samchain/econo-pairs-v1 huggingface dataset:
c.  Highlights of development in delivery channels and payment system infrastructure  As banks serve various segments of the economy, it is important to widen the accessibility of e-payment services through various channels to cater to the needs of different consumer groups. The industry should continuously identify and address any gaps in the current e-payment infrastructure and services by improving their product offerings. For instance, building on the wider penetration of online banking services which now have a total of 17 million subscribers (of whom 7.5 million are active users), banks have also provided alternatives to consumers to conduct electronic funds transfers using either the Interbank GIRO (IBG) or the Instant Interbank Fund Transfer (IBFT) via 9,410 ATMs and 2,475 selfservice Internet kiosks nationwide. While the fees imposed for IBG and IBFT are differentiated, consumers are given choices that suit their preference. To promote infrastructure sharing and reduce cost and enhance online bill payment facilities in Malaysia, there is currently an ongoing industry initiative led by the Malaysian Electronic Clearing Corporation Sdn. Bhd. (or MyClear in short) to develop a national bill payment scheme known as JomPAY. JomPAY leverages on shared infrastructure to significantly expand the scope and utility of bill payment facilities. At present, customers can only use the online channel of a bank to make bill payments to merchants who maintain banking relationships with the same bank.

It is a part of the Bank’s public mission that is afforded little attention in everyday life. And that is how it should be. When interbank settlement is not something people talk about, we know it is working as it should. The uptime requirement cannot be lower than 100 percent. Technological advances have not stopped at online banking, card terminals and the forms of contactless payment we are familiar with today. New means of payment are being created and new financial motorways are evolving. But stability and confidence will also be essential elements of future payment systems – not only for the individual user, but also to prevent a collapse of the financial infrastructure. A central hub is still needed to guarantee that the payment system is subject to the necessary control. That hub is the central bank. Throughout the Bank’s two hundred years of history, one of its most important tasks has been to ensure stability in the value of money. The Bank has performed this task with varying success. The pendulum swings back and forth. In some periods, price stability has admittedly been below par. In other periods, the Bank has been criticised for being too “oneeyed”. And Norges Bank’s room for manoeuvre in terms of keeping inflation in check has also, at times, been limited. Today, this responsibility has been clearly and unequivocally delegated to Norges Bank.
The importance of predictability is underscored when one considers that in recent years, adverse economic shocks have generally been associated with sharp falls in longer-term interest rates. Such declines would tend to bring about faster MBS repayments and, if the outflow from the Federal Reserve’s portfolio were not constrained by a cap, an unforeseen tightening effect on financial conditions, amplifying the adverse shock. Prepared for the unexpected While I am confident that the FOMC’s plan will work well, there’s always the risk that events unfold differently than expected. In my view, we best prepare for the unexpected in two ways: we need to be operationally ready to change course when needed, and we need to remain analytically focused so we know when to recommend to policymakers that they do so. So long as the plan I’ve described to you proceeds uninterrupted and as expected toward normalization, it is likely that policymakers’ operational demands on the Desk will be considerably lighter than they have been over the last decade. However, it is possible that unexpected developments in the economy may require a change of plans. For example, the FOMC has made it clear in its addendum to the Policy Normalization Principles and Plans that it stands ready to resume reinvestment if a material deterioration in the economic outlook were to warrant a sizable reduction in the federal funds rate.

Taking this to the monetary policy context, expectations for disruption or volatility from an substantial change in the Federal Reserve’s operational posture, even if totally unfounded, could bring about disruption, as the holders of those expectations act to protect themselves or profit from what they believe is likely to come. The solution is to try to avoid generating such expectations for disruption to begin with, by acting gradually and predictably. 10 / 15  BIS central bankers' speeches  Another potential explanation for the relative stability of longer-term rates this time around is that balance sheet news this year, taken together, just hasn’t been all that surprising to market participants. Panel 6 shows market participants’ expectation for the level of the federal funds rate that would prevail when the reinvestment policy first changes, as well as expectations for the date of that change. As can be seen, balance sheet normalization started slightly earlier than expected, both in rate terms – it began with the federal funds rate at 1.16 percent – and, more notably, in terms of the absolute date. But at the same time, earlier in the year, many market participants had seen decent odds that the Federal Reserve would reduce its balance sheet more quickly with a full-stop end to reinvestment. Panel 7 shows the decline in expectations for both no change in Treasury reinvestments and a hard-stop in them.
When it became apparent that impaired loans were in circulation but that no one really knew where they were and to what extent, confidence in the banks disappeared. The market participants stopped lending to the banks. The banks also stopped lending to each other and when it also became impossible to sell previously liquid assets or to use them as collateral for loans the liquidity crisis had definitely arrived. One lesson that we have learned from this is how quickly liquid markets can become illiquid. We also know that the participants and the authorities underestimated how seriously the markets would be affected by the crisis. But, when the price of an asset falls it is no longer possible to borrow as much money on this asset. Participants are then forced to sell the asset to acquire liquidity. If many small – or a few large – participants sell at the same time then prices fall even further. From the point of view of an individual participant it is rational to decide to lend less or to sell the asset. However, the collapse in market prices that is a consequence of these decisions affects everybody. The impact this has on the market is, in other words, a negative external effect. Selling assets at “bargain-basement” prices should normally attract buyers. But exactly the opposite happened. There was uncertainty about the actual value of some complex and untransparent assets, which explains why the buyers disappeared.

At the same time, it is important that central banks and other authorities develop their ability to cooperate across national borders, particularly within the EU. Not least, we must learn to accept that someone will have to put their foot down when a cross-border risk develops, even though this may create a certain amount of fuss. The new European authorities – in the case of the banks primarily the European Banking Authority – are intended to act as arbitrators between national authorities on certain specific and limited issues. Although the right of the EU authorities to override the national authorities is limited, there are signs of a new tendency to transfer power to these international bodies. A risk council – the European Systemic Risk Board (ESRB) – is also to be set up in the EU with a special responsibility for the supervision of macro-financial stability. Even though the powers of the ESRB will be limited, this still represents an important step on the road towards a better consensus regarding the cross-border risks that exist and how they should be dealt with. An issue which in my opinion should be high on the agenda of the ESRB is lending in foreign currencies. Concluding remarks At the beginning of this speech I expressed the hope that we are heading towards a more stable and efficient financial system. The crisis has shown that we must reform regulation and supervision so that we can better prevent financial crises.
EMU also has implications for policy fields beyond those explicitly related to the management of the single currency. The interdependencies generated and reinforced by the introduction of the euro entail a shared responsibility for the common currency on the part of all euro area Member States. Inappropriate policy choices in one country can have an immediate impact on the common currency, for example, via the exchange rate. For the euro to be a lasting success – and to win the support of all citizens – national policymakers, businesses and trade unions will have to adapt to the conditions of a single currency. Even though this will be a gradual process, facing up to the challenges of the single currency will demand a steep learning curve for all involved. Allow me to elaborate: the European Central Bank as the single monetary authority within the euro area will have to build up and maintain a “stability culture” among the politicians and peoples of Europe. This is no easy task, despite all our efforts to explain monetary policy decisions to the public. 1  BIS Review 93/1999  Most importantly, the ECB must communicate the fundamental nature of, and justification for, its Treaty mandate to maintain price stability, not least since certain misperceptions of the goals and effects of monetary policy continue to exist. It will only be possible to fully gain the crucial support of the public for the new and so far untested currency if the ECB manages to retain its value over time.

The ECB is a novel and unique institution and in the performance of its tasks it is still navigating uncharted waters. Take, for example, the differing impact of monetary policy on economic activity in the different euro area Member States, which demands a well-balanced and comprehensive consideration of the precise timing and magnitude of interest rate decisions. The ECB must formulate a single monetary policy for an economic area made up of 11 distinct national economic policy jurisdictions. Our monetary policy decisions must thus always be oriented towards the conditions of this currency zone as a whole, since monetary policy by its nature is one and indivisible. Precisely this is our Treaty mandate. The ECB must develop into a truly European institution and we are making good progress in that direction. However, developing a wider perception of the euro area as an entity appears more complicated. Certainly, there are some areas where awareness of a single “euro area economy” is well developed. The financial market operators, for instance, appear to have adapted very quickly to the reality of the euro. The extensive recourse to the more favourable financing opportunities in the now more unified financial market or the ongoing consolidation in the banking sector bear witness to this shift of perception from the national to the European level. In this context, allow me to add the following observation.
In addition to that, work has commenced on reviewing respective jurisdictions’ preferential tax regimes against the standards outlined, to combat harmful tax practices. The standar4, which forms one of the four BEPS minimum standards, will require authorities to step up on transparency and substance rules for geographically-mobile activities, such as financial services. It seeks, for one, to prohibit the shifting away of income into preferential tax regimes where businesses have little or no economic activity. Such international developments will directly influence IBFC’s business model going forward. The world that we live in, since the creation of offshore Labuan in the 1990s, has drastically changed. What was relevant then is no more relevant now. We have no choice but to change with it. It is an opportune time for us to review of the current tax framework for Labuan. The purpose of this review is not only to ensure alignment with international best practices, but to confirm the continued relevance of such incentives in catalysing new growth areas. Tax incentives for businesses which have become irrelevant should be rationalised. The allocation of any preferential tax treatment must be supported by clear value propositions that are systematically measured across the qualifying period. Businesses that enjoy tax incentives will be benchmarked against the performance indicators that quantify economics and financial benefits. This is not meant to be onerous. It is a necessary tool to ensure that the economy grows in an inclusive and sustainable way and the public policies implemented bear the intended benefits.

In addition, we must improve the inequality in Labuan as measured by the Gini Index. It has to improve to at least the national level. High inequality in income affects growth, productivity and opportunities for social mobility; and 2. Second, the average unemployment rate at 5.1% in the recent years continues to be above national average in Malaysia. While this might be cyclical because of the downturn in the global oil and gas industry, we need a diversification strategy so that over reliance over certain sectors is avoided. Further, the workforce participation rate, especially among women, is markedly lower than the national averag2. Both reflect a worrying trend where the labour market is not tailored to meet the needs of the local community. This state of affairs is disappointing and cannot persist. It reveals that an improvement in the current economic operating model is warranted. A new model must be designed that can benefit the local community in a more meaningful manner. Without doubt, it is our collective duty, as an industry whether as regulators or industry players, to advance the welfare of society through a more inclusive economic development. The success or failure to achieve this will reflect on us all as a collective. In this respect, Bank Negara Malaysia is proud to offer undergraduate scholarships to two deserving local students. This initiative to provide educational opportunities for deserving talents is very much needed and it exemplifies how one can contribute in a tangible manner to the local community.
By locating the duties related to the execution of monetary policy at the New York Fed, the System gains a number of benefits. These include the New York Fed’s ability to develop expertise in and understanding of the broad spectrum of financial markets and institutions, and its access to a deep pool of specialized financial talent in the place where it is most concentrated. The New York Fed’s institutional knowledge and experience in financial markets and its related disciplines are a critical input at all times, but never more so than during periods of duress. This was evidenced during the financial crisis, when the New York Fed’s unique insights and expertise helped the Federal Reserve respond quickly and effectively to unfolding events. The authors who crafted the Federal Reserve Act such as Carter Glass – assisted by H. Parker Willis – deliberately created a central bank structure that fits the U.S. political system, with a series of important checks and balances – between Washington and the rest of the country, between Washington and New York, and with respect to the role of the federal government versus the private sector. These checks and balances exist to ensure that the central bank acts in the broadest interests of the nation, and is appropriately insulated from short-term political pressures and considerations. In this construction, New York does have a special role, but one that stems from where it sits, in New York City, the nation’s most important financial center.

At that point, a bank under duress had to either close its doors or quickly sell assets. Of course, either action worked to intensify the panic and to increase the stress on the economy. The Federal Reserve was established so that there would be a lender of last resort that could lend against high-quality collateral and provide a reliable and elastic currency. 2 The knowledge that such a lender of last resort existed reduced considerably the incentives for depositors to race to their banks to make withdrawals at the first sign of trouble. 3 At that time, the provision of an elastic currency was especially important because the agricultural sector represented a significant proportion of the U.S. economy. As a result, the demand for credit increased significantly each fall when farmers incurred the costs associated with harvesting their crops. Prior to the establishment of the Federal Reserve, accommodating this seasonal demand necessitated a flow of currency and credit from the major financial markets such as New York and Chicago that put upward pressure on interest rates. With its ability to provide an elastic currency, the Federal Reserve would be able to dampen such seasonal swings in interest rates. At its inception, the Federal Reserve differed from central banks in Europe in that it was decentralized. The design reflected long-standing concerns in our country about the concentration of power in a single authority. These concerns are reflected in the federated system established by the Constitution in 1787.
A good candidate could for instance be our policy to support fair access to payment instruments: Banque de France is committed to ensure the availability in our jurisdiction of a range of payment instruments suited the needs of all users. The development of electronic payments based on innovative technologies lays the foundation for a smoother and safer payment experience. But this should not exclude part of the population. Up to now, a large part of financial inclusion has also  been about making access to cash easier for those who don’t have a credit or debit card, and ensuring the acceptance and availability of banknotes has therefore been an important dimension of our retail payment policy. But changes in payment solutions supply and changes in payment habits in favour of electronic payments may make this policy more difficult and costly to maintain going forward. One possibility often mentioned would be for the issuance of a central bank digital currency accessible to the general public. At this stage, in many developed economies and certainly in Europe, the business case for this kind of innovation does not appear to me such that it should be a short-term priority. The priority should rather be to facilitate cross-border payments. The case is for me more compelling for a central bank digital currency at the wholesale level, for use between financial intermediaries, given the potential for a quick and widespread tokenization of financial assets.

Le Lab is a genuine Open Innovation laboratory: its goal is to bring new practices and technologies into our activities, and to that end experiment where necessary within short and flexible cycles. To do so, it works in close collaboration with innovative firms. An example of this work is to use artificial intelligence to improve our scoring of businesses. Scoring is something that Banque de France has been doing for a very long time: its branch network all over France gives quotations of companies based on analysis of financial data but also on-site visits (more than 250.000 last year). These quotations are then provided to banks and other institutions, in order to facilitate access to financing and therefore financial inclusion for many SMEs. This is why we are working, in collaboration with start-ups, on how to improve our data analysis and include learning algorithms in our scoring process. Of course, this is not easy – the integration in existing processes is complex, in particular the role of expert judgment. And we are 3/5  BIS central bankers' speeches  also part of a larger experiment led by the French government called “signaux faibles” (low signals). It aims at bringing together data from various French public authorities and developing AI analysis capacity to identify businesses showing signs of vulnerability, in order to better target public support towards them. A second way is by revisiting some of our policies and adapting them.
But as I say, Hong Kong is a compassionate community, and we need to be in step with those values. 36. We will probably need to consider a similar tolerant approach in future with small businesses that are perhaps slow to adopt e-payment systems. 37. That brings us to the overall segment of start-ups, and companies moving into Hong Kong. These clients have complained a great deal about the difficulty of simply opening corporate accounts. 38. These complaints were potentially affecting Hong Kong’s reputation as a welcoming place for business. We took this very seriously, and we believe we managed to sort out some of the underlying problems. 39. But this is a classic example of the dilemma we all face – as industry players and as the regulator. We do not want awkward due diligence and know-your-customer procedures. But we cannot accept the reputational harm and the other possible costs if one of our leading banks cuts corners and is then found to be handling funds from illicit activities. 40. This challenge – balancing risk – will continue. Technology 41. Perhaps the main possible solution to the problem of growing complexity is technology. And that brings me to my next subject. 42. Most of us here can remember when basic online banking was a novelty, and how we faced new challenges in cybersecurity. In the years to come, we are going to see continued transformation. We have already issued licences for eight virtual banks. 43.

It is a fundamental priority of the HKMA to ensure that the community can have full confidence in the system. 15. Confidence in our banks is also key to the functioning of our economy and society. And our work in this area in the last 10 years has affected all of you here today. 16. I think the most high-profile example is the loan-to-value ratio and debt-serving ratio limits on property mortgage loans. The last 10 years have seen strongly rising property prices, and competition between banks has been fierce. To some observers, including home-buyers, mortgage caps seem like a nuisance and make it harder to buy a property. But to the HKMA, it is an important matter of credit risk management and the stability of the banking system. We call these measures “counter-cyclical macroprudential”. And it would be highly irresponsible of us if we did not impose these limits. 17. This is also the case with Mainland-related lending. You all know the ways we have stepped up our supervisory efforts in this area, to ensure credit underwriting standards and risk management. As with property lending, the basic principle is “prevention is better than cure”. To take one example, we are collecting granular data from banks more frequently, to help identify emerging risks. As with mortgage caps, this might not please everyone – but it serves the wider public interest. 18. More generally, we have been implementing Basel III.