samchain/econo-pairs-v1 huggingface dataset:
What is really interesting and potentially useful about cryptocurrencies (beyond the mere intellectual stimulus, of course) is distributed ledger technology and the idea of digital money being issued by mainstream central banks themselves. The two are bound together by a common feature: a reduction of the importance of intermediaries. The distributed ledger technology behind bitcoin brings the attractive notion that, in principle, we don’t need any centralised settlement systems, any standardised systems that settle payments. The settlement system can be decentralised, thus potentially saving time. But let’s not forget how the system of payment confirmation works when distributed ledger technology is in play. Bitcoin makes many users confirm that a transaction has taken place. The process is very energy-demanding, akin to actual mining: it resembles all the processes employed in the past when we were dealing with physical money. Using classical commodity money requires physical investment; using bitcoin requires energy investment. So far it seems that distributed ledger technology would consume much more energy than standardised central clearing houses. That’s why we now use non-physical money without any intrinsic value – it is more efficient. Going back to any physical money would be like going back from PCs to typewriters. Maybe this is one of the reasons I haven’t so far heard of any distributed ledger technology being 2/3  BIS central bankers' speeches  used in the mainstream banking systems of Europe. Many institutions have been investigating the possibility, studying it, researching it, but that’s all.

This is to do with the fact that it is general price levels that can be influenced by monetary policy, and not the prices of items such as meat or nails. This is also to do with the fact that the positive effects of stable monetary value manifest themselves precisely because the players in the economy can rely on purchasing power which is not undermined. At the same time the Riksbank has, in various contexts, maintained that there can be reasons for ignoring effects on inflation which are thought to be temporary. The reason for this is that it is not often possible to influence inflation quickly enough to counteract transitional price impulses without this leading to larger real disruptions. We have said, however, that we shall give as clear an account as possible of what the temporary effects are and how we deal with them. When examining the formulation of monetary policy in situations involving considerable pricemoderating effects, it can also be a good idea to give some reflection to the time perspective of monetary policy. One possibility is that the visible effects ebb away quickly, even though they occur beyond the normal policy horizon. In that case, presumably, one should be careful not to stimulate the economy too much. The opposite would apply if inflation were forced up strongly by some effect which could be expected to dissipate beyond the 2-year horizon. This is obviously a difficult question of judgement. Should a forecast change in prices be considered to be temporary or not?
The global trend is being driven partly by an increased focus by banks on the financial performance and on the creation of shareholder value. In essence, the potential for growth lies in the value of their investments. This would be the right thing to do in the interest of long-term survival. There are enough  4  BIS Review 33/2002  examples of companies around the world that had lost track of the true reason for venturing into a particular business and as a result, they find themselves no longer in the business. Despite narrowing of interest margins and high costs, the banking industry has been able to increase their returns with the average return to shareholders in 2001 being 14.5%. Banks, like other companies in a free market economy, have a responsibility to generate returns for their shareholders. It is in the interests of the community as a whole that they do so, otherwise we could end up with a weak banking sector. But any company maximises shareholder value subject to constraints. These may be imposed by laws and regulations, or by the expectations of society. This means that if banks wish to preserve their reputation and the confidence of their customers, on which ultimately the strength of their franchise depends, they should act in a way that is seen to be fair and reasonable. To do otherwise, may in the long-term, be inconsistent with the objective of creating shareholder value.

While the gaps in operational efficiency and productivity have improved, there remains great scope for further improvement particularly in areas where the domestic banks are evidently behind the foreign banks. For instance, productivity standards of the counter personnel as measured by the number of counter transactions per counter employee for the domestic banks averaged approximately 5,000 compared with 11,000 for the foreign banks. Meanwhile, the number of domestic banks that did not experience any disruption in their retail deposit and loan initiation systems is significantly lower than that of the foreign banks. In terms of the time taken to approve new credit card applications it averaged 8 days for the domestic banks compared with 6 days for the foreign banks. As can be seen from the scorecard, the consolidation programme for the domestic banking sector was a necessary pre-requisite to enhance the sector’s capacity to compete. Size alone however, is not a sufficient condition that will result in producing efficient and competitive banks and it does not offer guarantee of success. Being a large bank is however, an important enabler to achieving enough scale to be able to invest in cutting-edge technology and management systems and to attracting the talent required to compete with the best players in the market. Domestic institutions need to be able to meet the range of products offered by foreign competitors. But the larger scale and wider range of activities will demand stronger management teams.
What do you see as the main priorities for the post-programme period? What are the areas that Greece should focus on in the years ahead so as to achieve sustainable growth? And what are the main risks? In line with what I have just said, allow me to focus on the financial sector. Reducing NPLs is certainly top of the list from our point of view. On the one hand, only stronger and healthier banks can provide the necessary basis for an increase in the supply of credit that can support economic growth. On the other hand, the restructuring of private and tax debt that could 1/4  BIS central bankers' speeches  accompany the reduction of NPLs is also expected to help healthy companies restart their activities and thus reinforce the demand for credit. A lot has been achieved under the programme. The legislative framework is in place, but continued implementation will be key. Improving the effectiveness of the judicial system is also essential to guarantee a well-functioning financial sector. We also still envisage improvements in banks’ governance frameworks, which will be essential to establish the conditions necessary to attract both domestic and foreign investors and allow the divestment of Hellenic Financial Stability Fund (HFSF) holdings over time. In any case, it will be very important that the authorities refrain from trying to influence banks’ credit decisions and focus instead on improving the framework within which they operate. Are Greek banks now safe in terms of their capital position?

The oil price futures used in our forecasts turned out to be poor predictors in volatile oil markets.2  1  2  A recent BdF working paper argued that short-term unemployment is more meaningful than total unemployment when looking at the Phillips curve in the US. Cf. Ferrara L. and Sestieri G. in Banque de France, Quarterly Selection of Articles, No. 36, Winter 2014-2015. Bec, Frédérique and Annabelle De Gaye (Nov. 2014), “How do oil price forecast errors impact inflation forecast errors? An empirical analysis from French and U.S. inflation forecasts.” Banque de France Working Paper 523. BIS central bankers’ speeches  1  But downside surprises also occurred for core inflation suggesting the need for complementary explanations. One candidate is the continuous appreciation of the euro between mid-2012 and the beginning of 2014, which has lowered prices of many imported non-energy industrial goods. One can expect this impact to be transitory as the euro has subsequently depreciated since the middle of 2014. This depreciation reflects the differences in the growth cycle between the euro area and its main partners and accordingly the differences in monetary policy. Those explanations do not account for the slowdown in domestic prices, which must then be attributed to an increase in domestic slack. For the European Commission the output gap widened from −2% in 2012 to −3% in 2013.
In particular, there are policy decisions required in the following dimensions: (i)  eligibility (what collateral should be accepted, and what should not);  (ii)  valuations and haircuts (how much is the collateral worth? );  (iii)  what fees should apply, if any, and  (iv)  limits (how much diversification should we seek across the collateral delivered?). These are important questions for the banking system as a whole, and have presented new and complex risk management challenges for central banks over the past few years. It is on these issues that we focus in this paper.3 To start with, we briefly outline some of the main features of the Bank’s lending operations. The sterling monetary framework The Bank’s main activity in the sterling market prior to the financial crisis was via its shortterm repo open market operations (STR OMOs). Those regular weekly operations provided the banking system with the right level of reserves such that short-term market interest rates would remain close to Bank Rate set by the MPC.4 In addition, in order to reduce the size of weekly STR OMOs to a manageable size, the Bank undertook longer-term repo OMOs (LTR OMOs) of 3, 6, 9 and 12 months maturity. The remaining operation of note was the Standing Facilities in which a commercial bank could borrow from, or lend to the Bank overnight, albeit at a less attractive rate than Bank Rate.

That means that less conservative haircuts would sometimes be required to support a given level of borrowing. That will benefit counterparties as well as deliver risk management benefits to the Bank. The Bank will also require the data to be made available to investors and other market professionals, so that they will be able to undertake their own risk analysis. That should deliver longer-term benefit to the financial system as a whole – standardising, simplifying and publicising the data should all reduce the mechanical reliance on third party judgments and  8  The counterparty can meet the margin call by either providing more collateral, substituting some of the existing collateral with higher quality assets which receive a smaller haircut, or returning some of the lent funds. 9  The aim would be for the Bank’s risk tolerance to be broadly the same for loans as for a securitisation of those same loans, so as not to provide incentives to submit one form of collateral over the other. BIS central bankers’ speeches  7  models, and hence reduce “single points of failure” within the ABS market (although it will be up to market participants to make best use of these changes). Other policy issues on the agenda There are some big issues facing the Bank and its collateral management going forward. The immediate challenge is to wind down the SLS to its conclusion in January 2012.
The strong momentum of the sukuk market is underpinned by the increasing demand for sukuk, especially sukuk of high credit ratings, from Islamic investors. Over the years, the Gulf region has accumulated a huge amount of oil revenue. The  1  Source: KFH Research  2  Source: KFH Research  3  Source: Zawya  BIS central bankers’ speeches  1  current account surpluses in the Gulf Cooperation Council (GCC) countries last year were estimated to be more than $ billion,4 while assets under management by sovereign wealth funds in those countries amounted to as much as $ trillion at the end of last year.5 Islamic investors in the Middle East and other Islamic countries generally have a preference for investing in Shariah-compliant assets. With the expanding liquidity pool in the Islamic world, naturally, there is a commensurate increase in the demand for Islamic investment instruments globally. 7. As an international financial centre and given our unique role as a gateway to China, Hong Kong is well-positioned to provide an effective platform to channel the surplus funds from the Islamic world to this part of the world where there is a huge financing need to sustain the high growth of the Asian economies. Our platform will enable Islamic investors to access investment opportunities in Asia, particularly China, while at the same time allowing fund raisers to tap into the liquidity pool in the Islamic world. 8. What’s more, sukuk are becoming a mainstream asset class in the global financial system.

Yet there is an effective limit to lowering rates since ultimately this conflicts with the ability of citizens to hold cash. Therefore some scholars have called for the imposition of electronic money and the abolition of cash. As I have discussed at length elsewhere, I see serious problems with such an approach.8 It risks gambling with central banks’ credibility at a time when credibility is paramount. And perhaps even more importantly, it denies the crucial social function of cash. Another option proposed by some observers is for central banks to raise their inflation objectives and therefore to lift equilibrium nominal rates. Leaving aside the debate about the costs of higher inflation, I am not sure that this idea is entirely convincing. The reason is that the mechanism through which it works is the signalling channel – people expect higher inflation, so inflation rises. But at a time when inflation is low everywhere, and when central banks are running very accommodative monetary policies just to achieve that, one can question whether such signals would really be credible. I see a risk, in fact, that changing our strategy to rely on fuzzy concepts and unobservables would only end up damaging our credibility. So what we need today, in my view, is to shift the debate away from its narrow focus on monetary policy. Rather than concocting more and more innovative solutions for central banks to get around the lower bound, we should focus instead on what other policy areas can contribute.
Chart 8: EM foreign currency debt as a share of GDP Per cent of GDP 22 21 20 19 18 17 16 15 14 13 12 95  97  99  01  03  05  07  09  11  13  15  17  (a) Excludes China, non-bank borrowers only. Sources: IIF and BIS. Despite these vulnerabilities, the Bank’s analysis finds that, for EMEs as a whole, reforms to domestic institutional “pull factors” have substantially increased the sustainability of capital flows and so shifted the distribution of capital flows to the right (Chart 9), all else equal. 9  All speeches are available online at www.bankofengland.co.uk/speeches  9  Chart 9: Pull factors have reduced Capital Flows-at-Risk for EMEs since the Asian Financial Crisis Probabilty density 0.12 0.10 0.08 0.06 0.04  B  A  0.02 0.00 -8  -6  -4  -2  0  2  4  6  8  10  12  14  16  18  Capital flows as a % of GDP 2008-2018 Post-2008 crisis  Asian Financial Crisis  Sources: IMF and Bank staff calcluations. Notes: Chart shows the contribution of pull factors to capital flows to EMEs during the Asian Financial Crisis (purple), and since 2008 (green). In both distributions push factors are held at their sample average, so only pull factors are changing. See chart 5 and annex for further details. Push factors Unfortunately for EMEs, all else has not been equal.

They are indispensable to avoid any room that may be used for abusive actions that would impair the institution. I therefore request that you take the necessary measures in terms of financial, human and technological capacities in order to ensure the safety of each banking operation. In pursuing its supervisory function, the Bank of Albania will have this matter under close focus and I assure you that any decision that may have hampered the safety of the activity will be handled with utmost stringency by the law. In a broader context, banking activity, in addition to operational risks, is faced with other financial-related risks. We will therefore increase the regulatory requirements for banks to be engaged in an integrated process of risk evaluation and management proportionate to the level of development and sophistication. In a more practical approach, this implies that banks should have specific functional structures that monitor risks in the main activity areas and endeavour to anticipate their possible evolution and impact on banks’ activity. These structures must be  2  BIS Review 174/2010  in place in the largest banks and their products should be an integral part of the decisionmaking process. Dear participants, We are leaving behind a challenging year but other numerous challenges will follow for banking activity. They provide us the opportunity to put our vision into practice, in order to ensure a stable banking activity as a precondition for conducting an efficient intermediation activity with remarkable contribution to economic development at home.
Uncertainty about future returns on financial assets is the essence of the modelling of financial markets. An excellent introduction to this area is contained in the two 2003 Nobel lectures by Robert Engle (2004) and Clive Granger (2004). 2  BIS Review 73/2004  death.5 Collective risk - that average expectation of life will rise or fall in the future - cannot, by definition, be shared among members of the same generation. The principle of insuring individual longevity risk is that those who live longer than average can be paid using the contributions of those who die earlier than average. But if the average itself rises all contributions must increase - there is no possibility for insuring changes in the average from within the cohort. Can we quantify this risk? The expectation of life has risen significantly over the past century. But how will it change in the future? To answer that question we need to model and quantify longevity risk. 3. Modelling and quantifying risks  Quantitative modelling has been one of the great advances of the social sciences over the past fifty years. But forecasts, whether of longevity or any other economic or social variable, inevitably require a judgment about how far the past can inform us about the future. Projecting longevity is fraught with difficulty.

Chart 8 constructs a fan chart for female life expectancy at birth in the United Kingdom derived from the latest forecast published by the Government Actuary’s Department. The width of the fan chart shows how forecasts of life expectancy are likely to change in the future, as new information and ideas about mortality evolve,  12  To understand the concept of independence consider the example of a church spire that is struck by lightning several times. Is this just coincidence (implied by the assumption that the strikes are independent of each other) or does the spire have certain characteristics that lead it to be struck regularly? Given our knowledge of spires and lightening the latter is more plausible. Similarly, there may be characteristics, genetic or other, and still largely unknown, that make particular families more likely to experience cot deaths than others. 13  Hill (2002) and (2004). See also Dawid (2004) and Eggleston (1978) for a discussion of the difficulties courts find with the concepts of conditional probability and Bayes’ theorem. 14  The forecast for inflation is based on the assumption that interest rates follow the path expected by financial markets over an average of the fifteen days prior to the finalisation of the Inflation report. 6  BIS Review 73/2004  causing forecasts to be revised - assuming that news about life expectancy arrives in the future at about the same rate as in the past.
Further on, Bank of Albania market interventions have been practically inexistent and the exchange rate 3/8  BIS central bankers' speeches  reflected the supply and demand situation in the market. Insofar results show that Bank of Albania interventions have accomplished the objectives. The appreciation pace of the exchange rate has diminished and the activity in the foreign exchange market has returned to normal parameters. In line with these developments, the Bank of Albania kept the direction and intensity of the monetary stimulus unchanged over the second half of the year. The policy rate remained unchanged at 1.0% while the financial market was supplied with the necessary liquidity and informed through the forward guidance on the future path of the monetary policy stance. The accommodative monetary policy implemented by the Bank of Albania has proven successful for boosting economic growth, inducing better utilisation of production capacities and building up inflationary pressures in the economy. The transmission of the monetary stimulus is noted in several aspects: First, the monetary stimulus has led to the reduction of financing costs for households and enterprises. Interest rates are close to historical lows, across all the range of financial instruments. Second, the accommodative monetary policy has led to the expansion of credit in lek, and to the reduction of existing debt service costs. Lek credit to the private sector increased at 6.7%, on average, in 2018.

To minimise the likelihood of deflation, central banks should err on the lax side and aim at significantly higher inflation rates. With this in mind, the IMF asks whether a permanent inflation target of 4% is appropriate. The proposal is nothing less than asking whether in the pursuit of price stability central banks put macroeconomic stability at risk. I do see the temptation for governments to ask for higher inflation in order to monetise the dramatic build-up of public debt in nearly all advanced economies. This is why calling on central banks to raise inflation rates permanently is most unhelpful. It deflects from the most pressing problem that, currently, macroeconomic stability is threatened by the unsustainable position of public finances in nearly all advanced economies. I can only reject the idea of raising inflation rates permanently. I would not like to imagine the consequences if, on top of the current financial fragilities and in an environment of high public debt, the general public were to lose trust in the purchasing power of money. There is no evidence whatsoever to support that deviating from price stability and aiming at an inflation rate of 4% would enhance economic prosperity or growth. On the contrary, no one would seriously deny that inflation has a detrimental impact. The inflation tax does not constitute just another tax distortion. It greatly exacerbates distortions from existing taxes, contributing to a misallocation of resources and a rise in the tax burden, especially for lower-income households, and ultimately depresses economic growth.