samchain/econo-pairs-v1 huggingface dataset:
The principle of same risk, same regulation is technology neutral – and could provide clearer expectations to innovators for how they will be treated by regulators when entering the market. But while same risk, same regulation may seem obvious, as payments chains increasingly continue to involve new entities, our regulatory framework may require some adjustment to meet this principle. Responding to innovation around the corner Some of the most high profile potential changes in the way we pay haven’t happened yet. The new “global currency” proposed by Facebook and partners, Libra, generated headlines across the globe when it was announced last summer. Other proposed private ‘stablecoins’ continue to emerge. The language some of these proposals use to describe themselves is grand. Libra promises to “Reinvent money. Transform the global economy. So people everywhere can live better lives.”  In practice, stablecoin arrangements would use cryptoassets (known as coins or tokens) for transactions currently processed by retail or wholesale payments systems. Existing crypto assets – for example Bitcoin – have so far proven too volatile to become widely accepted as payment. Stablecoins propose to address this by using asset backing to establish and maintain a stable value. It is concievable that some stablecoins – particularly if integrated into existing online platforms or social media – could achieve widespread adoption very quickly. In India, Google Tez reported having 50m users 10 months after its launch in September 2017. In China, Alipay and WeChat Pay by some measures handled more than $ in mobile payments in 2018.

Spencer Dale: 2010 – a progress report Speech by Mr Spencer Dale, Executive Director and Chief Economist of the Bank of England, at the Kent Business School 21st anniversary dinner, Canterbury, 1 December 2010. *  *  *  I would like to thank Ryan Banerjee, Rohan Churm, and Geoff Coppins for their considerable help in preparing this speech. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. Introduction It is an honour to be invited here this evening to help you and the Business School celebrate its 21st anniversary. Birthdays are a natural time to pause and reflect – especially those that mark a coming of age. Reflecting on your first 21 years, much has changed since the Business School was founded. Some of you may remember that 1989 was the year in which Nigel Lawson resigned as Chancellor and the Berlin Wall fell. You may remember less well that it was also the year that Kylie and Jason enjoyed four Number 1 hits and Coronation Street attracted its largest ever audience to watch Alan Bradley meet his grisly end under a Blackpool tram. How time flies. The economy has also had its fair share of ups and downs since then. After the 1990s recession, we enjoyed 63 quarters of consecutive growth, withstanding en route the effects of Black Wednesday and the dotcom bubble.
More institutions are expected to participate later this year. In this space, there are continuing ample and growing opportunities for Islamic finance to tap on as we ramp up in high value-added sub-sectors such as halal pharmaceutical and cosmetics, as highlighted in HDC’s sectoral development roadmap. Islamic finance also is primed to support initiatives under the National Investment Aspiration (NIA). As the new national investment policy strategy, the NIAs aim to increase Malaysia’s capacity to produce more complex and high-value products and create more high-skilled jobs5. This, in turn, will result in Malaysia producing new lines of goods and services beyond the traditional and upstream products, which will require support including in trade financing in developing businesses across these new product supply chains and penetrating new markets. The different nature of these needs, however calls for more well designed solutions that extend beyond readily available products. Conclusion Before I end my remarks, I would like to touch on the importance of calibrating trade finance processes with digitalisation. The World Bank’s Islamic Trade Finance Report recognises this as a priority area and calls for enhancements to online Islamic trade finance supply chain financing, and the use of blockchain technology. Such technological advancements that leverage distributed ledger technology and API-enabled trade finance platform can address long-standing issues in trade finance operations that mainly arise from the voluminous and manual nature of trade finance processes.

However, I call upon the institutions of the Paris financial centre to continue demonstrating prudence and responsibility in their search for client resources. The Banque de France and the Prudential Supervisory Authority will be vigilant in this respect. It is vital that market conditions be fully accounted for in setting the level of interest on financial products, whether offered by banks or life insurers. It is also best if preference is given to the collection of long-term savings that are indispensable for financing the economy. Indeed, I am actively seeking the support of the government with regard to this objective. The Bank will seek to ease the individual adaptations required by these numerous new regulatory frameworks. In particular we will strive to facilitate the management of liquidity and collateral, notably by continuing to support the mobilisation of lending to the economy via refinancing operations with the central bank, but also via markets. In this perspective, and at the initiative of the Banque de France, a Paris financial centre working group has been set up to develop innovative and safe securitisation mechanisms that should allow banks to make better use of the pool of claims on their balance sheets and to strengthen their financing capacities. The Bank will also continue to mobilise all parties concerned, and in particular companies, in order to accelerate and successfully implement France’s migration to SEPA payment instruments that should be finalised by 1 February 2014 for credit transfers and direct debits.
Another risk is the ongoing discussion in the United States to ward off a sharp fiscal adjustment in 2013. Failure to reach an agreement could significantly hamper growth and increase market volatility. And central banks of developed economies have continued to boost, and even intensify, very expansionary monetary policies, which can bring consequences on capital flows, asset prices, currency parities, commodity prices and credit growth in the other economies, including Chile. So far the domestic effects of these policies have been limited, but they are certainly a source of concern. Finally, in the emerging world, the biggest risk continues to be the pace of economic activity. Incoming data indicate that China has resumed strong growth, but the weakening of Europe and pending discussions in the United States could affect the Chinese economy, and through it the emerging world. Chile would be especially affected because of its incidence in the determination of the copper price. In addition, the recent drop in world trade growth figures is cause for concern. In Chile, despite particularly low inflation, medium-term inflationary risks remain present. The sustained dynamism of Chile’s economic activity has intensified the use of installed capacity, and a strengthening of domestic demand could trigger inflationary pressures incompatible with the inflation target. So far, inflation has remained bounded and has even decreased. Our evaluation is that the recent drop is a transitory event that will be gradually reversed within the next few quarters to return to levels around the Central Bank’s target.

These two anchors, which are enshrined in the Treaty, form the legal basis for our action, but, more than that, they are the basis for the confidence that 76% of euro area citizens have in our currency: this is our essential asset. Paradoxically, at a time when the ECB and the Banque de France are doing more than ever before, criticisms are being raised over their mandate, and whether it should be extended beyond price stability to include debt sustainability or the fight against the health crisis, and over their independence, and whether they should be placed “under political control”. With regard to independence, there are sometimes even strange resonances between Karlsruhe and certain debates in Italy or France. I would therefore like to clarify the reasons behind these two anchors and set out precisely what they contain. What does the future hold for price stability? Our price stability mandate is defined as inflation below, but close to, 2% over the medium term. This 2% figure has been the subject of frequent debate, but it represents the equilibrium point in discussions by economists – who all recommend a target of above zero – and is the target currently pursued by all major central banks. Naturally, there is a huge amount of uncertainty over how the economic environment will evolve, but this is probably less true for inflation. Nonetheless, it is important to share a few insights into its possible trajectory.
While these are positive steps, the feedback provided to the industry this summer after our review of the 2013 resolution plans for the largest firms suggested that quite a bit of work remains ahead on rationalizing legal entity structures, as well as in other areas, particularly: •  Developing a top-tier holding company structure that supports resolvability;  •  Establishing robust service level agreements and contingency arrangements to ensure ongoing provision of critical services among material affiliates and between material entities and third parties; and  •  Demonstrating the ability to produce, on a timely basis, reliable information about a material entity related to financial condition, financial and operational interconnectedness, and third-party commitments and contracts. 3. In the third area of our Framework – better managed – we have seen progress on several fronts, although this area remains very much a work in progress. Considering that a firm’s leadership, including the board of directors and the senior management, is ultimately responsible for the culture of the firm, and culture is a dynamic element that firms should always strive to improve, I see the work in the area of better managed as requiring on-going, sustained attention. It is impossible to achieve “perfection” in an area of art like management. I think it’s also important to acknowledge that cultures within individual firms ultimately play a role in defining the culture of the industry.

But as the Chinese saying goes, "A thousand miles begins with a single step" (). We are grateful that you have all chosen to join us to take important first step in this meaningful e-HKD journey. I know you're all eagerly waiting to hear about the potential use cases, so I'll give the floor to each pilot group to share their creative ideas. Thank you. 3/3  BIS - Central bankers' speeches
On average, greater intermediation would likely support more economic activity in the short-run but with a higher probability of disruption later on.7 Finally, point C represents an outcome from a policy regime that is not efficient. A different mix of policies could increase intermediation or decrease risk (or both) with no associated trade-offs. Point C is never a good outcome. Examples of such policies might be a burdensome compliance regime for activities that a bank doesn’t engage in, redundant data requests from the official sector, or a risk management system that does not address the most material risks. To summarize, both point A and point B can be thought of as efficient outcomes, where the only way to support more financial intermediation is to accept higher risk. To be clear, one point on the efficient policy frontier is not necessarily better than another, and changes in policy to move between them reflect policymakers’ choices to promote social welfare. By contrast, point C is inefficient, and changes in the policy mix that push outcomes toward the efficient frontier are likely to be welfare-enhancing. The official sector should always be looking for opportunities to move the financial sector toward the frontier.

Rather, building upon the theme of your prior panel discussion, the risk that dominates from my parochial view is the escalating and evolving cyber threat to our financial and payment systems, representing the challenge of our generation. The orientation that I want to pursue, reflecting this audience, is not what we are doing within the Federal Reserve to harden our critical infrastructure. While that is a manic and consuming preoccupation it is not my focus today. Instead, I want to concentrate on endpoint security vulnerabilities to the payments system, in which partnership with the institutions in this room represents an indispensable element of success. Historically, market infrastructures have operated on the presumption that endpoint security is 1/4  BIS central bankers' speeches  principally the responsibility of the endpoint, and infrastructure security is principally the responsibility of the operator. In the United States, the legal framework for wholesale funds transfers codifies that presumption, with each actor assigned responsibility for that part of security most within its control. Yet, in the present environment endpoint security breaches can have serious implications for public confidence in the integrity of the network as a whole, even in circumstances when the operator’s infrastructure, applications, and security perimeter have not been compromised. A series of recent high profile events have underscored dramatically this endpoint security risk, a theme that has also captured the attention of global policy makers.
Greater emphasis and clarity are needed as to the purposes and limits of public intervention, and the extent to which those interests warrant different degrees, modes, and timing of public and private sector involvement, depending on the particular country and circumstances. In this way all parties will be better placed to understand current developments and how the international community might react to future strains. The argument against standstills There are of course other points of view. I would note that some have suggested that perhaps we should go in a different direction, that we should seek to build time back in by calling a time out. In particular, it has been suggested that an early recourse to comprehensive payment standstills (suspensions of debt service perhaps amplified or reinforced by capital controls) would increase the manageability of crises and enhance predictability. My reading of the record convinces me that trying to freeze market processes would do the opposite. I would like to share with you my thinking on this point. •  The desire for certainty and control which seems to underlie standstill proposals is understandable, as it offers the promise of using less public money, and seemingly entails less risk that creditors will be bailed out for poor credit decisions. But the control and manageability that might result may be more seeming than real. •  For one, a perceived disposition to preemptively lock the door seems likely to send investors heading for the exits all that much sooner.

There is general agreement that in order for countries to enjoy sustained and stable growth, the following are crucial: •  a sound and stable macroeconomic environment, and  •  well-functioning and robust financial systems in both capital exporting and capital importing countries. Moreover, both of these are most effective when supported by a dynamic and adaptive policy regime. There is considerable agreement on many of the elements needed to achieve these goals, for example the importance of attaining and sustaining price stability. This agreement has been reflected, in part, in the development and promulgation of globally accepted codes and standards for best practice in areas ranging from transparency in fiscal policy and in monetary and financial policy, to public debt management, and core principles for bank supervision. Guiding themes across these various standards have included the importance of transparency—indeed the whole New Architecture initiative has been as much about putting in more and better windows as about laying in sturdier foundations—and of building stability up from the firm and sector level. The latter is accomplished by encouraging sound risk management and stronger balance sheets, and creating efficient systems of market, legal, and regulatory discipline. Unfortunately, there is no comparable degree of consensus on how best to handle international financial crises once they do erupt, or the proper roles of public institutions and the private sector in containing and resolving such crises.
In addition, low interest rates and, in general, more accommodative financial conditions naturally have a positive impact on economic activity and employment and help stimulate the flow of credit, thus also driving up banks’ profitability. Indeed, this is the key rationale behind an expansionary monetary policy such as that implemented in the euro area in recent years. As an illustration of these effects, according to various ECB  12/29  studies2 and the Banco de España’s own estimates, the set of monetary policy measures adopted since mid-2014 will have an overall impact on real GDP growth in the euro area of around 2 pp in cumulative terms between 2016 and 2020. Moreover, these estimates do not include the measures agreed in September which, according to the Banco de España’s estimates, could add up to 0.4 pp in cumulative terms to euro area GDP growth by 2021. In any event, it is fair to say that there is evidence that, since the ECB’s deposit facility rate fell below zero, negative surprises in short-term interest rates have been accompanied by falls in European banks’ stock market valuations. Given the endogenous nature of the monetary policy response to projected economic developments, this response by bank share prices to monetary surprises may reflect, on the one hand, the negative impact of less favourable projections for the future macroeconomic setting and, on the other, the market view on the direct negative effect of further interest rate cuts on banks’ future profitability against a backdrop of a prolonged period of negative rates.

In particular, lower interest rate levels help reduce losses on credit portfolios, thanks to the favourable effect they have on borrowers’ ability to repay their loans, associated both with lower loan costs and with the higher income and lower unemployment levels linked to the positive macroeconomic impact of lower interest rates. These effects have been especially significant in countries such as Spain where the banking system had a high level of non-performing loans and where short-term and variable rate lending predominates, since this means that changes in market yields are rapidly passed through to the cost of outstanding debt. This effect thus explains part of the decline in the NPL ratio in recent years. In addition, lower interest rates help drive up the prices of financial and real assets. This effect is immediate in the case of debt securities, especially long-term ones, as their prices are more sensitive to yield changes. The prices of equities and real assets, such as housing, are also boosted by lower interest rates, owing to their effect on the discount factor, although these prices are also affected by other factors, such as macroeconomic expectations. All this entails capital gains for banks exposed to these financial and real assets. It also increases the value of loan collateral, which enhances the credit quality of loans and, therefore, reduces losses on the credit portfolio. That said, it is true that these capital gains become exhausted once interest rates cease to decline and remain at low levels.
However, while initially strong fiscal positions may have provided a sort of “spare tire”, as with any spare tire, it is risky to ride on it for too long, in part because it may be needed to deal with the next nail in the road. Public debt has already risen markedly in a number of countries, and contingent liabilities often remain significant, raising some concern about potential future debt growth. Thus, some governments now face the challenge of moving to retighten fiscal policy while preserving growth and stability and, over the longer term, gradually restoring their previously strong net debt positions. These considerations further underscore the importance of quickly completing the process of banking sector rehabilitation and of attracting new sources of capital. Such decisive action would allow the banking sector to again be an engine of growth, capable of offsetting the eventual withdrawal of fiscal stimulus. Improved transparency can help Achievement of the goals of corporate and financial restructuring, and of macroeconomic stability, are fostered by improved transparency. When authorities clearly explain the objectives or concerns that lie behind their policies, they greatly increase the likelihood that markets will move in a direction that supports, and even favorably anticipates, the authorities’ goals. Under the auspices of the IMF useful standards have been promulgated for transparency with regard to macroeconomic data, including international reserves, and for fiscal and financial policies.

Indeed, one of the main lessons of the crisis may be that those countries where central banks assume banking supervision took advantage of their ability to react quickly and flexibly to emergency situations. Obviously, for macro prudential supervision to succeed, all actors involved – regulators, central banks, national Treasuries and fiscal authorities – will have to closely work together. Amongst plans being floated or decided, it is notable that central banks have been assigned the function of systemic risk supervisor. BIS Review 85/2009  3  Conclusion Let me now conclude. All major financial crises in history have led to revisiting and redefining the role of central banks. This one is no exception. Central banking will not be the same after the crisis. It is important, however, that changes that will occur do not impact on their ability to reach their primary objective. Price stability may not be a sufficient condition for financial stability. But it is certainly a necessary one. Central banks have to enrich their role and expand their functions for the benefit of general welfare and prosperity. In that process, they will remain guardians of the integrity and stability of money, which is a cornerstone of the social contract in our democratic societies. Thank you. 4  BIS Review 85/2009