samchain/econo-pairs-v1 huggingface dataset:
Today, the euro is providing market stability, which is also beneficial to third currencies like the Swiss franc. In monetary affairs, size does not really matter, but the rules of the game are more challenging for small countries than for large economies. Small countries have no choice but to respect market realities. They have to accept exchange rate flexibility even if, in the short run, some exchange rate development might interfere with the interests of their export sector. If they were to complement inflation targets with specific exchange rate objectives, they would create market confusion and destabilise expectations. The implementation of a clear and coherent monetary strategy is of the essence. In my view, smallness in combination with monetary independence and flexible exchange rates is a strength rather than a weakness. For us, being able to set our own monetary policy has meant that we could react to country-specific shocks. Had we joined the euro area, we would not have had this flexibility. Furthermore, monetary independence is attractive for small open economies, because policymakers can concentrate on national data when setting interest rates. In a monetary union, data from different countries have to be combined. Also, the decision process in the union is more complicated, since there are diverging interests to be reconciled. As a consequence, monetary policy is more inertial than in a small open economy with a currency of its own.

Also ‘clipping’, that is, shaving off part of the material, was fairly widespread. This led to a phenomenon that many years later became known as Gresham’s law. It says that in commerce ‘bad coins’ drive out ‘good coins’ as the latter are kept for saving purposes. Mistrust in the coin system, or even its entire breakdown, was often the unhappy consequence. Another issue was the plethora of mints that continued to grow in number as technology spread. Fast forward, and at the mid-medieval period it had become fashionable for every European kingdom and principality to issue its own coins. With production costs lower than the coins’ value, this was a useful source of income to finance the frequent wars at the time. But with multiple coins drifting around and uncertainty about their true value, it was essentially a mess. However, where there is chaos innovative minds see opportunities. During the 12th century, in the northern part of Italy, a new type of institution emerged. These specialised in exchanging foreign coins for local ones, not unlike present day foreign exchange dealers. This reduced the problem with the many coins causing much confusion. Even more advanced, some of the new institutions started to swap coins for bills of exchange that could be used in local trade. 3 [15]  The medieval coin-exchange providers brought banking to Europe, it is often said. Initially, they only handled deposits, as charging interest was viewed as usury by the powerful church.
They were not two remote tail risks that both happened to materialize, or just a bad coincidence. There have been too many examples of other misconduct to list. Wells Fargo is the most recent example, but serious misconduct is not confined to a single jurisdiction or a business model. The evidence, which now stretches over a decade, has only reaffirmed my initial belief that there is an industry-wide problem. In light of these continuing and widespread failures, my colleagues and I recognize the importance of culture—that is the unwritten norms and accepted practices of an organization. The culture of each firm will necessarily be its own. But the pervasiveness of problems—across firms and countries—points to common, industry-wide norms that need attention. An industry-wide problem needs an industry-wide solution. I also think that, when the problem is cultural, any solution must be industry-driven. It is the public sector’s job to establish and enforce rules, but rules face some inherent limits in shaping conduct and behavior. It is natural to adapt to the behaviors that we observe around us. A common illustration of this point is the speed limit. Most drivers move with the flow of traffic. They pay less attention to a number posted on a sign. This is not to deny the necessity and importance of regulation, or to criticize any of the particular rules imposed in response to the financial crisis. But, we also must recognize that it is impossible to create a rule for every situation.

Cecilia Skingsley: Experience with macroprudential policies Summary of a speech by Ms Cecilia Skingsley, Deputy Governor of the Sveriges Riksbank, at a workshop arranged by the Committee on the Global Financial System, BIS, held at the Hong Kong Monetary Authority, Hong Kong, 10 August 2015. *  *  *  Since the global financial crisis, several countries have started implementing macroprudential policies. This workshop has provided us with the opportunity to deepen our knowledge regarding how different countries choose, calibrate and implement different kinds of macroprudential instrument. We have also gained a greater understanding of the efficiency of these instruments, as well as of how different countries incorporate macroprudential settings in the calibration of monetary policy. Although we have come a long way the past few years as regards setting up institutional frameworks and developing tools, macroprudential policy is still a relatively new policy field in many countries and there are many important issues that need to be addressed. I would like to elaborate on three of these issues. The first is the challenge of determining the proper mix of policy instruments and the right balance between them, and deciding how fast and resolute our actions should be when imbalances are building up. For example, on the one hand, we know from international experience that credit growth can be difficult to curb once it starts accelerating. This would speak in favour of prompt and strong measures.
The moving of manufacturing and services to other countries need not mean higher unemployment and lower growth if innovative forces are equally strong in the country from which the jobs are disappearing. In addition, flexibility in the labour market needs to be good. Measures to facilitate for the labour force to move between sectors are crucial, in order to avoid long-term unemployment, for example. Skills development and retraining opportunities must be offered to those losing their jobs in the sectors that are closing down. The adjustment process can be painful for those involved, but structural change is also a positive force. Lower costs and productivity gains enable investment and employment opportunities to move to other, more refined products and services. Old sectors or companies that are pushed out of the market create scope for new employment in areas where the country concerned has a comparative advantage or within domestic services production that does not compete to the same extent as the manufacturing industry. It should also be borne in mind that many rapidly-growing low-cost countries like China will probably increase their imports as much as their exports. What can we offer these countries in the future? The areas where we have comparative advantages contain future export potential and employment opportunities. Monetary policy challenges The fact that prices of imported goods have tended to be lower than we had earlier expected over a period of time raises the question of what measure of inflation we should concentrate on.

By influencing demand in the economy, we try to steer inflation 1-2 years ahead towards the target of 2 per cent. However, we conduct what is known as flexible inflation targeting. The Riksbank can choose to disregard effects that contribute to inflation deviating temporarily from the target. This occurs on a regular basis with regard to, for instance, indirect taxes, household mortgage interest expenditure, or supply shocks that are assessed as temporary. In practice, monetary policy is now primarily based on a measure of inflation, UND1X, which is adjusted for mortgage interest expenditure and the direct effects of changes in indirect taxes and subsidies. Moreover, if a shock should contribute to inflation deviating substantially from the target two years ahead, an assessment is made of how quickly it should be returned to target, in order to avoid unnecessary fluctuations in the real economy, that is, growth and employment. The Riksbank published a clarification of monetary policy in 1999, which repeated the original target wording but also made clear how these temporary effects would be managed, as well as substantial deviations from the target. Why an inflation target? The main purpose of introducing a price stability target was to break the pattern of inflation shocks, devaluation and poor real growth. If we look further back in time, periods of economic prosperity appear to have been connected with a low, stable inflation rate (Figure 2). Price stability does not only provide better and more secure conditions for making economic policy decisions.
I should add that the International Association of Insurance Supervisors (IAIS), a fellow association of supervisors in the insurance area, is now discussing a supervisory framework that would apply to all insurance regulatory systems globally. Evolution in risk management and the reform of financial supervision should complement and reinforce each other, and the progress in each area will be influenced by the work underway globally to revise accounting guidelines. The Geneva Association has taken a great interest in this topic, so I will conclude my remarks with some brief thoughts from my perspective on the convergence of accounting standards, advances in risk management, and supervision. II. Trends across financial services sector  Allow me to begin with an overview of recent trends in risk management. Last year, a body representing major financial supervisory agencies conducted a study of 31 banks, securities firms, and insurance companies in 12 jurisdictions. This body - called the “Joint Forum” - consists of expert supervisors from member agencies of the Basel Committee, the International Organisation of  BIS Review 32/2004  1  Securities Commissioners (IOSCO), and the IAIS. The Joint Forum seeks to identify best practices and develop guidance for activities across the financial services sector. In its report, which was published in August 2003, the Joint Forum identified two important and recent trends among large, complex firms engaged in banking, securities, or insurance, or in some mix of these activities. a.

Extraordinary growth in practices such as securitisation and in the use of sophisticated derivative products allowed banks to transfer credit risk in ways that the 1988 Accord does not capture. In addition, some banks began to manage their exposures to operational risk separately and as a comprehensive practice comparable to the management of credit or market risk. By the late 1990s, it became increasingly clear to leading banks and their supervisors that the original Accord no longer provided meaningful measures of risk for the most sophisticated banking organisations. As a result, the Basel Committee and others began to discuss ways to revise the existing capital rules to account for these advances. Supervisors sought more than a simple revision of the existing framework. We wanted to align our capital requirements more closely with the best measures of economic risks that banks actually face. We sought furthermore to fortify the stability of the banking sector so that banks could continue to serve as a source of credit through good years and bad. In our view, promoting financial stability will benefit not just banks, but also other businesses and consumers as well. To incorporate the latest advances in risk management, and to develop a more forward-looking approach to supervision, the Committee embraced a “three-pillar” approach to capital requirements. Rather than simply setting out a static minimum requirement for capital levels, the new capital framework will rely on three mutually reinforcing policy approaches.
Moreover, our statistics have been integrated into the euro area accounts, which provide an overall picture of the euro area economy. The next milestone is the release of the new investment funds statistics, today. For some years, the ECB has already published un-harmonised and partly estimated euro area investment fund statistics, at a quarterly frequency. Today we will present, for the first time, harmonised investment fund statistics that cover all investment funds resident in the euro area. This includes data for the main fund types such as bond, equity or mixed funds, but also other types of funds, including hedge funds. Our new dataset contains much more detailed breakdowns both on the assets held and liabilities issued by investment funds. The data provide, for example, detailed information on the residency and sector of the issuers of securities and shares held by the funds. New information is available, as well, on the residency of the holders of the shares issued by euro area investment funds. In addition to the detailed quarterly information, the ECB now also publishes key monthly information on the outstanding amounts and net sales of shares issued by the funds. A further important improvement concerns the timeliness of the publication of these statistics: as from 2010, the statistics will become available after one-and-a-half months (compared to 3-and-a-half months in the past). There are many reasons why high quality statistics on euro area investment funds are important for the ECB’s monetary and financial analysis.

The financial crisis clearly demonstrated that high quality and up-to-date statistics are indispensable to policy makers and market participants alike. Thank you very much for your attention. Now, the Director General Statistics, Mr. Steven Keuning, will present more detailed features and the first results of the new statistics. Following his presentation we stand ready to answer your questions. 2  BIS Review 165/2009
In such a world the right of the holder and the obligation of the issuer to be able to convert all private money into Bank of England digital money at par and on demand would secure the anchor currently provided by cash. The second consideration is to ensure that there can be competition and innovation in the development of new functionalities using tokenised money. Given the network externalities around money and the likely cost of developing robust and risk managed private tokenised money like stablecoins, it is possible that the development of digital settlement assets will converge on a few large players who will dominate and perhaps control innovation in payment services. We have seen a similar dynamic in the emergence of large internet platforms and marketplaces[18]. The Bank and Treasury consultation paper proposes a ‘platform’ model of the Digital Pound in which the Bank would provide the digital settlement and central transfer mechanism and the private sector would provide the wallets and consumer facing payment services. The Digital Pound would therefore be available to a wide variety of private sector innovators who wished to develop tokenised payment related services but do not wish or are not able to issue their own tokenised settlement asset. There are many other extremely important considerations, such as privacy and financial stability, around the possible introduction of the Digital Pound. These are discussed in the consultation paper and I do not want to detail them today.

There are I think strong arguments to keep these two models separate and require banks that wish to issue payment stablecoins under the new regulatory regime to do so through legally remote and otherwise distinct entities. I want to turn now to the third potential development: the issue of a central bank digital currency either for retail or for wholesale purposes. As many here may know, the Bank and HM Treasury published a consultation paper in February on the Digital Pound – a Sterling digital currency that would be issued by the Bank of England for general purpose retail use. No decision has been taken to implement the Digital Pound but the Bank and Treasury’s assessment is that it is likely to be needed if current trends in payments and money – some of which I have been discussing – continue. This assessment rests on two main considerations. The first is the need to anchor the value and robustness of all monies circulating in the UK. Physical cash issued by the Bank plays an anchoring role at present in a world in which only commercial banks issue private money. If future trends continue, cash use is likely decline further and cash itself will become less is useable in all everyday transactions, for example if internet commerce grows and if merchants increasingly accept only digital payment. At the same time, new, non-bank players are likely to enter the scene, issuing private money, such as stablecoins, for payment purposes.
The challenge to make the domestic employment of savings both more efficient and more attractive is one which must in part be addressed at the macroeconomic and political level. But it is also be necessary to develop the financial instruments and institutions to facilitate better intermediation within the domestic economy. In scope this might include anything or everything from basic depositbased savings schemes for the small saver, through collective investment instruments, to the development or enhancement of the wholesale stock and bond markets. And, as I have already noted, there is a strong argument that the disposition of funds should be on a voluntary basis and according to market principles. All of this leads me, by what has been an extremely circuitous route, to the point which I would wish to highlight to this audience today. Getting your firm’s name onto the next tombstone for some highprofile international syndication, which may even qualify you for a photograph in one of those glossy monthlies, is all very well. But what about business opportunities to improve domestic intermediation in various countries? Of course, I am yet again exaggerating in order to make the point, for I know that most of you are already involved closely in domestic markets, not least Hong Kong’s; but the  BIS Review 52/1999  2  need for improved domestic intermediation in this region as a whole is being voiced with increasing frequency by officials of governments and international agencies, financiers and academics.

In that sense we may be a victim of our own success on the exchange rate front, although I would not wish to place too much weight on this point - it may be a viable alternative only for a minority. However, if funding needs can be properly satisfied via alternative routes, we ought perhaps to rest content. Our role at the Hong Kong Monetary Authority is to help ensure that the infrastructure will allow the market to develop if borrowers and lenders wish it to, rather than to force the pace artificially. I believe, however, that there may be a stronger underlying interest in debt instruments among prospective borrowers and lenders than is currently visible on the surface. The move to list Exchange Fund notes on the Stock Exchange and the advent of the Mandatory Provident Fund are examples of potential significant new sources of demand for debt instruments. It is a challenge for all of us to identify and exploit these and any other pockets of latent interest. The Hong Kong Monetary Authority is in regular dialogue with the Hong Kong Capital Markets Association and we maintain an open mind, and an even more open ear, to ideas which people like you may have about the development of our markets. I should mention that we have regular contact also with the authorities of other centres in the region in order that we can gain from each other’s experience in such matters.
Capacity utilisation in the business sector is high and a growing number of enterprises are now facing constraints. Statistics Norway’s business tendency survey for the third quarter shows that Norwegian manufacturing is optimistic about the prospects ahead. A clear majority of industrial leaders assess the general outlook as more positive in the short-term than in the third quarter. A majority of industrial leaders are considering an increase in investment. A shortage of skilled labour is posing a mounting challenge to manufacturing in the period ahead. This picture is consistent with information from the company contacts in Norges Bank’s regional network. In the August round of interviews, 59 per cent of the companies reported capacity problems, and this share has increased since the previous round. Output and employment are increasing in all sectors. Pressures are particularly strong in the building and construction sector and some corporate services. The rise in prices is moderate in retail trade. It also appears that extensive use of foreign contract labour, particularly in some manufacturing sectors and building and construction, is curbing wage growth. An increasing number of our company contacts report labour shortages, particularly a shortage of engineers, project managers, transport workers and skilled labour in corporate services. Labour shortages are also beginning to emerge in retail trade and household services. High demand for labour has resulted in a marked decline in unemployment so far this year. Unemployment is now in line with the unemployment level during the previous expansion at the end of the 1990s.

In the last rounds of interviews with our regional network, an increasing number of companies reported that wage growth in 2006 will be higher than budgeted early this year. The level of unemployment that is consistent with stable real wage growth is uncertain and probably varies over time. We have assumed that increased economic integration across countries, both in the form of an increase in inward labour migration and intensified competition in product markets, may have a dampening effect on wage demands for a given level of unemployment. In the period ahead, a tight labour market is expected to result in higher real wage growth. Nevertheless, it is assumed that labour inflows will have a dampening impact on wage demands, so that real wage growth will be a little lower in the next few years than in previous periods of equally low unemployment. The upward pressure on price and wage inflation given the level of current resource utilisation, as reflected in the output gap, is estimated to be lower than in the previous expansion even though the unemployment rate is at approximately the same low level. This is due in part to high productivity growth in recent years. Growth in disposable income has been high in recent years. Lower interest expenses and relatively high real wage growth have resulted in an increase in household purchasing power. The rise in house prices may also have fuelled growth in private consumption.