samchain/econo-pairs-v1 huggingface dataset:
4 And both have taken steps to improve the resilience and coverage of overnight unsecured benchmark rates – the Bank of England by taking over the  3  Reforming Major Interest Rate Benchmarks – July 2014 http://www.fsb.org/wp-content/uploads/r_140722.pdf. 4  In the US, this is the Alternative Reference Rates Committee (ARRC). In the UK it is the Working Group on Sterling Risk-Free Reference Rates. 4  BIS central bankers’ speeches  administration and reform of SONIA 5, and the Fed by overseeing the creation of the Overnight Bank Funding Rate. Such benchmarks are a vital means of assessing the passthrough efficiency of changes in policy rates – meaning Darell and Arvind will continue to be able to write papers on the topic long into the future. Pass-through beyond money markets Let me turn briefly to pass-through beyond money market rates. Deep structural forces affecting savings and investment preferences have combined with the ongoing legacy of the financial crisis to push the interest rate required to keep our economies in balance much lower than historical experience. The resulting proximity of policy rates to what was once known as the zero lower bound has important implications for the pass-through of monetary policy. Specifically, once household and business deposit rates have reached a very low level, it becomes difficult for banks to reduce them further. Recent international experience seems to bear this out – Chart 7 shows that pass-through to retail deposit rates tends to be weaker when risk-free rates are very low.

This trajectory assumes that the peso depreciation of recent months will pass through to prices as it has done historically; that wages will be adjusted in line with productivity changes; and that capacity gaps will remain stable over the projection horizon. About the real exchange rate, we use as a methodological assumption that it will stay near its current values, considering that it is within the range believed to be consistent with its long-term fundamentals. We also use, as a working assumption, that the monetary policy rate will not change in the short run. BIS central bankers’ speeches  3  The baseline scenario reflects those events believed to be the most likely to occur with the information at hand at the closing of this Report. There are risks, however, that, if materialized, could reshape the macroeconomic scenario and thus may alter the course of monetary policy. Abroad, there is the risk of when and at what speed the Fed will start raising its benchmark rate, and how this will affect financial assets. The risk of greater market volatility has increased because of the growing discrepancies between private expectations and the Fed’s announcements, plus the divergence of monetary policies of the main developed economies. In China, the risks about its performance have gained importance, reflecting its recent weakening. The evolution of the Chinese financial system and real-estate sector are the main focus of attention, as they could result in a sharper drop in the copper price.
Andrew, it has been an absolute pleasure to serve as one of your guerrillas, and I very much look forward to working hand in glove with you in our new roles. For the 1,580 banks, building societies, credit unions, insurers and major investment firms we supervise, 1  there is a simple message about my approach to the role of running the PRA . That approach is: more of the same. That means supervision which is firm but fair, using all of the latest analytical tools and techniques, together with a healthy dose of common sense. My job is to serve the public interest by focusing on the objectives given to us by Parliament: promote safety and soundness, protect insurance policyholders, and – secondary to both – facilitate effective competition. These three objectives form a complete and coherent whole and I am absolutely committed to them. But they are easier said than delivered. So I am very proud of the effort my 1,325 colleagues at the PRA put in 2  every day in pursuit of them, steadily implementing the post-crisis reforms . But as I shall explain: the end of one chapter is the start of another. Firms need to renew their business models for the new world. A mixed economy  I think that the approach we have adopted for the PRA is the right one, but I am not starry-eyed about the system we are operating. 1 2  Firm total correct as at 19 October 2016.

7 Dovern, J. and G. Kenny (2017), “The long-term distribution of expected inflation in the euro area: what has  changed since the great recession?”, ECB Working Paper No. 1999. 8 See Kozlowski, J., L. Veldkamp and V. Venkateswaran (2015), “The Tail that Wags the Economy: Beliefs and  Persistent Stagnation”, NBER Working Paper No. 21719. The authors argue that if people base their beliefs on past realisations, then extreme, albeit transitory, events can generate persistent changes in our cognitive framework. 9 See e.g. Gerba, E. and D. Żochowski (2017), “Knightian uncertainty and credit cycles”, ECB Working Paper No  2068. 10 See e.g. Benigno, G. and L. Fornaro (2017), “Stagnation traps”, ECB Working Paper No 2038. 11 See Rossi, B., T. Sekhposyany and M. Souprez (2017), “Understanding the Sources of Macroeconomic  6/7  BIS central bankers' speeches  Uncertainty”, Barcelona GSE Working Paper No 920. 12 See e.g. ECB (2017), Financial Stability Review, May and November. 13 See e.g. Draghi, M. (2017), “Accompanying the economic recovery”, speech at the ECB Forum on Central  Banking, Sintra, 27 June. 7/7  BIS central bankers' speeches
Neither of these models is likely to fit within the regulatory regime for payment stablecoins, though they may fit within other regulatory regimes. In the first case, to be acceptable as a means of payment at systemic scale, stablecoins will be required to meet redemption at par  on demand which is inconsistent with an investment product. In the second case, the issue of liquid liabilities that can be used as money in return for illiquid debt obligations is the banking business model and issuers of tokenised money who wish to pursue credit creation will need to be regulated as banks. This brings me to the second area, the issuance by commercial banks of new forms of digital money to be used on new payment rails – in the form of ‘tokenised’ bank deposits. These might offer some or all of the functionality and efficiency claimed for stablecoins, allowing banks deposits to compete better with non-bank payment coins. Some banks in the UK and in other jurisdictions have been exploring and investing in the development of tokenised deposits as settlement assets on new forms of ledger (eg DLT). The majority of this effort appears to have centred on wholesale as opposed to retail financial transactions[16], though there are signs that attention is now being given to tokenisation of retail deposits[17]. In regulatory terms, the tokenisation of bank deposits is a much simpler proposition than nonbank stablecoins.

This commitment has been made, for example, in public statements from Governor Andrew Bailey here here and here and Sarah John, the Bank’s Chief Cashier, here  , from myself  . 5. The NPA is a multi-year project which will allow for real-time payments, be able to handle increasing payment volumes. It will include the rules and standards that make up various payment types, allowing the market to create new products and services as well as allowing for the development of new overlay services. 6. Open Banking’s joint regulatory oversight committee consists of the FCA, PSR, CMA and HM Treasury. 7. See for example early stage use-cases of DLT for supply chain finance reported in UCL’s Centre for Blockchain Technologies report ‘DLT in the Supply Chain  ’. 8. As set out in Money creation in the modern economy | Bank of England the majority of money in the modern economy is created by commercial banks making loans. 9. The umbrella term ‘stablecoin’ has been used to describe a range of instruments with quite different characteristics. In particular, they may be backed by a range of financial assets, commodities or unbacked cryptoassets (which in some cases are supported by algorithmic protocols). The robustness of those backing assets and the wider safeguards for guaranteeing stability of value vary significantly across the products labelled as stablecoins. 10. See for example the Libra White Paper and related Diem technical papers 11. As set out in the Regulatory Initiatives Grid  . . 12.
And finally, we must take account of new public goods in international agreements. II. Global public goods and development Global public goods – notably climate and social inclusiveness – are a matter of concern for all: politically they create rising expectations, and economically they generate externalities. Deficient provision of these goods can have huge disruptive effects on economic, financial, and social systems, with large welfare costs, still more in developing countries. The simple truth is that we have underestimated these expectations, for too long. The so called “Washington consensus” was economically sound, but socially too weak. Nothing sustainable is achieved without a strong economy, so let’s stick to that mandate. But globalisation has often been viewed as having mainly benefited large corporates – and their tax avoidance – as the prosperous, globally mobile class – and the rapid growth of their income. Inequalities between countries – in particular between the North and the South – have fortunately decreased, those within countries have increased. And younger generations are demanding that we ensure the protection of the planet. A lot has been achieved in recent years. For instance, the BWI have contributed to the significant reduction of poverty at the global level: since 1990, the number of people living in extreme poverty worldwide has dropped by 1.1 billion. But much remains to be done.

Mario Draghi: Global and domestic inflation Speech by Mr Mario Draghi, President of the European Central Bank, to the Economic Club of New York, New York City, 4 December 2015. *  *  *  Over the past years, central banks across advanced economies have provided unprecedented support to our economies, and the results are being felt. Output has been put back on an upward path. Growth is strengthening. The output gap is gradually closing, as is the case in the euro area, or in some cases it is closed already. Insofar as monetary policy is intended as a macroeconomic stabilisation policy, it is succeeding. But our mandate is not phrased in terms of real growth. It is phrased in terms of price stability. And there, success is not achieved yet. Inflation remains low everywhere, lower than our objectives require. And medium- to long-term inflation expectations have been less steady for some time, and also generally lower than our objectives. To some extent this apparent disconnect between real and nominal developments is an expression of lags in the transmission process. But it has also triggered suggestions that perhaps central banks are unable to fully control the trend in inflation – either because they lack the appropriate tools, or because inflation in any one economy is driven to a large extent by global factors outside their control. I would dispute entirely the notion that we are powerless to reach our objective.
Looking forward, however, the possibility of tighter global liquidity conditions has raised investor redemption risk for hedge fund managers, particularly as the share of less liquid assets has reportedly been increasing. At the same time, correlations of returns within some hedge fund investment strategies and among strategies remained high or even increased, raising the risk of disorderly synchronous exists from similar trades in an environment of unexpected market turbulence. This is illustrated in the chart on the right on slide 13. 6. Overall assessment  Having reviewed the developments in the key parts of the financial system, I will now turn to the overall assessment of risks to euro area financial stability. Let me first remind you of the scope and the nature of our financial stability analysis. In particular, drawing attention to sources of risks and vulnerability to financial stability does not seek to identify the most probable outcome, but it rather entails highlighting potential and plausible sources of downside risks, even if the probability of their realisation is relatively low. Let me now conclude by stressing that in June 2006, the financial stability outlook rests upon a delicate balance. On the one hand, the global economic activity is expected to remain robust and the shock-absorption capacity of euro area financial institutions has improved. But, on the other hand, risks and vulnerabilities remain and some have grown further.

Certainly, the more flexible is your economy (in terms of public finances, the labour market, and so on), the easier it is to cope with shocks and the less monetary policy is needed. However, the case of the Eurozone shows how tricky it is when the absorber in the form of monetary policy is switched off and nothing replaces it. The shocks are bigger and hurt more. Listeners themselves can answer the question of whether the labour market and labour law are likely be made more or less flexible (and dismissals made easier) in the future. In doing so, they will answer the question of whether there will be a need in the future for more or less domestic monetary policy in the Czech Republic, a country whose conservative population is so averse to upswings and downswings. 1/3  BIS central bankers' speeches  The “convergence trilemma” The standard “monetary trilemma”, which you know very well (a country cannot simultaneously have a fixed exchange rate, an open capital account and autonomous monetary policy), is accompanied in a converging economy of our kind with something I call the “convergence trilemma”. No country can simultaneously have high convergence growth, a fixed exchange rate, and low macroeconomic imbalances, be they internal or external. In our case, catching up with our wealthier, low-inflation Western peers means a long-term tendency for our currency to appreciate. This is hardly consistent with a permanently fixed exchange rate.
But we cannot rest on our laurels. There is still much to learn and to change. Economic theory moves forward and economic behaviour is never constant. The practice of monetary policy must keep up. But what we will not change is our commitment to monetary stability and to the achievement of the Government’s inflation target. It is that commitment which can deliver economic stability to this country. BIS Review 63/1999  10

1997 Q1-Q2 = 100  Chart 12 Nominal GDP Indices in $ Terms  120  120  110  110  100  100  90  90 80  80 70 60 50 40  Hong Kong Indonesia Korea Malaysia Singapore Taiwan Thailand  70 60 50 40 30  30 Q1 1997  Q2  Q3  Q4  Q1 1998  Q2  7  Q3  Q4  Q1 1999  Q2 12  BIS Review 103/1999
Moreover, in order to slow down credit expansion, we increased required reserve ratios (Chart 2). Meanwhile, in order to enhance financial stability by extending maturity of the banking sector liabilities, we differentiated reserve requirements across maturities, with higher reserve requirements for short-term liabilities. These measures led to a fall in net short-term capital inflows, stopped the acceleration of credit growth and extended maturities for deposits. Chart 2. CBRT Policy Mix CBRT Policy Rates  TL Required Reserve Ratios  (Percent)  (Percent)  Source: CBRT. Source: CBRT. In the first quarter of 2011, both the faster-than-expected increases in oil prices and the robust domestic demand required a more cautious stance regarding the inflation outlook. Specifically, oil prices hovering significantly above our January Inflation Report’s assumptions led to an increase in cost pressures. Moreover, the ongoing rapid growth in private consumption and private investment spending added to the need to contain domestic demand in order to avoid secondary effects of the increases in oil and other commodity prices. Notwithstanding historically low inflation at 4 percent in the first quarter, I would like to emphasize that we have acted with a medium-term perspective and started to highlight the upside risks to inflation since February. Accordingly, in order to eliminate the risk of deterioration in general pricing behavior, we have adopted a stronger monetary tightening than was envisaged in the January Inflation Report’s baseline scenario.

8  BIS central bankers’ speeches  Revised forecasts suggest that credits should grow at a measured and vigorous pace to keep inflation in line with targets over the medium term. To this end, we provide a numerical range for the annual rate of credit growth in order to be more concrete. I would like to underline that these growth rates should not be perceived as strict targets for the CBRT. At this point, I would also like to emphasize that the nominal credit growth consistent with the medium-term inflation target may vary over the years depending on the course of factors such as inflation, growth and the composition of the aggregate demand. As illustrated on the slide, over the next three quarters, inflation may display significant fluctuations mainly due to base effects driven by food prices. Accordingly, annual food inflation is expected to rise in the second quarter, decline in the third quarter, and increase markedly in the last quarter (Chart 15). Comparison of January 2011 and April 2011 Inflation Report Forecasts  Chart 16. Chart 17. Output Gap Forecast  Inflation Forecast  Source: CBRT. Source: TurkStat, CBRT. Comparing our current forecasts with those of the previous reporting period, I would like to reiterate that we revised the initial point of our output gap forecasts upwards due to the more-than-expected increase in the domestic demand in the last quarter of 2010 (Chart 16).
I mentioned one example earlier. A borrower may not repay a loan. Prudent lending standards—like securing good collateral and identifying credit-worthy borrowers—can help mitigate that risk. Here is another example. A depositor may use a bank account to hold, transfer, or obscure the proceeds of a crime. This is more difficult to determine, especially when deposits are received from half way around the world. Third-party service providers and customers are examples of risks from outside the bank that are unavoidable in the ordinary course of business. These third-party risks are not purely hypothetical. They featured in recent cases of attacks on the global correspondent banking network. My colleague Richard Dzina runs Fedwire®, the payments system that I mentioned earlier. Here is how he described some of the risk that he faces: Historically, and understandably, market infrastructures have operated on the presumption that endpoint security is principally the responsibility of the endpoint, and infrastructure security is principally the responsibility of the operator. Increasingly, reflecting the elevated cyber threat landscape, this distinction is not so clear, especially as endpoint security breaches can potentially have implications for public confidence in the network as a whole, even in circumstances when the operator’s infrastructure, applications, and security perimeter have not been compromised.3 3/7  BIS central bankers' speeches  I also worry that some risk management practices can themselves create risk. Advances in technology have enabled more sophisticated economic modeling, on which many financial institutions rely to assess and manage their risk.

No doubt at some point such perceptions will change - or the anticipated differences in future earnings growth be discounted by the change in asset prices, including the effect of exchange rates. There are some tentative signs that this may be beginning to happen. But in the meantime it is not at all clear that there is much that we could do - even if we wanted to - to weaken sterling against the euro by marginal changes in short-term interest rates. As it is our interest rate differential over the euro zone has halved since the euro started, while our exchange rate against the euro has appreciated by around 15%. We do already, of course, take full account of the exchange rate - and other prices - in both our forecasts and our policy decisions. Indeed, it was partly to avoid pushing sterling higher and so aggravating the imbalance within the economy, when we were not wholly convinced that we needed to take that risk in order to achieve the inflation target, that the Committee refrained from further monetary tightening over the past eight months. But looking ahead the risks and uncertainties are such that it would be unrealistic to suppose that we can altogether exclude the need for further tightening at some point.
Mario Draghi: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament Introductory statement by Mr Mario Draghi, President of the European Central Bank, before the Hearing at the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 15 February 2016. *  *  *  Mr Chairman, Honourable Members of the Economic and Monetary Affairs Committee, Ladies and Gentlemen, The first weeks of this year have shown that the euro area and the Union at large face significant challenges. A strong effort by all policy makers will be needed in the months ahead to overcome them. I am therefore grateful to be back before your committee to discuss these challenges and how the ECB can contribute to tackling them. In my remarks today, I will address in turn the global economic context, recent financial developments and the state of the euro area recovery. I will conclude by briefly presenting our most recent decision to disclose the Agreement on Net Financial Assets – or ANFA – as I know this topic is of concern to some of you. The state of the global economy Let me start with the state of the global economy. In recent weeks, we have witnessed increasing concerns about the prospects for the global economy. Activity and trade data have been weaker than expected, turbulence in financial markets has intensified and commodity prices have declined further. Slowing growth in emerging market economies is a focal point for this uncertainty.

This will support the banking sector’s ability to make long term sustainable business plans into the future. In fact, central bank governors and heads of supervision indicated that they are committed to not significantly increase overall capital requirements across the banking sector. In the euro area, the situation in the banking sector now is very different from what it was in 2012. Perhaps most importantly, euro area banks have significantly strengthened their capital positions over the past few years, notably as a consequence of the Comprehensive Assessment conducted in 2014. For significant institutions, the CET1 ratio has increased from around 9 to 13%, making them more resilient to adverse shocks. In addition, the quality of the banks’ capital has also been substantially improved. With the 2015 Supervisory Review and Evaluation Process (SREP), the ECB has outlined the steady-state Pillar 2 supervisory capital requirements. This means that, all things equal, capital requirements will not be increased further. Hence, the banking sector can now conduct much better capital planning. Moreover, in 2015, the banks under ECB supervision further increased profits relative to 2014. This allows banks to have appropriate distribution policies while still meeting regulatory capital requirements and buffers, and to support lending to the economy. In addition, the ECB’s monetary policy actions continue to support banks’ financing conditions and, more broadly, economic activity. Clearly, some parts of the banking sector in the euro area still face a number of challenges.