samchain/econo-pairs-v1 huggingface dataset:
*********************** We look to history when we chose a new character, but money has a future not just a past. The selection of the new £ note character is not my only announcement today… because as I alluded to earlier, money is evolving. Today, it is much more than polymer. While cash remains invaluable to many, it is now the second most frequent transaction method after debit card payments.1 And innovation is expected to make other electronic forms of payment easier to make and faster to settle. The technological revolution in finance will bring more tailored products, keener pricing, and more diverse sources of credit for households and SMEs. The Bank is embracing fintech and ensuring that it develops in ways that maximise the opportunities and minimise the risks for society. We aim to enable, empower and ensure. 1  Cash transactions made up 37% of all transactions in 2017. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  Enable new technology by developing the right environment for fintech to thrive, such as by upgrading the Bank’s hard infrastructure on which finance relies – such as our large value payments system, RTGS. The Bank is one of the first to allow non-bank payment service providers to directly access its system, something that is lowering the costs of payments across borders. Enabling also means having the right soft infrastructure, such as rules and regulations, to help fintech thrive.

We very much value the skills and diversity they bring to our efforts, so in a short recruitment pitch, when you ‘Think Science’, think too of central banking. After all, science starts with curiosity and asking the right questions. Science teaches people to conduct dedicated research and disciplined analysis. These skills and talents make a good supervisor, policymaker or senior leader, and they are the reason that the Bank increasingly recruits from beyond the field of economics. Not least because scientific advances in Artificial Intelligence and machine learning are reshaping our world, transforming the nature of both work and commerce. This revolution will impact all aspects of the Bank’s work, from the future of work, through its effects on employment, productivity and wages, to the future of finance, as the nature of customer service, trading and risk management transforms. These advances in science and technology are also transforming our focus today – money. They are making digital money more like its physical counterpart – instant, anonymous and direct. And scientific advances are modernising physical currency, cash, which still has a hugely important role in society. We use a host of technologies to protect our physical banknotes against counterfeiting. The switch to polymer has allowed us to introduce new security features, including see-through panels, coloured foils and detailed metallic images. Polymer also makes our banknotes stronger, with a lifespan two and a half times that of paper notes, and greener, because they will be recycled when they reach the end of their useful lives.
Eddie Yue: Hong Kong Monetary Authority’s work on market development Keynote address by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the 2nd Asia Treasury and Trade Summit 2016 “Treasury Re-imagined”, organized by The Asset, Hong Kong, 11 May 2016. *  *  *  Daniel (Yu), distinguished guests, ladies and gentlemen: 1. Good morning. I would like to thank The Asset for hosting its Asia Treasury and Trade Summit in Hong Kong again. And, it is my great pleasure to welcome all of you to this event, in particular those who have travelled from overseas. As CFOs and treasurers, you are important users of Hong Kong’s financial services. Over the years, we have listened to and worked with many of you, not just to better serve your business needs, but also as partners to help develop Hong Kong as an international financial centre. Let me therefore start this morning by sharing with you a few examples of the HKMA’s work on market development. Some of you here today may have heard these facts before, so apologies for that, but we like to repeat the good news whenever we can! Development of Hong Kong as IFC 2. First, the promotion of renminbi business. And, I’m delighted to see that discussion of the renminbi “as a treasury currency” is high on your Summit agenda today! Indeed, Hong Kong is the largest global offshore renminbi business hub, with a liquidity pool of close to RMB900 billion, the largest outside Mainland China.

Many market participants have considered CTCs useful for a number of reasons:  BIS central bankers’ speeches  3  •  one, through centralising treasury activities, CTCs help effectively translate management’s vision into firm-wide policies, such as preferences on operating currencies, hedging and day-to-day transactions;  •  two, CTCs help lower funding costs through the optimal use of intra-group funding and netting, as well as external financing; make more co-ordinated use of corporate balance sheets, and; enable corporates to more effectively tap capital markets for longer term funding;  •  three, they help optimise working capital positions and facilitate daily sales through customised transactional arrangements. And by concentrating excess liquidity in CTCs, senior management can achieve better visibility and control over their cash and reduce frauds; and  •  four, they act as corporate centres to consolidate various foreign exchange and interest rate exposures and allow centralised hedging on net positions. Therefore, corporates can eliminate redundant procedures to reduce associated costs and enhance efficiencies. 17. In addition, more and more corporates are adopting technologies, such as the “Enterprise Resource Planning” System and the “Treasury Management System”, which enable them to improve control over local subsidiaries’ activities and standardise treasury operations. All in all, CTCs can play the critical role of an inhouse bank within a multinational corporation and a function that multinationals should develop in tandem with their global expansion plans. Hong Kong as a preferred CTC location 18.
First, because they can only be initiated at the point of insolvency, whereas a loss of confidence in a bank by its depositors will often precede that point. Second, normal insolvency procedures are not well suited to ensuring continuity of key banking functions, particularly access of depositors to their funds, but also the provision of credit. Third, a bank failure may involve substantial negative spill over and externalities – for instance to other banks via their inter-connectedness. But in normal insolvency procedures these externalities would not be taken into account when determining what to do in insolvency. Fourth, depositors play a special role as creditors of a bank. Unlike the creditors of a typical company, they are very numerous in number, most are not professional market participants, and their claims in the bank are in the form of money. The recent experience in the UK These are therefore strong reasons for treating the resolution of banks differently. But we didn’t start in this position at the onset of the financial crisis in 2007. At the time of the start of Northern Rock’s problems, the UK did not have a special resolution regime; rather, we were relying on the tools of the past. Northern Rock was a good example of a bank that had a liquidity problem, caused by the closure of its major funding market, for residential mortgage backed securities, and had a heightened probability of experiencing a solvency problem in the future.

To date, this rise in house prices has not translated, on available estimates, into an overvaluation of residential real estate assets. That said, we must continue to monitor this market closely in case this risk materialises, and to analyse other facets of the conditions under which mortgages are granted that are less influenced by the collateral value. 24/29  A second relative facet is the effort that repaying the mortgage entails for agents that have incurred this debt. Once again, empirical evidence shows that loan-to-income and debt service-to-income ratios are relevant variables for determining the probability of mortgage default, although the low interest rate environment mitigates the risk. In any event, as more than half of new mortgage loans continue to be taken out at a variable rate, high loan-to-income ratios continue to be a source of possible vulnerability for households. However, in this instance too, mortgage lending standards appear to be prudent, with no evidence that they have recently eased. Third, an additional dimension that is also relevant for estimating the probability of default is the maturity of the mortgage loans granted. Longer maturities are usually related to more foreclosures. Likewise in this case, standards have become stricter following the crisis and have not eased in recent months. Empirical evidence further shows that it is the combination of some of these dimensions that may prompt disproportionate increases in the probability of loan default. These mortgages with very lax conditions in several dimensions have also become much less significant in recent years.
If other government revenues fall, and the expenditure side of the government budget is shielded, the oil fund will have to foot the bill krone for krone. Chart: Probability of 50 percent decline in the size of the GPFG The risk of a sharp decline in the size of the fund is further illustrated in this chart, which shows the probability of a 50 percent decline in the fund over a ten-year horizon.4 In the initial year, fiscal spending of oil revenues is around 3 percent of the fund’s value – that is to say close to today’s level. Government expenditure is then assumed to grow in pace with the expected growth of the economy, which means the expenditure side is shielded even in a situation with declining revenues. When and if that occurs, the oil fund will carry the cost. With a 60 percent allocation to equities, the probability of a 50 percent decline in the fund over a ten-year period is just over 1 percent. A higher equity share increases this risk, but the risk is still moderate. However, with a higher level of oil revenue spending, the downside risk increases. The yellow bars illustrate a scenario where oil revenue spending in the initial year increases to 4 percent – a familiar figure. In that case, the risk of having to draw down the fund increases considerably. The probability of a 50 percent decline in the fund increases threefold.

My main message concerning this issue: First, fiscal policy must be decoupled from financial assets subject to considerable volatility. Second, it would be unwise to increase petroleum revenue spending from today’s level even if the fund continues to grow. The period of rising government spending of petroleum revenues should now be over. Inflation targeting has funcioned well In 2001, the same year as the fiscal rule was established, Norway introduced an inflation target as part of its monetary policy framework. A number of countries had, in the preceding years, abandoned exchange rate targeting in favour of inflation targeting. This policy change was a response to the challenges associated with the fixed exchange rate regimes in an increasingly open global economy. Since the financial crisis, monetary policy has faced an uphill struggle in many countries. The economic consequences of the crisis have been substantial, and the contributions from fiscal policy have been meagre. Weakened growth capacity has magnified the challenges. At the same time, persistently low interest rates pose challenges to financial stability. Yet despite the fact that monetary policy has been stretched far, no country has retreated from 8/9  BIS central bankers' speeches  the basic rationale behind flexible inflation targeting. In Norway, the Ministry of Finance is now considering whether the regulation on monetary policy should be modernised. After more than fifteen years, this is only natural. It should nevertheless be noted that the system has functioned well.
4 per cent of the Fund’s value as an annual average through the business cycle. This establishes a clear division of labour among the different components of economic policy. •  Monetary policy steers inflation in the medium and long term and can also contribute to smoothing swings in output and employment. The inflation target provides  BIS Review 139/2007  1  economic agents with a stable basis for their decisions concerning saving, investment, budgets and wages. •  The central government budget – growth in public expenditure – influences the krone exchange rate and the size of the internationally exposed business sector in the medium term. Government expenditure and revenues must be in balance in the long term. •  How well and how efficiently we utilise our labour resources and other economic resources is largely determined by wage formation and economic structures and incentives. When monetary policy anchors inflation expectations, this provides a sound basis for the interplay between monetary policy and other components of the economy. Inflation targeting provides a fixed framework for monetary policy and gives a clear indication of how the central bank is to respond in different situations. The social partners can determine wage growth in the knowledge of the monetary policy response. This system works well whether wages are set at the central, local or individual level.

Growth in the US economy has slackened. The US housing market has weakened and employment is rising at a slower pace than earlier this year. There are also signs of somewhat slower growth in western Europe. Economic growth in emerging economies remains strong, particularly in China. Developments in these countries are of growing importance for the world economy and for our own economy. China, India and Russia have accounted for close to half of overall global growth over the past year. In spite of weaker prospects for the US and western Europe, oil prices have increased since the October Monetary Policy Report and prices for other commodities remain high, partly owing to continued strong growth in demand from Asia. Uncertainty surrounding developments in the world economy has heightened as a result of the turbulence in financial markets this autumn. The turbulence was triggered by problems in some segments of the US housing market. Many borrowers were granted mortgages they cannot service now that the interest rate has risen. There were losses, particularly on loans in the bond market and in complex loan products owned by separate companies that had relied on very short-term financing. These companies are linked to the large international banks, and the banks have had to transfer loans onto their own balance sheets. Combined with higher losses, this limits banks’ capacity to extend new loans to the housing market and other sectors, and will thereby have a dampening impact on economic growth.
In the first three quarters of 2004, imports increased markedly compared with the same period last year. This may indicate that some of the growth in demand has resulted in an increase in imports instead of higher domestic output. Imports as a share of mainland GDP are rising. This is a result of an increase in the international division of labour, due in part to the removal of trade barriers. The rise in the share of imports must also be seen in relation to low prices for imports from many low-cost countries and the weak competitiveness of domestically-oriented industries. The deterioration in Norway’s competitiveness relative to other countries stems from high wage growth over several years since 1998. The nominal krone exchange rate measured by the trade-weighted index (TWI) is now approximately at the level prevailing in the mid-1990s, while labour costs in manufacturing have risen considerably more than among our trading partners in the same period. The business sector is still burdened with the loss in competitiveness that can be attributed to high wage increases in the period 1998-2002. The exposed sector has been scaled back. Companies that are still in operation may be in a better position to cope with the high wage level. A more efficient service sector may also have strengthened the export industry. Nevertheless, costs may have negative impact on activity and employment.

While many digital-asset-related activities fall within existing U.S. laws and regulations, the rapid evolution and adoption of digital assets highlight unique risks that warrant a more comprehensive and aligned approach by agencies across the U.S. government with different regulatory remits. The Federal Reserve, as an independent central bank, is only one part of the puzzle. Many of these other stakeholders across the U.S. government, such as the Treasury Department, market regulators, and federal banking supervisors, will be involved in providing guidance and guardrails to the financial system as the universe of digital assets continues to evolve.7 In the current environment of rapid technological change, it is crucial that innovation proceeds responsibly in order to safeguard the stability of the financial system. To that end, on March 9 of this year, President Biden issued an Executive Order on Ensuring Responsible Development of Digital Assets. 8 This executive order outlined the first whole-of-government approach to addressing the risks and harnessing the potential  2/5  BIS - Central bankers' speeches  benefits of digital assets and their underlying technology. In response, over the past six months, agencies across the government have worked together to develop frameworks and policy recommendations that advance the six key priorities identified in the executive order: consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. The executive order will be a catalyst to increased coordination among U.S. regulators.
Rather, the current emphasis is on promoting an informal grouping of central banks called EMEAP (“Executives’ Meeting of East Asia and Pacific Central Banks) which is exploring opportunities for cooperation in areas such as payment systems, reserves management and banking supervision. Among other things, this may provide the opportunity over time to develop a more distinctive and focused regional voice on international supervisory issues. Consolidated supervision I will now return to the topic which I raised at the beginning of my speech, which is how we view consolidated supervision from the receiving end. I suppose that it goes without saying that we are in favour of the concept of consolidated supervision. As an international financial centre, we are vulnerable to adverse developments in banks abroad and we rely heavily on the consolidated supervision of the supervisors of those banks. The ability to conduct consolidated supervision is a key factor in whether we regard the home supervision of a particular bank as adequate - which is one of the criteria for granting a banking licence in Hong Kong. Within the legal framework in Hong Kong we try to cooperate with overseas regulators to ensure that they can effectively undertake consolidated supervision. In particular, we allow home supervisors to carry out on-site examinations of their institutions in Hong Kong subject to obtaining our prior consent - which we have not hitherto withheld.

That reflected continuing strong demand growth in the emerging market economies coming up against inelastic supply, augmented in the case of some foodstuffs by the development of bio-fuels and poor harvests. Of course, you have experienced many of these developments at first hand. This time last year, DEFRA’s measure of farm-gate prices had risen by 25% over the preceding twelve months, while the Economist food index had increased by around 55%. For much of last year, the MPC sought to balance these two forces: the turmoil in financial markets, pushing down on growth and inflation; and the rise in commodity prices, also pushing down on growth, but up on inflation. The latter proved to be the dominant force through the first part of the year, pushing CPI inflation up to 5.2%, well above our 2% target. Then, in September, an economic winter of unusual severity arrived. The global economy experienced the equivalent of Jevons’ sunspot – the collapse of Lehman Brothers. Investors  BIS Review 19/2009  1  had assumed the US authorities would never allow a bank the size of Lehman’s to fail. The resulting shock fatally undermined confidence in a number of similar institutions. You will remember the period in early October when bank share prices fell precipitously and a number of financial institutions around the world were rescued or closed.
central government, non-financial institutions, financial institutions, small and medium-sized enterprises (SMEs), residential mortgages or commercial property) are reported to supervisory authorities, but these breakdowns are not part of regular harmonised public financial reporting. Hence, surveillance indicators and assessment exercises based on publicly available credit exposure data may by impaired by the high level of aggregation of the information disclosed. For example, if early warning signals were to point to risks emerging in commercial property or the SME sector, it would be important to assess the relevance of banks’ exposures to this particular asset class in a systematic way. This is not possible if all credit exposures are disclosed in aggregate. Furthermore, the breakdown of credit exposures can be rather important for monitoring banks’ risk profiles in the macroprudential context. In risk assessment work, the quality of top-down stress testing results may be compromised if the distribution of credit exposures by bank across the main exposure classes needs to be approximated. Likewise, information on credit risk parameters, notably on incurred losses by type of exposure, would need to be consistently disclosed by banks, or to be made available to macro-prudential authorities from supervisory sources. In turn, owing to the importance of such credit exposure data, I much welcome the efforts being undertaken to harmonise the datasets in existing credit registers, subject also to an improved coverage, even if this can only complement extensive supervisory reports.

In the wording of the Treaty, the ECB is requested to contribute to the smooth conduct of policies pursued by the competent authorities with respect to the prudential supervision of credit institutions and the stability of the financial system. Furthermore, the ECB’s financial stability function is also related to its responsibility for overseeing financial market infrastructures. The legal framework under which the ECB collects statistical data has in fact recently been extended to expressly recognise its powers to collect data for this purpose. BIS central bankers’ speeches  1  In 2011 the EU institutional framework was revised to explicitly address both macro and micro-prudential supervision. This led to the establishment of the European System of Financial Supervision, the three new European Supervisory Authorities (ESAs) and the European Systemic Risk Board (ESRB). The ECB is in charge of providing analytical and statistical support to the ESRB, notably by collecting and processing information that feeds into discussions within the ESRB. 1 3. What has been achieved so far? In recognition of an increasingly interconnected financial system, considerable progress is being made in the enhancement and development of new statistics at the euro area, EU and global level. At the euro area level, improvements in ECB statistics are notable with regard to, in particular, the development of enhanced statistics relating to monetary financial institutions (MFIs) and to shadow banking (e.g. securitisation vehicles).