samchain/econo-pairs-v1 huggingface dataset:
Money must therefore also function as a store of value. The first coins to be struck, imprinted with the king’s mark as a guarantee of their weight, were produced in Lydia almost 2500 years ago – with the reverse bearing the mark of King Croesus. Since then, coins in a variety of metals have been widely used. The currency of Norway was directly linked to a metal for centuries, until the gold standard was abandoned in 1931. 1/9  BIS central bankers' speeches  Wealth in the form of silver and gold coins can – literally – be a heavy burden. The emergence of banknotes that could be exchanged for a specific monetary value in metal made it easier to manage large sums of money. A banknote is in reality a promissory note – an interest-free claim on the issuer. Its value depends on trust that the issuer will keep his word and that the banknote proves to have the promised value. The issue of banknotes by private entities was a fundamentally unstable system. The solution was to establish central banks in order to build abiding trust in the currency. The Swedish central bank, the Riksbank, the first central bank in history, was founded because the issue of banknotes by a private bank – Stockholms Banco – led to a banking crisis. The origins of the US Federal Reserve are similar: during the so-called “free banking” era, private banks could issue their own banknotes in various denominations.

From a more prospective point of view, artificial intelligence (AI) will be among the most 1 2/3  BIS central bankers' speeches  impactful technologies in the financial industry for the upcoming years:1 up to 30% of major French banks’ projects in current development are heavily focused on AI and the potential for insurers is equally huge both for the traditional damages insurance as for life insurance products. The expected benefits of AI in customer relationship and risk management are numerous: we don’t know the limits, and we shouldn’t be frightened of AI. To allow its wider use in a secured way, we have set up a Task Force on AI, led by the ACPR and gathering all relevant industry representatives. And I already stress that we have to collectively implement at least three core principles: (i) promoting a greater understanding of algorithms to avoid the ‘black box effect’; (ii) ensuring a sound governance of AI-based systems; (iii) fostering an ethical use of data so that bias-free AI applications promote inclusiveness. Last but not least, green finance represents a new frontier for the 21st century for us as central bankers and supervisors. One of our priorities is to better measure the long-term risks associated with climate change: we need both a “snapshot of the risks” – namely the identification and disclosure of exposures – and a “video of the risks” provided by forward-looking carbon stress tests.
We must push against these headwinds forcefully to best achieve our objectives. Thank you for your kind attention. I would be happy to take a few questions. 8  BIS central bankers’ speeches

The relations and cooperation of the CBRT in the international scene go well beyond our bilateral dialogue with your esteemed Bank and cover also the financial level (swap agreements signed with certain countries), as well as the educational level (the establishment of an international central banking research facility and regional training centre, the İstanbul School of Central Banking). BIS central bankers’ speeches  1  I would like to thank the Bundesbank for opening a Representative Office in İstanbul, for signing the MoU agreement and for all the support and assistance you have provided us in diverse fields and at various platforms. Closing my remarks, I would like to welcome my friend and colleague, Dr. Andreas Dombret, a member of the Executive Board of the Deutsche Bundesbank, and thank him for his tremendous efforts in bringing this project to life. Now let us celebrate our achievements. Thank you for your attention. 2  BIS central bankers’ speeches
But it certainly shows this can be done, with great efficiency, by proper internal adjustment. Second, both aggregate and country-based data do not point to widespread and inevitable unsustainability in peripheral Europe. The euro area’s aggregate budget deficit will stand around 4.1% in 2011, less than half that of the UK or the US. The same holds true for public debt, which amounts 85% in the euro area while it will soon cross the 100% mark in the US. The euro area is also the only major currency union with its external accounts in balance, which is an essential element of robustness and a strong guarantee of long-term solvency. Peripheral countries are also improving their fundamentals. The primary deficit of Spain for 2011 will be around 4.7%, half that of the US and the UK. Italy will be one of the very few advanced economies to have a primary surplus, around 0.5%. Both countries announced and adopted major fiscal consolidation and structural reform plans aimed at balancing their budget by 2013. Ireland provides the perfect example that a country with very high deficit and interest rates can reverse the trend if it makes the necessary efforts. The Irish deficit will fall from 32% in 2010 to around 10% in 2011, exceeding the requirements of the EU-IMF programme. At the same time, growth is back and will probably be around 2% this year. The third issue is more subtle. It relates to solvency and liquidity.

This global movement has been more pronounced in Europe, because of a third uncertainty, related to banks’ exposures to peripheral sovereign risk. In addition, French banks have suffered from two specific vulnerabilities, one real, one exaggerated. The real vulnerability is their dependence on dollar funding, due to the scale of their international activities, which they may have been too slow to address effectively. It is currently being dealt with through a combination of deleveraging and consolidation. In the meantime, and since this is a broader problem for European institutions, in order to ease the transition, the Eurosystem, together with other central banks across the world, has decided to conduct three US dollar liquidity-providing operations with a maturity of three months. A more exaggerated concern about French banks is their exposure to peripheral countries’ sovereign risk. Let me just point out some facts and figures: total exposure of major French banks to the sovereign risk of so-called “peripheral countries” amounts to € which is only a limited fraction of their core Tier One capital. In terms of liquidity, the Eurosystem refinancing policy provides for an unlimited provision and the total collateral of French banks amounts to $ in eligible assets. I would note that both so-called “vulnerabilities” are a consequence of the internationalization of banking activities. And there is a certain paradox in a situation where globalized banks, with diversified activities and balanced business models are perceived as riskier than more specialized institutions. Let me now conclude.
Investment managers have consistently been found to over-estimate their abilities and traders consistently to over-trade their positions. On average, there is little evidence of either consistently out-performing their peers. 29 Over-confidence effects tend to be more acute among individuals than groups, as groups dilute the influence of hubristic individuals, as well as promoting a greater understanding of others’ perspectives. Consistent with that, studies of decision-making by the US Supreme Court in the US have found benefits from expert, unelected committees. 30 Groupthink biases In 1951, Solomon Asch conducted a series of tests on a group of students. Each was asked in turn to state which of three lines on a card matched the length of the line on a separate  24  Oskamp (1965). 25  Cross (1997)  26  Svenson (1981)  27  Taleb (2007)  28  Goel and Thakor (2008). 29  Kahneman (2011). 30  Iaryczower et al (2013). 4  BIS central bankers’ speeches  card. 31 The twist came in the fact that all but one of the participants was an actor, primed to give the wrong answer. The real student, answering last, then responded. These Asch experiments found something remarkable. The unsuspecting student conformed to the group’s wrong answers between a third and a half of the time. Their decision-making suffered a systematic conformity bias. Interestingly, if as little as one dissenting view was added, this conformity bias was reduced by up to 75%.

In the early days of the MPC, the Bank used experimental evidence to assess the impact of committee decisionmaking. It found they made for better decision than individuals, by eliminating the bad play of individuals but also by promoting learning among Committee members. 57 Subsequent evidence from real-world MPC decision-making has found the same. 58 For effective information aggregation, individual MPC members need to bring a diversity of views. While difficult to observe directly, voting patterns suggest a reasonable degree of such diversity. There has been at least one member dissent from an MPC decision at around half of all meetings (Chart 8). External MPC members have contributed importantly to this diversity. On average, they have been around twice as likely as internals to dissent from monetary policy decisions (Chart 9). And although less likely to be in a minority, the Governor of the day has been outvoted on nine occasions. 59 Voting diversity does not of course prevent collective over-optimism. That might arise, for example, if the MPC consistently over-estimated its ability to forecast the economy. Since 1996, the Bank has published forecast paths for inflation and output growth, together with its assessment of the uncertainty around these estimates – so-called “fan charts”. 60 Chart 10 shows the fan chart for inflation from the Bank’s most recent Inflation Report. These fan charts allow us to conduct a real-world version of Oskamp’s experiment. Chart 11 plots the standard deviation of the Bank’s fan charts for output and inflation over time.
Direct greenhouse gas emissions, excluding uptake and emission of greenhouse gases from land use, GHG (kt CO2e)/GDP (USD million). Sources: UNFCCC, OEDCD and Climate Watch. Chart 4. Greenhouse gas emissions Blue bars show the Riksbank’s bond holdings and red bars show bonds sold in 2019, in Canada and Australia respectively. Emissions as a share of GDP 1,4  1,4  1,4  1,4  1,2  1,2  1,2  1,2  1,0  1  1,0  1  0,8  0,8  0,8  0,8  0,6  0,6  0,6  0,6  0,4  0,4  0,2  0,2  0,0  0  0,4  0,4  0,2  0,2  0,0  0  Note. Direct greenhouse gas emissions, excluding uptake and emission of greenhouse gases from land use, GHG (kt CO2e)/GDP (USD million). Sources: Australian Bureau of Statistics, Bloomberg, Government of Australia, Government of Canada, UNFCCC and Statistics Canada  Bond purchases for monetary policy purposes Like many other central banks, the Riksbank has bought bonds for monetary policy purposes. The Riksbank has limited purchases to nominal and inflation-indexed government bonds. As I have already mentioned, the Riksbank can broaden its purchases to other types of bonds, such as corporate bonds, municipal bonds and housing bonds. There is an international debate33 on to what extent central banks should consider sustainability aspects in these types of bond purchases: should they give extra  33  See, for instance, Cœuré (2018), Honohan (2019) and Mersch (2018).

This first step was followed by other steps related to other segments of the financial market, such as the securities and capital markets, including the establishment of the relevant supervisory and regulatory institutions. Initiatives in these aspects have promoted a constant expansion of the financial market, in terms of both diverse institutions and number of financial products and trading volumes. Yet, despite these developments, the financial system remains dominated by the banking system and relevant developments in it. The last financial stability report of the Bank of Albania states that banks account for around 90% of total financial system assets, equivalent to 92% of the GDP, whereas the rest of the financial sector shares only 10% of the financial system total assets. Assessments and studies of the Bank of Albania, as well as comparative studies by third parties, particularly by the International Monetary Fund, show that the financial distribution and expansion in the Albanian financial market is close to the equilibrium, dictated by the Albanian economy and consumers. Moreover, financial intermediation indicators, as a percentage of the Gross Domestic Product, are at similar levels to those in other countries of the region. The dominance of the banking segment has naturally led to a higher level of concentration of financial products and services in its favour. More than 80% of resident investments in the financial system are in the form of deposits and current accounts in banks.
The scope of the Financial Mediation Bureau has been expanded to cover, for the first time, Islamic banks, takaful operators, development financial institutions, as well as selected payment system operators and non-bank issuers of credit and charge cards. I am also pleased to announce that with the launch of the Financial Mediation Bureau, the limit on cases falling within the jurisdiction of the Bureau has been increased from the limits applicable to the former Mediation Bureaus. This will provide increased access to the Bureau as an avenue for redress for a wider spectrum of the public. 2  BIS Review 4/2005  Apart from the expanded coverage, the Financial Mediation Bureau plans to improve its nationwide accessibility by progressively establishing 5 regional offices. The Financial Mediation Bureau will be governed by a Board of Directors comprising nine members, of whom five are independent directors, with the balance from the banking and insurance industries. Tan Sri Dato’ Seri Haidar bin Mohamed Noor, the first Chairman of the Board of the Financial Mediation Bureau, has a long and distinguished career in the judicial service. I believe that the Financial Mediation Bureau will benefit from his vast experience and expertise in judicial matters. The Financial Mediation Bureau will be staffed by independent and experienced mediators who are experienced in judicial matters.

One core element has been reporting and disclosure, on which the FSB has led progress through the Task Force on Climate-Related Financial Disclosures (TCFD). But we also need to accelerate work to develop firms’ and authorities’ climate-related risk analysis and stress testing capabilities, so as to bring climaterelated financial risks into the heart of decision-making, and ensure that the global financial system plays its part in the transition to net zero. The UK’s international financial centre and the EU  Ensuring that the governance of international finance keeps pace with cross border risk is crucial to both the EU and the UK, integrated as we are in the global financial system. It is of huge importance to the Bank of England which is charged with ensuring financial stability. We are home to the largest and most complex financial centre in the world. And it is a truly global financial centre, where global capital, liquidity and risk are pooled and managed, with the accumulation of the people, skills and the expertise necessary for such a concentration of international finance. The City is home to around 250 foreign banks including all of the major investment banks. It is the same story for other financial sectors like asset management and insurance. 6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  Its financial markets are truly global.
These constraints meant that, while CHAPS Co had made important enhancements to its existing model, it was unable to fully meet regulatory expectations to act as an effective end-to-end systemic risk  5  https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator The rulebook (or ‘CHAPS Reference Manual’) sets out the requirements that a member needs to adhere to as a participant in CHAPS. The rules are designed to deliver a safe, secure, and resilient CHAPS payment system. 6  3  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  3  manager for the CHAPS payment system. Put another way, the Bank understood and mitigated the risks within RTGS, and CHAPS Co looked at risks in its participants but it was hard to join the two views together. Bringing these two views together could benefit financial stability. This is not to say that the Bank and CHAPS Co stood still in their joint operation of the service. Two key improvements to the resilience of CHAPS in recent years were the implementation of a Liquidity Saving Mechanism (LSM) and establishing a third site for RTGS to ensure settlement could continue to operate in the very unlikely event that the Bank’s data centres suffered a simultaneous outage. And CHAPS Co took important steps to streamline its governance arrangements, strengthen its rulebook, and improve how it sought assurance of compliance. The resilience of the CHAPS system is about more than just the central RTGS infrastructure or management of its Direct Participants7 in isolation.

Climate change is one of the most pressing challenges facing the world today. In recent years, we have witnessed increasing frequency and intensity of extreme weather events such as flooding and wildfires. I’m sure you still remember the catastrophic damages caused by super typhoon Mangkhut just three years ago. 22. In order to tackle the climate challenge, countries agreed, under the Paris Agreement, to take actions to cut greenhouse gas emission and eventually achieve carbon neutrality within this century. One of the most important steps is to make financial flows consistent with the pathway of lowering greenhouse gas emission. 23. To this end, we are now finalising our supervisory requirements on climate risk management. The requirements will set a benchmark to help banks formulate their plans to upgrade their risk management capability. Under the Cross-Agency Steering Group, we are also working in the areas of taxonomy and disclosure to increase the consistency of green definitions and the availability of ESG information to reduce the risk of “green washing”. 24. As the core part of the financial system, banks do have a key role to play in the transition into a low-carbon economy by channelling more financing to greener and more sustainable activities. However, if our path to green finance leads to a rapid off-ramping of “not-so-green” exposures or corporates without proper regard to transition needs, this will result in a disruptive transition. And the interim financial exclusion impact on some of the traditional industries could have profound implications for society. 25.
30  By changing the distribution of income, the global integration of labour markets may also lower global R*. The changes in relative wages in advanced economies have shifted income towards skilled workers, who have a relatively higher propensity to save. Rising incomes in emerging market economies may be reinforcing that effect as saving rates are structurally higher in emerging market economies, reflecting a variety of factors including different social safety regimes. 31  The high mobility of capital across borders means that returns to capital will move closely together across countries, with any marked divergences arbitraged. 32  As a consequence, global factors are the main drivers of domestic long-run real rates at both high and low frequencies (Charts 9 and 10). For example, Bank of England analysis suggests that about 75% of the  29  Lisack, N, Sajedi, R and Thwaites, G, ‘Demographics and the real interest rate’, forthcoming. Although retirees dis-save, they also tend to retain relatively high wealth during their retirement, so as the share of the population in retirement increases the stock of savings will remain elevated even as the flow of savings falls. 31 As Ben Bernanke noted, a ‘savings glut’ from emerging economies developed in the run-up to the crisis (see remarks on ‘The Global saving glut and the US current account deficit’, 10 March 2005).

19  All speeches are available online at www.bankofengland.co.uk/speeches  19  labour that result from Brexit – both effective and actual – should steepen the wage Phillips curve, increasing the sensitivity of domestic wages to domestic labour market slack (moving in the opposite direction to the rotation shown by (3) in Figure 1 above). UK potential supply capacity itself is also likely to be lower as some capacity tied to Europe becomes obsolete. The reduction and reorientation of trade is likely to weigh on productivity for some time through a loss of comparative advantage and the disruption of supply chains as companies in the UK shift from supplying customers in the EU to customers in the rest of the world. Empirical estimates suggest a 20% reduction in trade tends to drag on productivity by around 5% in the long run. 53  The actual impact will  depend on how quickly any lost access to European and third country markets (via European trade deals) can be replaced. In this regard, the UK Prime Minister’s discussions in Canada today are potentially significant. With respect to the exchange rate, the effects of imported inflation are particularly important to UK inflation dynamics, given both the openness of its economy, the low degree of home currency invoicing  54  and the  relatively slow but significant pass through of large, persistent exchange rate moves.