samchain/econo-pairs-v1 huggingface dataset:
There is a deep hunger internationally for Chinese consumers, Chinese exports, Chinese assets and of course, the Chinese currency. While the USD was at one time supported by its gold backing, the RMB today is backed by China’s huge foreign exchange reserves. Confidence in the currency is further enhanced by expectations of conditions in China remaining supportive of a strong currency. The main precondition on which China does not do well is in the stage of development and readiness of its financial system and policy frameworks. These challenges are not insurmountable but they are big enough to make Chinese policymakers adopt a gradual and sequenced approach to RMB internationalisation. They are big enough that premature liberalisation could create significant risks to macroeconomic and financial stability. The challenge for Chinese policymakers is to develop the domestic financial system to a level where integration with the global financial system would not lead to significant vulnerabilities. Therefore, the state of the financial system will be a key determinant of the extent to which policymakers are willing to liberalise and open their system, and consequently, will also be a key determinant of the extent and pace of RMB  2  BIS central bankers’ speeches  internationalisation. The global status of the RMB is closely linked to the global status of the Chinese financial system. Ambitious reforms could expedite RMB internationalisation. On the issue of being a global exporter of capital, China is certainly that.

This include RMB outflows through official aid, international loans by banks in China, foreign issuance of debt in Chinese markets, direct investment abroad, inter-company loans, repatriation of corporate profits, resident spending abroad and so on. Some of these are already happening. Offshore RMB balances in Hong Kong, Chinese Taipei and Singapore for example rose almost 40% between late 2013 and early 2014 to RMB1.4 trillion. These numbers are indeed encouraging, except for one thing. When the RMB is abroad, it gets homesick, terribly homesick. It yearns to return home to the land of its birth. When the legal avenues for it to do so are limited, it desperately seeks other ways to do so. And as the size of overseas RMB pool increases, the pressure of the homeward bound flows will also increase. Will the Qualified Investor Schemes, RMB clearing banks and the eventual introduction of the China International Payment System alleviate this situation of the offshore RMB? Yes, it would, but not entirely. In the current situation, despite the sharp increase in RMB related trade and investment transactions, the data I have seen suggests that the use of RMB remains rather lopsided and favours the flow of RMB into China rather than out of China. A significantly greater proportion of China’s exports were paid for in RMB, then its imports. Similarly, while 63% of the FDI into China was in RMB, only 16% of the direct investment out of China was in RMB.
The three consortium members have completed many successful twinning projects in the financial sector and have gained a sound project management capacity. We have strongly committed ourselves to this project for various reasons. We are encouraged by the progress achieved by the financial supervision authorities in Montenegro in bringing financial sector regulation closer to the EU requirements. Also, there are many signs of already built cooperation with the Montenegrin authorities that need further strengthening. Bulgaria, the Netherlands and Montenegro are in the same IMF constituency  BIS Review 168/2009  1  which has created good mutual knowledge of their economies and fostered long-term cooperation on financial issues. We consider our experience relevant to Montenegro not only because of the scale of the economy, but also because of the similarities of the supervisory structures. In the accession process we have learnt several major lessons. Bulgaria did not ask for any transitional periods or derogations concerning the banking sector acquis communautaire. Furthermore, all EU directives in this sector were transposed in time and most of them long before the deadlines. This approach has turned to be a success since the early adoption of the EU rules in financial supervision contributed to the smooth functioning of the financial market and fostered the stability of the financial system. One of the main keys to the smooth transition in the accession process is the cooperation between the institutions involved in financial regulation and supervision.

The respect for the independence of financial supervision authorities and the cooperation between them is an important indicator for the preparedness for EU accession. I would like to emphasise in particular the requirement for institutional financial and personal independence of the central bank as stipulated in article 130 of the Lisbon Treaty. Let me now turn to the challenges ahead of our project. First of all, the EU response to the crisis envisages fundamental changes in both the legal and institutional frameworks of financial regulation. Most of the EU directives and regulations are currently being changed. (Mr. Simeonov will talk about these later) This is a challenge for our project, and I would like to suggest that we take into consideration the latest EU acquis communautaire in our joint work. That is why we included in our team the experts who are members of the EU committees and working groups in the area of financial supervision, including the Committee of European Banking Supervisors, Economic and Financial Committee, Financial Services Committee, Committee of European Securities Regulators, where all these novelties are constructed. This will help the project to benefit from the most recent developments in the EU financial supervision policies and legal framework. The other challenge is related with the ongoing crisis which calls for an immediate response from the national authorities and is of utmost importance. Therefore, I believe we have to focus our activities as much as possible on helping the Montenegrin authorities in addressing the challenges of the crisis.
It’s not sufficient any more to be the best guy in the village; especially when there are an increasing number of villages on a global scale, with an ever increasing number of clever guys. •  From a convergence point of view, the sharing of experiences would avoid costly errors, while coordinated policies and steps would make a stronger case for a faster EU integration. We should demonstrate that the region is fit to enter the club, by firstly adopting the rules of the club among ourselves. In a more technical and concrete approach, the efforts of the public authorities in our region to achieve a real and meaningful cooperation should consider the followings: First, the mentality of the societies in our region should change. It is noted that this region has a history full of conflicts and many other disputes. It is now up to the young generations and to the people with an open-minded approach in our region, to find solutions and to promote behaviors that will build our future path toward Europe. Second, the commitment to full integration with the European Union, should serve as a solid platform for cooperation, and as an anchor for pursuing sound policies and coordinated structural reforms. Third, a very important precondition will be the strengthening of countries domestic anchors, specifically in the form of medium-term fiscal rules, fiscal councils, or embedding fiscal constraints in countries’ constitutions. Fourth, the legal basis that supports such international cooperation should be fully in place.

Even though there are variations across regions, the trend in house prices is the same – from a more moderate rise at the beginning 2007 to a clear decline at the beginning of 2008. Norges Bank’s lending survey for the third quarter shows that banks are tightening credit standards for households. Banks announced further tightening ahead. Owing to growing turmoil and liquidity shortages in financial markets, banks have raised their requirements with regard to collateral and borrowers’ debt-servicing capacity. Growth in household credit has slowed in recent months. House price developments affect building starts, which have decreased in the past year. The decline is sharpest for residential building starts. In October, enterprises in Norges Bank’s regional network indicated a very low level of housing starts in the period ahead. Order reserves for commercial buildings and holiday homes are high, however. Commercial construction is largely financed by loans, and may therefore be affected by changes in interest rate and credit conditions. Enterprises in Norges Bank’s regional network report that commercial building starts have declined in recent months. Household saving has picked up. Household income accounts show that the savings ratio excluding share dividends has risen, but is still very low and negative. Household borrowing requirements have also decreased somewhat. (Household net lending has picked up slightly.) The financial market crisis has led to higher borrowing costs for banks and has kept bank lending rates at a higher level than developments in the key rate would imply.
By first launching M-PESA as a service for payments between private individuals, the company was able to focus on getting one group of customers to connect to the service. This made it possible to exploit the existing network effects immediately and completely. Once the private customers were connected and were using the service, the time was ripe to also offer it to merchants. In this way the company got around “the chicken and egg” problem. Finally, the company already had access to the required IT platforms and communications equipment as part of its standard business operations. This made it possible to avoid high investment costs and to exploit advantages of scale by producing payment services using the existing infrastructure. Nor was there any competition from any other product. A well-developed business concept thus made it possible to overcome all the barriers I mentioned earlier. Cash usage in the future But what does all this mean to the use of cards and cash in the future? Will cards be outcompeted by new products and will cash gradually disappear entirely? I don’t think so. 4  BIS central bankers’ speeches  Assume that someone wants to launch a new payment service for everyday payments and that this service is not based on any existing payment service. If it is to be anything more than a niche product it will have to compete with cards.

However, high initial costs combined with the strong position of cards in terms of low costs, extensive networks and a reliable circle of customers at the banks who are used to handling cards present strong barriers to such genuinely new payment services. Remember that M-PESA’s success is based on the fact that only a small part of the population had bank accounts and that cards were unusual. The situation in Sweden is entirely different and as far as Sweden is concerned I do not think that the threat to cash (or cards) comes from a genuinely new product. One alternative to building an entirely new payment service is to further develop an existing service. This could relate to a new way of initiating card payments, for example by using mobile phones. In this way the new service would benefit from the advantages of scale and network effects provided by the existing service. The initial investment would also be lower as the infrastructure is already in place. The barriers to such payment services are lower than for genuinely new payment services and it is probable that development of this type would primarily be pursued by the existing players on the payment market, possibly in cooperation with an external party such as a mobile operator. Swedbank and Payair are currently running a pilot project in Uppsala on the initiation of card payments by mobile phone. Such solutions may reduce card usage in the retail sector if they are perceived to safe and easy to use.
•  So the PRA’s approach to prudential supervision entails making judgments of the kind:  •  Your bank isn’t as strong as you think it is  •  Cut back on the risk in your book  •  I’m afraid you’re not fit to run the bank  •  your business could not be resolved in an orderly way if it fails. •  This shift from rules to judgment changes the relationship between the regulator and business, and is an important example of what this series of talks is about. •  Challenge is how to make a judgment-based approach acceptable when we use it in earnest. Is our society really ready again for judgments from the Old Lady? •  Part of the solution is public law. The Bank must follow due process when it deploys its statutory powers, and that is subject to judicial review in the courts and appeal tribunals. •  But there is also a wider question about how society as a whole will keep us accountable or, more simply, just see what is going on during the periods, sometimes years, in which banks do not fail and the financial waters are – or at least seem to be – calm. Which brings me to our monetary and macroprudential roles, which indirectly touch every business, and household, in the country.

Interest rates had been very low for more than a decade, and they are still lower than they were before the global financial crisis. The ECB has not been alone in how it has acted. Some central banks started to normalise their monetary policy even earlier, and the exit from the highly accommodative monetary policy has been swifter than was expected. Headline inflation started to come down towards the end of last year, mainly thanks to a decline in energy prices, and it fell to 8.5% in January. More worrying however is that  5/8  BIS - Central bankers' speeches  core inflation has remained persistently high at more than 5%, as the underlying price pressures are not yet receding. The ECB Governing Council consequently announced last month that it will continue to raise interest rates and keep them high enough to bring inflation back to its target of two per cent in the medium term. We also indicated that we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in March. It is most likely this will not be the last rate rise in this cycle, and it is quite possible that interest rates will need to stay high for quite some time so that we can be sure that inflation will come back to, and remain at, close to two per cent.
More broadly, the long-term implications for the UK economy of these arrangements bear examination. Within the objectives of the Solvency II reforms, it is not clear that the incentives of third-party capital providers are aligned with UK insurers’ role in making investments in UK based long-term infrastructure and productive assets. Both the PRA and insurers need to think about the opportunity cost of funded reinsurance – in terms of UK direct investments foregone – as well as the benefits and risks. Greater interconnectivity with wider financial markets Related to that point, the third area I would like to touch on is a key aspect of the changing  Page 6  pensions and insurance landscape. One industry estimate, suggests that the UK life insurance industry could onboard more than £ of pension liabilities – and associated assets – over the coming decade[13] [14]. This is a big structural change in the control of long-term investments in the UK, and the decisions that insurers make now will have long term consequences for the performance and development of the broader economy. In line with the Government’s objectives for Solvency II reform, insurers’ investment strategies have an important role in supporting sectors that require certainty of funding over the long term, including education, social housing and infrastructure, and where financing the transition to net zero such as via renewable energy infrastructure and technologies requires patient and deliberate commitment. Making such investments can also generate a competitive advantage in a market where ESG credentials are increasingly valued by trustees[15].

To counteract this, there is discussion of alternatives such as using stress tests to a greater extent, making dynamic reservations and reducing the possibility to utilise an overly rapid increase in the value of an asset as collateral for a loan. The connections between a central bank's two objectives are thus many and complex. There is a pressing need to increase our knowledge of these mechanisms. Interest in financial stability has also increased in recent years. The Riksbank has published regular reports on the financial stability of the banking system for several years now. Many have followed our example, which shows that a large number of us realise the importance of maintaining stability in the financial system. Other economic policy implications In most of the financial crises that have occurred, the shaping of economic policy has played an important role both for the build-up of financial imbalances prior to the crisis and in triggering the crisis. The bank crisis in Sweden at the beginning of the 1990s can be seen as an example. It was preceded by deregulation of the financial markets, a tax system that favoured borrowers, an overly expansionary fiscal policy given the fixed exchange rate regime, and a monetary policy that could not be utilised to reduce overheating, credit booms or the rise in property prices. At the same time, the banks were unused to managing credit risk and the supervisory authorities were not prepared for operating on deregulated financial markets.
Speech by François Villeroy de Galhau, Governor of the Banque de France and President of the ACPR  ACPR conference of 22 November 2017 Bank resolution: from regulation to implementation  Ladies and Gentlemen,  I am delighted to welcome you to this new conference organised by the Autorité de contrôle prudentiel et de résolution. For the first time, the morning of this conference will focus on bank resolution. This is always a somewhat paradoxical subject: if we are spending time on it today, it is in the hope that we will never have to deal with it in the future. "Si vis pacem, para bellum", as the Romans said... just as they prepared for war to maintain peace, we must be fully prepared for a crisis if we are to avoid it. But I would like to start by noting an important victory: that of Paris and France, which will welcome the European Banking Authority. It represents an achievement for a highly motivated and dynamic team, as well as a threefold recognition, i.e. that of the attractiveness of France and the Paris financial centre today; the richness of a financial ecosystem that boasts one of Europe's most impressive talent pools; and lastly, I believe, the quality of the public regulators and the supervisor – the ACPR. And the European Banking Authority's decision to move from London to Paris clearly bodes well for other post-Brexit financial relocations.

The setting-up of a common backstop, as mentioned in the European Commission’s communication of 11 October, is a promising avenue, which could take the form of a credit line granted by the ESM (the European Stability Mechanism). If it is placed within the ESM's remit, the rules for triggering this backstop could be introduced during the ESM governance review. Furthermore, this avenue could provide a partial response to the issue of the liquidity of newly resolved entities – mainly the “good banks” –, which has not yet been addressed with sufficient clarity: liquidity support from public sources, beyond what can legitimately be expected from the Eurosystem, should be clarified. -  Second, consistency in the legal framework and requirements: faced with the accumulation of new and “separate” requirements, we need to adopt a holistic and consistent approach in order to avoid a prudential overload. In particular, the Total Loss Absorbing Capacity (TLAC) requirement resulting from the new international framework requires a consistent adaptation of the European minimum requirement for own funds and eligible liabilities (MREL). Therefore, the MREL targets should be set on the basis of updated prudential requirements – pillar II and buffers – and the most up-to-date financial position of the banks concerned. It is a question of consistency. In the same vein, the consequences of the Basel III reforms package – when it is finalised – should be carefully 2  taken into account, as it may lead to increased risk-weighted assets, which could in turn impact the MREL.
Zdeněk Tůma: The role of rules in public finance Introductory remarks by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the International Institute for Public Finance, Prague, 25 August 2003. *  *  *  Ladies and gentlemen, dear colleagues, It is a great pleasure and honour for me to join the previous distinguished speakers with some introductory remarks to this high level conference. As a central banker, I would not pretend to be an expert in specific details of public finance. Therefore, I have chosen a general topic that is common to both central banking and fiscal policy. That topic is the application of rules in stabilisation policies Over the last twenty years, the philosophy of stabilisation policies has evolved substantially. The rules-versus-discretion debate has led to a preference for a rule-based approach to policy making. This has been supported by the negative historical experience with discretionary policies, as well as by a realisation that successful public policies in first place have to be credible and transparent, so as to direct private expectations in a desirable way. In terms of the actual institutional design, monetary policy has played a leading role, the shift to greater central bank independence with a clear anti-inflationary mandate marking this trend. Nonetheless, three serious questions have emerged as a result. First, whether independence and reliance on strict policy rules has too high costs in terms of macroeconomic instability. Second, how to co-ordinate monetary policy with governmental actions to make a consistent policy mix.

The teething problems with the Stability and Growth Pact have been an example of these challenges. One of the key motivations of the Pact was an effort to avoid free riding by national governments in a multinational currency area. In other words, the desire to achieve a proper policy mix was present at the birth of this rule. In spite of that, the Pact is now criticised for being too rigid, not allowing for a proper policy response in times of distress, and thus ultimately leading to poor real economic performance. This naturally undermines its credibility and supports calls for various “escape clauses”, to use the inflation-targeting terminology. The Pact is thus fighting the same battle that the conservative central banker was some time ago. It should evolve towards a “constrained discretion” system that will fulfil its major goals - sustainability, credibility and co-ordination of stabilisation policies - yet at the same time be sufficiently flexible to allow for proper responses in adverse periods. It has yet to convince policy-makers and the public that it can deliver the lunch without them having to pay too high a price for it in terms of cyclical stabilisation. So far, the Pact has seemed to be losing the battle. This is somewhat unfair, as the adverse period came before most EU countries had achieved the target of balanced structural budgets, which reduced their manoeuvring space considerably. In a sense, the Pact is thus paying a price for being too lax in the previous period, i.e.