samchain/econo-pairs-v1 huggingface dataset:
The idea was that, as there was no ex-ante commitment to possible public bail-outs, the risk of moral hazard in relation to risk management policies and investors’ decisions could be sufficiently contained. The recent crisis has however illustrated very clearly the limitations of this “constructive ambiguity” approach. Thus, during the crisis, and in particular after the collapse of Lehman Brothers, the authorities have openly recognised that bank failures – even if they are not particularly large or complex – can seriously impair financial stability, making bail-out a natural policy response. As a consequence, there were widespread bail-outs of creditors of banks under stress. These rescues have obviously confirmed the existence of an implicit guarantee for banks’ liabilities which constitutes a serious challenge for fiscal balances and a substantial distortion of the system of incentives for bank managers and fund providers. There is now broad agreement that in order to restore the socially desirable incentives and minimise the use of public resources, it is not enough to work on preventing bank failures by adopting appropriate regulatory and supervisory policies, but rather it is also necessary to be able to deal with non-viable banks in an orderly fashion and obviate the perverse dilemma between two important public policy objectives: preserving financial stability and protecting taxpayers’ money. To that end, the constructive ambiguity approach must be replaced by clear resolution rules which can be credibly specified ex-ante and swiftly implemented ex-post.

June and the first half of July showed the first signs of weakening inflationary pressure, this is still not enough to speak of a steady decline in the inflation rate. In July, households’ inflation expectations continued to rise. In these conditions, even one-off factors might have a longerlasting impact due to their secondary effects. To prevent this, it is essential to create conditions that would encourage the propensity to save. For this, we need higher interest rates. We should not tolerate high inflation expectations in order to prevent their anchoring at this high level and avoid a more significant increase in the key rate that would be needed further on in this case. The second topic is the economy. According to our estimates, economic growth sped 1/3  BIS central bankers' speeches  up considerably in the second quarter. High-frequency indicators show that Russia’s economy has bounced back to its pre-crisis levels. Output in two-thirds of the major industrial sectors already exceeds pre-crisis levels, and this upward trend continues. Oil production has not restored yet. Output has also not recovered in international air transportation and hotel and restaurant business. However, this was due to remaining anti-pandemic restrictions, rather than insufficient demand. Moreover, the pandemic drastically affected the structure of demand and supply. In my previous statement, I mentioned the changes caused by the transfer of a significant portion of employees to work from home, as well as the elevated level of inventories now formed by companies.
This list is only illustrative. It is not by any means exhaustive. The traditional means to address bad behavior are enforcement actions against the bad actors and the organizations where they worked. 1 This traditional response, in my view, is appropriate and I strongly support the actions that have been taken and that will continue to be taken. All enforcement actions, though, are essentially retrospective. Of course, we like to think that enforcement actions will not only punish but also deter. But I wonder if this hope is really a prospective strategy. We would better serve the public good if we could do something – anything – more forward looking, and complementary to what our enforcement colleagues are doing to deter future bad behavior. Ethical culture The new emphasis on an ethical culture within financial services firms arises from the policy interest in preventing some of the bad behavior that has been observed. Now I use the phrase “some of the bad behavior” deliberately. I fully embrace the goal of eliminating all bad behavior. But we cannot let the goal of perfection become the enemy of progress. We need to start making progress, so let us agree that perfection is probably not realistic. Even an organization with the strongest ethical culture will have episodic bad behavior. Although culture is no panacea, I believe that the ethical culture of an organization can improve the behavior of the people who work there.

Few would disagree with the following: The bad behavior that contributed to the Financial Crisis was evidence of a culture that was not strongly ethical. Let me also pose a challenge to those who are skeptical about the benefits of a strong ethical culture: If this is not a suitable method to prevent bad behavior by bankers, what alternative proposal do you advocate? The status quo is not acceptable. As a wise man once said, “Plan beats no plan.” The components of a strong ethical culture So what are the key components of a strong ethical culture? It is said that lawyers love a metaphor, and this lawyer is no exception. I like to think about ethical culture as if it were a package. The culture that we will have is derivative of what we put into the package, and there are clear choices to be made. The contents depend upon the type of organization, the kinds of people, and the nature of the skills needed to conduct the organization’s activities. Time will not permit me to cover this thoroughly, so let me cover a few items with a very broad brush. What goes in For starters, the conduct of the people in any organization will be strongly influenced by incentives. Let me mention the “big three.” Bankers, like lawyers, want to do [1] quality work, [2] with people they like and respect, and [3] receive fair recognition in return.
Over the past five years, significant efforts have been undertaken to modernise Malaysia’s retail payment infrastructure and migrate away from inefficient paper based payment instruments such as cash and cheques. Good progress has since been made, especially in the displacement of cheques. The annual decline rate had accelerated from an average of –1.6% in 2011 to 2013 to –10.1% in 2014 and –16.5% in 2015. Concurrently, there is also an increase in the uptake of electronic fund transfer services. The annual growth rate for the Interbank GIRO (IBG) had increased from an average of 18.8% prior to 2013 to 34.1% in 2014 and 2015. The Instant Interbank Funds Transfer (IBFT) service had also recorded encouraging growth where its annual growth rate of over 60% since 2011 had further increased from 67.8% in 2014 to 76.7% in 2015, signifying greater confidence in the use of e-payments. However, we must not be complacent. As we move forward, there are two technology trends that hold immense promise to revolutionize the payments market. The first is the proliferation of mobile technology and ubiquitous communications. Increasingly, mobile devices are the preferred channel for consumers to make payments conveniently from anywhere and at any time. The second is the ability to process payments and move funds instantaneously around the clock. Towards this end, Bank Negara Malaysia’s wholly-owned subsidiary MyClear has initiated a multi-year program to modernise Malaysia’s payment infrastructure.

The key thrust of this plan is to develop a new real-time Retail Payments Platform that will serve as both a catalyst and enabler for innovative payments in Malaysia. This should meet the needs of consumers and businesses who increasingly expect payments on-demand where funds are available to the recipient immediately. In this regard, I would like to call upon the financial industry to jointly work with MyClear in the development of such new real-time Retail Payments Platform. Conclusion Payment and Settlement Systems are the foundation that underpin the financial market infrastructure and serve as a catalyst for economic growth. Hence, efforts to promote the  BIS central bankers’ speeches  3  resilience, interoperability and competition of such systems are of utmost importance. This has been and will continue to form the key thrust in Bank Negara Malaysia’s policy work in delivering our mandate of fostering safe, efficient and reliable payment systems. There are immense opportunities and new sources of growth including expanding financial accessibility to the underserved that is made possible from greater standardization and interoperability of the payment systems, as well as, innovation. Hence, in today’s rapidly evolving and highly competitive environment, the financial community should capitalise on such enabling environment, and collaborate through standardisation and interoperability, to lower costs, foster innovation and deliver better value proposition and choices to their customers. 4  BIS central bankers’ speeches
As its mandate broadens, the likelihood that its actions will be seen as the right ones lessens. We are hardly able to cure all the ills of modern economies, let alone whole societies. So, we should keep on practicing restraint, both in the scope of the mandate we wish for, and in our communication on more general issues lying outside our direct responsibilities and outside the time frame over which we can influence the position of the economy in the business or financial cycle. Such restraint also enables us to communicate convincingly and effectively without needing to resort to strong words. At a time when even the central bank’s core mandate – monetary policy – has become quite a challenge to implement, such quality of communication is of utmost importance. As we head toward the ZLB, as we ponder or carry out unconventional monetary policy measures, and as we address the consequences of similar moves made by our colleagues, we must be sure that our words are read carefully and taken seriously. In such a world, we must also carefully scrutinize whether we are overestimating our ability to forecast the fundamentally uncertain economic system and identify its crucial elements, and  BIS central bankers’ speeches  1  consequently whether we are overcommitting ourselves in our efforts to reduce the uncertainty felt by economic agents.

The Governing Council does not react mechanistically to a single variable - whether this be a forecast, the exchange rate, unit labour costs or fiscal indicators - but rather takes into account the complete picture offered by all available and meaningful leading indicators of future inflation. In this context, the Governing Council analyses the economic reasons behind the projected risks to price stability. The appropriate monetary policy response to a threat to price stability will depend on the nature of the threat. The Governing Council can only understand the nature of the risk if it is presented with a full set of data. From these, it can attempt to identify the nature of the disturbance to price stability. Having identified the threat, an appropriate policy response can be selected and implemented. Internal forecasts of economic activity and inflation in the euro area can also contribute to the success of an appropriately forward-looking monetary policy. However, the Eurosystem should not be judged on, or held accountable for, the accuracy of its internal forecasts. Thus, publication of the forecasts cannot contribute to accountability. Rather, its performance in maintaining price stability in the medium term should be used by the public to judge the success of the Eurosystem. Allow me to say a few words on certain proposals made in the recent public debate, which may be deemed to suggest that the focus of monetary policy should be shifted towards objectives other than price stability.
The recent global financial crisis serves as a reminder that status quo is never good enough. Financial development is therefore a journey that should never end, with milestones along the way. BIS central bankers’ speeches  1  As we move on to the next stage of our journey, it bodes well with a saying that “Yesterday was a walk in the park. But tomorrow is a step in the dark.” While I would not exactly call our past events a walk in the park, there are approaching challenges that depict dark clouds above our path. The contextual trends and challenges that I am going to highlight tonight derive from technological developments, the ageing society, urbanization, and regionalization. Firstly, with technological developments, traditional barriers to entry were brought down, allowing non-banks such as fintech companies and cross-border players to the market, and helped reduce operating costs. At the same time, consumers expect better and more timely services. Banking is something that customers want to do “anytime and anywhere”, and they want to do it cheaply as well. While technology may help us reach our destination faster, it also dictates that we be more adaptive and responsive to changes. Banks that get stuck in the past will lose out quickly. A second challenge that put banks’ adaptability to the test is the shifting demographic structure of Thai population.

12  Anders Åslund: The Group of 20 must be stopped, Financial Times November 27, 2009. 13  Article IV, Section 3 (a) of the IMF Articles of Agreement. 6  BIS Review 22/2010  I would emphasize certain key principles:   First, systemically important countries need to collaborate effectively on consistent economic policies. Their success is vital not only for their own good, but also for that of others, including small open economies.   Second, this collaboration should be anchored in a multilateral and statutorybased system of representation, for example through constituencies, where smaller countries would participate, even if indirectly.   Third, the constituencies should have rotating representation, where small countries, at least periodically, could participate directly. Without such a global order, the interest in contributing to international efforts is certain to diminish. There can be no taxation without representation. Thank you. BIS Review 22/2010  7
35 For example, Albertazzi, Becker and Boucinha (2018) show evidence of the portfolio rebalancing channel from the ECB’s asset purchase programme. 30  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  New, highly granular data are also coming on stream on payment, credit and banking flows. Some of these have been used to help predict, or track, movements in economic activity. They have had some success. For example, in the US a dataset of over 12 billion credit and debit card transactions over a 34 month period 36  has recently been used to analyse consumption patterns by age, firm size, metropolitan area and sector. In time, it is possible these sorts of data could help to create a real-time map of financial and activity flows across the economy, in much the same way as is already done for flows of traffic or information or weather. Once mapped, there would then be scope to model and, through policy, modify these flows. This is an idea I 37  first talked about six years ago. Today, it looks closer than ever to being within our grasp. These are all areas where DAFM could contribute importantly to efforts to improve the quality and timeliness of data on the macro-economy and financial system. As is well-recognised, the scope for improvements in 38  the quality of National Accounts data is considerable. And those measurement challenges will only  become greater as we move towards an increasingly digital and service-oriented economy.

To date, they have focussed on items such as groceries and clothing. Although early days, the potential benefits in terms of increased sample sizes and granularity seem to be considerable. For example, the ONS have so far collected 7,000 price quotes per day for a group of 27  grocery items, which is larger than the current monthly collection for those items in the CPI. For GDP measurement, new sources and methods are also gaining ground. One recent study used satellite imaging to measure the amount of non-natural light emitted from different regions of the world. This has 28  been found to have a statistically significant relationship with economic activity. This approach could  potentially help in tracking activity in regions that are geographically remote, where statistical surveying techniques are poor or where mismeasurement problems are acute. A more down-to-earth example, used by the UK’s ONS and other statistical agencies, is so-called administrative data. This includes data collected by government agencies as part of their activities – for example, on tax revenue and benefit payments. In the UK, some of these data have recently become available for wider use through the government’s Open Data initiative, albeit subject to important checks. 23  Coyle (2014). Fouquet and Broadberry (2015). 25 Cavallo and Rigobon (2016). 26 Cœuré (2017). 27 See https://www.ons.gov.uk/economy/inflationandpriceindices/articles/researchindicesusingwebscrapedpricedata/august2017update 28 Henderson, Storeygard and Weil (2011).
News conference  15 December 2022, 10.00 am  Introductory remarks by Martin Schlegel I am pleased to give you an assessment of current developments with regard to cash. Since June, after many years of strong growth, we have seen a significant decline in banknote circulation. To contextualise this decline of approximately 10%, let me first say a few words about the above-average growth in recent years. In the period since the 2008 financial crisis, the value of banknotes in circulation grew, on average, more than twice as fast as in the two preceding decades – by around 6% instead of 2.5% per year (cf. chart 1). Between mid-2008 and June 2022, the value of banknotes in circulation more than doubled overall, from around CHF 41 billion to CHF 91 billion. This sharp increase was driven in particular by the desire of companies and private individuals to hold cash as a store of value. There was particularly strong demand for the large denominations, such as the 1000-franc and 200-franc notes (cf. chart 2). We see two reasons for the increased demand for cash as a store of value over the last 15 years or so. First, there were multiple periods of high uncertainty, notably the financial crisis and the coronavirus pandemic. Cash tends to be popular as a secure store of value during such times. Second, the general decline in interest rates – and negative interest rates in particular – also contributed to the increased demand for cash.

We will present the results in the spring of next year. Page 2/2
Maintaining an exchange rate peg over such a long time span is hard, though changes to the composition of the currency basket allowed some flexibility. Throughout this period, the lira was only devalued once, in 1992, in the wake of the turbulence seen in Europe, which saw the pound sterling ejected from the Exchange Rate Mechanism (ERM) and the devaluation of the Italian lira among others. Otherwise, the Bank’s determination to maintain the peg never wavered. We never blinked. The ability to maintain the peg may have been partly due to restrictions on trade and stringent controls on capital movements, at least in the early decades. By the mid-1990s, however, trade and financial market liberalisation meant that these factors became less and less important. Instead, major reforms in 1994 brought about fuller independence for the Central Bank and a gradual liberalisation of interest rates amid increasing recognition that, in the absence of capital controls, monetary policy had to be more actively oriented towards maintaining the peg. Throughout, the lira was buttressed by a healthy stock of external reserves. The Central Bank of Malta was legally bound to maintain reserves equivalent to at least 60% of the monetary base, but in 3  For a review of Malta’s monetary and exchange rate policy over the years, see Anton Caruana Galizia (1989) “Malta’s exchange rate policy since the breakdown of the Bretton Woods system” in the Central Bank of Malta Quarterly Review, June 1989 and Aaron G Grech (2003) “The framework of monetary policy in Malta”.

I would now like to turn briefly to the experience of the Central Bank of Malta in dealing with these policy issues over almost 50 years of its existence. Malta is an extremely small, open economy, highly dependent on international trade for its prosperity. The Bank’s monetary policy objective was initially set as the promotion of “the orderly and balanced development of Malta and a rising level of employment and income consistent with the maintenance of monetary stability in Malta and the external value of the currency”. In practice, among these multiple objectives, the Bank gave priority to maintaining stability in the external value of the Maltese lira (or pound as it was initially known). An exchange rate peg was seen as necessary to support foreign trade and inward investment from abroad. Moreover, given Malta’s  2  For an account of the euro area’s exchange rate policy during the first decade of its existence, see Lorenzo Bini Smaghi, “The euro area’s exchange rate policy and the experience with international monetary coordination during the crisis”. Speech delivered on 6 April 2009 in Brussels. 2  dependence on imported goods to satisfy domestic consumer demand, the peg was also seen as a prerequisite to safeguard domestic purchasing power. 3  Throughout its existence, therefore, the  Bank’s monetary policy orientation was always focused on a fixed exchange rate as the nominal policy anchor.