samchain/econo-pairs-v1 huggingface dataset:
Traditional banks are taking the new technologies on board, occasionally through strategic alliances with new technology firms. New companies are also being incorporated into the sector, ranging from small start-ups to large firms. The new firms must, however, win the confidence of consumers and investors,  6/7  something that traditional financial institutions have secured over a long period of time, anchored by strong regulation and financial supervision. From the standpoint of the regulators, the fintech challenge affects both prudential and consumer protection policies. From the prudential perspective, regulators must strike a balance between catalysing innovation and the efficiency that new technologies can provide, and maintaining a sound regulatory framework. The guiding principle should be to apply the same regulation for the same type of financial services. In this respect, as the presence of fintech increases, it might be useful to put greater emphasis on the regulation of services, instead of placing it on the institutions that provide these services. Turning to consumer protection policies, it is vital that investors and consumers should understand how the new services function and the attendant risks, including, for example, credit, cyber-security and privacy-protection risks. Here we should strengthen our information and financial education policies. We are mindful at the Banco de España of the need to step up our efforts in this area.

Indeed, last week we approved a reform whereby, under our Directorate General Operations, Markets and Payment Systems, a new Associate Directorate General Financial Innovation and Market Infrastructures was created to assume the competencies in these areas, centralising in this new structure the functions previously assigned to different units in the Bank. This Associate Directorate General will have to face two families of problems. First, the questions that arise with the emergence of new agents and new operators in the financial markets, providing services that already existed (but in a different way), or services that did not exist, namely new types of financial services. As regards these new market players, two groups of problems are posed: on one hand, those referring to matters of competencies, i.e. all agents and operators should be subject to the same demands or regulations; on the other, investors and consumers should be protected and alerted as to the new risks, just as they are in respect of the former operators and their products. The second family of matters which the new Associate Directorate General of the Banco de España must face concerns new technology and its application in financial markets, something which, in these times of continuous innovation, is obviously of great importance. Thank you for your attention. 7/7
We need to avoid having ex ante criteria that are so strict that in practice they prevent the ESM from being used preventively. These actions should also be supplemented by a common fiscal capacity: these words are probably less contentious than a common “budget”, but as the President of the ECB wrote last week, we shouldn’t shy away from its stabilisation function. If so, it would support the single monetary policy and price stability. ** I will conclude by quoting President Mário Soares, one of the key actors of Portugal's accession to the European Community: “Recent history has shown that rather than deferring crises we must confront them head on, with a determination to overcome them9”. Let us face the challenges for 2019 with this determined spirit: Brexit and the European elections as well as national domestic elections including in Portugal, and now in Spain. Our role as European central bank is to be faithful to our mandate while remaining totally independent. But we also have to be more attentive than ever to our environment: we have to be ready to react in response to economic uncertainties, and we must plead for a sensible strengthening of European sovereignty. Thank you for your attention. [i] See Article 127 of The Treaty on the Functioning of the European Union. [ii] Hartmann, Philipp, Smets, Frank, “The first twenty years of the European Central Bank: monetary policy”, ECB Working Paper Series, No 2219, December 2018.

10  BIS Review 145/2009  Table 2 Economic growth, current account and inflation (annual change, percentage) 2007  2008  2009 (f)  2010 (f)  GDP  4.7  3.2  -2.0 to -1,5  4.5 to 5.5  Domestic demand Domestic demand (w/o change in inventories) Gross fixed capital formation Total consumption Goods and services exports Goods and services imports  7.8 8.2 12.0 7.1 7.6 14.9  7.4 7.9 19.5 4.2 3.1 12.9  -6.2 -3.5 -12.9 0.0 -4.7 -13.8  6.7 3.7 7.4 2.5 4.9 9.0  Current account (% of GDP)  4.4  -2.0  1.9  1.2  CPI inflation December CPI inflation CPIX inflation December CPIX inflation CPIX1 inflation December CPIX1 inflation  4.4 7.8 4.0 6.3 4.1 6.3  8.7 7.1 8.4 8.6 7.8 7.7  1.7 -0.8 2.8 -1.2 2.8 -0.6  1.5 2.8 1.0 2.6 1.2 2.6  (f) Forecast. Source: Central Bank of Chile. BIS Review 145/2009  11
Companies should think carefully where they wish to position themselves in the long term and have a clear plan on how to get there. There might be companies that may aspire to grow and be major providers in their own lines of business. There might also be companies that want to position themselves as a complete solution providers or becoming principals with large agent networks. And then, there are companies that have been very successful as agents, building strong partnerships with their principals while keeping operating costs low. In fact, our engagements with the industry reveal that many agents are doing better than before in terms of business flows and profits. The regulatory framework in Malaysia is specifically tailored to accommodate all these options, supported by operating guidelines that is efficient and proportionate to risk. A company that takes on more risk and business responsibility must be prepared to meet the higher requirements that reflect the scope and levels of complexity of the business, including  2  BIS central bankers’ speeches  the kind of management team that needs to be in place, the board’s profile and level of engagement and their ability to provide strategic leadership to the company. Companies also need to consider changes to processes as well, as investments in critical systems is important to support operations over the long term. Most importantly, there must be a clear strategy of execution and an honest assessment of the company’s ability to implement such a plan.

Bahrain and Malaysia has one of the strongest relationships among the countries in the Middle East. It was further cemented with the signing of a Memorandum of Understanding between the Central Bank of Bahrain and the Central Bank of Malaysia in 2001 to jointly develop Islamic finance internationally. In fact, an 80-strong Malaysian delegation led by HRH Raja Dr. Nazrin Shah, Crown Prince of the State of Perak and Malaysia’s financial ambassador, visited Bahrain in October 2009 to forge greater financial ties with the Bahraini Islamic financial community. It is heartening to note that common grounds have been reached on the standard contracts that the Association of Islamic Banking Institutions Malaysia or AIBIM, and the International Islamic Financial Market, or IIFM, have produced. This is invariably a reflection of the growing cross border harmonisation of interpretations of concepts and agreements. Furthermore, AIBIM’s interbank Murabahah master agreement (IMMA) and the corporate Murabahah master agreement (CMMA), recently launched in Malaysia, would further unlock the potential of the Malaysian Islamic money market, which saw around $ billion worth of transactions daily last year. In the global scene, it is estimated that the global commodity murabahah market is valued at more than $ trillion, giving rise to a huge business potential. I would encourage you to focus more resources here as it is one of the key areas that we can jointly promote in our regions.
It can therefore be said that employment and capacity utilisation directly affect the Government’s monetary policy to the extent that compliance with the inflation target only takes place gradually within a period of two years. This is to avoid too great fluctuations in the real economy – in employment and capacity utilisation otherwise. However, unemployment and capacity utilisation affect inflation and are therefore included as components of inflation forecasts. These circumstances therefore also play an indirect role for the Riksbank’s monetary policy. The exchange rate is not an objective for Riksbank policy although it also has a direct and indirect effect on inflation. An appreciation of the exchange rate will have, all other things being equal, an immediately dampening effect on import prices. As import prices are included in CPI, inflation will be reduced. The exchange rate will affect inflation indirectly by affecting demand. A higher real exchange rate reduces exports and thereby reduces the level of activity with some time lag. This indirect effect tends to reduce inflation in the somewhat longer run. Supply is also affected by the exchange rate in time by (initially) affecting import and export prices, which eventually spreads to other prices and wages. By the direct and indirect effect of the exchange rate on inflation, the exchange rate plays a role for the Riksbank’s policy in those cases when a change in the exchange rate is expected to be, or proves to be durable.

A good illustration of this is the industrial worker’s wage in 1975 and 1994. In 1975, an industrial worker earned 27 kronor per hour on average while in 1994 the hourly wage was SEK 95. However, if 1975’s hourly wage is recalculated at the 1994 price level, the 1975 wage was worth SEK 107 in 1994. Thus, twenty years of trade union struggle when nominal wages rose by an average of 6.9 per cent per year, resulted in a decline in real wages of 12 kronor per hour in 1994’s prices. However, it was not just trade union policy that failed. It was just as much a failure for the Government’s stabilisation policy. How could it have been so bad? Stabilisation policy activism The large devaluation of 16 per cent that the newly-appointed Palme Government carried out in October 1982 was what could be called an offensive (aggressive) devaluation, on top of that that had taken place in 1981. Through the 10 per cent devaluation in 1981, the real cost situation had been somewhat normalised and the competitiveness of Swedish industry restored. Now Sweden was to get off to a flying start. This was also the case as there was an upswing in the USA at that time and an exceptional long boom.
In short, the FPC and PRA have many different, independent policy decisions to make. Ensuring both financial stability and safety and soundness of firms, requires both policy sets. The issue is sometimes raised as to how systemic stability and safety and soundness interact – especially during or after a financial downturn, when defensive actions by financial firms may be pro-cyclical. This is perhaps the period when cooperation and communication between the committees comes to the fore most strikingly, and forward guidance on policy can be most effective and necessary. The FPC and MPC will want to make sure that the regulatory system is not pro-cyclical – they will want to avoid anything that reduces the capacity for credit creation when the wider economy needs most support from its financial sector. One might worry that supervisors would see the general relaxing of requirements – the use of capital and liquidity buffers – as weakening the safety and soundness of their firms. In fact, the PRA also needs to recognise the relevance of the economy-wide situation to its objectives. Weakness in the real economy in a general downturn is one of the biggest threats to the safety and soundness of firms, as it can lead to substantial impairment of asset values. More than this, the consideration of capital and liquidity is more subtle than many people seem to appreciate. It is often asserted that requiring firms to hold more capital automatically reduces the capacity to lend. That is not the case.

•  The MPC’s objective is to deliver price stability – defined by the Government’s inflation target of 2% – and, subject to that, to support the Government’s economic objectives including those for growth and employment. •  The FPC’s objective is to protect and enhance the stability of the financial system of the UK – and, subject to that, to support the Government’s economic objectives including those for growth and employment. 1  See for example, R Bryant (1995) International Coordination of National Stabilization Policies. Brookings, Washington, and the many references therein. 2  See for example some of the material in N Acocella, G Di Bartolomeo and A J Hughes Hallett (2013), The Theory of Economic Policy in a Strategic Context, Cambridge University Press, Cambridge. BIS central bankers’ speeches  1  •  The PRA has two statutory objectives: to promote the safety and soundness of deposit takers, insurers and major investment firms and, specifically for insurers, to contribute to the securing of an appropriate degree of protection for policyholders. It also has a secondary objective, to facilitate effective competition in the markets for services provided by PRA-authorised firms. The PRA Board The PRA Board is the least well known of the 3 committees and so I want to say a few words about how it operates. I have been attending as an observer since I moved to the PRA on 1 June.
Listening to my presentation, you will no doubt have concluded that the process of demonetisation of gold is well under way and that one can reasonably expect that the gold parity of the Swiss franc will be abandoned in the spring of next year. Formally, the demonetisation of gold will give the SNB sufficient room for manoeuvre to become active on the market. Gold transactions could thus be scheduled to begin next year when the legal framework will be in place. Greater uncertainty surrounds the question of the allocation of excess reserves, but this will have no impact on our sales intentions. As no precise date for the beginning of our sales activities could be set, I will limit myself to indicate to you in what spirit we plan to approach this question. In my opinion, two observations seem essential: First, as a major holder of gold, the Swiss National Bank has no interest in adopting a strategy which would push the price down. We know that 1300 tonnes of gold cannot be absorbed by the market in a short period of time. We therefore are considering distributing the sales over a period of several years. Second, we intend to keep important gold holdings. Once the sales programme has come to an end, gold will continue to play an important role in our monetary reserves. The recent revision of the Constitution has led to the stipulation that we should maintain “sufficient” gold reserves.

The SNB will be allowed to evaluate its gold holdings at their market price, and a revaluation surplus will appear on our balance sheet. Technically, the SNB will also be able to buy or sell gold on the market. 3.2 Second stage: transfer of excess reserves The recently revised Constitution and the new Federal Law on Currency and Payment Instruments are not sufficient as a legal basis for allowing the National Bank to transfer excess reserves for external use. A special constitutional basis must be created for this purpose and then specific legislation will have to allow the realisation of concrete projects (law on the Swiss Foundation for Solidarity, for example). 5  BIS Review 73/1999  Consequently, a second revision of the constitutional article concerning the SNB is now being drafted. Among other things, this new article provides for the possibility to transfer, outside the SNB, excess reserves deriving from the revaluation of the gold stock. Deliberations on this article have just begun in Parliament. If everything goes well, the article could be approved by both houses before this summer. Afterwards, in compliance with Swiss regulations, the draft of the new article of the Constitution will be submitted to the voters and the cantons for approval. In Switzerland, every amendment to the Constitution must reach two majority votes: a majority of the citizens’ vote and a majority of the cantons approving the revision. This vote could take place in spring 2000, i.e.
Most of them were industry-oriented with special tax advantages, but with a fragile financial base and a lack of managerial integrity and experience. Against that background, the system was highly inefficient and proved poorly effective because it was unable to develop its role of channelling saving to the most productive uses and, without any doubt, it held back economic growth. At the same time, the Spanish regulatory and supervisory framework was weak and outmoded, based mainly on a simple leverage ratio. In turn, supervision was geared towards formal compliance with administrative regulations. The need for a change in the supervisory framework to preserve the soundness of the banking system became apparent when the oil crisis of the early 70s prompted the Spanish economy into a profound recession, leading to the deepest crisis of recent Spanish banking history. Up to 50 banks went bankrupt, involving 20% of the deposits of the banking system. It is interesting to analyse the effect of the crisis and the limitations of the regulatory and supervisory framework at that time, in the light of the framework set by the Core Principles [for effective Banking Supervision] developed by the Basel Committee on Banking Supervision. Allow me to summarise the main group of principles that would have been breached. First, the principles related to licensing criteria would not have been accurately met. Indeed, the process of licensing did not consist of a proper assessment of the fitness and propriety of Board members and senior management, including their strategic and operating plan.

Most have accumulated massive international reserves, well in excess of what would be needed for precautionary reasons. All in all, this paints a very different picture as compared to past episodes of global turbulence, when these economies used to be not only “influenced” by the ups and downs of the changing risk preferences in global financial markets, but simply “driven” – even “drowned” – by them, sometimes regardless of their economic fundamentals. In my view, this separation from the main stream of the turbulence constitutes an achievement in itself. From other stand point, it is certainly striking that in this period of global financial turbulence inflation is identified as the key economic challenge for emerging economies. Indeed, the rise of inflationary pressures on food prices derived from the commodity boom, is becoming a very worrying concern. The large change in relative prices that underlies this prolonged boom is having a stronger impact on developing economies, with very negative and substantial effects on the well being of the poorest portions of their populations. Therefore, as inflation creeps up the concern of policymakers deepens, not only in the sphere of macroeconomic stability, but beyond. In connection with this, the fact that monetary policies have remained focused on inflation stability in most emerging market economies is an additional novelty to mention in the context of the present turmoil.
The so-called vulnerable groups, which according to the Swedish Public Employment Service will have difficulty finding work, include, for instance, young people with little education and people born outside of Europe. As shown in Figure 5, the percentage of people registered as unemployed and belonging to vulnerable groups rose in 2008 and 2009. This percentage has since remained at a level that is much higher than for groups with a stronger position. 11  See Statistics Sweden’s report “Integration – a regional perspective”, 2010. BIS central bankers’ speeches  9  Figure 5 Total unemployment broken down into vulnerable and non-vulnerable groups Percentage of register-based labour force, seasonally-adjusted and trend-adjusted statistics 12  12  Vulnerable Non-vulnerable Total  10  10  8  8  6  6  4  4  2  2  0  0 04  05  06  07  08  09  10  11  Note: The group of vulnerable people includes those with only secondary-school level education, those in the age range 55–64, those born outside Europe, and those with disabilities. Source: Swedish Public Employment Service  Despite the recovery in economic activity in 2010 and 2011, the percentage of employed in the most vulnerable groups thus hardly declined at all. Almost 60 per cent of the total number of persons registered as unemployed belongs to groups in the labour market that experience difficulty finding jobs quickly.

Calculating equilibrium unemployment after the fact is difficult and requires a number of assumptions. Serious attempts have been made, but as shown, they have had varying results. At the same time, monetary policy is forward-looking and is thus guided by forecasts of economic development. However, assessing the level of equilibrium unemployment in several years is even more complicated. And, as I mentioned earlier, even if we could know what the level of equilibrium unemployment would be further ahead, this would give us no guidance for monetary policy in the here and now. The economy is regularly subjected to structural changes affecting equilibrium unemployment. And we have limited knowledge of how the adjustment from one equilibrium rate to another occurs, or how long it takes. This means that using equilibrium unemployment in practical monetary policy is not uncomplicated. It is therefore important to closely monitor all of the statistics that reflect conditions on the labour market, which we already do. Monetary policy can primarily affect unemployment in the short term, via aggregate demand. Here I can mention that several debaters have previously claimed that an incorrect balance in monetary policy has made a significant contribution to the negative developments in the labour market. Naturally, we should not conduct a monetary policy that leads to demand being unnecessarily low and to unemployment becoming higher than it would have been because we single-mindedly react to the risk of inflation rising.