samchain/econo-pairs-v1 huggingface dataset:
One step towards effective early intervention is the establishment of the Single Supervisory Mechanism (SSM). This will endow the ECB with the ultimate responsibility for specific supervisory tasks related to the financial stability of banks across the euro area. The need for a single supervisory mechanism arises from the increasing interconnectedness between financial institutions and financial markets across the euro area, such that problems that originate at a national level can quickly spread across national borders and imperil the entire European banking system. A central authority is better placed to spot these risks. However, the SSM framework alone will not be sufficient to successfully address significant threats to financial stability across the euro area, particularly in the light of the possibility of cross-border spill-over effects in the event of bank crises and the link between sovereign debt and bank debt. The European Commission has therefore identified the need for a banking union to strengthen the banking sector and restore confidence in the single currency, and this is projected as part of a longer term vision for economic and fiscal integration. Hence, the idea goes beyond the SSM or single-rule book. As President Van Rompuy points out in his report entitled Towards a genuine Economic and Monetary Union, the components of this integrated financial framework have to include not only bank supervision (as delivered by the SSM), but also bank resolution as well as bank deposit insurance.

However, the word “disproportionate” is very relevant, since it seems that some Eurosystem funding could be put to a better purpose than lying idle as deposits with the Eurosystem. For example, one possible use is to extend low cost credit for investments that promote restructuring and competitiveness and thus improve potential economic growth. For instance in the case of hotel upgrading or manufacturing restructuring to higher value added activities, banks could explore areas of growth that would benefit the economy and such niche markets could be kept distinct from existing uses of funds, to avoid cross-overs and refinancing of existing loans. The interest rates on such loans may be linked to the MRO rate, plus of course a margin for credit risk. This would provide a clear link to the provision of lower cost funding by the ECB and serve to break this apparent barrier in Malta of providing lower cost loans in tandem with ECB policy. On this issue of interest rate charges in Malta, it is somewhat paradoxical that despite the excess liquidity in the system, several institutions seem to be competing through higher deposit rates offered to customers. Competition is healthy and certainly depositors are better served by having such competition leading to higher returns. 2  6  ECB, Changes in bank financing patterns, April 2012.
Our history and that of the region is paved with stabilization measures based on the exchange rate, which generated severe setbacks, and ended in balance of payments crisis, financial turmoil and economic disasters. For this reason, we have evolved into a floating exchange rate regime, which permits to better reconcile the stability of the Chilean economy with the volatility of the external scenario. This is not the time or the place for a lengthy discussion on the subject; suffice it to recall that every economic crisis in Chile over the past fifty years – except the recession of 2009 we are leaving behind with unprecedented vigor – have been associated to exchange rate misalignments and rigidities. Furthermore, a very significant element to explain why the emerging economies were spared the worst effects of the recent global crisis was that their currencies floated, which allowed them to absorb the shocks, eliminated the invitation to investors to wager against currency weakening and opened room to relax monetary policy and provide liquidity. However, although a floating exchange rate has many advantages for economic and financial stability, it may happen that, at times of high uncertainty or excessive optimism, financial flows could persistently push the real exchange rate away from its medium- and long-term fundamentals, with negative effects on the economy. In such situations, the Central Bank may intervene in the foreign exchange market with the purpose of mitigating or eliminating these imbalances.

The evidence in credit creation is so far mixed, which is not in my view a mark of the failure of policy since this operates with a lag. But it does indicate that all of us should go on looking for changes that will help. The distribution and information issues around SME lending identified by Kate and her colleagues are one such area, and in my view more focus needs to be put on the consequences of debt overhangs linked to commercial property in those parts of the market where there are problems. Thank you  4  BIS central bankers’ speeches
If so, then there may be similar potential uses in the non-financial private sector. However, it’s the application to the settlement of financial assets – above all financial securities like equities and bonds – in which the private sector has become most interested. There are several new firms seeking to exploit the opportunity. It remains to be seen whether these ventures prove successful. But one can understand why they’ve come about. What a distributed ledger would seek to replace, in the case of securities exchange, isn’t just a single “third-party centralised clearer”, but a complicated system with lots of institutional layers: custodians who look after the securities and perform basic services such as collecting dividends; brokers, through whom trade orders are placed; exchanges and clearing houses where exchange and settlement occur. Each has its own particular function in the process; at each stage, there may be a degree of settlement risk; each is obliged to keep its own record of the same balances and transactions. It’s hard to know the combined cost of these services, but a recent study estimated that, in the G7 countries, the cost of clearing and settling securities was $ a year5. These are the economic resources it requires to transfer the assets, verify who owns what, and reconcile the various records. The hope is that, by displacing these various middlemen, a distributed ledger would result in a cheaper and more secure system for providing these services.

4  BIS central bankers’ speeches  Would it compete with cash or with bank deposits? The CBDC and “narrow banking” But which would it be – an actual bank account, with all the extra services such things entail, perhaps including the payment of interest; or simply “e-cash” – something that can only be used for retail transfers and doesn’t receive any interest? This is an important question. If all it did was to reduce the demand for physical cash, it’s not clear the macroeconomic effects of a CBDC would be that significant. It’s possible the retail payments system might become more efficient. It’s also true that, were a CBDC fully to displace paper currency, that would open the door to the possibility of materially negative interest rates (Buiter (2009), Rogoff (2014), Haldane (2015)). But that would require explicitly abolishing cash, not just introducing an electronic alternative. As long as it’s possible to hold something with a guaranteed nominal return of zero there’s a similar lower bound on all other forms of money, whether reserves at the central bank or a more widely available CBDC. Leaving aside the question of whether or not you should actively get rid of banknotes8, a purely cash-like version of a CBDC would mainly involve substituting one zero-yielding liability of the central bank for another. It seems to me that the more material effects of a CBDC would arise if it provided competition not just for banknotes but for commercial bank deposits as well.
Here, it may be worth emphasising that the credit cycle does not typically coincide with the business cycle (the fluctuations of which we, at the Riksbank, attempt to dampen with the use of monetary policy), but has a longer course. But once again, the primary purpose of the countercyclical capital buffers is to increase the resilience of the financial system by ensuring that the banks have enough capital in periods when risks are accumulating. Negotiations are underway on the EU level regarding the implementation of Basel III, and thus also the countercyclical buffer. Who will be responsible for the instrument – an existing authority, several authorities together or a newly- formed authority – is an open question in Sweden and many other countries. The Swedish government has appointed a commission to investigate the implementation of countercyclical capital buffers in Sweden. 9 …but the Basel regulations do not capture all risks in Sweden The Basel III Accord will also place requirements on the banks’ leverage ratio, which is the minimum amount of capital that the banks must retain regardless of the risk class of the assets. 10 The fact that a requirement for the leverage ratio sets a ceiling for indebtedness in the banking system is very attractive. It guarantees a kind of minimum level for resilience. At the same time, the banks will no longer have to rely upon the risk weights correctly reflecting the actual risk in lending.

Mohammed Laksaci: Investment financing in Algeria Speech by Dr Mohammed Laksaci, Governor of the Bank of Algeria, at the Japan-Arab Economic Forum, Tokyo, 7–8 December 2009. * 1. *  *  Recent economic and financial developments  The deep and synchronized recession in advanced economies, which resulted from the deepening financial crisis during 2008 and which rapidly spread to many emerging and developing countries, appears to recede. Indeed, the second and third quarters of 2009 recorded the first signs of stabilization and even some signs of improvement in the global financial situation. The massive public interventions in many countries have contributed to reducing systemic risks and uncertainties in the financial markets. However, signs of malfunctioning in the financial sector remain and commercial banks are still dependent on exceptional budgetary support and central banks, in the context of gradual recovery in some advanced countries. Ensuring sustainable growth anchored to financial stability remains a major challenge. The spill over of the impact of the global financial crisis and recession to emerging and developing countries is well established in the first half of 2009, especially in countries affected by sudden capital outflows in the context of high exposure of their banking sector to international financial markets. In response, recovery plans focussed on supporting domestic demand have been implemented in a number of emerging countries, particularly in Asia, thereby contributing to stimulating commodity export recovery in Latin America and the Middle-East.
There could also be reason at some point to indicate that the market's pricing has moved significantly out of the region considered reasonable. For instance, this was the case, as I understand it, when the ECB intervened last autumn. In these cases the central bank can take action to "nudge" or reinforce a trend in the market without actually establishing any ceiling or floor. In my opinion, however, one should be restrictive in the use of such interventions. If the trend should turn and move in the opposite direction, the intervention might do more harm than good. Is it good for Sweden if our currency is undervalued over a long period of time? All experience indicates that this is not so. Although an undervalued currency gives the export industry and importcompeting industry a competitive advantage, which may sound positive in the short term, it reduces competition pressure and in the longer perspective it delays the structural transformation necessary when the exchange rate eventually returns to a balanced level. At the same time, the import industry has an uphill struggle, which leads to companies being wiped out in this sector that would have not have collapsed with a correctly valued currency. In addition, major fluctuations in themselves have a subduing effect on developments as the risks increase on all international transactions. This can be counteracted to some extent through hedging, but hedging also has a price that rises as uncertainty increases.

The figures from the labour market also look gloomy and leading indicators are retreating. Although the stock exchange has shown an upturn in recent weeks, it is still very volatile and the household sector's burden of debt is continuing to increase. Leading economists have ceased talking of a V-shape when they describe economic developments. The upturn will come, but it will probably take longer than was estimated a month or so ago. This is what one should bear in mind when regarding the four American interest rate reductions of a total of 2 percentage points during the spring, two of them outside of the normal Federal Reserve Board meetings. It is hardly likely that the Fed knows something they have not told the market, which is what is sometimes implied by analysts. This is not the way a central bank works. However, the American economy came to a standstill more quickly than expected and the Fed probably fears that the unease on the financial markets will frighten away both investors in real capital and consumers from spending their money. This fear is certainly justified. Then, of course, one can feel some hesitation over the fact that monetary policy is taking on the role of short-term saviour of the American consumers, who can thus carry on consuming beyond their incomes for some while longer, i.e. with a negative savings ratio.
And what of short-term fiscal dynamics in the euro area? President Draghi recently underscored the importance of fiscal policy as a short term stabilisation tool as well as the difficulty of utilising it in the current imperfect union. Consider the following comparison between the euro area and the UK. In the euro area, the private sector continues to generate surplus savings of 3½% of GDP (Chart 7). Those must be recycled effectively to generate an expansion. The UK no longer faces that challenge. Its private sector is in balance. The euro area unemployment rate of 11½% is twice that in the UK. Gross general government debt in the euro area is roughly the same as in the UK and below the average of advanced economies. The weighted average yield on 10-year euro area sovereign debt is around 1%, compared to 1½% in the UK. And yet, the euro area’s fiscal deficit is half that in the UK. It structural deficit, according to the IMF, is less than one third as large. It is difficult to avoid the conclusion that, if the euro zone were a country, fiscal policy would be substantially more supportive. However, it is tighter than in the UK, even though Europe still lacks other effective risk sharing mechanisms and is relatively inflexible. A more constructive fiscal policy would help recycle surplus private savings and mitigate the tail risk of stagnation.

For instance, fluctuations in private consumption are considerably larger in Iceland than in other developed countries, and much greater than can be explained by fluctuations in external conditions. But there is a certain problem concerning the implementation of various types of exchange rate peg, in that studies of the structure of the Icelandic economy suggest that a flexible exchange rate is in some ways a beneficial arrangement for Iceland. It is also clear that concluding Iceland’s EU membership application will take some time and, if Iceland does choose to join the EU, adopting the euro will take even longer. As a consequence, it is very important to ask whether monetary policy, demand management in general, and the regulatory and supervisory framework of the financial sector can be reformed in such a way as to make a flexible exchange rate on the basis of the Icelandic króna an attractive option without sacrificing free movement of capital. Such a solution could benefit Iceland either in the run-up to euro area accession or for the longer term. The Central Bank report entitled Monetary policy in Iceland after capital controls contains a discussion of possible reforms aimed at addressing the shortcomings in demand management and the regulatory framework before the financial crisis. A subsequent report, Prudential rules following capital controls, outlines the regulatory framework that would reduce the financial system risk that can accompany free movement of capital. Together, the recommendations in these two reports would make domestic monetary policy more effective and would hopefully reduce excess exchange rate volatility.
However, this concern for customer rights came into being and developed in a context of maximum customer confidence towards banks and, most importantly, towards bank employees, which, in short, led to a high degree of customer loyalty to banks. During the 1990s and in the first half of the last decade such loyalty was negatively and slowly impacted by growing competition and the subsequent need to improve net interest margins. And the crisis unleashed as from 2007 saw the culmination of this deterioration and led to a significant loss of confidence by customers in banks, giving rise to a new scenario. Against this background of public mistrust in banks, and the weakening of the aforementioned degree of loyalty, the new technologies add additional challenges for the industry when it comes to tending to their relationship with customers. They alter consumer demands, with consumers now seeking flexible, immediate and personalised interaction anywhere and at any time. They also lower the entry barriers to the business, as the extensive networks of branches to capture and retain customers that characterised traditional banking no longer seem necessary. I consider that, as regards technological innovation, it is more fitting for the moment to talk about evolution rather than revolution, and that not all technological initiatives exert the same influence on banking business and nor do they necessarily constitute projects that enter into direct competition with banks. But there are indeed technological innovations that are acting as a catalyst for firms that may come to compete with banks in specific segments.

And one segment where this may have a greater impact, and specifically alter the bankcustomer relationship, is that of payment services. Bank customers and technology: the payment services segment. Allow me to illustrate the changes emerging in this segment with a brief reference to the new Directive on payment services, known as PSD2, as I previously mentioned. 4/8  One of the most notable aspects of this Directive is that it definitively institutionalises the activity of the so-called third-party service providers, or TPP. The Directive acknowledges the right of holders of a payment account to expressly authorise a third-party entity, provided it is duly authorised, to order payments on their behalf and/or to consult certain information associated with this account. In the first instance, we are talking about what are known as “payment initiation service providers”, while in the second case they are called “account information service providers”. The latter offer users the possibility of gaining consolidated knowledge of the situation of the payment accounts the users have with different entities, thereby helping them with their financial planning. Conversely, payment initiation services arise as an alternative to the use of cards, for the payment of purchases made in e-commerce environments. They are consequently characterised by providing payment beneficiaries with the security that payment has been initiated correctly, acting as a spur for expediting the delivery of the good or service.
Dear ladies and gentlemen, The new agreement, similarly to the previous one, enables the Bank of Albania to be part of a rich, deep and diverse programme of bilateral assistance and capacity building for central banks. Through qualifications and capacity building, the goal of the cooperation agreement is to perfect the analysis, the decision-making and, consequently, the policy-making processes at the Bank of Albania. I think that we have already established firm foundations that guarantee an even stronger partnership for the second phase. Expected outcomes from the implementation of the second phase include: monetary policy decision making sustained by improved forecasting capacities, macro-prudential policy formulated based on a larger body of knowledge about various risks; and research further enriched with the best research methodologies and practices. These goals form the core of our medium-term strategy. The Bank of Albania aims to increase the impact of research results on decision-making, extend research to other departments, and adopt highest standards on ethics and rigorous research, which renders it one of the priorities of the cooperation. Many of the current developments and challenges in certain countries or regions may appear as distant and alien to us, but globalisation and economic integration disregards borders and their effect and impact may spill over into our economy. The problems that persist from the financial crisis, the continuation of quantitative easing programmes and the new normal for the monetary policy affect the functioning of the central bank.

Thus the technological advances of the last 25 years – especially the internet – have not significantly diminished the demand for cash. People still appreciate cash as a store of value and a means of payment. It is visible and tangible, which makes it especially valuable when there is uncertainty about the stability of banks. In addition, interest rates have been very low for some time now, and therefore the opportunity costs of holding cash are also low. However, the significance of cash as a payment instrument, too, remains unimpaired. In this regard, two essential characteristics stand out: As legal tender, cash is widely accepted and extremely reliable to use. Nevertheless, technology is constantly moving forward in terms of new forms of electronic payment as well as in the area of digital forms of money. What is more, the share of the population which grew up without bank cards, the internet and mobile telephones is continually shrinking. Is Switzerland therefore becoming a cashless society? Even if the importance of cash does decline over time, it is unlikely that it will be completely replaced. Its specific advantages suggest, rather, that it will continue to be used as a store of value and a means of payment. With well-established, flexible processes in banknote production and handling, the SNB contributes to ensuring that cash continues to meet the public’s requirements at all times. BIS central bankers’ speeches  1