samchain/econo-pairs-v1 huggingface dataset:
A subset of those digital assets, known as stablecoins, could over time be used by consumers and businesses as money, if they serve as a safe means of payment, a store of value, and a unit of account.2 Some jurisdictions are considering bringing these kinds of instruments into the regulatory framework by requiring their issuers to become banks or other licensed entities.3 This could enhance the ability to safely integrate them into the payments system. It could also expand access to central bank accounts and services to new entrants, allowing the stablecoins to be backed by the most liquid and stable of assets: central bank reserves. Traditional commercial banks are also forming consortiums and partnering with digital innovation firms to increase their offerings of liabilities associated with digital activities, which might entail offering deposits to stablecoin issuers or even direct issuance of stablecoins. Many are also investing in distributed ledger activities that could transform their businesses. Preliminary analysis of the May 2022 Senior Financial Officer Survey suggests that most U.S. Global Systemically Important Banks (GSIBs) expect growth and development in these areas to be a medium or high priority over the next couple of years, and banks continue to explore these areas to see how they fit into their business strategies.4 Central banks are also innovating. Many are implementing new forms of payments or experimenting with central bank digital currencies (CBDCs) to prepare for the future.

Currently, over 60 jurisdictions have launched faster payment services.5 In addition, central banks are building expertise and investing in technology to examine the potential applicability of CBDCs.6 Monetary Policy Implementation in An Evolving Monetary System As we consider the potential impact of this array of innovations, it is useful to start with a view into the current monetary system. For decades, central bank reserve balances have been the safest and most liquid asset, at the core of a smoothly operating financial system. Most economies operate with two-tier monetary systems, in which households and businesses hold and make payments  Regulation, supervision, and deposit insurance help keep commercial bank money safe. In turn, deposits fund growth in the economy through loans to households and businesses. And central banks provide liquidity backstops to ensure that the banking system can meet its liquidity obligations to the public. Most policy implementation frameworks around the world are designed based on this two-tiered system. In these frameworks, central banks control the aggregate supply of their liabilities and the rates at which these liabilities are remunerated, which in turn influences the market interest rates that are transmitted to the economy.7 In considering the impact on implementation frameworks of an environment including private and public digital currencies, I would like to raise two key questions that central banks might consider. First, what are the implications for the tools of interest rate control? And second, how might the central bank balance sheet adapt?
Critical infrastructure such as transport, water, power and telecommunications systems are also likely to be affected. Nearly all aspects of the economy in every country are therefore potentially at risk because of the widespread dependence on a country’s core infrastructure. The unprecedented scope of the Year 2000 problem means that a critical aspect of the issue is the management challenge. Substantial management resources are needed to coordinate the efforts to assess, repair, and test affected systems prior to the fixed deadline of BIS Review 85/1998  -2-  January 1, 2000. At the Federal Reserve, for example, we have created a number of management positions within our organization that are focused exclusively on different aspects of our Year 2000 preparations. A final point that underscores the need for urgent and sustained action is the increasing focus on the issue by the media, by the public and by market observers such as the rating agencies. Over the course of 1999, the extent of Year 2000 preparations by financial organizations will become the subject of ever more intensive scrutiny. As supervisors, therefore, we must do all we can to support the efforts of market participants to address the problem effectively, and to build confidence among others that this is being accomplished. While we must make it clear that supervisors cannot solve the problem, we can help mobilize others to take the necessary steps.

Changes in supply chains – with a shift in emphasis from efficiency to resilience – may also exert a drag on economic recovery. Overall, MAS expects the global economy to grow by 3.5% in the second half of this year, following an estimated minus 5.5% in the first half. [3] SINGAPORE ECONOMY 2 / 15  BIS central bankers' speeches  The Singapore economy is going through its most severe downturn since Independence. In year-on-year terms, the economy contracted by 6.5% in the first half of 2020, its first decline since the global financial crisis. It is more meaningful to evaluate the performance and prospects for the economy by type of activity rather than the usual categories of construction, manufacturing, and services. Construction, travel-related, and customer-facing domestic services bore the brunt of the COVID-19 containment measures. Construction, accounting for about 4% of GDP, was severely affected by the Circuit Breaker measures and the spike in infection among foreign workers in the dormitories. The travel-related cluster—comprising air transport, accommodation, arts, entertainment and recreation, and also accounting for about 4% of GDP — exerted the largest drag on economic growth. Consumer-facing domestic services—comprising retail, food services and land transport and accounting for another 4% of GDP—were affected by heightened fears of infection and the Circuit Breaker measures. Thus, roughly 12% of the economy is at the epicentre of the impact from COVID-19. The trade-related cluster – comprising manufacturing, wholesale trade, and water transport and storage – was also affected by the COVID-19 pandemic but less so.
For a small, open economy like Sweden the natural starting-point for the forecasting work is how economic activity and inflation develop in the world around us. The forecasting work therefore begins with an international outlook meeting, which has the purpose of reaching a preliminary forecast for international events. Soon after this a financial market meeting is held. At this meeting there is a discussion of market participants’ expectations of the repo rate and how these have changed since the previous monetary policy meeting. These are then compared with the model forecasts for the repo rate and how these have changed. In addition, there are analyses and discussions of what has happened in the financial markets since the previous assessment. House prices, credits, stock market rates, exchange rates, money supply, international rates and so on are also discussed at this meeting. After this a current status meeting is held, where the focus is on the current situation in the Swedish economy. One particularly important aspect is to assess how much of the Swedish economy’s total resources in the form of labour and machinery are currently being used to a normal extent. Apart from new information on the current economic situation, there are also discussions of other new information that may be important for the forecasts in the slightly longer term. The first monetary policy group meeting with the Executive Board summarises new information After this it is time for the first large monetary policy group meeting.

This assurance should also facilitate the further development of the financial sector in these countries, as foreign banks and other financial services providers seek to tap what is soon to become an enlarged market of almost 500 million people, either directly by setting up shop in these countries or indirectly through the cross-border provision of financial services. The advantages for financial stability of a diversified financial structure are well-documented. Suffice it to recall that because different financial market segments react differently to economic shocks, the presence of different types of intermediaries and markets functioning alongside each other should strengthen the financial system’s capacity to absorb liquidity shocks emanating from specific institutions or market segments. For accession countries, the scope for diversification presented by EU membership is significant, not only because the financial sector tends to be small relative to their economic size, but more so because intermediation in these countries is dominated by the banks. In fact, a recent ECB report concludes that the financial sectors of accession countries could assimilate a fifteen-fold increase in absolute 3 terms. Financial integration in the euro area, moreover, may also promote financial stability in the accession countries through the advantages inherent in a single currency area. For a start, the disruption arising from currency risk is eliminated, domestic economies become immune to currency misalignment episodes that disturb trade and currency risk premiums disappear from interest rates.
There are perhaps three key robustness results from this literature which are relevant to the financial system. Perhaps the key one concerns the “robust-yet-fragile” property of connected networks. 6 The intuition behind this result is beguilingly simple, but its implications profound. In a nutshell, interconnected networks exhibit a knife-edge, or tipping point, property. Within a certain range, connections serve as a shock-absorber. The system acts as a mutual insurance device with disturbances dispersed and dissipated. Connectivity engenders robustness. Risk-sharing – diversification – prevails. But beyond a certain range, the system can flip the wrong side of the knife-edge. Interconnections serve as shock-amplifiers, not dampeners, as losses cascade. The system acts not as a mutual insurance device but as a mutual incendiary device. Risk-spreading – fragility – prevails. The extent of the systemic dislocation is often disproportionate to the size of the initial shock. Even a modest piece of news might be sufficient to take the system beyond its tipping point. This same basic logic has latterly been applied to financial systems, using mathematical models and simulated data. 7 These knife-edge dynamics match closely the behaviour of the financial system in the recent past. A lengthy period of seeming robustness (the Golden Decade from 1997 to 2007) was punctuated by an acute period of financial fragility (the period since). The shock causing this tipping point to be reached – the sub-prime crisis – was by global financial standards rather modest. The robust-yet-fragile property of networks helps make sense of these non-linear financial dynamics.

As a result, the structure of the euro area financial sector is changing. In 2008, total assets held by investment funds were only 15% of banking sector assets. In 2017, euro area investment fund assets had grown to 42% of total banking sector assets, amounting to EUR 12 trillion. This major growth in relative size is likely to have far-reaching implications for the ability of the financial system to absorb shocks and for the financing of the economy more broadly. On the positive side, an increase in market-based finance through the issuance of debt and equity instruments can help diversify the funding base of the real economy. It also gives investors more choice and enables them to benefit from diversification effects offered by investment products. This holds true for retail and institutional investors alike, as an increasing share of institutional investors are using professional asset management services. The growing share of investors outside the core financial system tends to increase the system’s risk-bearing capacity, as traditional end-investors, typically not leveraged, can absorb any potential losses more smoothly. One should also acknowledge that thanks to significant efforts in the last ten years, investment funds in the EU are subject to an enhanced regulatory framework.
And for several years now, the Banque de France has been striving to improve the financial literacy of the general public, and particularly that of our younger generations. This has involved ongoing vocational teacher training in the framework of the 21 academic partnership agreements signed with the Ministry of Education thanks to our nationwide presence, as well as [slide 5] ambitious projects such as “Citéco”, the Cité de l’économie et de la monnaie. Citéco is an innovative and recreational museum dedicated to economics, money and finance, that will open its doors to the public at the end of 2018 in the newly renovated Hôtel Gaillard in the 17th arrondissement of Paris. 1/3  BIS central bankers' speeches  Therefore, the Banque de France plays the role of conductor of the French national strategy for financial education [slide 6], in order to mobilise and coordinate the activities of all stakeholders, be they associations, institutions or finance sector representatives. Through these partnerships, we can thus ensure that efforts are stepped up to raise awareness and train as many people as possible.

Andrew Bailey: The challenges in assessing capital requirements for banks Speech by Mr Andrew Bailey, Executive Director of the Bank of England, at the Bank of America Merrill Lynch conference, London, 6 November 2012. *  *  *  Thank you for inviting me to speak today. I want to talk about the challenges bank supervisors face in determining the appropriate approach to assessing the capital requirements for banks. Scarcely a new subject I know, but nonetheless one that is at the top of the agenda of regulators, both macro and microprudential. My starting point today is not whether banks are, or are not, adequately capitalised – I will come to that – but the framework by which supervisors assess capital needs, a subject that is attracting a great deal of attention. I will put my cards on the table at the start. I am not a believer that supervisors should rely on any single data point when assessing a given firm’s stability. We need to assess measures of capital, liquidity and leverage. The art of supervision is to look at a situation from several angles and seek thereby to identify weaknesses. Good supervision is about judgement. The psychologist and behavioural economist Daniel Kahneman has described good judgement as, “the product of a solid grasp of intuition coupled with empirical validation where possible”. There was too much box-ticking in the past, but I do not intend there to be in the future.
Following  4  For example, Hamilton (1977) notes the difficulties for the US administration in obtaining taxes to finance the American War of Independence 1775-1783: “Our revolutionary ancestors were willing to fight … for [the] country; but hardly anyone was willing to pay taxes for it.” (p. 14). Hall and Sargent (2022) compare the US financing of “three world wars”, where the third world war refers to the war against COVID-19. They find that tax financing was significantly lower during the corona pandemic than during the First and Second World Wars. 5 Rockoff (2015). The Vietnam War is an exception, to the extent that it can be described as a minor war. Part of the funding then came through printing money. 6 Bomberger and Makinen (1983). Another possibility is that the government simply refuses to pay its debts, which is of course associated with major problems with regard to future confidence. 7 Hanke and Krus (2012). 3 [14]  Russia's invasion of Ukraine, rising energy and commodity prices have of course been an important reason behind the increase in global inflation. War can also mean that people are forced to flee, which requires increased public spending in the countries where the refugees are received. This may have some effects on inflation in the recipient countries. The most significant example of huge waves of refugees is, of course, in connection with the Second World War.

A more recent example is the people fleeing from the war in Syria, and we are now seeing a similar development in connection with the war in Ukraine. Depending on the circumstances, war may also give rise to a period of sharply increased geopolitical uncertainty. This may mean that countries that are not directly involved in the war choose to arm themselves and thus increase public spending. However, greater uncertainty about the future may also mean that the private sector chooses to postpone investment and increases its precautionary saving. There are thus counteracting effects on aggregate demand and thereby on inflation. All in all, there are thus a number of different ways in which war can lead to inflation rising, both in individual countries and in the world economy as a whole. Four periods of high inflation since 1900 This is something that is quite clear when studying a longer time series for inflation. Figure 1 shows inflation in Sweden from 1900 onwards. Figure 1.
We have  BIS Review 115/2008  3  experienced many years of extremely good economic growth and low inflation. Now we must be prepared for high inflation, higher interest rates and lower employment possibly leading to a deterioration of the finances of many Swedish households over a couple of years. Monetary policy often comes into focus in this type of situation. The recent debate – is the Riksbank chasing inflation spectres? The Riksbank’s interest rate increases have been much discussed recently. It has been said that the Bank is chasing a non-existent inflation spectre, that the inflation target should be scrapped or reformulated, and that the Riksbank should take more notice of economic activity than inflation. To begin with, inflation is a real problem for many households. Inflation means that everyone gets less for their money. Oil, electricity and food prices have risen substantially. These goods are an important part of household consumption. Together food and energy comprise approximately one quarter of the CPI. The fact that, for instance, oil and food prices have risen so much here in Sweden is largely because these goods have become more expensive in the world market. Should the inflation target be reformulated? Some of the recent criticism has concerned whether the inflation target should apply to some other measure than the CPI. The idea is that monetary policy should stabilise around a measure of inflation that excludes import prices. The Riksbank is in any case unable to affect prices in the world market.

Stefan Ingves: Financial turbulence, monetary policy and inflation Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, to SACO, the Swedish Confederation of Professional Associations, Stockholm, 24 September 2008. *  *  *  When storms are raging in the world around you and the course is affected, it is important to keep focus on where you are heading. Take in as much information as possible and steer back towards the target in the way that provides the best journey home. In a way, this is how the Riksbank tries to conduct its monetary policy. The inflation target is to provide economic stability, in particular when there is turbulence in the world around us. The original idea was that I would come here today to talk about monetary policy. And I will do so. But the international turmoil, particularly in the financial markets, has escalated in recent weeks. I would therefore like to begin first by saying a few words about this, and about the measures taken by the Riksbank and others to counteract the effects of the financial crisis in the United States. The financial turbulence One can say that the Riksbank is active in two main areas. One is monetary policy. The other is what is usually known as financial stability – promoting a safe and efficient payment system, as it is written in the Sveriges Riksbank Act. To simplify, this means ensuring that payments in the Swedish economy can be made securely and efficiently.
For money to be a generally accepted medium of exchange, it must be possible to use it to buy goods or services not only today, but also tomorrow, and the day after, and so on. Money can therefore also be used as a store of value. However, money is not the only means of holding and growing wealth, and it is often not the most profitable. Although it does offer security and flexibility, unlike risky financial investments it generates little or no return. So what constitutes sound money? My answer is unlikely to come as a surprise: money is sound if it fulfils its functions as well as possible. And this depends on its value being stable. Only if this is the case will it be broadly accepted as a medium of exchange over the long term. Furthermore, as a unit of account, money that is stable in value makes it possible and easier to plan and calculate, and it is also suitable as a store of value. However, the importance of money that retains its value goes far beyond these three narrowly defined functions. Sound money contributes to preserving the real value of financial claims with fixed nominal amounts, such as savings deposits, bonds, employment contracts and pensions. It thus creates security and trust, which in turn promotes social harmony and cohesion. Money is therefore sound if it neither depreciates nor appreciates, i.e. if there is neither inflation nor deflation. But how can we measure the development of the value of money over time?

However, there are also many examples from history where paper money proved to be decidedly bad, as high inflation led to a rapid erosion of value with disastrous consequences in some instances for the economy, society and politics. The flexibility that is the defining feature of the paper money system is both its strength and its Achilles heel. Used properly, i.e. with the focus on the goal of value retention, this flexibility can contribute to the stability of economic development and the solidity of the banking system. However, things start to get dangerous when it is misused to solve political or structural problems by issuing central bank money – as advocated by the proponents of the aforementioned modern monetary theory, for example. The temptation to fulfil such wishes via the printing presses, by creating money out of thin air, is of course all the greater the more politicised monetary policy becomes. 8 The solidity of a paper money system therefore lies in three mainstays: a clear mandate for the central bank, setting as its target the preservation of price stability and thus ensuring sound money; protection from political influence by enshrining the independence of the central bank in law and actually putting this into practice; and healthy state finances. After all, experience shows that high government deficits mean increased political pressure on the central bank, and in cases where monetary policy has been politicised, there is a clear risk of significant currency depreciation sooner or later. When are bank deposits sound money?