samchain/econo-pairs-v1 huggingface dataset:
Private commercial banks issue predominantly digital money in the form of electronic transfers between bank deposit accounts[3]. Page 4  We have seen major changes in recent years in the form of use of money to make payments. In the mid-1960s, most workers were paid weekly in cash, and around 70% of the population did not have a bank account. [4] Very few had access to credit or debit cards. Consequently, for every £ of funds that people held to make payments, over a third would be held as cash. Nowadays, less than 5% is held as cash. Even 15 years ago, 60% of transactions in the UK used physical cash; pretty much everyone in this room would have carried enough for everyday transactions. In 2021 only 15% of transactions involved physical money. Technology and the increasing digitalisation of everyday life has transformed the way we use money. Private commercial bank money accounted for 85% of the payments made by the public. Within that, debit and credit card transactions accounted for 69% of transactions. Contactless payment has made such transactions much easier for everyday life. And the growth of internet commerce has required the use of digital money. It is always challenging to forecast how technological advances and social trends will play out. Few at the turn of this century would have predicted the development and growth of a massive and dominant market and social platforms.

Against the background that I have portrayed in my previous comments, it is clear that central banks have a genuine interest in improving their understanding of how the objectives of financial integration and financial stability, or even macroeconomic stability, interact with each other. I already mentioned that this is an area which is under-researched. Two years ago, the Network on Capital Markets and Financial Integration in Europe identified this gap and decided to include the relationship between financial integration and financial stability in a list of the network’s priority areas, posing a series of stimulating questions aimed at providing some guidance for researchers’ efforts. I think it is useful to recall the five questions posed by the Network: -  First, how can financial regulations be designed so as to be conducive to integration while still ensuring financial stability? -  Secondly, what are the main links between financial integration and contagion? -  Thirdly, what are the mechanisms that can trigger contagion and financial fragility? BIS Review 118/2006  3  -  Fourth, how does competition in the financial services industry affect the ability of the financial system to withstand shocks? -  And finally, how and to what extent do financial crises affect economic activity? As you will have realised, there is an almost perfect correlation between these questions and the main topics of the different papers that make up the excellent and well-balanced programme that the organisers have put together for this Conference.
Yves Mersch: Behaving responsibly in a low interest rate environment - a central banker's perspective Speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank, at the Stiftung Marktwirtschaft: Expertentagung "5th Kadener Gespräch", Alveslohe, 10 February 2017. * * * The policy of the European Central Bank (ECB) is often said to be at the root of the current problems in the banking and financial sector. Particularly in Germany, there’s the added accusation of monetary policy “expropriating” savers. A closer look quickly reveals that such hasty judgements fail to appreciate the complexity of the matter. Today, therefore, I shall examine carefully the underlying reasons for our monetary policy action. By focusing on the reasons for our actions we can understand more easily how to get back to a normalisation of monetary policy. Low natural interest rates Why are interest rates so low? The growth trend has been declining in many mature economies not just since the crisis, but for several decades. This slowdown in growth has led to lower long-term interest rates. The structural causes of this trend of slowing growth is a subject of controversy among specialists. Demographic and technological developments are mentioned, as are the effects of the financial cycle, which may be out of sync with the business cycles. I do not want to pre-empt this ongoing discussion.

This conference series is also a good way to organise informed discussions on the Mainland's financial sector issues. The first part of the conference examines the experiences of Chile, India, Korea and Thailand in their capital account liberalisation, with the view of drawing useful lessons for Mainland China. The second part focuses on the Mainland, assessing the effectiveness of current policies in dampening the impact of capital inflows on the domestic economy, their costs, as well as policy options of outward investment. A final paper will gauge the current level of financial integration between the Mainland and Hong Kong, and discuss the policy implications. I am pleased that this conference has brought together a group of experienced researchers and policymakers from a wide range of central banks, international organisations and research institutes. As earlier noted, the recent global financial turmoil will probably turn out to be the most critical time in recent economic history which will shape future economic and policy thinking. I hope this conference can provide a useful platform for fruitful discussions on capital account liberalisation to enhance our understanding on the issue. I wish the conference great success. BIS Review 141/2008  3
New technology, new participants, new regulations and more globalisation have made this fairly complicated subject matter even more challenging to keep up with. Norges Bank has a statutory responsibility for promoting an efficient payment system. This responsibility becomes even more demanding when the systems change rapidly. The focus of my address here today will be on Norges Bank’s responsibility as distinct from the responsibility of the market participants and, in particular, that of the banks. However, before I embark upon this I will provide an assessment of risk and efficiency in the Norwegian payment system. I would like to begin with four observations on risk and efficiency in the payment system: 2. Observations  First, payment system risk is closely linked to the organisation of payment services (legal agreements, time of payment, etc.) Central banks have been particularly concerned with risk in large value transfer systems, or systems for clearing and settlement of payments between banks. These systems are located at the top of the so-called payment pyramid.

1  BIS Review 7/2000  Chart 1: The payment pyramid  The payment pyramid  inte rba nk s y ste m  S e ttle m e n t b an k  C le arin g h o u s e  Ban k  B an k  P a y er  pa ym e nt se rv ice s sy st em (re tail)  P a y ee  This is where the large, time-critical payments occur and obviously where the system risk is greatest. Disruptions in this segment of the payment system can lead to severe consequences, partly through the banks’ exposure to each other and partly through the banks’ processing of payments to and from their customers – i.e. retail payments. At Norges Bank, we have come to focus more on risk in the retail payment system, not least because many small transactions can amount to a fairly large sum, but also because it typically takes some time before final settlement between banks occurs. Internationally, more attention has been paid to risk in retail systems. Moreover, if such systems combine pure retail payments and large payments - as is the case in Norway - it is recommended internationally that the risk-reduction measures be as strict for these systems as for systems for large-value transfers. We have also seen that part of the credit risk between banks arises in connection with (the legal basis related to) the various payment services.
It is therefore that much more important that the reforms are well-planned and credible, and that they are implemented consistently, but also prudently. There is also the threat that pressure will build on central banks to compensate a failure to reform with monetary policy measures. Central banks can and must resist this pressure, in order that they can continue to focus on ensuring price stability. Governments, on the other hand, should embrace this deep crisis as an opportunity to implement urgently needed structural reforms. Only then will we be able to say, with certainty, that the end of the financial crisis is in sight. BIS central bankers’ speeches  1

An open exchange of views and information between individual policy actors - without any commitment or mandate to take and implement joint decisions - will strengthen economic governance if it manages to improve the common understanding of the objectives and responsibilities of the respective policy areas and does not dilute accountability. The central legal basis for economic policy co-ordination among Member States within monetary Union is specified in Article 99 (ex 103) of the Maastricht Treaty, which states that “Member States shall regard their economic policies as a matter of common concern and shall co-ordinate them within the Council.” On the basis of this principle, the framework for the definition of economic policy priorities is provided by the “Broad Economic Policy Guidelines” adopted by the Council each year. These channels for policy co-ordination among Member States do not involve the independent monetary policy of the ECB. Any form of exchange of views and information, however, should clearly be distinguished from an attempt to co-ordinate macro-economic policies ex ante, which would give rise to serious information, incentive and enforcement problems. Ex ante co-ordination among different policy actors would blur the fundamental responsibilities of the respective policy areas under the Treaty. This, in turn would reduce accountability of individual policy actors and ultimately increase uncertainty about the policy framework. Given the Eurosystem’s monetary policy strategy, there should be no ambiguity how the single monetary policy will respond to developments in fiscal policies and wage settlements to the extent that they will affect the maintenance of price stability.
Today over half of the Swedish population have downloaded the fast payments app (Swish) on their smart phone and it has become a prominent feature in the retail payment landscape, providing a substitute for cash in person to person (P2P) payments. Cards and cash are the most common payment methods among consumers  Source: Sveriges riksbank. These two examples shows that a central bank may need to be both “hands off” and “hands on” depending on the situation to foster innovation. The trick is to find the right degree of intervention at the right time. And to perform that trick there are no short cuts. A thorough analysis of costs and benefits is needed. 3 [4]  Another lesson is that in the wake of such fundamental changes, like the one currently transforming the Swedish retail payments market, new questions keep arising. With change, there will be winners and losers. In this case the winners are the Swedes who have adapted to electronic payment means. Losers are the ones who want, or for some reason need, to keep on using cash and who increasingly find themselves in a world where access to cash, and acceptance of cash, are on the decline. This creates a new challenge for society. This change needs to be managed. For a central banker, the transformation of the retail payments market also implies a more fundamental question. If cash basically disappears, then the general public will lose access to central bank money – they will only have access to commercial bank money.

Is that a good outcome? Responding to this, the Riksbank has decided to analyse a “possible do”. Should we issue an electronic currency? An e-krona? We have given ourselves about two years to come up with an initial answer to this question. One possible outcome is that we as central bank in some sense will ourselves become an innovator. Moreover, what we eventually decide to do is likely to affect the possibilities and business cases for different financial innovations in more general terms and have possible repercussions on many other aspects of central banking, such as monetary policy and financial stability. To conclude, I believe that a central bank has an important role to play. What we do, and what we do not do, will affect the pace and the substance of innovation in the financial system. I believe this to also apply to the regulatory community in general. We can talk about the promise of innovation, but we also need to walk the talk – that is to make decisions that balance innovation, stability and growth. That will by necessity involve deciding upon a suitable degree of public and regulatory intervention. There will be winners and losers from these decisions. Making the decisions, and finding that balance, is a major challenge, but it is also an unavoidable challenge. 4 [4]
Long-run structural economic factors are hard to estimate with precision and it can be even harder to forecast their development. For example, demographics are likely to reverse some of the increase in saving as dependency ratios increase and people in retirement spend their savings. When this will occur will depend on many factors, including how long older people are able to stay  4  The analysis by Bank staff was not the joint estimation of a single, structural model. Instead, it drew on separately estimated impacts of a variety of contributing factors - it’s possible that these might overlap. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  in the workforce. What is, I think, safe to say, is that the trend real rate has gone down over the last few decades, driven by structural factors. To put it in historical context, the 10-year rate of interest in 1976 was 16%, but that has fallen to around 2½% today, reflecting very large structural changes since I left this university. Part of that fall is associated with much lower inflation rates today than were experienced in the 1970s. But also, since the early 1980s, structural factors have put downward pressure on both the expected real rate and term premia. Inflation premia are much lower now accounting for around 2½% and term premia, which are much harder to estimate, are probably around 0%, which leaves a trend rate of around zero.

Some of the world’s biggest banks, asset managers and insurers are already preparing for life after Brexit and steering their European operations away from London to our capital. Paris is already home to four of the eight 1/3  BIS central bankers' speeches  global systemically important banks in the euro area, in addition to being number one in the region in insurance and asset management. Recent regulatory initiatives have made Paris even more dynamic. Capitalising on the reform of Negotiable European Commercial Paper (NEU CP) in 2016, a number of very innovative projects have been launched: for instance, the French telecoms company Orange and the fintech SETL have jointly set up a new central securities depository (CSD) called ID2S for the NEU CP market, using blockchain technology. Paris is also at the heart of cross-border initiatives, making the European financial market more integrated. The market exchange operator Euronext is continuing to expand its federal model and in November 2017 acquired the Irish Stock Exchange. The CSD Euroclear is also committed to fostering common infrastructures, and is even looking beyond Europe with partnerships in the United States with DTCC or in Asia thanks to Bond Connect. Building on this comprehensive financial ecosystem, Paris has also been one of the principal supporters of the renminbi’s move towards internationalisation. As of today, Paris is indeed the leading continental European centre for deposits and bond issuances in RMB.
What might a CBDC mean for monetary policy transmission – would it bring new tools and fuller, faster transmission of policy choices? To what extent would a CBDC ‘disintermediate’ the banking sector, and what impact would this have on the cost and availability of credit, and the resilience of banking business models and funding? And what services and infrastructure should a central bank offer as part of a CBDC and what might best be left to the private sector? The paper from Brookings in July on ‘Design Choices for CBDC’ helpfully explored a number of these issues, as well as key technological points on the need for interoperability and connectivity between and among central and commercial bank systems for CBDC to function effectively. 8 Such standards are even more important in a world where there might be a need for interoperability and friction-free movement between CBDC, private stablecoins and other payment mechanisms. We, along with international counterparts are considering these closely. The Bank of England is exploring these issues and published its Discussion Paper on CBDC earlier this year,9 setting out key considerations and an illustrative model based on a central bank core ledger and private payment interface providers offering overlay services to users. The paper received a wide range of responses. We are currently working through the responses, continuing to engage with stakeholders and look forward to setting out more information next year. We are also working closely with our international counterparts who are facing the same questions.

What is not acceptable is to fall between regimes – for instance to argue that by holding backing assets such as sovereign bonds that are in general much safer than those on a bank’s balance sheet, this is good enough to ensure convertibility into fiat money at par. Low risk is not the same as no risk. This is why the FPC set out in its Financial Stability Report that stablecoins used in systemic payment chains should meet the standards equivalent to those expected of commercial bank money in relation to stability of value, robustness of legal claim and the ability to redeem at par in fiat. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  Some major stablecoin proposals do not appear at present to meet this expectation  Some stablecoin proposals do not include a legal claim for coin-holders. And some stablecoins propose backing in instruments that may have material market, credit and liquidity risk, but do not have the money protections I have outlined. While this might be acceptable for speculative investment purposes, it would not be for payments widely relied upon by households and businesses. Stablecoins need to offer coin-holders a robust claim, with supporting mechanisms and protections to ensure they can be redeemed at any time 1-to-1 into fiat currency. Some may ask if this would rule out a multi-currency stablecoin? Such a proposition is the wrong place to start – it raises questions around the value of the coin, and the underlying money it represents.
A recent instance is, for example, the run up to European monetary union and the attention this drew to Sweden’s commitments as a member of the European Union. Some observers believe that the Riksbank may have an (unacknowledged) exchange rate target. That is a misconception. The Riksbank does not target the krona’s exchange rate. In a flexible exchange rate regime with a price stability target, the exchange rate is admittedly a major factor, but only one of many factors that impinge on inflation. A permanent appreciation or depreciation of the krona affects inflationary pressure via import prices, for example. A given exchange rate trend may well support monetary policy’s drive for price stability; when this is not the case, however, the Riksbank has to intervene and adjust the repo rate. At the same time, the exchange rate is the price of an asset that is current throughout the economy; the value of the krona is highly important in many economic decisions, not least for export companies. This makes a stable exchange rate fundamentally desirable. It is then easier for all economic agents to make decisions. All else equal, this should lead to higher growth. BIS Review 47/1998  -5To this basic endeavour to keep the price of the krona stable should be added our European undertakings. As a member of the European Union we are committed to treating our exchange rate policy as a matter of common interest.

All this had a marked downward effect on domestic demand. The drop in output—almost 6 per cent in the course of three years—meant in turn that government finances worsened dramatically. From a surplus at 4.2 per cent of GDP in 1990, the budget balance swung to a deficit of 12.3 per cent in 1993. In this period, moreover, registered unemployment shot up from 1.7 to 8.2 per cent. In a way, the economic crisis in the early 1990s can be said to have been generated by political decisions. The combination of a stabilisation policy realignment with some structural reforms did play a part in the course of the crisis. But it should also be underscored that such measures were broadly essential. The problem was not so much the measures that were implemented when an inflationary bubble had already developed as the fact that policy had not been realigned earlier. In recent years, economic developments in Sweden have been favourable. Growth has been stronger than in the high phase in the late 1980s and it has proved possible to combine good growth with low inflation. A couple of years after the realignment of economic policy, inflation had fallen BIS Review 47/1998  -2sharply to around 3 per cent. Moreover, the reduction of current inflation has been accompanied by a downward revision of inflation expectations. Today, neither households, firms nor financial market agents perceive any serious threat from inflation in the coming five years.