samchain/econo-pairs-v1 huggingface dataset:
The existing size of the sterling T-bill and gilt repo markets may, however, limit the extent to which this solution would be achievable in sufficient scale to meet the needs of sterling investors, at least in the near term. And this would of course also have significant implications for the funding of banks. Second, at the other extreme, the liquidity mismatch could be removed by making funds nondaily dealing – i.e. not cash on demand. This would require a term notice period. Such a fund would be somewhat like a term deposit with no break clause. This would fundamentally change the potential uses for which MMFs could be held, and so would also have repercussions for the demand for other instruments, such as bank deposits, the implications of which would require further consideration. Third, there may be a middle option whereby a combination of measures are used to reduce the risks to a sufficiently low level. We have a menu of options to choose from. For instance, a limit could be introduced on the percentage of assets a money market fund could hold in nongovernment instruments, to reduce the holding of less liquid assets. This could be combined with making sure funds are structured as variable net asset value, albeit with this asset mix the variability of the value in the fund should be lessened. And we would need to ensure the absence of regulatory cliff-edges, so that funds could be more confident to release their cash buffers in times of stress to meet withdrawals.

At the Bank of England we do still consider that the stability of the financial system depends crucially on the stability of the banking system. Banks are at the heart of the payments system, they are the principal source of funds for many businesses, and they are an important savings medium for a large part of the population. The regulatory framework in turn affects the behaviour of banks, making it essential to get it right. It needs to create both the right incentives, and establish the right level of buffer - in the form of capital - to protect the system. We fully support the Basel Committee’s objective of updating the 1988 Accord to make it more comprehensive and risk sensitive. And as a member of the Basel Committee, the Bank is working alongside the FSA to ensure that these objectives are delivered. Importance of risk sensitive capital charges I am aware that some commentators have questioned the aim of making the system reflect risk in a more differentiated way. One argument is that this will make capital charges procyclical, so that economic downturns or external shocks are amplified by the regulatory demand for higher capital. There is a concern that the consequences could be particularly severe in the case of lending to emerging markets, where rating changes have sometimes lagged the onset of crises. This is certainly a risk, and one which we have to take seriously. Clearly there could be macroeconomic implications, both domestically and internationally, possibly on a systemic scale.
As a result, the size of the fed funds market has declined relative to pre-crisis levels and the nature of most fed funds activity has changed. Nevertheless, trading volumes remain reasonably robust. Since July 2014, the average overnight borrowing in the fed funds market that banks report to the Fed through our FR 2420 reporting form has been roughly $ billion, with an average of about 300 transactions per day (Figure 7). 22 Moreover, longerterm correlations between fed funds and other money market rates remain robust, with the fed funds rate remaining a suitable measure of banks’ marginal borrowing costs. A variety of regulatory changes and other developments have also influenced motivations for participating in fed funds and other money markets. Liquidity and capital rules affect the management of bank balance sheets and the costs of many money market transactions, affecting banks’ incentives to engage in short-term borrowing, arbitrage between different money market rates, and provide customers access to their balance sheets. Notably, regulatory changes affect different institutions in different ways. For example, changes to the calculation of FDIC deposit insurance assessment fees affect primarily domestic banks. The implementation of Basel III banking standards also varies by jurisdiction, so the rules for foreign bank branches operating in the United States are somewhat different than those for domestic institutions. 23 The effects of regulatory requirements on money market dynamics can be seen especially around key financial reporting dates. As many market commentators have noted, some borrowers actively manage their balance sheets on quarter-end dates.

The Committee noted that an ON RRP facility will be used only to the extent necessary and will be phased out once it is no longer needed to help control the federal funds rate. With respect to the Fed’s balance sheet, the Committee intends to reduce securities holdings in a gradual and predictable manner, primarily by ceasing to reinvest repayments of principal on securities held in the SOMA. 3 In the longer run, the Committee intends that the Federal Reserve will hold no more securities than necessary to implement monetary policy efficiently and effectively, and that it will hold primarily Treasury securities. The March 2015 minutes augment the September Principles and Plans with additional details about the FOMC’s intended operational approach at the commencement of policy firming. Specifically, the Federal Reserve intends to target a range for the federal funds rate that is 25 basis points wide, and to set the IOER rate and the offering rate associated with an ON RRP facility equal to the top and bottom of the target range, respectively. It intends to allow aggregate capacity of the ON RRP facility to be temporarily elevated to support policy implementation. It can also adjust the IOER rate and parameters of the ON RRP facility, and to use other tools such as term operations, as necessary for appropriate monetary control based on policymakers’ assessments of the efficacy and costs of their tools.
This is further complemented by the proliferation of payment cards, particularly electronic money, which enables banking and payment services to be conducted without a bank account or visits to traditional bank branches. According to data from the Consultative Group to Assist the Poor, or CGAP, there will be more than 120 mobile money schemes in developing countries by the end of 2009, more than double the number in 2008. CGAP estimates that by  BIS Review 162/2009  1  2012 some 1.7 billion people will have mobile phones but no bank account, and 20 percent will be using mobile money. A key challenge, to implement a commercially viable and workable mobile banking solution, especially where population density is low, is to achieve a critical mass of users required to reap economies of scale to keep transaction cost low. This is even more relevant if the aim is also to promote financial inclusion as financial services would have to be offered at affordable costs. Thus, a requirement for an open and interoperable mobile platform that facilitates the participation of many service providers and that offers a broad range of services is critical in developing a sustainable and efficient solution for both providers and users. The other type of branchless banking is the use of non-bank financial service providers, also referred to as Business Correspondents in certain jurisdictions.

As the Islamic financial community significantly grows in size, it is congruent that this enhanced Islamic finance platform being launched today has widened its outreach to the subscribers globally and from contributors of data and information from institutions around the world. To support this new enhanced Islamic finance platform, Bank Negara Malaysia and the other community members under the MIFC initiative is pleased to be one of the contributors. The MIFC page in the enhanced platform provides insights on Shariah, MIFC business opportunities and key developments. It also hosts the extensive network of Islamic financial community in Malaysia. On this note, I wish to congratulate Bloomberg, AIBIM, Bursa Malaysia and the many teams that worked on this initiative to serve the Islamic financial industry. 2  BIS central bankers’ speeches
HB: What needs to be changed? Trichet: We certainly do need change in Europe – fundamental change. Not only in the area of surveillance and monitoring of fiscal policy, but also as regards structural reform policies and competitiveness policies. HB: Examples? Trichet: We need to improve drastically everything: the quality of the diagnosis and recommendations by the Commission, much more stronger procedures – and where necessary automatic procedures and tools – to prevent ex ante bad policies, and much more effective sanctions ex post. I will make all these points with the greatest energy in the Van Rompuy Committee. HB: Will the measures adopted by the ECB now dampen growth in Europe? Trichet: No. It is a complete fallacy to say that fiscal soundness dampens growth. It is exactly the contrary. It is the absence of fiscal credibility which dampens growth. Medium term sound and credible fiscal policies are a major prerequisite for confidence. And confidence of the households, confidence of the entrepreneurs and confidence of the investors is what is indispensable for the recovery. HB: Did you ever think that you would have to take such difficult decisions as President of the ECB? Trichet: I have had to take difficult decisions throughout my career – including as President of the Paris Club in the 80’s and Chairman of European Monetary Policy Committee in the 90’s as well as Governor of the Banque de France.

If productivity growth were high, one might expect that the return on capital might also be elevated, putting upward pressure on real rates. The late 1990s surge in productivity growth during the internet technology boom seems to be a good example of this type of phenomenon. If the growth in labor input and productivity were positively related with the equilibrium real short-term rate, then in the current environment this would be consistent with a relatively low r*. The potential labor force has grown very slowly in recent years (less than a ½ percent annual rate over the past five years), and productivity growth has been subdued – running at only 1 to 1½ percent annual rate on average over the past few years. In sum, by focusing on the components rather than on the overall real potential GDP growth rate, one might find stronger and more persistent relationships with the equilibrium real short-term interest rate. The second issue that I want to briefly explore concerns the degree of uncertainty about the equilibrium real short-term rate and its implications for monetary policy. The paper argues quite convincingly, I think, that when this uncertainty is high, then an inertial policy rule may be preferable – that is, would lead to higher expected welfare. While I think this is true, I also think it is important not to overstate the implications of this conclusion in today’s environment. Currently, short-term rates in the U.S. are low relative to the standard formulation of the 1999 Taylor Rule.
Peter Pang: Managing capital flows – the search for a framework Welcoming address by Mr Peter Pang, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Asian Development Bank Institute and Bank for International Settlements Joint Seminar for the book launch on “Managing Capital Flows: the Search for a Framework”, Hong Kong, 21 April 2011. *  *  *  Good morning, Ladies and Gentlemen. 1. Let me thank Mr Kawai for inviting me to this event. It’s my honour to welcome you to this joint seminar by the Asian Development Bank Institute (ADBI) and the Bank for International Settlements (BIS) to mark the launch of the new book, “Managing Capital Flows: the Search for a Framework”. This is a topical issue right at the centre of attention of policymakers in this region. And as the title suggests, it is also a subject that we are still in search for an answer. 2. There is an old Chinese proverb saying that “water can keep a boat afloat but it can also capsize the vessel”. This suitably characterises the nature of international capital flows – it brings both benefits and risks to the development process in Asia. Capital inflows have been playing a key role in the economic development of the region – funding investments and bringing along technology and skill transfers. These were conducive to the emergence of the “four Asian Tigers” in the 1980s, and the rapid modernisation process of China, India and other Asian economies.

It is already clear however that it will amplify the headwinds to the strong recovery that the euro –area has been experiencing in 2021, and that it will intensify inflation pressures in a context where inflation has already increased significantly and will remain high over the coming months. The general uncertainty that marks the euro-area macroeconomic environment has implications for the conduct of monetary policy. In these conditions, it is important to balance carefully the risks of waiting too long to act as opposed to those of normalizing too soon. In any case, the  commitment of the ECB is clear: the Governing Council will do what is necessary to bring inflation firmly and durably to around two per cent over the medium term. The forward guidance, relying on state contingent criteria and the “sequencing” are instrumental to this goal. Policy normalization will follow a clear order: the ECB will end its asset purchases first, likely in Q3 2022, then raise the key interest rates, eventually reducing its balance sheet in a third step. All along this gradual process of normalization, the Governing Council of the ECB made it clear that it will maintainoptionality; gradualism and flexibility in the conduct of monetary policy. In that context, financial markets are currently considering that the rise in interest rates might start in the near future, with a first 25 bps hike almost fully factored in (90 %) as of next July, followed by two others by the end of this year.
And at a time that the central bank would normally need to loosen policy to stimulate the economy, it needs tighter policy to ward off inflation. I am not as concerned about cyclical adjustments as I am about structural impediments to long-run growth in Brazil. During this time of remarkable liquidity and cheap credit, and despite a decade of high commodity prices and booming exports, Brazil failed to advance further market reforms. Mexico, on the other hand, has continued to build on its earlier reforms such as its commitment to free trade through NAFTA and other trade agreements. Mexico has secured the openness of its economy and ensured the global competitiveness of its manufacturing sector. Exports plus imports as a share of Mexico GDP reached 64 percent in 2012 while Brazil’s trade share of GDP was just 21 percent. Mexico is now the No. 2 exporter of auto vehicles to the U.S. after Japan and has been the top exporter of auto parts since 2001. BIS central bankers’ speeches  5  Mexico reforms and the Texas shale oil boom Mexico in the last year has logged impressive structural change. Your government stands as an example for many other nations, including my own. A dozen reform bills passed Congress and were signed into law in 2013, five requiring constitutional amendments. To put this feat in perspective, this government has accomplished more in the last year than the three preceding administrations combined.

This is in addition to international migration, which is still high but has decreased from where it was before the crisis. This is what I see for Mexico. Structural reforms – handled judiciously, especially as U.S. economic growth accelerates and Europe recovers – can pay off in spades for the Mexican people, who deserve it many times over. While Mexico has somewhat reduced its dependence on the U.S., 80 percent of exports still go to El Norte. In a strange twist of fate, it may be helpful in the near to medium term to be exporting manufactured goods to a slowly recovering U.S. and Europe rather than maintain the last decade’s shipments of raw materials to China as in the case of Brazil. 6  BIS central bankers’ speeches  Mexico has emerged I began my talk tonight by running through the events, institutional backdrop and the thinking behind the Fed’s quantitative easing efforts. I clearly have not been onboard with all the decisions the FOMC has taken during the economic recovery. I fear that we are feeding imbalances similar to those that played a role in the run-up to the financial crisis. With its massive asset purchases, the Fed is distorting financial markets and creating incentives for managers and market players to take increasing risk, some of which may result in tears. And all this is happening in uncharted territory. We have aided creation of massive excess bank reserves without a clear plan for how to drain them when the time comes.
Around half of the European SMEs and from the region agree that the most relevant source for financing are the bank related products (credit line, bank overdraft, bank loans) and leasing or hire purchase. Also, companies from the region and the European Union use grants or subsidized bank loans and retained earnings (one third of the companies) as source for financing. On the other hand, market-based instruments, such as equity and debt securities, and factoring are less considered potential source of financing. Chart 11: Relevance of different sources of financing Relevance of the sources of financing for SMEs (average of 2015-2017)  60%  54%  51%  50%  Relevance of the sources of financing for SMEs (average of 2015 -2017)  49%  47% 46%  42% 40% 30%  27%  30%  18%  35%  32% 31%  17%  16% 14% 25%  13%  12% 10%  10%  20%  11%  8%  10%  6% 0% Retained Grants or Credit line, bank Bank loan earnings or sale subsidised bank overdraft or (excluding of assets loan credit cards subsidised bank (Internal funds) overdraft loans, overdrafts and credit lines) EU-28  Trade credit  Leasing or hirepurchase  4%  3%  2%  2% 0% Debt securities  Region  Equity capital  EU-28  Factoring  Region  Source: Survey on the access to finance of enterprises (SAFE), EC and ECB.

The second matter of interest is how to reconcile the current large investment needs of the region, with the already high leverage level, both in the private and public sector, as well. This will be also discussed further in the note. Structural decomposition of investment in CESEE countries vis-à-vis EU points to CESEE countries having larger share of investment in non-residential construction, and, to a lesser extent, in machinery, transport equipment and ICT equipment. This structural characteristic is connected with two historical episodes – first, the transition process, when large investment was needed to replace and renew the outdated infrastructure and second, large capital inflows in the form of FDI before the crisis triggered increase in the imports of machinery and equipment goods. On the other hand, CESEE region faces potential weaknesses in the part of investment activity connected with intellectual property, innovation and R&D. Namely, in all CESEE countries, there is a gap in investment in intellectual property, which, in turn creates critical support for more dynamic increase in productivity and value added, boost economic growth and real convergence. For the whole region, the gap vis-à-vis EU is around 9 p.p., for the period 2000-2008, and 10 p.p, for the period 2009-2017, but for some countries it is even larger (e.g. for Albania the difference is around 17 p.p. in the share of intellectual property vis-àvis the EU share). 6  Chart 7: Investment categories, difference vis-à-vis the EU in the share of the respective category in total investment (p.p.)
Policy recommendations that are appropriate for some economies are not necessarily suitable for other economies. One salient theme, however, is that fiscal policy space is more limited across the spectrum than it was in the run up to the 2008–2009 financial crisis. Moving from broad policy recommendations to concrete messages on policy implementation is required to draw the policy-makers’ attention and establish a constructive dialogue. The Consolidated Multilateral Surveillance Report is a positive step in that direction. II. The medium-term challenges and the fund’s action plan  Under the current circumstances, the Fund should focus on its short-term policy challenges. Indeed, one of the main issues that the Fund is tackling right now, namely the Triennial Surveillance Review, will be shaped directly by the lessons that the practice and traction of surveillance reveal in the current uncertain environment. Such surveillance practices will be the basis on which to revamp the surveillance framework, for instance, through an integrated surveillance decision that encompasses both its bilateral and multilateral aspects. The Fund’s resource adequacy is, in our view, directly linked to the functioning of Regional Financial Arrangements (RFA) and the existence of bilateral central bank swap lines. It is welcome that major central banks are currently cooperating in this area. A reasonable  2  BIS central bankers’ speeches  question is whether current Fund resources, plus those available through RFAs and bilateral swap lines, are sufficient to deal with a significant major financial dislocation.

Gent Sejko: Launching of the new Albanian banknote serie Address by Mr Gent Sejko, Governor of the Bank of Albania, at the launching of the new Albanian banknote serie, Tirana, 12 September 2019. * * * Honourable Minister Denaj and Minister Shalësi, Your Excellencies, Distinguished guests, Ladies and gentlemen, It is a great pleasure to have you with us in this very important day for the Bank of Albania and our national currency. In the history of the modern Albanian state, the establishment and modernisation of its monetary and financial systems has a substantial place. The Albanian currency is a symbol that has been present throughout the development of the country, bearing distinctive features of each era in the history of Albania. It is not a coincidence that one of the key objectives in the creation of a national bank was, among others, the issue of the Albanian currency, immediately after the sublime act of the Declaration of Independence that laid the foundations on which the Albanian state was created. In 1926, one year on from its founding, in 1925, the National Bank of Albania presented and put in circulation, for the first time, a complete series of Albanian banknotes and coins. Subsequent developments in the centralisation and later modernisation of the Albanian state dictated the need for continuous improvements of banknotes in terms of both content and design. It has always represented, however, the economic, social and political development phases of Albania.