samchain/econo-pairs-v1 huggingface dataset:
And finally, I do worry about diluting overly the focus of the prudential regulator, which was I’m sure one element of what led to the financial crisis. The same logic applies to a competitiveness objective, which surprisingly often gets confused with our competition mandate. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  Seventh, five years on, I am slightly worried about a looming political economy problem. We have I think taken quite an expansive view of our secondary competition objective, by which I mean that we have been vigorously prowling all parts of the PRA’s terrain actively looking for things we can do to advance the objective. But our terrain is not limitless, so the flow of new initiatives will I think slow, and we will have to spend more time tangling with more difficult questions of the sort I have discussed today. I am worried that people may infer from a lower volume of announcements a reduced commitment to our secondary competition objective. There is no such reduction in commitment – we are simply implementing our commitments thoroughly. Those taking an interest should hold us to account for that, and press us on what we can do in the next five years about the more awkward questions which now confront us. So to sum up: in my view the competition objective has had quite a profound impact on the PRA’s activities and approach over the last five years.

Bluntly I think we wouldn’t be doing our job if we didn’t do this – but at the same time the competition objective requires us to ride both horses at once. This is doable but it is tricky. It also raises an interesting question about the relative costs of supervising smaller firms versus higher FSCS levies to cover failures, which would merit further study. Fourth, how is technology going to affect all this? This is obviously a huge topic in its own right, and others here will touch on it so I will make only two brief comments. One, in my view the jury is still out on whether Open Banking and/or PSD2 are the gateway to a bigger change. Two, it is notable that some digital banks are making material inroads into the current account market – is this the leading edge of a bigger change, or not? Fifth, might Brexit create opportunities to move further on proportionality for smaller firms? I’ve already talked about the way in which we make the regime tougher for larger firms. This is entirely appropriate, but is not the same as saying we should have a weak prudential regime for smaller firms – indeed, I think that is the last thing we need both from a safety and soundness and a competition perspective. However, there may be a reasonable case that a simpler (simpler, not weaker) regime for small firms would advance both our safety and soundness and competition objectives.
BIS Review 51/2002  3  The classical example is the telephone - who wants one if no one else has one? With regard to payments, positive network effects mean that the benefit for the consumer of using a particular payment system grows in relation to the size of the system. This means that their willingness to pay also increases. Network effects also influence the introduction of new technology and here the consumers’ expectations of the future scope of the system play a decisive role. Consumers can continue using a certain payment instrument or system, even if a superior alternative is available, because the old system/instrument is established and accepted and has a large market share. To continue with the telephone analogy, imagine you were the only one with a new GSM telephone, what use would it be to you if everyone else was still using NMT? The fact that GSM is considered to be a superior system is hardly any comfort. The producers therefore have greater opportunity to reach a critical mass when new systems are being introduced if they co-operate with one another. The ATM co-operation, where customers can withdraw money from an ATM regardless of whether they have an account with that particular bank, is a good example of this. It also shows that co-operation, even if it essentially benefits the customers, may come into conflict with the Competition Act. The Swedish banks’ approach to launching e-money in the Cash system is another example, to which I will return shortly.

Preliminary figures indicate that approximately 130 million giro payments were made over the Internet during 2001. Between 1998 and 2000 the number of giro payments initiated over the Internet increased by a good 890 per cent. Today all Swedish banks offer Internet banks with rapidly growing range of services. Studies also indicate that Sweden is way ahead with regard to utilisation of Internet services. At the end of 2001 there were more than 3 million bank customers subscribed to Internet banks. For the banks the electronic payments entail considerable opportunities for rationalisation, probably to a much greater extent than could be foreseen just a few years ago. Some time ago I met the manager of a banking office in Stockholm who told me that he now had the same number of employees as five years ago, but his turnover was almost 50 per cent higher. This was largely due to the fact that the companies (including small and medium-sized companies) that had earlier been serviced by the bank could now carry out many of their transactions themselves via the Internet bank, which simplified their work and facilitated cash management. The companies could, for instance, with one click (as we say nowadays) pay all wages through a paperless transfer from the company’s account to the employees’ accounts and at the same time do the bookkeeping and pay slips, all without the long paper strips that needed to be manually checked.
The Federal Open Market Committee (FOMC) is in the process of winding down its massive purchases of Treasuries and mortgage-backed securities. At our last meeting, in recognition that the economy is improving and acknowledging that we have generated massive amounts of excess reserves among depository institutions operating in the U.S., we voted to reduce our purchases to a combined $ billion per month, on the path to eliminating them at the earliest practicable date. Speaking only for myself as a voting member, barring some destabilizing development in the real economy that comes out of left field, I will continue to vote for the pace of reduction we have undertaken, reducing by $ billion per meeting our purchases and eliminating them entirely at the October meeting with a final reduction of $ billion. I was not for this program, popularly known as QE3, to begin with. I doubted its efficacy and was convinced that the financial system already had sufficient liquidity to finance recovery without providing tinder for future inflation. But I lost that argument in the fall of 2012, and I am just happy that we will be rid of the program soon enough. I am often asked why I do not support a more rapid deceleration of our purchases, given my agnosticism about their effectiveness and my concern that they might well be leading to froth in certain segments of the financial markets.

I expect that our new Chair, Janet Yellen, will play a significant role here as she uses her press conferences to explain what simply cannot be communicated with a series of dots or within the statement we release after each meeting. Alas, there is Congress Now mind you, your monetary authority – your Federal Reserve – does not hold every card to your future in its hand. No matter how clearly we communicate, no matter how expertly we tailor our supervision of your banks, no matter how we conduct monetary policy, our work is necessary but not sufficient to the success of the Louisiana, Texas and U.S. economies. The fiscal authorities – Congress and the executive branch – must do their job to provide the proper tax, spending and regulatory incentives for businesses to take advantage of the cheap and abundant money the Fed has made possible and put it to work to grow, expand their payrolls and let America truly prosper. I will spare you my thoughts on Congress (it is not very central banker-like to resort to profanity). All I will say is that you and your neighbors and friends and customers are the ones who elect people to office and whether you are a “D” or an “R,” you need only look at yourself in the mirror to see who is in charge of placing the right people in office to get the job done of putting the American economy back on track. I’d say you have some serious work to do here.
Chart 13: The near-term indicators of house price growth have weakened  Chart 14: Interest cost of mortgages will probably remain below average for a while  Balance 80 60 40 20 0 -20 -40 -60 -80 2000  Per cent 12  Per cent 8 6 4 2  8  0  6  -2 -4 -6 2005 2010 2015 RICS price expectations balance (LHS) House price growth (RHS)  Sources: Royal Institution of Chartered Surveyors (RICS) Residential Market Survey, ONS, Land Registry and Bank calculations. RICS price expectations are three month ahead net balances. 10  4 2  Average 1993-2007Q2  0 1987 1992 1997 2002 2007 2012 2017 2022 Sources: ONS, Thomas and Dimsdale (2017) sheet M12, Bank of England, Barclays Live and Bank calculations. The fan is calculated using probability distributions implied by options on sterling interest rate swaps. For further information on how option-implied distributions are derived, see Clews, Panigirtzoglou and Proudman (2000). I can now (finally) get to the point I wanted to make about interest payments. Even if low bond yields don’t presage rapid growth of house prices, one thing they do suggest is that interest payments on mortgage debt will also remain relatively low. Chart 14 plots those payments over the past, as a share of household income. It also includes a range for the future. This assumes that mortgage debt continues to grow in line with household income (whatever that turns out to be).

For this reason, the SNB welcomes the Federal Department of Finance’s decision to set up a commission of experts to draw up proposals on macroprudential oversight and to determine the associated institutional responsibilities. 1  SNB’s comment on the recommendations made by the business audit commission of the National Council and the Council of States. 2  IMF Country Report No. 11/115 within the framework of the Article IV Consultation of May 2011. BIS central bankers’ speeches  3
They are connected with, firstly, a faster reopening of borders. In this case, domestic demand may partly shift to imports of tourism services, easing domestic demand-side pressure on prices. Secondly, if the pandemic deteriorates, depending on the pace of vaccination and the spread of new coronavirus strains, the global economy will grow much more slowly. Thirdly, a bumper harvest may cause inflation to slow down. As far as monetary policy prospects are concerned, we are prepared to step up actions needed to bring inflation back to the target. As I have already mentioned, the Board of Directors sees the necessity of further increases in the key rate at upcoming meetings. We will determine the scope and pace of increasing the key rate based on our assessment of the level of sustained inflationary pressure, the timeframe for inflation expectations stabilisation, as well as the forecast 3/4  BIS central bankers' speeches  of further movements of aggregate demand and supply. Our monetary policy will ensure annual inflation to return to the near 4% target in the second half of 2022. Thank you for your attention! 4/4  BIS central bankers' speeches

The second pillar of European financial sovereignty concerns the efficiency of retail payments and market infrastructure. Regarding retail payments, while the Single Euro Payments Area (SEPA) has proved to be successful, further convergence is still needed in response to the growing influence of major third countries’ firms in payments solutions. In order to preserve our sovereignty, a European strategy for retail payments would be necessary, with a view to (i) addressing market fragmentation and promoting unified European-based solutions, (ii) improving the protection of payment data and (iii) encouraging European players to take part in the current concentration in retail payments. Regarding infrastructure, the European System of Central Banks shouldered its responsibilities in strengthening European post-trade integration, notably through the Target2Securities platform. In the coming years, the set-up of a unified collateral management platform operated by the Eurosystem will be another key step directly contributing to an effective Capital Markets Union. Moving on to the third pillar, the international role of the euro is a key component of our European financial sovereignty. After a significant rise, the international use of the euro has declined since the financial crises of 2008–2012 and remains limited in comparison with the dollar. The US dollar is a clear advantage in the exercise of American power, while China cares about the internationalisation of the renminbi. A larger use of the euro would help to protect our businesses against foreign exchange risks or legal disputes abroad. In this regard, the concrete measures identified by the European Commission in December are particularly relevant.
In Anglo-Continental Guano Works v Bell (Surveyor of Taxes), Mr Justice Cave summed up thus: “It seems to me... that the gains of the trade are quite independent of the question of how the capital money is found… [One] cannot take into  BIS central bankers’ speeches  5  consideration the fact that the firm or trader has to borrow some portion of the money which is employed in the business... If you did that it would land you in very extraordinary results”.12 Indeed, it might land you in the guano. But banking was about to buck this trend. In Farmer (Surveyor of Taxes) v Scottish North American Trust, Limited, Lord Atkinson referring to the Anglo-Continental case concluded: “It does not appear to me that the reasoning on which this decision is based can apply to a bank whose business is the borrowing and lending of money”.13 From early in the 20th century, debt interest became a legitimate deductible from bank profits. Where banks led, non-financial firms followed. This debt bias has persisted in the century since.14 The scale of tax-induced debt bias is generally greater the higher the rate of corporation tax and the lower the rate of personal taxation of equity. The IMF (2009) has recently estimated the scale of debt bias in a selection of developed countries. For low or tax-exempt investors, such as pension funds and non-residents, debt is typically between 30–40% cheaper than (new or retained) equity.15 For high-tax investors, the biases are smaller but still significant.

This is the same methodology as Oxera (2011) with a downward adjustment for the risk free rate to the nominal yield on 1-year UK gilts and considers that support can be realised at any time during the year. The figure for global banks is an estimate based on the UK figures. (b) Calculated by comparing the difference in funding costs calculated as an annual average for individual banks, based on the difference in the average funding cost of benchmark financial institutions rated at the support rating and the average funding cost for financial institutions rated at the standalone rating. This difference is then multiplied by the rating-sensitive liabilities of the bank or building society. Data availability for non-UK banks is less granular. BIS central bankers’ speeches  25
Indeed, the acceleration in globalisation in the 1990s and 2000s was accompanied by steady growth in world imbalances. Even though the role played by these imbalances in the triggering of the last crisis is still a matter of debate, their coincidence with the rise in financial imbalances in several economies, such as the credit and securitisation boom, the sharp increase in asset prices, government deficits, etc., is striking. In short, the issue of global imbalances and that of regulation in a global economy are undeniably closely linked. Two major topics appear particularly relevant to our discussions today. The first focuses on the developments in the international monetary and financial system. The financing of current account imbalances has been facilitated by the liberalisation of capital movements that occurred in a large number of countries in the 1990s; international capital flows thus increased seven-fold between 1990 and 2010. These flows clearly had a positive effect, in particular for emerging countries which require capital to develop. However, the rapid increase in the volume of financial flows was accompanied by a rise in their volatility, which represents a new source of risk. The sudden withdrawals of international capital have played a major role in triggering and spreading financial crises over the past fifteen years. This is the main concern of the French Presidency of the G-20 and it appears crucial to me to examine it, not only from the narrow perspective of the management of capital flows, but also from the wider perspective of global liquidity.

Changes in the exchange rate should only be resorted to when everything else has failed. They should be a measure of last resort. Besides, they only produce the desired results if they are accompanied by a comprehensive set of complementary policies implemented in a controlled environment. Speculating about the exchange rate without producing conclusive proof that it is the root cause of the economy’s difficulties is, therefore, inappropriate and can have serious repercussions. The national interest requires all of us to concentrate rather on the more immediate, and well documented, reasons for the economy’s slow growth. I have elaborated on this aspect in a recent interview carried by another local newspaper. 1/1
Shortly after, HSBC and Bank of America did a proof-of-concept that showed how trade finance processes could be streamlined using blockchains and smart contracts. Building on these, MAS and the Hong Kong Monetary Authority will jointly develop the Global Trade Connectivity Network, a cross-border platform for trade finance using distributed ledger technology. GTCN will be an open architecture platform that enables the seamless transfer of digital documents and data across borders, starting with the Singapore-Hong Kong trade corridor. If all goes well, we expect the GTCN to go live in early 2019. Strengthening Supervision and Reducing Compliance Cost: SupTech It is not only the financial industry that needs FinTech, but regulators as well. MAS has embarked on its own FinTech journey to make our supervision more effective and the compliance burden we impose less painful. We call it Supervisory Technology, or SupTech for short. Let me give an example: detecting trade syndicates in the stock market. One of the most difficult things to detect in the market is collusive behaviour and price manipulation. MAS has put in place a data analytics and pattern recognition system, to study trading behaviour and detect accounts that may be 6/9  BIS central bankers' speeches  acting in concert to manipulate share prices, or engaging in circular trading to create a false impression of market interest.

The international component is particularly apparent in that the majority of banks today conduct a considerable amount of business in several EU countries. At the same time, the responsibility for supervision and crisis management remains at the national level. This entails obvious risks of coordination problems and conflicts of interest between countries, which naturally do not promote financial stability. It is therefore necessary that organisations for supervision and crisis management be coordinated within the EU. Lower repo rate in the wake of the crisis The escalating crisis intensifies the downswing in the Swedish economy, which was already apparent. As can be seen in the Monetary Policy Report from 23 October, our growth forecast for next year has been revised sharply downward to the prospect of zero growth. To alleviate the real economic effects of the financial crisis, over a short period the repo rate was cut by one percentage point to the current level of 3.75 per cent. Our forecast for the repo rate shows that in the future it may need to be lowered by an additional half percentage point over the course of the next six months. We can do this without jeopardising the inflation target. It is mainly rising commodity prices in the global market, such as the price of oil and food, that have driven inflation upwards. Now that the price trend for these commodities has broken and turned downwards, the rate of inflation will drop rapidly. At the same time, domestic inflationary pressure will be eased by the weaker economic trend.
This concerns the extent to which the authorities should be involved in the development of the financial infrastructure. I am sure you are aware of the huge amount of public money spent in all jurisdictions in the development of the physical infrastructure, building highways, bridges and airports to take people and goods from one place to another safely and efficiently, thus facilitating the conduct of economic activities for the benefit of all. Authorities, however, seem to devote only disproportionately small amounts of resources to the development of the financial infrastructure to move money and financial instruments from one entity to another safely and efficiently for the purpose of enhancing financial efficiency that promotes economic prosperity. To some extent, the development of the financial infrastructure can be left to the market, with SWIFT being a sterling example of private sector initiative in this area. But many of the important elements of the financial infrastructure are public goods, the provision of which, in a form that serves the public interest best, may not be financially viable for the private sector. Furthermore, the conflict I mentioned earlier often comes in, affecting the willingness or the enthusiasm of the financial intermediaries to develop and use a financial infrastructure that promotes financial efficiency.

Mr George paints a broadbrush picture of challenges and change for the markets as the year unfolds  Speech by the Rt Hon Eddie George, Governor of the Bank of England, to the Euromoney International Bond Congress at the QEII Conference Centre in London on 16 February 2000. *  *  *  It’s a pleasure, as always, to have been invited to bring proceedings at this great annual event to a close. You seem to go from strength to strength - from what I hear your sixth Congress has been as lively and interesting as its predecessors. Lively and interesting are pretty good words to describe the last twelve months in the markets too. When we were together here last year there were still plenty of clouds around. The emerging markets in Asia were still only in the early stages of patchy recovery. Russia was still fragile and there were real fears of another round of financial upset in Latin America, particularly Brazil. In the industrial countries, too, the prospects were for slow growth - some were even still forecasting recession. I concluded that we’d all need strong nerves in the year ahead. Well, by and large we kept our nerve, and the skies have brightened over the past year as the clouds of financial instability and global economic slowdown dispersed. The focus now is not on how we keep the ship afloat but how we keep her on a steadier course - which, if you’re a sailor is a comparative luxury.