samchain/econo-pairs-v1 huggingface dataset:
Jon Nicolaisen: Digital challenges for the payment system Speech by Mr Jon Nicolaisen, Deputy Governor of Norges Bank (Central Bank of Norway), at the Financial Industry’s Digital Services Conference, Oslo, 9 June 2016. *  *  *  Introduction Technology advances rapidly, giving rise to opportunities and challenges. Norges Bank will actively promote efficient solutions for payments and financial transactions. I presume that the participants at this conference have the same goal, so we have common interests in this area. The Norwegian banking industry was among the first to adopt digital solutions. The giro systems were integrated and a common debit card system was put into place. The first internet bank giro was available already 20 years ago. Internet giro payments and BankAxept card payments in shops are cheap, efficient and widely used. Payment system costs in Norway have been considerably lower than in most other countries for a long time. Common solutions do not impede competition. Banks and other operators have their own customer interfaces, services and prices. But underlying that are a common infrastructure and common standards. This provides economies of scale and accessible solutions for customers, regardless of where they hold an account. Cooperation has rendered the payment system efficient and robust. New operators and new technology are now entering the payment market. This can, in principle, strengthen competition and improve efficiency. But it is important that the competition is rooted in a robust and cost-efficient common infrastructure.

The benefits of FinTech applications in this field for financial stability may include: (i) increased market efficiency, in particular for Real Time Gross Settlement (RTGS) among large financial institutions, (ii) enhanced risk measurement of each bank and a more transparent financial system, (iii) lower trade costs, robustness against cyber-attacks, and less need for collateral, (iv) a stronger wealth-channel for monetary policy if more agents access financial assets and loans. Similarly, crowdfunding and P2P reduce systemic risk since they do not involve money creation through the conventional multiplier/maturity transformation mechanism of banks. While this may significantly limit the scale at which operations can develop, they can be an affordable alternative for businesses that are not covered by conventional financial institutions. FinTech market support tools can also contribute to financial stability to the extent that they can mobilize a larger volume of information to better assess credit risk and to mitigate it through smart contracts, guarantees and collateral. 10  Central Bank of Chile 29 June, 2017  Slide 14  Risks ▪ New systems may have unknown weaknesses that are not apparent in the trials—“flash crashes” ▪ Pressures for users of automated payments and transfers systems— “smart contracts” ▪ Cryptocurrencies poses a number of challenges to financial systems and central banks alike ▪ Perhaps the greatest risk of FinTech is that of cybersecurity  Risks [SLIDE 14] FinTech developments also pose a number of risks for financial stability and monetary policy.
Gent Sejko: Welcome remarks -14th SEE Economic Research Workshop Welcome remarks by Mr Gent Sejko, Governor of the Bank of Albania, at the 14th SEE Economic Research Workshop, virtual, 10 December 2020. * * * Dear professors and researchers from academia, Dear fellow central bank colleagues/researchers, Dear participants, It is a great pleasure to open the proceedings of the 14th SEE research Workshop. Due to the difficulties and restrictions imposed on all of us by the COVID 19 pandemic this year’s workshop is organized virtually. I am glad to see that you are all well, and wish that you and your families stay safe and healthy during these difficult times. In a way it is sad that we cannot welcome you all in Tirana during these December days. However, at the same time I am very glad that despite the forced change in the format and in the presence of the many inconveniences caused upon all of us by the pandemic and related restrictions, we are having a full house with participants from the academia in Europe and central banks. We thank you for your interest and take this as a certification of the quality and reputation of this activity. Our research staff is eager to get to know your work and discuss with you the research that has been produced by bank of Albania during 2020.

This shock and the negative effects that it brought upon the economy and the central bank policies have been beyond comprehension. The authorities are feeling the difficulty of performing their task in the zero lower bound or very close to it. In this respect central banks have lost the traditional instruments of monetary policy and are reverting to money as the instrument of monetary policy. The shift has been significant not only in size but also in concept. The leading central banks in developed economies, the ones which set the trends, are under process of reviewing their objectives and monetary policy. Using support of research analysis and conclusions they are eventually rewriting monetary economics by giving central banks new instrument in the form of permanent use of the central bank balance sheet as a tool of monetary expansion. However, while implementation of balance-sheet strategies is easy to implement and deal with for developed countries central banks, same policies might not be easily adaptable and applicable by developing economies. Narrow and shallow capital markets, problems of financial inclusion and financial education, stressed private, public and fiscal balance-sheets and history, remind us of several potential risks that such policies can have for the highly dollarized/euroized economies of South-East Europe. Yet in the presence of current constrains faced by monetary policy we have to react and to find new ways to support the economy.
Closer attention must therefore be paid to the financial fragility that accompanied this process – both to the factors that led to the distortions in asset prices and to the factors that amplified the crisis once the adjustment took place. Let me touch briefly on two of these factors:   The first is financial innovation. Despite a lot of public debate and criticism I believe that financial innovation is essentially welfare enhancing. However, we must not forget that financial innovation can also become a form of circumventing regulation. The way some securitized assets where used was the clearest case of this abuse. They were structured in a way that only secure tranches remained in the balance sheets of banks, and the others were sold, many times to off balance vehicles, allowing credit to expand with a weak capital base. The result was excess demand for certain securitized assets, and excess exposure of highly leveraged intermediaries to these assets. Moving forward, financial innovation needs to move in step with regulation to ensure that it adds value and is not just a form of evading regulation and aggravating financial fragility.   The second is liquidity transformation. Along with important benefits, liquidity transformation entails significant risks. We have known the vulnerabilities of liquidity transformation in the presence of aggregate shocks for a long time; in fact, many countries paid very dearly for this risk before central banks where set up to provide aggregate liquidity.

The dose will depend on the initial conditions of the economy and the magnitude of the shock. A simple example is dealing with uncertainty in financial markets that increases demand for liquidity, which requires the provision of liquidity by the central bank. Is this consistent with price stability? Yes, indeed. If the financial shock consists of a collapse in asset prices that weakens balance sheets and leads to further declines in asset prices, the economic contraction can be substantial. The monetary policy response in this case will be to reduce interest rates, consistently with price stability (as in Bernanke and Gertler, 1999). In the aforementioned cases, policy interventions under financial stress, either lender of last resort (liquidity injections) or interest rate types, are consistent with PS and FS. But it may be the case that the magnitude of the financial shock is so severe than neither price nor financial stability may be fulfilled. The problem is not that these two objectives are mutually inconsistent, but that the shock is too large to be addressed with the standard tools. Nevertheless, the fact that the targets may not be achieved within the “policy horizon” does not mean that monetary policy cannot be effective to reduce the costs of the crisis. If something, output costs associated to the global financial crisis have been, so far, significantly lower than the ones we observed in previous comparable episodes. Macroeconomic policy has a lot to do with this.
With both commercial and residential rents, not to mention sales prices, high and rising in Manhattan, northern New Jersey has an opportunity to capitalize on its widening cost advantage by attracting companies and residents that value an urban location, but find New York City to be too pricey. And if preferences are indeed in the midst of a long-term shift toward urbanization, this bodes particularly well for New Jersey’s own cities. With a major international airport and seaport, a 20–30 minute train ride from most of Manhattan – but much cheaper rents – as well as a number of universities and a solid infrastructure, Newark has strong potential to develop its prominence as a major local business, economic and cultural hub. Concluding thoughts To conclude, I would like to say a few words concerning proposals to reform the Federal Reserve System. First, I concur with Chair Yellen that the Federal Reserve already is very transparent and accountable to Congress and to the public. I share her strong belief that the independence of the central bank to make appropriate policy decisions consistent with its legislated mandates is essential to a nation’s economic well-being. With regard to the structure of the Federal Reserve System and the role of the regional banks, including the New York Fed, I also agree with Chair Yellen that the system is working well, and I do not see a need for any substantive changes. I believe that the System has been designed appropriately so that a wide range of regional views are represented.

For the effectiveness of such interventions, however, there needs to be clarity in the objectives to be achieved by such central bank presence and the results that are expected to be delivered. Of importance, there needs to be the recognition of the temporary nature of such interventions and the challenge of efficiently unwinding such presence when the objectives are achieved. There is also the need to manage the risks of unintended  2  BIS Review 155/2010  consequences of such direct central bank interventions. Such risks could include the potential for circumvention, or the gravitation to other markets not protected by such intervention. There could also be potential costs associated with such interventions, not only the current costs, but also the cost to future generations. While the pace of deregulation and liberalisation may differ across emerging economies, there is a discernable distinct shift to greater market orientation in this recent decade. These reform efforts have been reinforced by efforts to develop the financial markets and financial infrastructure. Within this framework, the nature of intervention has been in the form of direct presence in the financial markets, the setting of rules and regulation, and in the resolution of problem financial institutions. Such interventions were evident during the Asian financial crisis in the late 1990s to restore stability in the financial markets. This in turn created conditions for the resumption of the financial intermediation process.
However, it is interesting to note that emerging market economies also enjoyed a Great Moderation, but it came in the second half of the 1990s, much later than in developed economies, which coincides also with the time in which inflation was conquered, supporting the hypothesis that it was good policies rather than good luck (De Gregorio, 2008). It is easy to discredit the Great Moderation in the current juncture. However, the resilience of emerging market economies to the global crisis was impressive. Indeed, emerging markets had a recession, but much milder than in the past and with a remarkable recovery. And this was, of course, the consequence of much better macroeconomic management. The case of Chile illustrates this point. We did suffer a recession, but the size of the initial impact and the speed of the recovery were quite different from previous episodes. In the second half of 1998, affected by the Asian Crisis, Chilean GDP fell by 4.3% quarter to quarter. Returning to the initial GDP level took us one year. But, comparatively, the unemployment rate more than doubled between the beginning of 1998 and mid-1999, reaching almost 12% and staying high, around 9.5%, until 2005. The effects of the 2008–2009 crisis were very different. Economic activity fell, but less than in the previous episode, by 3% between the end of 2008 and mid-2009. The recovery was much faster and only two quarters after the downturn, by the end of 2009, GDP was comparable to the precrisis level.

It has clearly emerged from the discussion today that post-trade harmonisation is gaining momentum and achieving concrete results. The example we heard about in more detail is the progress made on the T2S harmonisation agenda. The T2S Community and the post-trade industry have engaged in the implementation of harmonised standards and market practice in areas such as cut-off times, ISO messages, corporate actions processing, account numbering and settlement finality. As Jean-Michel Godeffroy illustrated earlier today, there is an ambitious plan in place for the coming months and a sound record of achievement so far. I noted that the audience expressed moderate optimism that the “priority one harmonisation topics” would be achieved by the launch of T2S. However, there is still a lot of work to be done in order to complete all these projects. It was very interesting in this regard to hear about the experience of Professor Giovannini, whose very name is closely associated with harmonisation and market integration. In particular, he analysed the problems faced by the Giovannini Group in the early 2000s. These reflections are very important for us now to learn from past experiences and to be able to achieve concrete results going forward. The large participation at this conference today, with distinguished speakers and almost 250 participants from all over Europe, is testimony to the joint willingness of both the European and national institutions and market players to achieve post-trade harmonisation, and thus contribute to financial integration in Europe.
That is because those firms that are able to will raise their price in response to a shock that raises the overall price level relative to target. If the central bank subsequently seeks to bring the overall price level back on to the originally prescribed path, then the relative price of those firms will be too high. It is better instead to allow some base drift in order to reduce the average (squared) distortion in relative prices across the economy as a whole. That suggests that some hybrid of price-level and inflation targeting may be a good idea; targeting average inflation over a run of years is one way to approximate such a hybrid regime (King, 1999). A final issue with price-level targeting lies in communications. While the public can probably relate to the idea of inflation as the average rate at which prices in the economy are changing, it less clear that they will understand what a consumer price level index means. Such a target for the price-level would therefore probably need to be portrayed as stabilising average inflation over a very long period. The extent to which a shift to targeting the price-level, rather than inflation, acts as a bulwark against the ZLB is ultimately an empirical issue. Interestingly, however, the behaviour of the price level in many advanced economies during the Great Moderation suggests that it might not make a lot of difference whether or not countries move to targeting a path for prices rather than inflation.

One can, however, answer a slightly different and more straightforward question, namely what impact the accommodative policy stance had on asset prices and credit growth. Bernanke goes on to provide time-series and crosscountry evidence, which suggests that monetary policy played a relatively modest role in the boom in house prices in the United States and a number of other countries. Chart 1 shows that both UK and euro-area policy rates were less noticeably out of line with their respective Taylor benchmarks. That too is striking. Indeed, in the United Kingdom, they were actually above the benchmark for much of the relevant period, even though the United Kingdom saw one of the larger run-ups in debt and house prices during this period. And, in the euro area, countries such as Spain experienced substantial house price booms, while countries such as Germany did not. That need not imply that monetary policy was innocent in the run-up to the crisis, as the equilibrium real interest rate could have been higher in the United Kingdom than in the calibrated Taylor rule. And differences in equilibrium real interest rates across countries can in principle explain the heterogeneity in the euro area. But this is hardly compelling evidence for assigning the central role to monetary policy, suggesting that other factors were more important. To complement Bernanke’s analysis, we provide some further evidence on the impact of policy on credit and asset prices, obtained from estimated vector auto-regressions for the United States and the United Kingdom.
Investor demand for green bond 6/9  issues is a clear sign of the growing concern about the effects of climate change, but it may also reflect a lower underlying risk. In any event, this change in attitude by investors should also serve as a catalyst for change towards more sustainable activities. Taxonomy I should, however, also mention a general problem that may be holding these markets back. Although the establishment of various green principles, such as the GBP, facilitated the launch of the green bond market, the lack of a commonly accepted taxonomy4 could be hampering its subsequent development. A shared taxonomy is essential to be able to make a coherent analysis of the green/brown bond yield spread. It is also important for the supervisor, as it permits aggregate risk and default analysis, consistent stress testing and the development of macroeconomic models, all of which are required to assess medium and long-term effects on the economy. Lastly, a common taxonomy is needed to provide clear and consistent information to investors and the general public, as will be required of all listed companies in the future Spanish legislation on environmental transition. In this setting, the European Commission’s action plan, presented in March 2018, is crucial. The plan includes three sustainable finance regulations, including one on the creation of a “common taxonomy”.

News conference on new banknotes  Berne, 3 September 2019 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg  Ladies and gentlemen I am very pleased to welcome you to our presentation of the new 100-franc note, the last denomination of the ninth banknote series to be issued. To mark the final milestone in this challenging project, as well as inviting the media we also have some guests here who were heavily involved in developing and producing the new banknote series. It gives me great pleasure to welcome representatives from our suppliers Orell Füssli, Landqart, Sicpa and Kurz. I am going to start by unveiling the hotly anticipated 100-franc note, before showing you the full series, with all six denominations together for the first time. My colleague Thomas Jordan will then review the issuance process for the entire new series, before looking to the future. After that, we will take your questions on the new 100-franc note, and the ninth series in general. We do of course have all the denominations here with us, so that you can take photos of both the 100-franc note and the entire series. Finally, we will round off today’s event with a drinks reception, to which you are all warmly invited. But let’s start by unveiling the last denomination in the new banknote series. Voilà, the new 100-franc note. I’ll now take you through the details of the new note. Like its predecessor, the new 100-franc note is blue.
3  Because Swiss GDP statistics do not fully take into account the improvement of the terms of trade regularly realized by the tradable sector, the growth differential between Switzerland and other advanced economies is overstated but remains significant nevertheless. See e.g., Term-of-Trade Changes and Real GDP: Evidence from Switzerland, Ulrich Kohli, SNB Quarterly Bulletin, June 2002. BIS Review 24/2004  3  Monetary policy and EMU Accession to a monetary union transfers the power over monetary policy from the national to the union level. There are costs and benefits to such an abdication of monetary sovereignty. Nominal interest rates are equalized throughout a monetary union and the nominal exchange rate is no longer available as a tool for alleviating the impact of asymmetric shocks. Necessary economic adjustments between different countries of a monetary union must therefore occur through various price and factor movements. As I have already suggested, imposing real wage adjustments in particular can be politically costly. In the case of both the UK and Switzerland, these potential costs of EMU membership are mitigated by virtue of flexible labor markets in both countries. In the case of Switzerland, EMU accession would also lead to the loss of an interest rate bonus our country has traditionally enjoyed. At least partly, this bonus is rooted in the credibility of the Swiss National Bank, acquired over a long period of independent and successful monetary policy (Chart 2).

A similar situation has not been seen since World War I when earnings in the shipping industry and other export  1  See also the analysis in Norges Bank Watch 2007. BIS Review 47/2007  5  industries were exceptionally high for a period. Norway’s disposable income increased in real terms by 30 per cent from 2003 to 2006. Second, an ample supply of labour has boosted output growth. In particular, the supply of foreign labour has increased sharply after EU enlargement in 2004. Over the past two years, these labour inflows have accounted for over 30 per cent of growth in the labour force in Norway. At the same time, this has enabled Norwegian companies to be bolder in accepting new assignments and investing knowing that they can procure labour throughout Europe. In addition to increased labour inflows from Poland, Lithuania and other central European countries, we have long benefited from inflows of labour from Sweden. Many workers are on temporary assignment and their consumption is primarily concentrated in their home country. The Norwegian economy has seen a net capacity increase. Third, the Norwegian business sector has been quick to integrate new technology. This applies both to companies competing on international markets and those supplying goods and services to the domestic market. In comparison with other countries, it is particularly productivity gains in banks and other service sectors that stand out. Examples are automated processes and swifter payments in the financial industry and improved inventory and management systems in commerce and transport.