samchain/econo-pairs-v1 huggingface dataset:
With the influence of external factors squashed, the ringgit is now priced more efficiently and increasingly more reflective of Malaysia’s strong fundamentals. Nevertheless, questions remain as to why the ringgit is far from reflecting its fair value. Numerous research pieces by analysts based on real effective exchange rates, have in fact, indicated that the ringgit is one of the most undervalued emerging market currencies. Despite 1/7  BIS central bankers' speeches  strong GDP data for the first three quarters and better-than-expected exports performance in 2017, the ringgit exchange rate movements have remained lethargic, with flows and sentiments still driven by external factors and foreign players. At times it appears as if domestic traders were playing second fiddle in own their market. It is time for our traders to price the ringgit accordingly, and play their rightful role in their home market. The ringgit should reflect economic fundamentals and emerging data. It is time for our local traders to be brave, stand up and be counted. This reminds me of a saying by Abraham Lincoln ‘Whatever you are, be a good one’. Part II – What drives the level of the exchange rate? Granted, the ringgit does, to some extent, reflect Malaysia’s economic fundamentals. The fact that the ringgit’s recent recovery coincided with strong domestic data releases suggests that. Nevertheless, in a global financial market that is driven by short-term developments, the ringgit exchange rate can veer in unexpected directions and reach levels that are far from reflecting economic realities.

Unfortunately, most of these movements are not driven by facts, but perceptions. In ringgit’s case, I would call it misperceptions. Perception is the thinking we make based on the information that we receive. Everyone thinks. It is our nature to do so. In fact, many of us in this room not only have to think, but we are tasked and compensated to think, decide and act upon our thoughts. It is said that an adult supposedly have to make an average of 35,000 decisions per day. This necessitates us to think fast and decide quickly. But studies have also shown that thinking forces the brain to consume a lot of oxygen, so much so that the process of thinking is tiring for our brain. Such decision fatigue can be paralysing. To ease the decision fatigue, most of us begin looking for mental short-cuts, heuristics and simple rules-of-thumb to ease the cognitive load and cut decision-making time. But as we rely on simple rules-of-thumb to form judgments and make decisions, we leave ourselves vulnerable to errors, manipulations and cognitive biases. Most of the time, this is not done deliberately. The large body of research in neuroscience seems to suggest that these cognitive biases are neurologically hard-wired, afflicting us all either consciously or unconsciously. Let me touch on three instances where our perception and actions have been influenced by these biases. First, take some of the psychological thresholds for example, loan-to-deposit ratio of 90%, ringgit level at RM4.00, and reserves level below USD100 billion is considered as vulnerable.
One of the most important is determined by what we know about the functioning of the economy and the effects of monetary policy. Not everyone agrees, however, that transparency is a good thing for attaining financial stability. Many people argue that so-called constructive ambiguity is the best way to avoid problems of moral hazard in the banking industry. I believe, however, that transparency is important in this area as well. Banks that are "too big to fail" from a systemic point of view will in any case count on support from the government. Especially when it comes to countries like Sweden, which experienced a severe banking crisis not so long ago, it is likely that support to banks that encounter financial problems will be expected if nothing else is being communicated. Another risk associated with constructive ambiguity is that it could limit the motivation of central banks to seriously consider what to do in a crisis. In other words, it could provide an excuse for not thinking the issues through. However, if you are not prepared, you could easily become the bank's prisoner in a time of crisis. Through deeper analysis of the "too big to fail" problem and open communication of crisis strategies, it should be possible if anything to mitigate the moral hazard problem. If you can show that the banks do not need to be systemically important, it should make banks even more uncertain about the possibility of receiving support than any policy of constructive ambiguity.

Running through to 2024, the plan aims to integrate climate-related risk into the ECB’s monetary policy strategy, not just in asset purchases but also in the framework governing the collateral eligible for central bank refinancing. Central banks themselves also have a role to play in steering investment flows towards the green transition, in particular by greening their own funds. The Banque de France was the first Eurosystem central bank to adopt and implement a Responsible Investment Charter, which it did in 2018 for its own funds portfolios. It aims to limit the exposure of its assets to climate-related risk while also taking account of the impact of its investments on the environment, in keeping with the double materiality principle promoted by the EU. In conclusion, there is certainly no shortage of challenges for banks. However, I hope I have shown that these challenges are also opportunities. Accordingly, we should neither overstate nor underestimate their significance. Thank you for your attention. 6/6  BIS central bankers' speeches
About the monetary policy rate, at the statistical cutoff of this Report market expectations showed differences in  BIS central bankers’ speeches  3  the expected path for 2015. The surveys indicated that the MPR would remain in 3 percent throughout this year, to rise during 2016. Meanwhile, the prices of financial assets suggested that it should be raised during the second half of 2015. As a working assumption, the MPR is assumed to follow a trajectory that is somewhat above what is implicit in the surveys (figure 10). As is usual in our projections, the baseline scenario reflects those events estimated to be the most likely to occur with the information at hand at the close of this Report. There are risks, however that, if materialized, may reshape the macroeconomic scenario and, therefore, may alter the course of monetary policy. Abroad, there are several elements that might trigger new episodes of volatility in world financial markets, with significant effects on credit costs, currency parities and the short-term inflation outlook. On one hand, important surprises regarding the timing and the speed with which the Federal Reserve will raise the benchmark rate may cause significant volatility in global financial markets, pushing interest rates up and further appreciating the dollar. In such a scenario, one cannot rule out that, additionally, we observe an abrupt portfolio rebalancing, given the low level of long-term interest rates and the high stock prices in the United States.

Distinguished Guests, Another major risk to the inflation outlook is a sharper than expected slowdown in global economic activity, which, in turn, could lead to further volatility in financial markets. The eventual impact of financial turmoil on global economic activity triggered by mortgage loans in the US economy is yet to be seen. These uncertainties have been dampening the risk appetite and thus slowing capital flows to emerging economies. The CBT will not react to temporary fluctuations in financial markets. Yet, we will not hesitate to tighten monetary policy in case of a significant worsening in the overall pricing behavior. Under current liquidity conditions, I believe it is useful to note that the Central Bank has the resilience to implement a strong monetary tightening within a short time. The recent cuts in the amount of foreign exchange auctions, reduced FX borrowing of the Treasury and the increase in demand for money has led to a decline in the withdrawal of excess liquidity in the overnight market. The said tendency is expected to persist in the upcoming period, which will thus lead to relatively tighter monetary conditions. This framework not only allows the Central Bank to perform more resilient and efficient liquidity management but also to adopt tighter monetary policy without the need for a Monetary Policy Committee Meeting.
The latter should comprise people who help to formulate the policies of their countries in national capitals, and so could not be full-time in Washington. The main function of the Executive Directors was not to manage the Fund, but to act as an essential link between the Managing Director and the national treasuries and central banks from which they were drawn. In retrospect, Keynes's position seems sound. Given the ease of modern travel – at least in comparison with 1946 - serious consideration should be given to a non-resident Board, meeting some six to eight times a year with directors comprising senior finance ministry or central bank officials. 6  BIS Review 11/2006  The process of shifting to a non-resident Board would bring the issue of the division of responsibilities to the fore. Member countries might conclude, for example, that they wanted to retain control of decisions to lend under the exceptional access framework. But in other areas, such as surveillance, it would make sense to delegate responsibility to the Managing Director in the context of a clearly defined remit. Moves in this direction would need to be accompanied by reforms to strengthen the accountability of the Managing Director. A first step in this direction would be to instigate regular IEO assessments on the effectiveness with which the Managing Director and staff had discharged their surveillance responsibilities. Finally, in terms of legitimacy, its members must feel that the ownership of the Fund is shared and that all have a voice.

That analysis should lead to an assessment of the risks to the world economy as a whole. The second task is to encourage countries to abide by their commitments to each other by promoting greater transparency about national policies. In agreeing the Second Amendment of the Fund’s Articles, all member countries made a general commitment to each other to pursue policies consistent with the objectives of stable global growth and low inflation. Only in relation to exchange rate arrangements were members asked to specify what framework they would follow to be consistent with this commitment. As Tim Adams, Under Secretary for International Affairs at the US Treasury, has noted recently, the nature of those commitments was left unhelpfully vague and should be clarified. In doing this, we should not lose sight of the fact that the policies of all significant members have spillover effects and all should be required to be more precise about their policy making frameworks. Clarity about the objectives of policy of member countries should make it easier for all countries to formulate their own policy. And by making their national policy frameworks sufficiently transparent, countries will be making it possible for the IMF to hold them to account and to fulfil its role as an umpire. The third task is the provision of a forum for national authorities to discuss risks to the world economy.
The Supervisory Capital Assessment Program (SCAP) exercise that we undertook in the United States leaned against this. By forcing all the banks to have sufficient capital to withstand a stress environment, we increased the likelihood that all the big banks would be able to survive a stress environment. This generated an improvement in confidence and a willingness of banks to engage with each other. This also made it easier for banks to be able to tap the capital markets. The SCAP exercise made a bad state of the world outcome less likely, helping to create a virtuous circle rather than a vicious one. The SCAP exercise was conducted on an ad hoc basis. It probably would be much better to figure out how to do these types of exercises on a systematic basis. Such exercises may need to be hardwired into the oversight of the financial system. Capital requirements are one area where I think we could adjust the rules in a way to improve incentives. For example, imagine that we mandated that banks had to hold more  2  BIS Review 83/2009  capital, but that the added capital could be in the form of a debt instrument that only converted into equity if the share price fell dramatically. What would this do? It would change management’s incentives. Not only would management focus on generating higher stock prices, but they would also worry about risks that could cause share prices to fall sharply, resulting in dilution of their share holdings.

It could undermine banks’ profitability and their ability to meet regulatory requirements, and ultimately affect their capacity to finance the real economy. The issuance of a CBDC could alsoreduce the role of banking intermediaries in client relationships, depending on the architecture chosen by the Eurosystem, which could restrict access to client information. To avoid these undesirable consequences, it is essential that commercial banks be involved. Their input is needed, for example, to set limits and/or remuneration disincentives for CBDC holdings. In addition, choosing an intermediated architecture would allow us to exploit financial intermediaries’ expertise in customer interface management, and thus preserve the essential role they play in this field. b- Avoiding impediments to the conduct of monetary policy  Choices will also need to be made to avoid any adverse consequences for monetary policy conduct. The introduction of an unremunerated retail CBDC with no holding limit could make it difficult for central banks to pursue a negative interest rate policy, as market participants would prefer to hold the CBDC instead of assets remunerated at negative rates. This effect could be avoided by setting an appropriate level of remuneration for the CBDC. c. Improving the efficiency and integration of payment solutions Choices will also need to be made to ensure that the CBDC complements existing payment solutions, so that it can increase the efficiency and integration of certain market segments. This notably applies to cross-border payments.
Market participants – and indeed the general public – will learn about the authorities’ behaviour and shape their own  10  For more information, see “The Corporate Sector and the Bank of England’s Asset Purchases” available at: http://www.bankofengland.co.uk/publications/Pages/speeches/2010/423.aspx  BIS central bankers’ speeches  5  accordingly. Moral hazard is one aspect of this – that can lead to market participants taking more risky actions because of the perceived backstop provided by the central bank. More generally, communications strategies can be a positive part of the toolkit, in particular by giving out information about the central bank’s monetary policy “reaction function”. For the most part it is helpful for markets to be able to predict what the central bank will do. That way one can often hope to generate the desired responses with less severe policy actions than otherwise. Credibility matters. For example, if people believe that inflation will be 2% in the medium term, and act accordingly, it is much more likely that inflation will stay close to 2% in practice without big swings in monetary policy. Keeping inflation under control is much more costly for the economy if expectations become de-anchored from the official target. But how explicit do we need to be about our forward plans? This is a very live policy debate.

The recovery in financial markets that we have seen in the past 6 months or so, is in part driven by the statement that the ECB will do “whatever it takes” to keep the euro area together and the perceived commitment that the Fed will do whatever it takes to restore growth in the US. The belief in these policy approaches has been immensely powerful. But it must be backed not only by perceived intent but also by capability and delivery if needed – and economies always generate some surprises. If the actions don’t follow the words when necessary, then similar policy statements in future will be less effective. In the UK, market expectations are already consistent with monetary policy remaining very supportive for some time to come, indicating no change in Bank Rate until well into 2015. Yet there is still a debate about whether the MPC should give more “forward guidance”. In practice we have being doing this through the Inflation Report. The most recent edition makes it clear that we do not see much pressure arising from domestically generated inflation. Rather, we continue to see inflation being driven by factors such as tax changes, higher commodity and energy prices, and other external influences. These and similar adverse relative price changes have made us all financially worse off and contributed to keeping inflation higher than target over the past few years. In response, the Bank could have chosen to tighten monetary policy to keep measured inflation rates down.
The next step will be an Open Forum to be held at the Guildhall in November which will bring together policymakers, financial market participants and users, academics, media representatives and wider society to map a positive future for financial markets. Conclusions I hope the above gives some idea of the comprehensive set of regulatory reforms that have either been applied or are in train. They cover policies to increase the quantity and quality of capital, to fix appropriate liquidity requirements, to manage systemic risk, move closer to ending too big to fail; and to establish clear management and personal accountability. The chart in Annex 2 shows these initiatives and gives a broad indication of the timelines out to the start of 2019. This is a massive change agenda, absorbing a lot of resources at regulators around the globe, especially in the UK, and many times more resources in the regulated firms themselves. What are the consequences? I frequently get asked questions on this so let me try and give my – strictly personal – answers to the most common questions. Has the reform agenda been completed? I think most of the major planks are now in place, at least in design, but many have yet to be implemented and there are still details of components being debated; not least the ongoing reviews of elements of the capital framework by the BCBS. It will take at least until 2019 until most of the measures outlined in this lecture are broadly in force, with some taking longer.

Jean-Pierre Roth: Switzerland - a financial centre in the heart of the euro area Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Belgian Financial Forum, Brussels, 16 February 2004. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Switzerland is not a fortress. In relation to the rest of Europe in particular, it is an economy that is very much open to mutual exchanges - notably with regard to trade and finance. It is not by chance that Switzerland has become a major financial centre. This can be ascribed to a number of positive factors, including specialist knowledge, a long-established banking tradition, the quality of the financial infrastructure, and customers’ confidence in the soundness of the country’s financial institutions. Switzerland’s political stability, its high level of savings and the international standing of the Swiss franc have also enhanced the appeal of its financial system. Increasingly, however, Switzerland is not alone in offering such advantages. Moreover, the Swiss financial centre - like all the others - has to face the challenges of globalisation and the fight against financial crime. As banking secrecy does not afford any protection to funds of dubious origin, the Swiss authorities are able to combat money-laundering with a reasonable degree of efficacy. In this area, Switzerland has implemented measures that have received international recognition.
In facing them, we need a visionary industry and creative solutions that will lift our economic potential and improve lives of our people. Such solutions must be built on the strongest foundations the strength of our technical capability, our financial strength and our uncompromising stance towards professional ethics and standards. With these foundations firmly in place, the industry can bridge new horizons and expand beyond traditional borders. BIS central bankers’ speeches  5

There are thus a number of good reasons that explain why we use cash and why we will continue to do so for some time to come. For this reason alone there is a lower limit below which cash usage cannot fall. Where exactly this limit lies and how quickly we may reach it will largely depend on what other payment services are developed. For payments from private individuals to companies there are a number of competing services such as card payments, mobile payments, Internet transfers and so on. However, for payments between private individuals there are far fewer alternatives. Despite the rapid rate of technological development, no satisfactory replacement for cheques has emerged in this context. What is required to make new payment services successful? There are a number of fundamental characteristics of the payment system that affect the chances of successfully launching new substitutes for cash and other existing payment services. Some of these characteristics raise barriers to innovation and may thus help to protect the already established payment services. If we assume that, in one way or another, new payment services will be based on payment by electronic means between accounts in one or several custodial institutions, then there at least three problems that a payment service must overcome in order to succeed. First, launching a new payment system is in itself costly.