samchain/econo-pairs-v1 huggingface dataset:
These beneficial tax regulations have given households an incentive to increase their saving in securities. As households have saved to a greater degree in securities, the conditions for the banks’ funding have also changed. There is indeed a global trend for households to invest in unit trusts and other securities, but in Sweden saving in mutual funds is rather more extensive than in many other countries.3, 4 Although household saving still finances the banks, it now done increasingly indirectly through the securities market, when pension funds and other financial agents, both Swedish and international, invest in the banks’ bonds. This has meant that the number of intermediaries and links between different financial agents has increased. In other words, the system has become more complex. A more integrated financial system Mortgage institutions were for a long time independent of the banks, although there were indirect links in that the banks invested in the mortgage institutions’ bonds. When the credit market was deregulated and liquidity ratios were revoked, these investments were to some extent replaced by direct loans to mortgage institutions. Over the years, the links between mortgage institutions and the banks have continued to strengthen. At the beginning of the 1990s, a number of amendments were made to the regulations, enabling the banks to acquire mortgage institutions. This laid the foundation for the major banking groups we have now. Initially, the mortgage institutions continued to fund their operations with housing bonds, and from 2007 these were gradually replaced by what are known as covered bonds.

Our current econometric models provide us information about these future developments. Our internal studies show now that the Bank of Albania is able to make reliable forecasts. We also discussed the consequences of situations where the consumer price index increases, let us say, more than 3% at an annual basis. This may for instance happen due to higher electricity prices, or higher oil prices. These energy prices are a main share of our daily expenditures. Therefore, they are a main share of the total basket of consumer prices for the “average” Albanian household. However, the focus of our discussions was the analyses of the further impact on the Albanian macro-economy. Higher prices will lead to a lower purchasing power. Households will buy less in case of a price increase, under the condition of unchanged household income. Then, if many households in Albania start consuming less, the Albanian economic growth will suffer. The Albanian production will slow down due to the overall lower demand for goods and services. This process can take some time. But, anyhow, each economist will agree that strong increases in prices are bad for the economy. A high inflation, that is another way of saying a strong increase in prices, will harm economic growth. The Bank of Albania aims at an average increase of the consumer price index of 3%. The Bank of Albania will set the interest rate for keeping expected price increases to 3% plus or minus 1 percentage point.
Given the cross-border nature of MMFs, it is important we work together internationally to ensure that we are aligned in our objectives, and adhering to common principles, even if the precise implementation varies a little to reflect the specific nature of each jurisdiction’s markets. The dash for cash provided an unwelcome reminder that the post financial crisis did not finish the job and left a dangerous gap in our exposure to the risk of financial instability. We must finish the task this time. Thank you. I am grateful to Imane Bakkar, Adam Brinley-Codd, Alice Carr, Geoff Coppins, Edward Denbee, Steven Dodkins, Lee Foulger, Karen Jude, Clare Macallan, Nick McLaren, Jon Relleen and Konstantin Wiemer for their assistance in helping me prepare these remarks. 1 The International Accounting Standard 7Opens in a new window defines cash equivalents as “short-term, highly  liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value”. 6/6  BIS central bankers' speeches

Ravi Menon: Economic dynamism amidst demographic change Transcript of remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the IPS Singapore Perspectives 2018, Singapore, 22 January 2018. * * * Ladies and gentlemen, good morning. I want to first thank IPS for the opportunity to share my thoughts with this large audience. I would also like to commend IPS for convening a conference on what is an important, existential topic: the implications of demographic change. I will focus my presentation on the economic implications of demographic change: what it means for economic growth and economic dynamism. The two are different. My presentation will centre around two broad themes. First, I will describe our demographic trilemma – the constraints and the choices we need to make. Second, I would like to argue that demographics is not destiny – why economic dynamism is not a numbers game and how we can remain dynamic amidst this demographic challenge. 1 / 17  BIS central bankers' speeches  Let’s start with the total fertility rate, or TFR. By the way, we must be one of the few countries in the world where most people know what TFR stands for! It is indeed an existential issue for us. The TFR is the starting point of all demographic analysis. Singapore has had a sustained decline in its TFR. Our TFR fell from around 1.8 in the 1980s (which is already below the replacement level of 2.1) to about 1.3 in the early 2000s.
Let’s take the euro area perspective for a moment: What would have happened to euro area exports to Switzerland if the minimum exchange rate had not been introduced? Given that Switzerland is the euro area’s fourth largest export destination, this is an important question. Moreover, European intermediate goods serve as an important input for Swiss exports worldwide. In the absence of the minimum exchange rate policy, the Swiss franc would have continued to appreciate strongly in an extremely volatile environment, and the risk of Switzerland entering a deflationary trap would have escalated. This would have depressed Swiss aggregate demand and European exports to Switzerland. In short, a policy of deflation avoidance had benefits for both sides in Swiss-European bilateral trade. In addition, given the broad use of the Swiss franc as a funding and credit currency in Europe, the introduction of the minimum exchange rate had a positive impact on financial stability beyond our country’s borders. Switzerland’s economic stability is not just important in the realm of international finance and trade. It should be remembered that Switzerland is the second most important provider of international remittances, directly after the United States. Moreover, in terms of FDI, even the U.S. is a major beneficiary of Swiss investment.

See the following references: Bauer, M. and C. Neely (2013): “International Channels of the Fed’s Unconventional Monetary Policy”, Federal Reserve Bank of San Francisco, Working Paper 2012-12. Glick, R. and S. Leduc (2013): “The Effects of Unconventional and Conventional U.S. Monetary Policy on the Dollar”, Federal Reserve Bank of San Francisco, Working Paper 2013-11. Neely, C. (2010): “The Large-Scale Asset Purchases Had Large International Effects”, Federal Reserve Bank of St. Louis, Working Paper 2010-018C. BIS central bankers’ speeches  1  because asset purchase programs are expected to be scaled back, thereby unleashing a new round of currency tensions. Against the background of currency fluctuations and weak global demand, the problem of global imbalances still lingers. In the debate on global adjustment, there have also been calls for countries with a current account surplus to let their currencies appreciate. For some observers, this includes Switzerland. Our country’s large current account surplus – so the argument goes – is a sure sign that the Swiss franc is too weak. The SNB should therefore abolish the minimum exchange rate and allow the Swiss franc to appreciate further. This in turn would allow the current account surplus to diminish, thereby contributing to global rebalancing.3 I would like to point out that such a critique is not based on a full understanding of Switzerland’s situation. For a comprehensive assessment of the Swiss current account and the Swiss franc, the following factors also need to be considered.
It is a “currency without a state”, in which a group of fiscally sovereign countries shares a single currency and a single central bank issuing fiat paper money, yet evidently lacks a clear monetary hegemon. So the euro is not just a different version of the gold standard, as Balczerowicz, de Soto and many others argue. Not least because of the fact that unlike any commodity standard, the euro lacks anything resembling an ultimate numéraire. And more importantly, within the eurozone Germany is not a monetary hegemon anymore. Yes, the German mark and the Bundesbank were clear monetary hegemons in Western Europe in the pre-euro era. And remember, it was argued that the euro would become “the German mark for the whole of Europe” in the many public debates that went on in Germany prior to its introduction. Yet it is evident that it could not and cannot function in this way. Yes, monetary unification in Europe does not make much sense without Germany. This is still true. But my definition of a clear hegemon is: it should have the right to set the rules and to force others to behave accordingly, the right to enforce the rules. And it has to have the right even to breach the rules itself and still not allow the others to breach the very same rules. But this is not true for Germany after the introduction of the euro.

So the only thing that remains rather difficult to understand is the former hegemon’s efforts to resolve what is, for it, the awkward situation of non-compliance with and infringement of the rules of the club (including its own infringements) by creating new and ostensibly better rules for the same club with the same members. Yes, Otmar Issing, for instance, rightly warns against Eurobonds and simple fiscal unification, but with the European Stability Mechanism and the planned banking union we are effectively creating something like common fiscal liabilities and common bonds, just with less transparency. Arguably, the German mark was – from a monetary point of view – a rather well administered pan-European public good. After the euro, this public good became overconsumed. Philipp  2  BIS central bankers’ speeches  Bagus, sitting today here in this room, argues that the euro is a classical example of a “tragedy of the commons” from the start, and that the smaller and weaker countries therefore inevitably ended up racing to make maximum use of the commons for their own benefit at the expense of the rest, thereby destroying this shared asset. The German mark can indeed be viewed as a sort of public good that became the subject of decisions made outside the public sphere in Germany and hence was fundamentally transformed. The average quality of the public good called monetary stability and good currency in the eurozone will very probably go down with the ultimate demise of the former European monetary hegemon.
Christine Lagarde: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament Introductory statement (by videoconference) by Ms Christine Lagarde, President of the European Central Bank, at the ECON Committee of the European Parliament, Frankfurt am Main, 28 September 2020. * * * Madam Chair, Honourable members of the Economic and Monetary Affairs Committee, Ladies and gentlemen, Thank you very much for giving me the opportunity to speak to you today and to have a frank and timely discussion about the ECB’s monetary policy, as befits the topics you have chosen for this hearing. After a few words on the euro area economic outlook, I will focus my remarks today on the ECB’s monetary policy and in particular on the role of asset purchases, before sharing some reflections on the ECB’s accountability arrangements. The euro area economic outlook The impact of the coronavirus (COVID-19) pandemic is still being felt across the euro area. Businesses are facing difficulties, people are losing their jobs, and prospects about the future remain uncertain. While euro area economic activity rebounded in the third quarter, the recovery remains incomplete, uncertain and uneven. Consumer spending has resumed significantly, but consumers remain cautious owing to anxiety about their job and income prospects.1 Similarly, business investment has been picking up, but weaker demand and elevated uncertainty continue to weigh on firms’ investment plans. In this context, job retention schemes and national guarantees on bank loans remain critically important factors in reducing uncertainty and softening the impact of the pandemic.

First, we have provided access to central bank liquidity at very favourable terms and over long tenors to help maintain the supply of credit from the banking sector. To this end, we have adjusted the terms and conditions of our targeted longer-term refinancing operations (TLTRO III), which strengthen the incentives for banks to lend to the real economy. For a year, banks will be able to borrow at negative rates, which can be as low as –1% on the condition that they lend to the economy. Largely in response to this recalibration, we have seen a very high take-up by banks. And second, we have launched the pandemic emergency purchase programme (PEPP) to ensure the smooth transmission of our monetary policy and to ease the overall monetary policy stance thereby helping to offset the downward impact of the pandemic on the projected path of inflation. The PEPP, launched with an initial envelope of € billion in March, was increased by € billion in June to a total of € billion. We will conduct net asset purchases under the PEPP until at least the end of June 2021 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over. In the current environment of elevated uncertainty, the Governing Council will carefully assess all incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook.
Since the end of the Second World War, Thailand employed the regime of fixed exchange rate one way or another. At the beginning our currency was fixed to the British Pound, and later to the US Dollar - first directly, then later via a basket with a very heavy US Dollar content. The regime had served us very well. It provided certainty for international trade, and it helped to attract foreign investment. We were able to maintain the parity with the US Dollar for more than 18 years until 1981 when we had our first devaluation. The pressure on our parity in the early days was slight. Thailand’s exports at that time were rice, rubber, tin and teak. Our production costs for those items were among the lowest in the world. However, beginning from the 1980’s, we began to industrialize. Our industrial exports which was only 33 % of the total exports at the end of the 1970’s quickly rose to 76 % in 1990 and even further to 86% today. With industrialization, we began to find that our productivity did not keep up with our major trading partners, particularly the US, and pressure on the parity began to build up. Our domestic costs of production have never been flexible downward. To ask for a wage and salary reduction was unthinkable then - as it is today. Our only choice was to devalue. The devaluations that occurred were not always smooth.

It allows the intermediation process to proceed uninterrupted when the banks are temporarily in difficulty. But more importantly, it helps with liquidity management. In the case of Thailand, the government throughout the 1980’s had been very disciplined in their fiscal policy. They maintained balanced budgets in most years. As a result, no new government bond was issued, as old ones were being retired. Without a deep and liquid government bond market, growth of corporate bond was also slow. When the crisis erupted, financial institutions that could not seek liquidity from the inter bank market were stuck without liquid instruments in hand. Some of them might have survived had the bond market been more active. After the crisis, the government had to issue massive amount of bonds to cover losses in the financial system. Today, the Thai bond market is therefore much larger, at 38 % of the GDP. We have a much more active market. What does an active bond market mean to monetary policy? I will highlight three points. First is the implication on transmission mechanism. When the central bank wants to change stance in monetary policy, it changes interest rate up or down. But it does not directly change the interest rates along the whole spectrum of the yield curve. It only affects the key policy rate, which in the case of Thailand is the very short-term 14 day rate in the repurchase market.
The Committee is now finalizing the process of reviewing the comments received on this consultation and plans to issue a further consultation paper in the coming months. Let me offer some personal reflections at this stage, which should not be understood as preempting the outcome of this work. In particular, in deciding how best to harness the potential benefits from these markets while mitigating their risks in a world of uncertainty, in my view, it makes sense to err on the side of caution and prudence. In this regard, how many asset classes market themselves as being “stable” and “currencies” while often failing on both counts? We have witnessed some clear examples along these lines during the last few weeks. Additionally, as mentioned earlier, banks' crypto-asset exposures are currently limited, which means that there is currently very little activity that could even be shifted to the non-bank sector as a result of a conservative prudential approach. Finally, if there are unregulated areas of the financial system, including the emergence of a "shadow" crypto financial system, then the appropriate response is to bring these areas within the relevant regulatory perimeter, instead of diluting banking prudential regulation. The cross-border cooperation has been particularly visible in the adoption of international standards aimed at preventing the use of virtual assets in illicit transactions.

31.05.2022  Crypto-assets: a financial authority’s view Masters in Finance Closing of the Speakers Series, ESADE Pablo Hernández de Cos Governor  Good afternoon. I am delighted to be here today to address an audience of recent Masters graduates. Not only as recognition of the growing importance of furthering our education in such a changeable world, but also because it affords me the opportunity to talk about cutting-edge themes with those who will play a leading role in the future of our society. Among the many topical issues I could have selected for my address, I believe crypto-assets are the most suitable choice. Among other reasons, because young high-earners who study or work and live in big cities are precisely those who best fit the typical crypto-asset investor profile in Spain.1 Despite being a somewhat misleading term, so-called “virtual currencies” have already been part of our lives for over a decade now. However, only in recent times a series of factors have emerged that seem to be underscoring their ultimate potential to end up playing a significant role in the financial system.
BIS central bankers’ speeches  1  And I am delighted to announce that on the £ note the great economist and moral philosopher, Adam Smith, will be replaced by Joseph Mallord William Turner. Why Turner? Turner is arguably the single most influential British artist of all time. His work was transformative. His influence spanned his lifetime and endures today. He inspired the French impressionists and, as Ruskin said, was “the father of modern art.” His works include masterpieces such as Dutch Boats in a Gale, The Slave Ship, and Rain, Steam and Speed – The Great Western Railway. He captured the age of sail, of the advent of steam, the very atmospherics of the British Isles, and lines between light, movement and colour. And his influence endures. When Mark Rothko visited an exhibition on Turner at the Museum of Modern Art in New York, he jokingly said: “This man Turner, he learnt a lot from me.” The Margate gallery shows Turner’s continuing legacy, with a number of exhibitions influenced by Turner, including that of the Danish artist Joachim Koester – The Other Side of the Sky – which pairs his works with Turner watercolours. Turner’s story begins with humble origins. Born to a London barber and wig maker, his talent was unquestioned. He went to extremes in pursuit of the visceral artistic experience. Turner exhibited at the Royal Academy at 15, and became an Academician at 24. He was undeniably prolific, producing more than 550 oil paintings, 2,000 watercolours, and 30,000 sketches and drawings.

His work will now feature on another 2 billion works of art – our new £ notes. How did we decide? How did we arrive at Turner? As befits Turner, we took the process of selecting a new banknote character out of the black box and brought it into the sunlight. In December 2013, the Bank of England committed to making our character selection process much more open and transparent. First, the Banknote Character Advisory Committee was created and then decided the field of accomplishment. They chose visual arts, which had never before been properly displayed on a banknote. The Bank then invited the public to make nominations in this field. They proposed artists, sculptors, printmakers, designers, craftspeople, ceramicists, architects, fashion designers, photographers and filmmakers. Indeed, the response was exceptional. We received almost 30,000 individual suggestions, between them nominating 590 different eligible characters – demonstrating not only the depth of achievement of British art but also the public’s passion for it. This pool was handed to our expert Banknote Advisory Committee – John Akomfrah, Sir David Cannadine, Andrew Graham-Dixon, Sandy Nairne, Alice Rawsthorn, Baroness Lola Young, and, from the Bank, Deputy Governor Ben Broadbent and Chief Cashier Victoria Cleland. They used their considerable knowledge, supplemented with views from public focus groups, and whittled down to a shortlist of five characters. What were the criteria? 2  BIS central bankers’ speeches  First, an unquestioned contribution to the visual arts. Second, a wider contribution to British society. And third, an enduring influence.