samchain/econo-pairs-v1 huggingface dataset:
Benoît Cœuré: A budgetary capacity for the euro area Introductory remarks by Mr Benoît Cœuré, Member of the Executive Board of the European Central Bank, at a public hearing at the European Parliament, Brussels, 2 March 2016. *  *  *  Madam Chair, Mr Chair, Honourable Members of the European Parliament, Ladies and gentlemen, I am grateful to the two rapporteurs and to the two committee chairs for holding this hearing today to advance the public debate on a fiscal capacity for the euro area. We are all well aware that political attention is largely focused elsewhere, but we should not lose sight of the objective of completing Economic and Monetary Union (EMU), securing its capacity to absorb economic shocks and creating confidence today in its future economic performance. As I have said elsewhere, if downside risks to the recovery were to materialise, this would not make it easier to respond to the refugee crisis or to counter terrorism. 1 A quick glance at fiscal policies today should further convince us of the importance of this discussion: •  The recovery in the euro area is proceeding at a sedate pace; it is mainly supported by our monetary policy measures and by the low price of energy. At the same time, the global economy is overshadowed by renewed uncertainty and broader geopolitical risks. •  Public finances in many euro area countries are still in a fragile condition.

A fiscal capacity for the euro area There are many ways a euro area fiscal capacity could be implemented, ranging from simple macro insurance or an unemployment benefit scheme to a fully-fledged euro area budget that could include the provision of public goods. Each of these options entails its own technical and political challenges and opportunities. In the end, the choice as to which option or combination 2  BIS central bankers’ speeches  of options should be adopted will need to be a political one. This is in fact an opportunity to have a debate about Europe’s collective goals; such a debate is more necessary than ever and goes beyond the economic sphere alone. 3 From the perspective of the economist and of the central banker who has a keen interest in making EMU as a whole work better, the crucial question behind the discussion about a fiscal capacity for the euro area is how to maximise its positive effects on the functioning of EMU, while at the same time preserving incentives for sound fiscal policy-making and addressing structural weaknesses at the national level. To start with, we should all be able to agree that the objective of the fiscal capacity should be to make EMU more resilient by increasing the capacity for automatic stabilisation in the euro area. The aim should not be to actively fine-tune national economic cycles or to equalise revenues.
The spectrum of buy side institutions active in FX is particularly complex and varied, encompassing hedge funds, high frequency trading firms, asset managers and corporates among others. The size and complexity of their FX market activities and the nature of those activities may differ significantly. Hearing the viewpoints of many different institutions was critical to delivering a relevant Code for this diverse landscape, recognizing that while the Code applies to all, the details of precisely how it applies may differ. I found that the series of frank debates and discussions that we—market participants and central bankers alike—had over the past two years was an important process in itself, and not just a means to an end. The result was multiple drafts of the Code and, ultimately, a product that more clearly articulated principles and defined terminology. The 55 principles within the Global Code focus on promoting transparency, fairness and mitigating risk across six primary areas–Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement. I would like to highlight a few of these principles to provide a sense of the Code’s content, and use these examples to illustrate some of the fundamental building blocks of a fair, transparent, and efficient market. The Code begins with principles on ethics. The very first principle states that Market Participants should strive for the highest ethical standards. While this is a basic concept, the principle is fundamental and underpins each and every principle that follows.

Many of you are very knowledgeable about these topics and we hope you will take the opportunity to share your insights on these questions. The GFXC is not only seeking views at the tails, but also those more in the middle of the spectrum as well. Importantly, all perspectives are welcome. Conclusion The request for feedback is an opportunity to engage at an industry level in supporting the resilience of this critical and fundamental market—one that represents far more than the sum of its parts and players. As I said in 2015, 3 “the transactions that take place [in the FX market] are the lifeblood of a global economy that comprises many different national currencies.” At that time, I called upon the industry to take action and I am impressed by what I have seen through the work in developing the Code and in the spirit in which it has been received so far. But that work isn’t over—it never is. Best practices do not work without the ongoing commitment of those in the industry, those making the choices each day. No Code, and in fact no law or regulation, can force all 5/6  BIS central bankers' speeches  participants in a market as broad and diverse as FX to maintain a marketplace that values openness, resilience, high ethical standards, and competition. But, that fact is no reason to forego striving for such a marketplace. Developing the Code has been one way of working toward that goal.
With this area as an important field for trade, Swedish firms have to meet the increased price competition which the monetary union entails without reaping the benefits which their euro area competitors reap from decreased exchange costs and access to a large, liquid market for capital. In order to reduce these disadvantages, firms can try to match their euro income with their expenditures in Sweden, for example for wages BIS Review 68/1998  -6-  costs and payments to suppliers. The exchange risk would then be passed on to domestic players - households and firms - and these in turn would want to pay their bills in euro. How probable is such a scenario? One question is how serious the competitive disadvantages will actually be for export companies. Another aspect that can be discussed is the extent to which households and Swedish-owned companies are prepared to accept an exchange risk. They will want to receive income in the same currency as their expenditures. Otherwise they take an exchange risk that makes the real income uncertain. Even when the monetary union has started, most of the expenditures of households and Swedish-owned companies will presumably be expressed in the national currency. Retailers set prices and accept payments in Swedish kronor. The status of the krona as legal tender means that they are under no obligation to accept payments in other currencies. Moreover, Swedish taxes and households’ fixed long-term loans are paid in kronor.

Today this is the case in just a few countries, of which Sweden is one. Monetary policy’s interaction with fiscal policy will be important, at both national and EMU level, for the perceived credibility and consistency of economic policy in general. A constructive dialogue is therefore needed between the ECB and the governments of the euro countries. The arrangements are not yet clear but an intense discussion of this and other matters is now under way in Europe. The Treaty provides a number of opportunities for contacts between the two spheres. Functional economic structures must also be in place so that the single monetary policy can establish low inflation without eliciting unnecessary economic tensions. A matter of particular importance in this context is the workings of the labour market. A labour market that functions properly reduces the risk of regional unemployment and thereby of political problems that could ultimately pose a threat to the monetary union. Temporary factors  BIS Review 68/1998  -5-  The discussion of the euro’s development has included the point that the introduction of the single currency will trigger widespread portfolio rearrangements, mainly by private investors but also in public reserves. The euro will alter the composition of exchange risks in investors’ portfolios and this could result in flows to restore the degree of diversification. Investors who achieved diversification previously with holdings in German marks and Italian lire, for example, will have to adjust their portfolios when both these currencies are replaced by euro.
But the key lesson from the upheaval in the global crypto industry is clear: investing in cryptocurrencies is highly risky. This is what MAS has been warning the public about for the past 5 years. In fact, MAS’ repeated warnings against retail investments in cryptocurrencies and ratcheting up of policies to restrain retail access have raised some questions as to where MAS stands with respect to the digital asset ecosystem. Next month, we will organise a dedicated Green Shoots seminar to share our strategies to develop Singapore as digital asset hub. We will explain our position on cryptocurrencies, stablecoins, blockchains, tokenisation, smart contracts, digital assets, etc. – their risks and opportunities; shortcomings and potential. We will set out how our developmental and regulatory approaches will work in harmony to achieve the vision of Singapore as an innovative and responsible digital asset hub. FINANCIAL SECTOR PERFORMANCE AND STRATEGIES Let me now turn to the financial sector, which continued to perform well in 2021. Value-added grew by 7.4%. FinTech investments hit a high of $ billion. A total of 4300 net jobs were created in financial services and fintech. The global financial landscape has continued to transform. The Russia-Ukraine war, COVID-19 pandemic, and US-China tensions have introduced new risks and uncertainties for financial markets and institutions. The nature of globalisation is changing and supply chains are adjusting, with a greater focus on business resilience. At the same time, structural trends towards greater adoption of technology and the drive towards sustainability have gathered pace.

In China, growth has slowed in the face of mobility restrictions imposed in line with the zero-COVID policy but inflation is not a problem and there is sufficient policy space to support growth. In emerging Asia, where the uptick in inflation has been more recent and less sharp, the lifting of mobility and travel restrictions is likely to spur a recovery in demand and  possibly some price pressures. Demand-pull price pressures have been accentuated by a variety of supply-side disruptions, worsening inflation. Supply chain frictions began to emerge in H2 last year, even before the Russia-Ukraine conflict. Intermittent movement restrictions in various economies caused bottlenecks across production chains, for example by interrupting freight handling in major ports. The most significant supply shock has, of course, been the Russia-Ukraine war. Russia and Ukraine are major producers and exporters of oil and gas, and a variety of food grains and commodities. The disruption to these supplies has sparked inflationary effects across the world. The disruption of Russian oil and gas supplies to Europe is pushing up energy prices worldwide. The impact on fuel and electricity prices across the world has been almost instantaneous. The disruption of grain exports from Russia and Ukraine is having knock-on price effects across the food production chain. The two countries make up 25% of global exports of wheat and barley, and 14% of corn. These grains are used in a variety of foodstuff, whose prices have consequently been pushed up.
Without any asymmetries of information, banks would not be necessary, since households could invest their savings directly or through mutual funds. Therefore, by definition we cannot have banking with full transparency. 14 Fortunately, banks are not totally opaque either. Some risks can be assessed more or less readily. A US Treasury bill is clearly less risky than an unsecured loan to an obscure software company. Therefore, capital requirements can at least partially be based on the relative riskiness of various types of assets, even in our non-ideal world. “Basel I”, the first Basel Accord of 1988, introduced “risk buckets” for this purpose. For instance, loans received a risk weight of 100%, government bonds a risk weight of 0%. “Basel II” – the revision of the  10  Raghuram Rajan and Luigi Zingales (1995): “What Do We Know about Capital Structure? Some Evidence from International Data”, Journal of Finance. 11  Tier 1 capital to total assets. Source: The Banker, July 2007. 12  See, e.g., Jean-Charles Rochet (1992): ”Capital Requirements and the Behavior of Commercial Banks”, European Economic Review. 13  See, e.g., the classic article by Douglas Diamond (1984): ”Financial Intermediation and Delegated Monitoring”, Review of Economic Studies. 14  See Charles Goodhart (1988): The Evolution of Central Banks, p. 63. BIS Review 158/2008  3  first Basel Accord – which is currently being implemented, tries to go beyond what were perceived to be rather crude risk buckets. Under Basel II, risks are differentiated in more detail.

6  See John Galbraith (1990): A Short History of Financial Euphoria. 7  “Hedge Funds, Leverage, and the Lessons of Long-Term Capital Management”, Report of The President’s Working Group on Financial Markets, April 1999. 8  Q & A with Joseph Stiglitz, Columbia University and The International Herald Tribune, 11 October 2006. http://blogs.iht.com/tribtalk/business/globalization/?p=177  9  G7 Finance Ministers and Central Bank Governors Plan of Action, 10 October 2008. 2  BIS Review 158/2008  Naturally, therefore, rental cars have a much shorter life span than non-rental cars. The same reasoning applies to banks. No sane banker will intentionally manage his bank into insolvency. But he or she has a lower incentive to avoid insolvency than if he were not insured. This sub-optimal level of caution is immediately apparent in banks’ balance sheets: Banks tend to hold very low levels of capital. In a cross-sectional comparison, banks have much lower capital cushions than uninsured firms. On average, listed non-financial firms have capital-to-asset ratios of 30 to 40 percent. 10 In stark contrast, before the onset of the current crisis, all of the world’s top 50 banking institutions held, on average, only 4 percent of capital. None of them held more than 8 percent. 11 In short, banks have a preference for very high leverage. This highlights a fundamental dilemma of capital regulation: Banks don’t like it. Bankers will typically argue that high leverage is beneficial or even necessary. Therefore, banks will naturally oppose any regulation aimed at restricting leverage.
How this policy should actually be carried out in practice is a complicated issue and I believe that the IMF can play an important role in this context too. The financial crisis revealed major problems The era in which we were said to be living in the best of all possible worlds, popularly known as “The Great Moderation”, came to a disastrous end in 2007. Following a long period of steady growth and stable low inflation, we had been lulled into the belief that this would never change. We believed that the financial markets were excellent at converting savings to loans and distributing risks so that they were taken by agents who both wanted and were able to  1  The Nordic-Baltic constituency consists of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. BIS central bankers’ speeches  1  bear them. The risks that were mainly discussed were the imbalances in the global economy in the form of countries with large current account surpluses and those with corresponding deficits. Those who raised questions about the stability of the global financial system and the risks relating to a rapid expansion of credit found it difficult to be heard in this situation. The financial crisis brought into focus the inability of the international community to prevent and manage crises in the global financial system. There were several problems. First, there was a lack of knowledge about the links and the contagion risks in the financial system.

The proposed amendments drew reference from the revised FATF Recommendations and international best practices, so as to take into account latest global developments and incorporate emerging best practices. Some of these amendments relate to enhanced transparency on beneficial ownership information. MAS is currently reviewing the feedback from the private sector and will also be looking at updating the MAS Notice on AML/CFT for licensed trust companies. Continual review of our policies and guidelines, in consultation with industry stakeholders such as yourselves, remain the bedrock of our regulatory approach. It makes sure that Singapore’s regulatory regime is in line with international standards, while at the same time taking into account industry feedback to facilitate practical implementation. Increased momentum towards tax transparency 18. Turning now to tax transparency. 19. To combat cross border tax evasion, the G20 endorsed Article 26 of the OECD Model Tax Convention on Income and Capital to be the global standard for Exchange of Information (“EOI”) for tax transparency, in 2009. This provided for bilateral EOI-on-request, where a jurisdiction may request from another jurisdiction information on its tax payer that is foreseeably relevant to its determination of whether the tax payer has evaded taxes. 20. Following that, there has been strong progress towards enhanced tax transparency – most recently, the G20 and OECD advocated the adoption of AEOI as the new global standard for tax transparency (the “AEOI Standard”), and urged all jurisdictions, including all financial centres, to implement the AEOI Standard swiftly.
Responsible openness in the Insurance Sector Speech given by Anna Sweeney, Executive Director, Insurance Supervision  Association of British Insurers Prudential Regulation Webinar 25 May 2021  I would like to thank Alex Stephenson and other colleagues for their help in preparing this speech. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Thank you for the invitation to speak today, and to all of you for dialling in to this session. I believe technically at this point I could deliver this speech in person, but only to six of you at a time. I believe technically at this point I could deliver this speech in person, but only to six of you at a time – which would take all day and result in quite a long queue. However, I do look forward to attending events in person again and meeting many of you in future. I would like to focus on three issues today that I consider to be of particular importance as we move beyond the UK’s departure from the EU:  1. Our role as a host for international insurance business; 2. Actions we can take to facilitate effective competition in UK insurance sector domestically and internationally in conjunction with high prudential standards; and 3. Our ongoing focus on international standard setting and policymaking, including in relation to climate change. Competiveness and policyholder protection are sometimes portrayed as objectives at odds with each other.

Fellow Members of Staff, Invited Guests, Ladies and Gentlemen, as we move ahead and look to the next 50 years of Central Banking in Zambia, the Bank of Zambia will continue to play catalytic role in facilitating the exchange of ideas among financial sector players and all other key stakeholders. BIS central bankers’ speeches  1  Today, we are here to officially launch the celebrations of 50 years of our existence. I would like take this opportunity to inform you that a number of activities have been lined up to commemorate this wonderful occasion. These include: 1. An international symposium to discuss selected pertinent to the Bank of Zambia and in line with the theme of our celebration, scheduled for 7th August 2014;  2. An exhibition dedicated to the history of the Bank of Zambia;  3. The publication of a book on the History of the Bank of Zambia;  4. The launch of a book on Economic Policies in Zambia;  5. A national school quiz; and  6. A family day to show our gratitude to the families of the members of staff for their support in our execution of the Bank’s mandate. Ladies and Gentlemen, it is our expectation, therefore, that all members of staff will take part in the upcoming activities in order to make the anniversary celebrations a success and memorable.
Zdeněk Tůma: Forecasting at the Czech National Bank Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Bank’s Forecasting Dinner, Prague, 18 February 2010. *  *  *  Ladies and gentlemen, dear colleagues, Over the last seven years I have had the privilege to welcome you here at the premises of the CNB and open the Forecasting Dinner with my thoughts on forecasting and related issues. Unsurprisingly tonight it won’t be any different. However, as it is almost certain that this is my last chance to speak to such distinguished audience still as the governor of the Czech National Bank, I would like to use this opportunity and discuss the forecasting process in the Czech National Bank from a little bit broader perspective. Those of you who were expecting exact inflation and GDP growth numbers I will kindly ask to refer to our latest Inflation Report that was published last Friday. As many of you well know it is generally recognised that central bank policies must be forward-looking. As emphasised by Milton Friedman, for example, there are long lags between monetary policy actions and their impact on the economy.

Of course, expert judgment and short-term analyses still play an important supplementary role in the design of the final forecast. It is worth mentioning that the development of our forecasting system has been part of the wider evolutionary process that the Czech inflation targeting regime has gone through. The first years of the new regime were not easy, and included frequent numerical target misses. Nevertheless, the Czech Republic enjoys low inflation, and inflation expectations seem to be firmly anchored at low levels at present. Monetary policy decision-making is rule-based and transparent, thereby enhancing the credibility of the CNB. Let me conclude with the statement that a “forecast based” monetary policy framework seems to fully allow an independent central bank to commit credibly to its long-term goal of price stability and this certainly means a lot. 2  BIS Review 17/2010