samchain/econo-pairs-v1 huggingface dataset:
They also support the case for clarity in the application of these regulatory policies. Not least given its newness, there may be further to go clarifying the motivation behind macroprudential interventions and the circumstances which might justify different macroprudential instruments - in short, in defining and refining the macroprudential policy reaction function. The UK’s Financial Policy Committee has made some progress in this area, most notably in setting out its strategy for using the countercyclical capital buffer (Bank of England (2016a)). A discussion of the principles underlying the UK’s approach to macroprudential policy can be found in Brazier (2017a). The benefits of pursuing this path are clear from monetary policy experience (Brazier (2015)). Increasing the predictability of policy can enhance the ex-ante signalling and expectations channels of regulatory policy, as has been achieved in relation to monetary policy (Bernanke and Mishkin (1997)). It enhances ex-post accountability to stakeholders, political and societal. And it reduces the potential behavioural biases otherwise associated with discretionary decision-making and which have been found in the past to affect discretionary regulatory policy, including regulatory capture (Dal Bó (2006)) and defensive decision-making (Gigerenzer (2014)). At the same time, there is clearly a balance to be struck. As Greenwood et al (2017) argue, strict rules-based systems are likely to be arbitraged and exploited by banks. For example, recent theoretical work and experimental evidence suggests remuneration contracts can be restructured to recreate the excessive risk-taking incentives that new rules seek to reduce (Thanassoulis and Tanaka (2017), Harris et al (forthcoming)).

Essentially there is a risk that the single monetary policy - the single, one-size-fits-all, short-term interest rate - within the euro area, which is a necessary corollary of the single currency, will not in the event prove to be appropriate to the domestic needs of each of the euro-member countries. There is no doubt that such risks exists. They may result from cyclical divergence. They may arise from differences in fiscal positions even though these are to be constrained through the Stability Pact. Or they may result from economic shocks of some sort that have a bigger impact on some countries than on others. The rise in oil prices in the early 1970’s or German reunification are classic examples. So the risk of divergent monetary policy needs within the euro area is real. And the damage it could cause if serious tensions between member countries were to emerge is substantial, because alternative adjustment mechanisms, such as labour migration or fiscal redistribution, that exist within individual countries, and which help to alleviate the similar regional tensions that arise at the national level, are simply not well-developed at the pan-European level.
The main points of monetary policy under this program were as follows: ·  The Central Bank set a ceiling on increases in net domestic assets. ·  The Central Bank paid close attention to keeping increases in reserve money in line with increases in demand. Open market operations were actively used during the year to mop up excess liquidity created by the increases in our net foreign assets. ·  The Central Bank monitored exchange rates throughout the year, with special attention to maintaining stability in the foreign exchange market. ·  Continuous domestic borrowing by the Treasury made a positive contribution to achieving all targets. ·  Turkish lira interests rates were determined mainly by the borrowing strategy of the Treasury. The Turkish Central Bank has played no direct role in the determination of interest rates. In an economy with market-determined interest and exchange rates, where a persistent public deficit is being financed mainly through the domestic markets, the monetary policy tools available to the central bank are few and of limited effectiveness. As noted above, interest rates are determined primarily by the borrowing activities of the Treasury. By the same token, foreign exchange rates are determined as a function of the external trade deficit (itself a function of growth) and the level of interest rates. Under these conditions, the central bank is absolutely obliged to keep the items on its balance sheet under careful control.

Coming to a concrete and operational perspective, I will first give a few personal suggestions on how the resolution framework could evolve over the coming years (I), and then highlight why and how supervision and resolution authorities should work more closely with one another (II). I. How resolution could evolve over the coming years Resolution currently stands as the only harmonised crisis management framework at EU level, and is therefore a public good to be preserved and enhanced. After seven years of determined preventive action and two successful resolution decisions, the SRM is entering a more mature phase where it can start contemplating how resolution may evolve, taking advantage of the upcoming revision of the crisis management framework. Primarily, we should broaden the scope of banks that could be subject to resolution measures, by considering the regional impacts of a failure in public interest assessments (PIAs). The SRB and some national resolution authorities have already taken a first step in this direction. I very much welcome this evolution, which in my view could go one step further to enable medium-sized banks to be subject to resolution measures if their PIA concludes that there is a public interest in doing so. We would naturally have to determine the criteria for identifying medium-sized banks, and for excluding small banks whose limited footprint would never justify resolution. Furthermore, instead of focusing exclusively on bail-in, resolution planning should ensure that the whole range of currently available tools are considered.
And secondly, because the Spanish parliament was prepared to approve some of the harshest and most difficult measures adopted in Europe to rapidly reduce the budget deficit. But the task is by no means complete and, therefore, the responsibility of Spain’s parliamentary forces remains of paramount importance. True, the countries that required financial assistance have more problems to resolve, but in their favour they have precise programmes of measures agreed with the International Monetary Fund and the European Union with which they must unfailingly comply. If they fail to do so, they will be withdrawn. They know perfectly well what they have to do and when they have to do it. In our case the responsibility is greater, since we ourselves must decide on the content and timeframe of the reforms and that means we must be capable of adopting the right measures for exactly as long and as intensely as required, and over a sufficiently short timescale so as to convey to all the firmness of our resolve to overcome the crisis. Let us turn to the most important and pressing tasks facing us: to bring about far-reaching change in the legal and institutional framework for employment, to comply with the deficit-cutting plan and to complete the restructuring of the financial system and the overhaul of savings banks. Nothing is more necessary for improving the well-being of workers and of all Spanish citizens than reducing the unemployment rate and raising productivity so that wages may grow at a higher rate.

In operational terms, this means that, in the conduct of their duties, neither the European Central Bank nor the national central banks of the Eurosystem may request or take instructions from the Community institutions, national governments or any other body. They are entirely institutionally, operationally and financially independent. Transparency and accountability are also essential for gaining credibility Naturally, the independence of these institutions requires transparency in their decisionmaking processes and accountability vis-à-vis the general public and their representatives. As regards new institutions such as the ECB, transparency is even more important for gaining credibility and building up economic agents’ confidence in the new currency. In order to establish this credibility and gain the confidence of agents, it is imperative to be understood, which in turn calls for transparency. For the sake of transparency, the Governing Council has specified and quantified its definition of price stability (inflation below but close to 2% over the medium-term). Second, the ECB has gone beyond the accountability requirements laid down by the Treaty by instituting regular testimonies by the President of the ECB before the European Parliament and regular informal meetings with the Eurogroup of Finance ministers. Another channel for transparency is constituted by the regular publication of reports on economic developments and Central Bank analysis, of the Eurosystem’s and ECB’s staff projections exercises, most prominently in the ECB’s Monthly Bulletin.
With expectations rising faster than the ability of governments to meet them out of available resources, however, the norms of prudent financial management were put aside and growing resort was made to deficit financing. Understandably, politicians are wary of asking citizens to give up any of the rights they have acquired in the process, especially on the eve of elections. The problem is that there comes a time – and that time is now in Malta as in some older EU members – when the financial burden of an extensive welfare system (itself compounded by the effects of an aging population) and of a large, and relatively inefficient public sector becomes too heavy to bear. It also deprives the economy of both the resources and the flexibility necessary to respond successfully to the competitiveness challenge coming from low-cost or more efficient producers. This is a challenge which cannot be ignored. The people need to be told that certain attitudes and practices are unsustainable, and that the only effective response to the relentless march of globalization, to EU membership and other sources of competitive pressures is nothing less than a culture change, a complete break with the past. I believe it is possible to build an alternative, more efficient system for managing the economy and which nevertheless reconciles the objectives of social cohesion and financial sustainability. It is in this broader context that I have often called for a wider application of means testing.

If anything, the importance of the Bank’s independence, which is already enshrined in Maltese law and has been duly respected by successive governments, will be even greater once the Bank becomes a member of the Eurosystem. First of all, the autonomy of national central banks is mandated by the Maastricht Treaty. Reflecting this requirement, the Central Bank of Malta Act now fully guarantees the institutional, functional, financial and personal independence of the Bank and of the members of its decision-making bodies. As for the ECB, it has adopted low inflation as its overriding objective, and its independence helps to guarantee its ability to deliver on this commitment. As I said earlier, the governors who sit on the Governing Council of the ECB do so in a personal capacity and must be guided only by euro-area wide considerations. As members of this Council, therefore, governors of national central banks must not only be persons of recognized professional competence and personal integrity, but they must also be prepared to defend their own bank’s as well as the ECB’s ability to act independently of political and other pressures. 4  BIS Review 59/2007
In the last rounds of interviews with our regional network, an increasing number of companies reported that wage growth in 2006 will be higher than budgeted early this year. The level of unemployment that is consistent with stable real wage growth is uncertain and probably varies over time. We have assumed that increased economic integration across countries, both in the form of an increase in inward labour migration and intensified competition in product markets, may have a dampening effect on wage demands for a given level of unemployment. In the period ahead, a tight labour market is expected to result in higher real wage growth. Nevertheless, it is assumed that labour inflows will have a dampening impact on wage demands, so that real wage growth will be a little lower in the next few years than in previous periods of equally low unemployment. The upward pressure on price and wage inflation given the level of current resource utilisation, as reflected in the output gap, is estimated to be lower than in the previous expansion even though the unemployment rate is at approximately the same low level. This is due in part to high productivity growth in recent years. Growth in disposable income has been high in recent years. Lower interest expenses and relatively high real wage growth have resulted in an increase in household purchasing power. The rise in house prices may also have fuelled growth in private consumption.

In the course of 2005, office rental prices began to pick up in the largest Norwegian cities, with considerable variation within the various quality and location segments. The rise in consumer prices has also edged up since the beginning of the cyclical upturn. The year-onyear rise in the consumer price index (CPI) was 2.6 per cent in September. Energy products such as electricity and oil have put upward pressure on inflation over the past year. Electricity prices, including grid rent and taxes, were 48 per cent higher in August than one year earlier, while petrol prices were 1 per cent higher. Since the beginning of 2001, the rise in energy prices has been over 7 per cent on average. Variations in energy prices may also lead to wide monthly variations in consumer price inflation. As a result of high electricity prices, the rise in CPI inflation will remain steady though 2006. Energy prices are expected to fall in the spring of 2007, dampening the rise in CPI inflation. The rise in prices for non-energy goods has been moderate in recent years. Price impulses from imported consumer goods have been particularly weak. Their contribution to inflation has been negative virtually every year since the mid-1990s, partly reflecting increased trade, a shift in imports towards low-cost countries and a substantial improvement in distribution efficiency in Norway. Price impulses from imported consumer goods are expected to continue to exert downward pressure on inflation for some time ahead, albeit to a lesser extent than in previous years.
When I was still at the Bank for International Settlements, I gave a speech here in Iceland on financial globalisation to an audience of high-level European bankers. In that speech I discussed the risks associated with the internationalisation of banking and said: “ … emergency liquidity assistance will be complicated or even impossible for central banks to deliver when internationally active banks face liquidity problems in currencies other than that of their home country. Iceland is a case in point”.1 That is essentially what happened in the autumn of 2008. But this was in May 2007, before the international financial crisis emerged in August that same year. Then it became gradually more obvious and the Icelandic authorities tried to build defences and seek international support, but with limited success. Given the lack of international cooperation, the Icelandic authorities were forced to consider radical solutions. Although they were probably not articulated fully at the time, these solutions entailed several goals: preserving a functioning domestic payment system, ring-fencing the sovereign in the case of bank failures, limiting the socialisation of private sector losses, and creating the conditions for the reconstruction of a domestic banking system. In essence, the adopted solution saved the domestic operations of the banking system and let the international part to go into a resolution process. The new banks were created by carving the domestic assets and liabilities out of the old, failing banks. The new banking system amounted to 1.7 times GDP.

Comprehensive capital controls were an important element in the programme, but their rationale was to help to stabilise the exchange rate in a situation where the currency had fallen more than 50% in 2008, where foreign króna positions that were a legacy of carry trade and capital inflows amounted to around 40% of GDP, and where a large fiscal deficit that had to be financed in the domestic market had developed. The capital controls therefore gave monetary policy more scope to help stabilise and turn around the real economy once inflation came down. Franek will discuss the IMF programme in more detail, but I would like to make one more remark regarding fiscal consolidation, as it is such an important part of the story. The crisis hit Government finances hard, as can be seen from this slide. BIS central bankers’ speeches  3  It was therefore of vital importance that Government debt was relatively low immediately before the crisis. However, fiscal consolidation was needed earlier than some considered optimal at the time from a demand management perspective, in order to regain internal and external confidence and open market access. The effort was huge, as can be seen from this slide, but back-loaded, as automatic stabilisers were mostly allowed to work in 2009. And it did not derail the recovery that began around the middle of 2010.
22 And just as finance is global, and tech is global – so is regulation global. The UK public sector is closely joined up with its peers in other jurisdictions, both bilaterally and through organizations such as the Bank of International Settlements, the Financial Stability Board, G7 and G20. This is why we are very excited that the Bank will start hosting a new BIS Innovation Hub later this year. The BIS Innovation Hub, with locations around the world, is an innovative way for central banks to collaborate on technological developments. I look forward to it adding a new way for us to provide global infrastructure, both hard and soft, to support safe innovation across the world. We are already collaborating with the BIS-IH in Singapore looking at digital regulatory reporting and standards for mortgage data. Conclusion  As I hope these remarks have illustrated, fintech is a broad and dynamic sector that requires a wide-ranging and dynamic response from the authorities. The Bank of England recognises the benefits that fintech and technological innovation can bring, and that it may come in many forms and from many sectors. The infrastructure we provide, whether hard or soft, takes just as many forms and, as the examples I have discussed have shown, ranges across a very wide area of the fintech landscape. It touches on the work not just of our Fintech Hub but of many other areas of the wider Bank.

The Bank of England and Fintech: Public Support for Private Innovation Speech given by Dave Ramsden, Deputy Governor for Markets and Banking  UK Fintech Week 2021 21st April 2021  With thanks to Andrew Whitworth and Tom Smith for their assistance in preparing these remarks, and to Bank colleagues including Shiv Chowla, Victoria Cleland, Louise Eggett, Angus Moir, Helen Packard, Varun Paul, Andrei Pustelnikov, Will Saunt and Oliver Thew for their many helpful contributions and suggestions. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction  Thank you for this invitation to speak at UK Fintech Week. Every year this event performs an important role in highlighting the strength and potential of the fintech sector in the UK. After a year like the last one, we need to be more certain than ever about the resilience of the sector. Today, I will discuss how the Bank of England delivers its role to support the safe development of UK fintech in line with our mission: to promote the good of the people of the UK through monetary and financial stability. Engaging with fintech is an important part of achieving that mission, as I emphasised when I spoke here last two years ago in 2019.1 In the three years since the Bank set up its ‘Fintech Hub’, and the two years since Huw van Steenis’ 2019 ‘Future of Finance’ report for the Bank, the UK fintech sector has grown significantly.
In a few months’ time, the Bank will be issuing an Exposure Draft on Fair Treatment of Financial Consumers which will set out heightened regulatory expectations for all players. Agents will need to exercise greater care, skill and diligence in their dealing with customers. But rules and regulations are in themselves not sufficient to create a pool of agents trusted by customers: That would require all-round, holistic professionalism – an agent who is technically qualified, fully committed and uncompromising on ethical standards. To me, it is this integrity and calibre that will ultimately guarantee the continued success of agents into the next decade, more so than any other factor. Faced with a more demanding and complex business environment, agents must continuously develop and equip themselves with skills and knowledge that are relevant, and that will continue to remain relevant well into the future. There are plenty of formal programmes available to help agents progress in their technical competencies. There is also a whole host of open online courses which can be accessed anytime, anywhere, with the desire to learn is the only prerequisite. It is encouraging that various professional training courses are already being offered through NAMLIFA’s Financial and Life Practitioners Council, and that one of the programmes has been accredited by the Financial Accreditation Agency (FAA).

An Accenture survey revealed that aggregators account for 70% of new business premiums in the UK private automobile insurance market. Indeed, two product aggregators platforms are already operating within Bank Negara Malaysia’s Regulatory Sandbox. The Bank is reviewing the regulatory framework to enable the aggregators to operate by the end of this year. 1/5  BIS central bankers' speeches  These are headwinds that the industry has to tackle head-on, and like it or not, they will further intensify. While we cannot stop these changes, we can certainly choose how we respond to it. With challenges are opportunities. These can only be reaped through a combination of traits – greater proactiveness, a willingness to adapt and clear strategic thinking. I do not doubt that this is much harder than it sounds, but I believe a good place to start would be focusing on three priorities. Allow me to elaborate on each in turn. Technology that matters The vision for the life insurance and family takaful industry is to achieve a penetration rate of 75% of the Malaysian population. Within this, the takaful industry has set a 25% target to be achieved by 2020. For this to happen, it is crucial that the industry gets to grips with the shift in market demographics, especially where interactions with technological platforms are concerned. It is imperative that agents embrace technology. A 2017 study 1 by Bain & Company indicates that nearly 60% of insurance customers in Malaysia are digitally active.