samchain/econo-pairs-v1 huggingface dataset:
As I explained, the structured convergence process towards the adoption of the euro which is laid down in the Treaty provides the best guarantee for a smooth inclusion and a mutually beneficial life in the monetary union. Against this background, unilateral euroisation is something which we would not support because this would be a way circumventing the stages foreseen by the Treaty. 2. I would like to point out that the house of EMU is built upon solid foundations. The house of EMU is open to newcomers; it is not a “closed shop”. However, we would like to welcome the newcomers through the front entrance, and not via the backdoor. 3. Since Iceland is a European state, it is of course entitled to apply for EU and subsequently euro area membership. I was asked to provide you with some more information about the time frame of this latter scenario. As Iceland is a member of the European Economic Area, its accession to the EU could proceed relatively smoothly. As for accession to the euro area, the minimum time between joining the EU and joining the euro area is two years. This is because the exchange rate convergence criterion foresees that an applicant euro area country must participate for at least two years – without severe tensions – in the Exchange Rate Mechanism II. This should allow the applicant country to demonstrate that it can manage its economy without recourse to excessive currency fluctuations, thus mimicking somewhat the conditions under a monetary union. 4.

8  BIS central bankers’ speeches  Table 2 Domestic scenario (annual change, percent)  2014  1.9  GDP  2015 (e) Dec.15 Report 2.1  2016 (f) Dec.15 Report  Mar.16 Report  2017 (f) Mar.16 Report  Mar.16 Report  2.1  2.0-3.0  1.25-2.25  2.0-3.0  Domestic demand  1.1  2.0  1.3  2.5  1.5  2.3  Domestic demand (w/o inventory change)  -4.2  0.7  -1.5  1.7  0.5  1.0  Gross fixed capital formation  2.8  2.4  2.2  2.7  1.8  2.7  Total consumption  1.1  -1.7  -1.9  1.0  0.6  2.40  Goods and services exports  -5.7  -1.4  -2.8  1.6  -0.6  2.10  Goods and services imports  -1.3  -1.7  -2.1  -2.6  -2.5  -2.0  Current account (% of GDP)  20.9  20.0  20.4  19.1  19.9  20.2  Gross national savings (% of GDP) Nominal gross fixed capital formation (% of GDP)  23.0  22.0  22.7  21.9  22.6  22.1  23.0  22.0  22.7  21.9  22.6  22.1  (e) Estimate. (f) Forecast. Source: Central Bank of Chile.
One of the main axis of the strategy aims at facilitating the use of cards for proximity payments through the modernization of card terminals and infrastructures which will boost the development of contactless payments, as a secure and efficient alternative to cash for everyday transactions. The National Payments Committee, which will take over from the National SEPA Committee shortly, will, similarly to the ERPB at the European level, involve all stakeholders under the aegis of Banque de France to foster the necessary dialogue for an effective implementation of the national strategy and feed the ERPB with input from the French community. 2) In addition to their catalyst role, central banks through their oversight function should aim at ensuring that competition between market participants does not translate into a race to the bottom, but rather translate into a race to the top in terms of security, by setting high level objectives and by overseeing that they are complied with. Indeed, while innovation is a promise  2  BIS central bankers’ speeches  and a vector for economic growth, it is also a door open to new threats for the very security of payments and public confidence in those. Changes in the customers’ usages generate new risks that may not be fully and comprehensively mitigated at the present time. I will only recall that Card-not-present payments, though accounting for “only” a little less than 12% of the overall value of card-based transactions in France, represent more than two-third of the overall value of fraudulent card-based transactions.

Norman T L Chan: A fascinating train journey Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the CUHK (The Chinese University of Hong Kong) Business School Master Degree Graduation Ceremony 2015, Hong Kong, 21 November 2015. *  *  *  Professor Michael Hui, Professor Kalok Chan, parents, graduates, ladies and gentlemen: 1. It is a great honour to be invited to attend today’s graduation ceremony. It is also a great pleasure to be back to CUHK, where I spent the most beautiful part of my life as a student. There were so many fond memories and I cannot tell you how much I have missed my campus life even though I have graduated for nearly 40 years. 2. My fellow graduates, today is a memorable and joyful occasion not only for you, but also for your parents, your family, your loved ones and your friends. You have all worked very hard and gone through many rounds of examinations and challenges before you can be here today on this occasion. You must feel very proud and wish to tell everybody that “I have made it”. My heartfelt congratulations to you all: you have made it. You have received a master degree that provides you with the knowledge and skills that are badly needed and sought after in the modern era of business and finance.
A case in point is the SNB’s decision to introduce the minimum exchange rate of CHF 1.20 per euro in September 2011, and then discontinue it earlier this year. As mentioned, in enforcing the minimum exchange rate, the SNB intervened heavily in the foreign exchange markets, and did not refrain from taking on significant balance sheet risks, particularly in 2012. At the time, interventions were necessary to counteract upward pressure on the Swiss franc resulting from substantial capital inflows and a lack of outflows due to flare-ups in the European debt crisis. Towards the end of 2014, the minimum exchange rate again came under increasing market pressure, requiring renewed interventions by the SNB. This time, however, the international environment was very different. While expectations of an interest rate rise in the United States were mounting and the dollar was appreciating, from mid-year onwards there were signs in the euro area of further monetary policy easing, and the euro started to weaken across the board, pushing the EUR/CHF exchange rate close to the CHF 1.20 per euro floor. On the back of these developments – also reflecting the collapsing interest rate differential – Swiss franc investments again became relatively more attractive. Given these circumstances, and in view of quantitative easing in the euro area, the continuation of the minimum exchange rate policy would have meant a permanent, potentially uncontrollable expansion of the SNB balance sheet.

Why not persevere with the minimum exchange rate, instead of exposing the Swiss economy to the downsides of negative interest rates and the challenge of a stronger currency? With this question in mind, let me turn straight to a second fiction regarding Swiss monetary policy, namely, that an unlimited lengthening of the SNB balance sheet would be riskless. This fiction flies against common sense and is mostly prevalent in academic circles. I will try and clarify some misunderstandings with respect to central bank balance sheets by stressing three important facts that apply both generally and to the current Swiss monetary policy situation in particular. First, a central bank balance sheet is never a target per se, but rather, its size and composition simply mirror monetary policy decisions. Second, massive balance sheet expansions carry financial and economic risks. 3 This is clearly the case when the policies underlying the balance sheet expansion comprise outright purchases of foreign exchange. This puts foreign exchange risk on the central bank’s balance sheet. Third, policy measures involving a significant balance sheet expansion should be taken only as long as the benefits in terms of the broader policy objective clearly justify the risks and cover the costs associated with the balance sheet expansion. It is important to note that the costs and benefits of a given policy measure may change over time, and must therefore be reassessed repeatedly.
Ladies and Gentlemen you will agree with me that we have come a long way since the time when many viewed the financial system simply as a sideshow, or a passive channel that allocated scarce resources to the most efficient uses. Today, almost everyone agrees that the financial system is essential for development. Improving the financial system can lead to higher growth and reduce the likelihood and severity of crises. It is essential that we have a clear understanding of the causes of business cycles and the working of monetary policy. In thinking about financial reform, we need to treat liberalization as a means rather than an end. Instead of pushing for immediate deregulation, we should try to understand the important role authorities play in financial markets. These steps will not only result in a better and more stable allocation of domestic capital, but also help countries to develop their capital markets with the requisite financial systems. In view of this I encourage you all to join hands with authorities in your countries in improving financial infrastructure so as to contribute to the development of our regional financial  BIS Review 149/2010  5  systems and thereby improving the availability of capital. I am also encouraged by the increasing number of financial service providers in our economies. As competition intensifies, banks and other financial institutions will start to reposition themselves by lowering the cost of lending to the private sector.

This is important because the crisis demonstrated that bank investors and debt holders have a strong presumption that only common equity is truly loss absorbing outside bankruptcy. In the crisis, as losses climbed, Tier 1 capital ratios were eroded from the bottom, with tangible common equity ratios sometimes shrinking to levels that raised questions about a bank’s viability and its ability to access the equity and debt markets. Although common equity is typically a higher-cost form of capital for banks, it absorbs losses on a going-concern basis and so preserves an institution’s viability in the eyes of the market much better than other forms of Tier I capital, such as perpetual preferred stock or trust preferred securities (TRUPS). Second, the standards create a new definition of what constitutes common equity. The emphasis is on the ability of common equity to be loss absorbing. For that reason, there are limits on the amount of the assets that are not readily saleable or loss absorbing that can be counted toward a bank’s tangible common equity. These include assets such as mortgage servicing rights and deferred tax assets. Also, there is strict treatment of equity tied up in the form of minority interests. That is because this invested equity is not immediately available to the parent company to absorb losses in that company’s operations. Third, the minimum required ratio of total tangible common equity to risk-weighted assets will be increased significantly. Once the new standards are fully phased in, it will have to equal 4.5 percent of risk-weighted assets.
While the adjustments in housing market are also ongoing in Europe, and some European Banks have reported losses in CDOs, the impact on economic activities is expected to be more limited. For example, Consensus Forecasts in February, revised downward the Euro Zone’s GDP growth for 2008 by only 0.3 percentage points from December compared with a 0.5 percentage point downward revision for the US. For Southeast Asia, the impact is also forecasted to be limited. Latest consensus forecasts for Southeast Asia’s GDP growth is 5.7 percent for 2008, declining slightly from the forecast of 5.9 percent in December last year. These forecasts, together with the latest data, suggest that, in the short-term, things will likely get worse before they get better, and the slowing of growth in the US will impact growth globally. The key question, at this time, is how deep can things get before we see a turnaround. This is definitely an important, but a difficult question to answer. Market  BIS Review 29/2008  1  participants as usual will have a range of views, and I personally do not intend to offer another prediction. Instead, I want to share with you my thoughts on the current developments and on what this will mean for Thailand. To begin, one context that I think is useful in understanding the current turmoil is the unwinding of the global imbalance, triggered by corrections in the US housing market that began in 2006, and is now ongoing.

Since speculative activities naturally fit into this risk-return temporal pattern, given that they usually yield substantial immediate profits at the outset at the expense of a possible once-for-all large loss at an uncertain future date, a more cautious credit strategy will tend to penalise the funding of self-fulfilling asset-revaluation processes. Forward-looking risk management that is aware of how risk-drivers change through the cycle and in stress conditions will tend to build shock absorbers to be used when difficult times arrive. I will return later to this idea and how Basel II encourages the appropriate use of capital buffers. Let me add now that the idea of building robustness in good times is not only a prudent policy, it is also theoretically consistent because we all have a tendency to think that risks increase in bad times. From my perspective, this is only true in part. A better description is to say that exposures and therefore risks increase in good times and that in bad times these risks materialise. On top of that, to the extent that risk assessment and control methods become more formalised and rigorous, this will lessen the likelihood of making bad decisions and will improve risk-adjusted pricing policies. It will also contribute to the prompt detection of errors and deviations from targets, allowing banks to implement corrective measures at an early stage.
Both when the bank aims at the quantity of money and inflation, it works with a so-called intermediary target, as inflation control has in view an inflation forecast that can diverge from actual inflation, just as the growth of the quantity of money can diverge from inflation. This shows that the difference is inconsiderable between the two approaches in practice. Banks with an inflation target also study changes in the quantity of money when they make inflation forecasts. Banks that say that they have a quantity of money target deviate from this without ceremony when it clearly leads in the wrong direction taking into consideration the inflation forecasts that the banks also work with. 4. Confidence There is great benefit in publishing an inflation forecast. The general public can then see how the bank assesses inflation in one or two years’ time, how well founded the forecast is, and how policy is carried out in relation to the forecast that has been made. The Riksbank’s task has been laid down by the Swedish people through a Riksdag decision, as I mentioned to begin with, namely to maintain a fixed monetary value. To that end, the Riksbank has been made autonomous, so-called autonomy of means. However, the Riksbank is responsible to the Riksdag for its policy by presenting an account of its policy twice a year to the Parliamentary Standing Committee on Finance.

It can therefore be said that employment and capacity utilisation directly affect the Government’s monetary policy to the extent that compliance with the inflation target only takes place gradually within a period of two years. This is to avoid too great fluctuations in the real economy – in employment and capacity utilisation otherwise. However, unemployment and capacity utilisation affect inflation and are therefore included as components of inflation forecasts. These circumstances therefore also play an indirect role for the Riksbank’s monetary policy. The exchange rate is not an objective for Riksbank policy although it also has a direct and indirect effect on inflation. An appreciation of the exchange rate will have, all other things being equal, an immediately dampening effect on import prices. As import prices are included in CPI, inflation will be reduced. The exchange rate will affect inflation indirectly by affecting demand. A higher real exchange rate reduces exports and thereby reduces the level of activity with some time lag. This indirect effect tends to reduce inflation in the somewhat longer run. Supply is also affected by the exchange rate in time by (initially) affecting import and export prices, which eventually spreads to other prices and wages. By the direct and indirect effect of the exchange rate on inflation, the exchange rate plays a role for the Riksbank’s policy in those cases when a change in the exchange rate is expected to be, or proves to be durable.
A financial crisis is a sure way of thwarting economic growth, as we saw nine years ago. What is the risk now? From one perspective, the wide-ranging post-crisis regulatory reforms have made the global financial system more robust and resilient. Large banks are stronger, more liquid, less leveraged. Derivative markets are safer, with central clearing covering more than 90% of OTC derivatives trades in the major jurisdictions. Yet, from another perspective, the risk of financial instability is not small. This is mainly due to the build-up of leverage in recent years. In the G7 economies, the ratio of government debt to GDP has increased by 45 percentage points since the crisis and is now at its highest since World War II. 5/7  BIS central bankers' speeches  In emerging Asia, corporate debt issuance has ramped up to about $ billion p.a. since 2014, three times the average volume in the preceding five years. Household debt has built up sharply in many advanced as well as emerging market economies, with escalating house prices a key driver. High leverage is a risk factor for financial instability. I spoke earlier about how an increase in interest rates in a high leverage environment can create debt servicing pressures. If these pressures lead to widespread credit defaults, financial instability is usually not far off. Another channel of causation from high leverage to financial instability is through sharp corrections in asset prices, particularly real estate prices.

Ravi Menon: The Goldilocks economy - will the three bears return?" Speech by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the UBS Wealth Insights Conference, Singapore, 15 January 2018. * * * Mr Edmund Koh, UBS Head of Wealth Management Asia-Pacific, Ladies and gentlemen, good morning. Let me first wish everyone a happy 2018. And also thank UBS for the invitation to speak at this conference. Global growth about as good as it gets 2017 has been a good year for the global economy. World GDP is estimated to have grown by 3.8%, significantly higher than the 3.2% registered in 2016. This is the strongest pace of expansion since the rebound from the global financial crisis in 2010. All indications are that 2018 will be another good year. Most of the world’s major economies are expected to continue strengthening over the course of this year. The IMF expects growth in 2018 to be even better than 2017. There are good reasons for optimism. The most encouraging is investment. Investment expenditure, which had been largely missing from the GDP growth numbers since the global financial crisis, is coming back. Global fixed investments have rebounded by almost 6% in 2017, after contracting in the previous two years. Trade is another piece of good news. Growth in global trade has almost doubled to 4% in 2017, outpacing world GDP growth. This has arrested a worrying trend since 2011, with global trade growing slower than global GDP.
Higher competition, in its turn, improves the efficiency, which ultimately leads to higher quality and lower prices for consumers. Indeed, this is one of the main ideas underpinning the European single market. This idea is undoubtedly true also for the banking industry. There is increasing evidence of the positive link between the efficiency of the financial system, of which banking is the most important part, and the wealth and growth of the real economy. Thus the potential benefits of a more efficient financial system are substantial. Considering that most financial services bought by consumers (private individuals and SMEs) are bought from their bank, the low integration (and in many cases low efficiency) of European banking is a significant hindrance to creating an overall efficient market in financial services. Barriers to integration Why then is integration of European retail banking not happening or only happening very slowly? The first and second bank harmonisation directives and more recently the many initiatives within the Financial Services Sector Plan, FSAP, have set the legal framework for cross-border expansion. In principle, any European bank can easily set up or acquire a subsidiary in another member state. More importantly, a bank only needs one single banking licence in one member state to be able to offer banking services in all EU member states. So why are we not seeing serious integration of European banking? A number of possible reasons have been cited. These could roughly be divided into three kinds: economic, regulatory, and political.

Lars Heikensten: The integration of European banking - some regulatory challenges Speech by Mr Lars Heikensten, Governor of Sveriges Riksbank, at the seminar “The Integration of Financial Markets in Europe”, at the “Riksdagshuset” (Swedish Parliament), Stockholm, 21 April 2004. *  *  *  Thank you for inviting me to share my views on the integration of financial markets in Europe. We have just heard about the positive role capital markets might have in fostering economic growth and stability. We have also heard about how the regulatory process has been changed to promote the growth of an integrated European market for capital and securities. It is my hope that also the area of bank regulation will become part of this simplified process. It is certainly needed. Compared to the European securities market, the banking market is lagging many years behind in terms of integration. True, large companies may have access to foreign bank funding as well as to international debt and equity markets. When it comes to choosing your bank at the retail level, however, Swedish households and small and medium sized companies are left to a market which is to more than 90 percent dominated by Swedish banks. This situation is shared by most other EU countries. This is not a problem in itself. Swedish (or, in general, domestic) banks might very well be excellent. However, most of us tend to believe that cross-border integration, just as trade, is something good because it increases competition.