded, at least for now.   A deal has been struck on the second Greek bailout package, allaying fears of a messy default situation.   The ECB’s two tranches of Long-Term Refinancing Operation, or LTRO, amounting to more than 1 trillion Euros, has provided Eurozone banks much needed liquidity to meet their funding needs.   The LTRO has also helped to compress sovereign yields significantly, particularly at the front end of the yield curve. 3. In the United States, the risk of a double dip recession has waned.   Employment data have surprised on the upside.   New orders for both manufacturing and non-manufacturing continue to indicate higher levels of activity for the next six months. 4.
As elsewhere, a regulatory regime of constrained discretion has given way to one with too much unconstrained indiscretion. This calls for regulatory repair. Without change, the current regulatory system risks suffering, like the Chicago teachers and the LIBOR fixers, reputational damage. Fortunately, there are early signs that regulatory change is afoot to place tighter constraints on this (in)discretion. The emergence of self-regulation To understand how we ended up here, it is useful to explore the historical contours of the regulatory debate. This is a history in roughly four chapters. Chapter 1 covers the period prior to the agreement of the first Basel Accord in 1988. Until then, a patchwork of national regulatory frameworks for capital adequacy operated. Some countries set capital adequacy standards based on simple measures of bank equity to assets – a leverage ratio. Others, including in the US, used risk-based standards with risk weights set by regulators for a small set of asset categories. Chapter 2 begins with the introduction of the Basel Accord. This was a landmark agreement: the first-ever genuinely international banking accord, based around an 8% bank capital ratio, with internationally-set risk-weights applied to a small set of banks’ assets. The Accord was explicitly designed to lean against an international “race to the bottom” in capital adequacy standards (Goodhart (2011)). It also helped ensure a level international playing field. Chapter 3 commences with the Market Risk Amendment to Basel I in 1996 and continues through to the Basel II agreement of 2004.

For that reason, they became relevant for our monetary policy. 2  BIS central bankers’ speeches  The role of domestic inflation These global factors, however, have by no means been the only force driving disinflation in the euro area. If we decompose inflation in the euro area and the United States, a striking difference is that, at least until the start of this year, domestic factors explain a much more important part of our disinflationary trend (Figure 3). This stronger role for domestic forces in the euro area has contributed to core inflation diverging from some other advanced economies. It has hovered consistently around 1% since mid-2013 (Figure 4). The ECB’s objective is headline inflation, and there are good reasons for this, not least to keep purchasing power stable. Headline inflation is also a better predictor of short-term inflation developments. But core inflation has to be taken into account because it is more closely linked to medium-term inflation trends. In fact, ECB staff analysis shows that core inflation is a better predictor of medium-term headline inflation than headline itself. Persistently low core inflation is therefore a risk to our mandate. So why have domestic factors affected inflation more in the euro area? The main reason is that, from 2011 onwards, the euro area experienced a sovereign debt crisis and a double-dip recession, while other advanced economies recovered (Figure 5). That led to a very prolonged downturn, which was associated with a decline in employment, depressed wage growth, and low business and consumer confidence.
The national convergence or stability programmes each member state presents to show how it intends to follow the guidelines supplement the latter, which can be likened to a common budget statement for the euro area. It is envisaged that the countries will exert peer pressure to bring about a good economic development in  3  BIS Review 76/1999  each country and thereby fulfil the common objectives of sustainable growth with high employment and stable prices. A central issue here is the formation of fiscal policy, for which there are binding rules. In the Maastricht Treaty the EU countries agreed that budget deficits and government debt relative to GDP are to be limited to 3 and 60 per cent, respectively. In summer 1997 the EU finance ministers agreed to clarify and tighten the existing fiscal policy goals so as to guarantee a sound development of government finances in the Union. The background to this was that the rules of the game once the monetary union had been established were less clear than the criteria for participation in the euro area. More specifically, there were worries that once they had joined the euro area, countries with a high debt ratio would implement a less vigorous policy because their incentives for exercising restraint would not be as clear. The pressure on these countries to consolidate their budgets might also ease if their interest rates fell on account of ‘borrowed’ credibility from the German economy. The Stability and Growth Pact was initiated by Germany.

This has been justified by saying that it might cause more confusion than clarity about the grounds for the policy. That has not been the Riksbank’s experience. Our view of inflationary pressure in the Swedish economy is published on a quarterly basis. The clear presentation gives observers a chance of understanding and questioning our assessments. As new information becomes available, moreover, they are in a position to relate it to our earlier assessment and continuously form a fairly good picture of how interest rates are likely to move in the future. BIS Review 76/1999  2  The publication of our inflation assessments has also facilitated decisions in recent years to raise or lower interest rates. In that the grounds for our actions are clearer, there is less risk of our being accused of heeding extraneous considerations, a worry that featured in the European discussion last autumn. It is my belief, however, that the ECB will become more open about its economic assessments as it settles more comfortably into its forecasting process and inflation assessment. Another difference in transparency concerns access to discussions at the decision-making meetings. The ECB has chosen not to publish any minutes. An important argument for this policy - and one that I find understandable but debatable – is that minutes disclosing how individual members voted might occasion a greater element of national considerations.
Partly reflecting the improvement in the terms of trade, the nominal krone exchange rate has remained strong. Wage costs in Norway are now very high compared with other countries, measured in a common currency. The current situation is considerably different from that of the mid-1990s. At that time, performance in the manufacturing sector was strong partly owing to solid competitiveness. Today, the manufacturing sector is faring well in spite of a strong krone and a high cost level. The reason is the unusually buoyant markets for Norwegian goods. At the same time, the strong krone exchange rate has eased the impact of revenue gains. In periods, the effects on the krone may nevertheless be somewhat excessive, partly owing to the low level of inflation in Norway. Low interest rates, increased petroleum investment, strong global growth and the improvement in the terms of trade have contributed to solid growth in the Norwegian economy. Capacity utilisation has probably reached a higher-than-normal level, and the cyclical upturn is continuing. Enterprises are steadily increasing their debt to finance investments. So far, the cyclical expansion has been marked by strong production growth, with ample labour supply and unusually low inflation. 1  2  Adjusted for lower maximum day-care rates. BIS Review 44/2006  For a long time, employment growth measured by number employed was lower than in previous upturns, partly reflecting the fall in sickness absence as of summer 2004. In 2005, the number of person-hours worked increased relatively rapidly and productivity growth picked up.

In a period of increasing cross-border labour flows, major technological advances, changes in competitive conditions and substantial changes in trade patterns, inflation will probably, with our very open economy, show somewhat wider variations, as witnessed over the past two to three years. The operational objective of monetary policy is low and stable consumer price inflation. Over time, the consumer price index will provide a guide for assessing monetary policy. Monthly variations in consumer prices reflect temporary conditions which monetary policy cannot control. According to Norges Bank’s remit, the Bank shall not normally take account of direct effects on consumer prices of changes in interest rate, excise duties and extraordinary, temporary disturbances. Energy prices have traditionally shown wide variations. Hence, a price index that is adjusted for variations in such prices as well as for indirect taxes can be a measure of underlying inflation in the economy. However, such a price index does not take account of that fact that the trend rise in energy prices has been higher than for other prices and is therefore not a perfect measure of underlying inflation. In the past 10-20 years, energy prices and taxes have pushed up consumer prices annually by an average 0.35 percentage point. Even when taking into account trend increases in energy prices, inflation is still moderate. Experience indicates that inflation expectations remain stable even if inflation varies somewhat, as long as the interest rate is used actively to curb the effects.