samchain/econo-pairs-v1 huggingface dataset:
What implications will these changes have for the entire payments ecosystem? And what further adjustments will the cashless payment system have to undergo if it is to remain efficient and secure in the future? 4 5 6 7  Allsopp, Peter et al. (2009), The evolution of real-time gross settlement – access, liquidity and credit, and pricing, The World Bank Financial Infrastructure Series – Payment Systems Policy and Research, February 2009. Interbank payments comprise payments relating to FX operations or money and capital market transactions, but also large-value payments transacted by the non-bank sector. PostFinance’s decision in 2016 to settle all of its domestic payments via SIC in future has also significantly increased the volume of retail payments in the SIC system. The recent SNB survey on payment methods shows that cash continues to play an important role in payments in Switzerland. However, a large proportion of payments by households is now conducted via credit card, and above all via debit card. Swiss National Bank (2018), Survey on payment methods 2017 – Survey on payment behaviour and the use of cash in Switzerland. Page 5/9  Before turning to these important questions, I should emphasise that I will not be talking about cryptocurrencies such as Bitcoin or Ether. 8 The question I will focus on today is: how is digitalisation changing payment systems? One important finding is that the changes being wrought by digitalisation are affecting the entire payments ecosystem.

Central banks can reduce payment-related risks very effectively. By establishing security and confidence, they contribute decisively to the efficiency of the payment system. Today, money changes hands mainly via transfers or direct debits, with payments being booked directly to the commercial banks’ accounts at the central bank. Settling in electronic central bank money is equivalent to settling in cash; it is final and irrevocable. This approach reduces credit risk and inspires confidence – both in the payment system and in money itself. On the slide, this is the third phase: the transition from private promises to pay to central bank money – in other words, to today’s banknotes and the electronic sight deposits that commercial banks hold with their central bank. RTGS systems – a milestone in the evolution of cashless payments Let us now turn to Switzerland. For many years, the postal cheque service of Swiss Post was at the heart of the cashless payment system. This area only began to become attractive for banks as well from the middle of the 20th century. Around this time, so-called ‘bank clearing’ – Switzerland’s first interbank payment system – came into existence. This was an important step in the development of the cashless payment system. However, the predominantly manual nature of the system made it cumbersome. It could take up to four days to execute a payment, making efficient liquidity management virtually impossible for the participating banks. Furthermore, in the ‘bank clearing’ system, payments were settled on a net basis.
According to the standard neoclassical growth model, convergence should be driven by capital flows towards the lower income countries, which  1  I would like to thank Jonathan Yiangou, Neale Kennedy and Grigor Stoevsky for their contributions to this speech. BIS central bankers’ speeches  1  have low capital-to-output ratios and hence a higher marginal return on capital. An increase in labour productivity in the catching-up economies would also accelerate convergence, as capital deepening would empower production in those economies and organisational processes would gradually reach the standards of efficiency set by more mature regions. When EMU was launched, the conditions for economic convergence to proceed according to this model seemed to be present. Nominal interest rates between higher and lower income countries converged rapidly. Capital flowed towards lower productivity economies where the marginal product of capital was higher, supported by the elimination of exchange rate risk within the euro area. For example, from 1999 to 2008 exposures from banks in higherincome economies towards those in the catching-up economies (Spain, Ireland, Greece and Portugal) increased more than fivefold. Facilitated by these flows, capital accumulation accelerated in these countries: from 1999 to 2007 average growth in capital services in catching-up economies ranged from around 5% to almost 9%, compared with a range of 2% to 3.5% in more productive economies. On the surface, these developments appeared to be contributing to convergence: GDP growth in catching-up economies was generally faster than in higher income economies.

In 1997 and 1998 the economy shifted from an upturn with high growth rates to an expansion with lower growth but low unemployment, labour shortages in many sectors and strong growth in labour costs. The period of strong expansion has ebbed away in the course of the past year. Winter 2002 marked the turnaround in the Norwegian economy. Growth in the mainland economy is now lower. Unemployment is approaching the average for the 1990s. Industrial leaders are pessimistic. Companies report a decline in production, employment and orders for both the export and domestic markets. Many companies have relocated or have plans to relocate all or some of their production operations abroad. In particular, enterprises producing capital goods are experiencing problems. The number of bankruptcies has increased sharply. The number of bankruptcy petitions is the highest in nine years. If we disregard personal bankruptcies, there has been an increase of 32 per cent from the first quarter of 2002 to the first quarter of 2003 - 200 more than a year ago. The largest increase in the first quarter is in retail trade and the property management and commercial services sector, while manufacturing and the construction sector accounted for the largest increase in the previous quarter. The number of bankruptcies increased in all counties compared with 2002, with the sharpest increase in Hordaland, Buskerud and Oslo (161, 111 and 18 per cent respectively from 2001 to 2002). Oslo accounted for most bankruptcy petitions, with 249 in the first quarter.
It is thus not enough for the legal structure to be in place; there must also be a practical solution that quite simply does not provide any incentives to “push one’s way to the front of the queue”. I welcome these efforts to strengthen the frameworks and look forward to seeing the results. But I believe that one should have realistic expectations of the possibility to write down claims in a shaky market situation. The experiences from the Swedish banking crisis and also the Northern Rock case show us that in such situations it may be necessary to have an extensive guarantee of the banks’ obligations to stop a bank run or secure continued access to the international capital markets. …and a simpler way which has proven its worth in real crisis situations I would therefore recommend also introducing regulations that give the government the right to take over the ownership of a bank in a certain situation. If this is done in the right way, it will not only deal with the requirement that the shareholders should be held responsible, it will also minimise the risk that the government will need to bear costs that the creditors should bear. For this to work, the government should have the right to take over the shares before the capital is completely wiped out. There are at least two reasons for this. First, there is a risk that the owners will “gamble for resurrection” when the capital is low.

One hard-won lesson was particularly important: the central bank must keep the crown and government at arm’s length and must not extend credit to government. Control of the printing press would promote economic stability and prevent unrestrained money printing to finance spending by the crown. Two hundred years later, safeguarding the value of money remains monetary policy’s main task. Responsibility for monetary policy rests with Norges Bank, but today policy is geared towards maintaining stable inflation rather than a stable currency backed by a precious metal. The Bank’s role has also changed in other areas. From being the country’s only bank, Norges Bank took on the role of the bankers’ bank, with the new responsibilities that entailed. The central bank also has a responsibility to promote robust financial markets. The core of Norway’s payment system is housed in this building. Two hundred years as a central bank in a small open economy The Norwegian economy has changed over the past 200 years. In the early 1800s, eight in ten Norwegians worked in agriculture, forestry and fisheries compared with one in forty today. But some important features have not changed. Norway is a small open economy and developments abroad have an impact at home. Our foreign trade is largely based on natural resources. In the early 1800s, fish, timber and shipping were the mainstays of our economy. In recent times, oil and gas sales have accounted for a large share of Norway’s export revenues.
The Eurosystem cyber strategy for financial market infrastructures Following the increase in both the frequency and severity of cyberattacks over the last few years, legislators, regulators and standard setters have issued legislation and guidance on cyber security at national and international level and at cross-sectoral as well as sector-specific level. Let me briefly mention three initiatives. First, in 2016, the EC adopted the Directive on security of network and information systems (the NIS Directive). Its aim is to bring the cybersecurity capabilities of operators of essential services to the same level of development in all the EU Member States and to ensure an efficient exchange of information and good cooperation on the topic throughout the EU. Second, at international level, the G7 countries have drawn up a set of fundamental elements of cybersecurity for the financial sector, as well as three further recommendations on the effectiveness of cybersecurity assessments, third-party risks, and coordination with other critical sectors. Third, with a key focus on financial stability, the CPMI-IOSCO published a principles-based “Guidance on cyber resilience for financial market infrastructures” in June 2016. Supplementing the “Principles for Financial Market Infrastructures”, it provides additional detail related to the preparations and measures that financial market infrastructures should undertake to enhance their cyber resilience. In recognition of the escalating cyber threats, the legislative and regulatory guidance and the required paradigm shift, the Eurosystem’s overseers have launched a strategy for cyber resilience in relation to financial market infrastructures.

I look forward to the productive and engaging discussions during this conference, and wish you a pleasant stay in Kuala Lumpur. I shall now invite the ISI President, Professor Vijay Nair to deliver his Opening Remarks. 2  BIS central bankers’ speeches
28 The Riksbank's focus on CPIFXE in connection with the April meeting resulted in questions on whether the Riksbank was changing target variable or rudder once again. This is not the case. Another example is from September 2018. Nyhetsbyrån Direkt writes: 29 CPIFXE inflation (the CPIF excluding energy), the measure on which the Riksbank is currently focusing a lot on, … I have quoted two examples here but there are more. The measure that was intended to make it easier for us to understand and to help us in our monetary policy decision-making has instead come to be perceived as the actual target for monetary policy. For my part, I handle the trade-off between taking in other measures than actual inflation in the assessment and being clear that CPIF inflation is the target for monetary policy as follows. The desirable properties for an underlying measure as I described earlier in my speech are very important to me. The underlying measures I analyse are of decisive significance when assessing the development of inflation. And I can say here that CPIF excluding energy does not fare well in the competition. 28  Handelsbanken Capital Markets, Ränterullen 25 June 2018. 29 19 October 2018. 15 [19]  In my speeches and presentations on monetary policy, I have in principle always referred to CPIF inflation. When I have included underlying measures, they have never been alone. This has been my way of emphasising that it is CPIF inflation –nothing else – that is the target for monetary policy.

Figure 7 plots the volatility of four price indices over time. The standard deviations here are calculated over a moving 36-month period 25. The figure shows that volatility has different levels during different periods. The prices of Swedish-produced fruit and vegetables varied more in 1995-2019 than between 2005 and 2019. The volatility of prices of coffee and cocoa has increased again after being quite low over a 15-year period. The price movements on books have become much more volatile in recent years. 26 The same applies to prices for foreign travel. 27 The changed volatility can often depend on changes in measuring methods. A new way of measuring prices of foreign air travel, for instance, has contributed to a new seasonal pattern with a higher volatility in recent years. Figure 7. Rolling standard deviation for different price indices  Annual percentage change 35  35  30  30  25  25  20  20  15  15  10  10  5  5  0  95  97  99  01  03  05  07  09  11  13  15  17  19  0  Fruits and vegetables, Swedish Coffee and cocoa Books Air travel Sources: Statistics Sweden and the Riksbank  25 The calculations are based on annual percentage changes. 26 The price measurement for books was changed in 2007.
I cannot finish without reminding you that tomorrow is the 300th anniversary of the birth of Benjamin Franklin, arguably the greatest of the American founding fathers. During his lengthy stays in England, Benjamin Franklin visited Kent many times. To celebrate his tercentenary the American Brewing Association has produced a new recipe for Franklin’s favourite beer. The hops recommended for the recipe are Kent Goldings. Despite the fears of the demonstrators on Hop Saturday in 1908, the Kent hop industry has not disappeared altogether. The area under planting is certainly much smaller, but research in centres such as Wye College has produced the new hedgerow hops which are recognised worldwide. Employment in Kent, though, has moved into new and more productive sectors. Adapting to changes in the external environment is not easy for any of us- whether running a business or setting monetary policy - but if we do adjust the benefits will accrue, if not to everyone immediately then to the great majority over the years to come. BIS Review 9/2006  3

We are assuming in our most recent forecast that GDP in Sweden will increase by 2.2 per cent this year and by 3.7 per cent next year. These are upward revisions of around one percentage point and half a percentage point respectively, compared with July last year. They are not very large changes in growth, but they are changes in the right direction and a sign that economic activity is on firmer ground. The largest change in our forecasts concerns the labour market, as I mentioned earlier. In July we were assuming that employment would fall by just over 3 per cent a year and would not begin to rise until 2011. Now we have already seen an upturn in employment and we are instead forecasting a marginal increase in the number of persons employed. In July we were assuming that unemployment would peak at 11 per cent in 2011. Following the large fall in production this appeared to be a reasonable forecast in line with historical patterns, and it was also shared by most other analysts. However, developments are now rather different  BIS Review 58/2010  5  and our current forecast is that the current unemployment level of 9 per cent is a peak and that unemployment will be 8 per cent at the end of our forecast period. How has the stronger labour market affected the interest rate decisions?
This is the consequence of two types of processes. First, the adjustment, in the form of balance-sheet recession, that the crisis represented. Second, by the structural problems created by ageing populations, globalisation, energy and environmental risks and decreasing returns of technological progress recently underlined by Robert Gordon16. In this context, the attention that will have to be given to the other form of political legitimacy referred by Scharpf gains accrued importance. This calls for greater participation by citizens in European decisions. In some ways, it may stand-out as contradictory with the search for effectiveness linked with the first form of legitimacy requiring stronger central deciding bodies. To understand the great difficulty in addressing this issue, we could establish an analogy with the political trilemma of the world economy, as recently stated by Dani Rodrik17: “we cannot simultaneously pursue democracy, national determination and economic globalization”, but I will not enter into such complications. I will recall, however, that in this context, we should never forget that Europe is unique: it is neither a nation nor a state. Political life and legitimacy continues to take place mostly at the level of nation-states. This implies that to foster legitimacy we have to act on the two levels the European and the national by giving for instance, the European Parliament a stronger euro area dimension and encouraging greater engagement of national parliaments in euro area discussions. Conclusion Let me conclude.

This all means that after the rebound of the economy completes, it will develop more smoothly, at a more gradual pace, as compared to the recovery growth of output observed over the last 12 months. In a situation when companies experience a shortage of workers or components, monetary policy measures promoting demand will not increase output or consumption. For instance, if the demand for cars rises even more, this will not boost their output, when there are no parts, but will only increase the queues for them and speed up price growth. 1/3  BIS central bankers' speeches  As regards inflation, it is above the forecast rate, and inflation expectations remain high. In August, annual inflation was 6.7%. According to the steady indicators of inflation measuring the inflation rate without volatile components, inflationary pressure continued to considerably exceed our target in both August and early September. Indeed, inflation is impacted by multiple factors that do not depend on our monetary policy. The most important of them are world commodity prices, the country’s fruit and vegetable harvest, and bottlenecks in global supply chains (container shipments, microcircuit manufacture, etc.). It has been stated recently that these factors should be completely ignored if monetary policy cannot influence them. This opinion leaves out one essential circumstance, namely, the fact that all these factors impact inflation expectations which, in turn, influence consumers’ sentiment and behaviour. Hence, they drive inflation across a wide range of products.
Analogously, in significant degree financial stability is about safeguarding the stability of private money (deposits held by households and firms with the banking system) relative to central bank money. Depositors with banks have to be confident that they can exchange their deposits at face value for our money – our notes; or that they can smoothly transfer their deposits to other banks where they could be confident of that. Those two formulations amount to much the same thing, as transfers between banks are settled across our books in central bank money, the economy’s ultimate settlement asset. 5 At the level of the system, we need an “exchange rate” of unity between private money and central bank money. And we need wholesale funders of banks to be confident of that too. Absent that stability and confidence, the payments system and credit creation become severely disrupted, with big social costs. Of course, banks are not the only lenders in our economies. The current crisis owes a lot to the non-bank financial sector – funds, conduits, SIVs, securities dealers, and so on. But the excessive leverage and maturity transformation in the shadow banking system was in general predicated on the plentiful availability of credit on too-easy terms from the  maintenance period. For more details see paragraphs 74-81 of “The Framework for the Bank of England’s Operations in the Sterling Money Markets (the ‘Red Book’)”, Bank of England. 4  Ibid., paragraph 166.

There are just 30 or so mentions of COLR on the web. One possible starting point is how we have learned to think about bespoke liquidity-support operations. After explicitly recognising that occasionally liquidity support operations can end up providing de facto risk capital if the recipient deteriorates, the late Eddie George offered some thoughts on this in 1993; 29 “central banks are not in the business of providing public subsidy to private shareholders. If we do provide support, we will try to structure it so that any losses fall first on the shareholders and any benefits come first to us. And any support we provide will be on terms that are as penal as we can make them, without precipitating the collapse we are trying to avoid ……… We look for a clean exit. The company may be required to run down or restructure its operations, under our surveillance, to the point where it can do without our support.