samchain/econo-pairs-v1 huggingface dataset:
A recent BIS survey4 of central banks found that 86% were actively researching the potential for CBDCs, 60% were experimenting with the technology and 14% were already deploying pilot projects. The central bank digital money, intended to be digital equivalent to cash, could further increase consumer choice, competition and accessibility with regard to digital payments, thus supporting financial inclusion and making cross-border payments faster and cheaper. In addition, some central banks see the preservation of monetary sovereignty in case of widespread use of crypto assets (issued by private entities) as a motivation factor. However, central banks are also exploring possible side effects of digital currency. For example, the risk of financial disintermediation as households and businesses can chose between holding accounts with commercial banks or central bank, or the increased run risk in case of distress, as there will be readily available safe assets, hence endangering the financial and monetary stability. Therefore, it is crucial that digital currency meets public demand, contains possible risks and ensures that payments landscape remains competitive. How do we as a central bank embrace evolving challenges in the payments area? Two years ago, we established an Innovation Hub aiming to facilitate, encourage and support financial innovation. We find this communication channel very useful for both the fintech and the National Bank. We help new players to better understand the existing regulation, and in turn, they help us discover potential regulatory gaps.

1  Nout Wellink, ‘The Role of National Central Banks within the Europeans System of Central Banks: The Example of De Nederlandsche Bank’, 30th Economics Conference, Oesterreichische Nationalbank, June 13 – 14, 2002. 2  BIS Review 46/2002  This would not, however, represent much of a change because already today the Bank has only limited autonomy in the conduct of monetary policy. As far as the transition to the euro is concerned, therefore, the path that Malta should follow seems fairly straightforward, given the starting point of the existing exchange rate regime. Today, the basket consists of the euro, the US dollar and sterling, with weights of around 52%, 26% and 22%, respectively. There is no fluctuation band. The peg is backed by official external reserves, which have comfortably exceeded the monetary base over the years and are equivalent to a fifth of broad money. The first step would be to increase the weight of the euro in the currency basket at the expense of either or both of the other component currencies. If the United Kingdom were to join EMU, this would automatically raise the proportion of the euro in the currency basket, making Maltese entry into ERM II that much easier. On accession, the timing for joining ERM II, as well as technical questions relating to the entry level and the fluctuation band will be up for discussion. If the Maltese lira were to join ERM II with the normal fluctuation band of ±15%, this would inject more flexibility into the system.
What is, perhaps, most notable is that the supervisory focus was placed on banks’ interest rate risk and the sustainability of their funding plans, issues that are crucial in a context of rising interest rates and liquidity withdrawal by central banks. Also, the most exposed European banks were required to improve the way in which they monitor and manage this risk. In some cases, they were even asked to be more conservative in their interest rate assumptions and in their model calibration and validation. Similarly, when it became apparent that there were interconnections between the banking system and non-bank financial intermediaries, the decision was also made to place the supervisory focus on analysing the risks for European banks of this type of exposure. The EU banking sector is so far benefiting from the ongoing normalisation of interest rates, as the interest rate pass-through on the asset side still significantly exceeds the pass-through on the liability side. Consequently, aggregate banking sector profitability is at its highest level since 2014. However, several factors continue to cloud the outlook for banks. First, the deceleration in economic growth and higher interest rates may have an adverse impact on asset quality, leading to higher impairment costs, and on lending volumes, exerting contractionary pressures on income generation capacity. Second, banks’ funding costs are on the rise, bringing potential pressure on interest margins. The impact of these factors is expected to become more pronounced over time and more likely the longer the high-interest rate period continues.

Recent bank instability episodes outside the EU are a further reminder that we need to remain vigilant. The resilience of the financial system is essential. Only a resilient financial sector will be able to support the real economy during times of stress,14 and all financial authorities and institutions across the EU must contribute to this end. In this regard, regulatory actions and policies towards banks and NBFI intermediaries must aim to preserve shock absorption capacity in the form of capital and liquidity buffers. 14  See also Macroprudential policy in Europe: building resilience in a challenging environment, Welcome remarks by Christine Lagarde, President of the ECB and Chair of the European Systemic Risk Board, at the sixth annual conference of the ESRB, December 2022.
These figures demonstrate that we should be able to seize the abundant business opportunities arising from the Mainland’s expansion in external trade if we continue to fortify our trade relations with the Mainland and the rest of the world, just like our trade intermediation activities growing from 15% of GDP in 1979 to 20% in the early 1990s, and then to 25% now. 6. Let me illustrate with another example why Hong Kong will not be marginalised as the Mainland continues to open up to the world. Let’s look at the opening of the cross-strait “Three Direct Links”. Prior to 2008, there were no direct flights between the Mainland and Taiwan. Passengers had to make a mid-way stopover at a third place. As a result, Hong Kong became the busiest transit point between the Mainland and Taiwan by virtue of its favourable location. Some pundits predicted that the opening of the “Three Direct Links” would deal a devastating blow to the aviation industry between Hong Kong and Taiwan. On the contrary, air traffic between Hong Kong and Taiwan increased by 15% from an average of 118 flights per day in 2007, before the implementation of the “Three Direct Links” in 2008, to 136 daily flights in 2013. This clearly illustrates that as long as Hong Kong is able to maintain its attractiveness and competitiveness, we can continue to effectively perform our role as an intermediary between the Mainland and Taiwan. Are Hong Kong and Shanghai deadly rivals? 7.

The Banco de España projections include a third scenario, in which the materialisation of some of these risks might give rise to a decline in GDP for this year of 15%. 3. Economic policy in the second phase of the crisis The key magnitudes of these forecasts illustrate the challenges we face and the need to formulate a forceful economic policy response. I shall now turn to detailing the main elements which, in my view, this response should include. As earlier stated, in this second phase of the crisis economic policy should combine two objectives: to support the recovery and provide for the structural adjustment of the economy. First, I shall broach the policies relating to the monetary and financial areas. As part of the European Central Bank (ECB), the Banco de España contributes to such policy decisions at the European level. Here the priority should continue to be to support the recovery and maintain financial stability. As mentioned in my previous testimony to the Economic Committee, I believe we should all share the goal of preventing the current crisis from being  3  accompanied by a generalised tightening of financing conditions or from seriously harming our financial system. In this connection, and in relation to monetary policy, we have on the ECB Governing Council reiterated our commitment to doing everything needed to support euro area citizens in these extremely difficult times.
Since the Second World War, the number of years of schooling has risen rapidly (Chart 8), more than trebling in emerging markets and almost doubling in advanced economies. Latterly, that rise has been driven by increasing numbers of adults with degree-level (tertiary) qualifications. Human capital has widened and deepened. Empirical studies suggest higher educational standards may have accounted for as much as a fifth of US growth since 1950. 26 Given the much larger scale of improvement in educational standards between the 16th and 18th centuries – the shift from an illiterate to a largely literate workforce – human capital accumulation seems likely to have played an even larger catalytic role in driving the Industrial Revolution. The picture is similar if we move from human to social capital. This is a more difficult concept to capture quantitatively. It embraces properties such as co-operation, reciprocity and trust within society. Although more elusive, these sources of social capital have been crucial to the success of nation states – for example, in supporting growth of trade. 27 One measure of social capital used by sociologists is the incidence of violence or war in society. This is the limiting case of a lack of cooperation or trust within or across societies; it is the sociological equivalent of financial crisis. 28 Chart 9 plots the incidence of murder (homicide) in Western European countries since 1300. It, too, tells a striking story. Violent crime fell dramatically between the 15th and 18th centuries, by a factor of around five.

My understanding of the present debates leads me to the following four pragmatic suggestions that I hope can stimulate your discussions: 1. Remain very clear about your objectives – uncertain times are not the right ones to create additional doubts about, say, your inflation target – and about your capacity and determination to use your tools in a predicable sequence. 2. But, whilst being consistent with your guidance, be very flexible in the precise calendar and calibration of your implementation. In short, be as predictable as possible, but never be precommitted. 3. Act to prevent the worst outcomes occurring but without supplying complete insurance, which would create moral hazard. 4. Never base policy on only one expected path for the economy. In conclusion, we cannot seek to control, or avoid, uncertainty; instead we must implement strategies that are the most robust to it. The French philosopher Edgar Morin put it nicely: “La connaissance progresse en intégrant l’incertitude, non en l’exorcisant” – “knowledge advances by integrating uncertainty, not by exorcising it”. With that in mind, let me wish you all a very productive symposium with lively and enlightening exchanges of views. Christine, the floor is yours. 3/3  BIS central bankers' speeches
In the digital age, of course, biting won’t help, and standard counterfeiting doesn’t rank among the many problems that bitcoin faces. Two years ago we held a seminar on cryptocurrencies (and especially bitcoin) at our central bank. When we were preparing for the event, people from the libertarian, cryptocurrency-loving community in Prague asked me: aren’t you afraid of us? Aren’t you afraid of bitcoin and other independent, central-bank-free currencies and their power to marginalise traditional money? I said – well, not really. Let’s put aside the fact that all of these alternative currencies are still marginal in terms of size and scope (all the electronic transactions using bitcoin worldwide combine to some 16% of the number of electronic transactions conducted in the Czech koruna, a currency used by a mere 10.5 million people). Bitcoin’s global market cap also constitutes only a fraction of even the Czech money supply. The key problem is bitcoin’s constantly changing purchasing power. So far it has been more volatile than natural gas, the most volatile commodity. Such a feature is really worrying for any innovation that wants to be seen as money: a means for paying and settling transactions, a unit of account and a store of value. Let’s try to imagine the following: today’s five pound note being worth ten pounds tomorrow and then one pound the day after tomorrow. It would be very difficult to exist in such a monetary system, to use the currency in everyday life.

Our fault as central bankers is that we have been unable to explain, at least in many developed countries, that one of the key reasons for the actions we took during and after the Great Recession was simply to keep the price stability, i.e. to keep the purchasing power of money relatively constant and predictable. Yes, sometimes it required unorthodox policies. In conservative societies, people tend to fret about too much money being “created”, but they typically have no idea whatsoever about how much money there actually is in circulation, how large the effective money supply is. When I ask about the size of the money supply even in front of well-educated audiences, I often get estimates that are wildly off the mark. In contrast, I obtain very precise answers on the rate of inflation. Price stability, not money supply, matters. Bitcoin nicely illustrates the very essence of the current monetary policy, which relies on elastic money. It is a policy of nominal stabilisation of prices, of the purchasing power of money. In consequence, the impact of shocks does not require tough adjustments through wages and employment. So, as long as central bankers abide by the principle of purchasing power stabilisation, I’m not afraid that any newly invented fixed money system will spontaneously prevail and become dominant. The fact that current money is fiat, not really in line with my libertarian friends’ dreams, is less important than price stability, I would say.
Ravi Menon: Financial inclusion and innovation - retaining the customer Opening remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the BIS-World Bank Roundtable on Impact of Technology on Financial Inclusion and Financial Stability, at SFF x SWITCH 2019, Singapore, 13 November 2019. * * * Let me first thank Mr Agustín Carstens, General Manager of the Bank for International Settlements (BIS) and Mr Alfonso García Mora of the World Bank Group for hosting this Roundtable. And also Her Majesty Queen Máxima for her presence, inspiration and for tirelessly championing the cause of financial inclusion globally over the last ten years. I am delighted to welcome the BIS, the World Bank, the UN Secretary General’s Special Advocate for Inclusive Finance for Development (UNSGSA), and fellow central bankers and regulators to the Singapore FinTech Festival. • I hope you had time to soak in the FinTech Festival, feel its spirit and energy, spilling over 60,000 attendees, six halls, and 1,000 exhibitors. I want to focus my remarks on the important evolution taking place in financial inclusion: from Financial Inclusion 1.0 to Financial Inclusion 2.0. • Financial Inclusion 1.0 was about improving access to bank accounts. Financial Inclusion 2.0 focuses on usage of bank accounts. • Financial Inclusion 1.0 was about developing nimble innovative financial solutions for the unbanked. Financial Inclusion 2.0 is about facilitating collaboration among financial institutions and FinTechs, to promote integrated solutions.

Second, digital finance needs to be embedded in the way small businesses operate daily, across their supply chains. • A merchant is more likely to pay her employees digitally, if she receives digital payments from her customers, and transacts digitally with her suppliers. • We will not progress if we have cash on one side of the supply chain, and digital payments on the other. Going a step further, if we can unlock digital SME trade across borders, we will help SMEs access a broader range of trading opportunities and reach economies of scale faster. • This is what the Business Sans Borders initiative by MAS and the InfoComm Development Authority is seeking to do. • BsB is an open connector of platforms (a “meta-hub”) which helps address three challenges faced by SMEs – opaque pricing, complex supply chains, and lack of access to digital solutions. 2/3  BIS central bankers' speeches  •  This is a cross-border platform, connecting infrastructure across countries. Fundamentally, finance needs to support the way people live their lives and businesses go about their business. • Embedding innovation and digital finance in people’s lives is the only way to achieve sustained and meaningful financial inclusion. • As countries, we must learn from one other, partner in innovative projects, and manage risks collaboratively. •  And we should do so with the consumer right at the centre of our thinking. 3/3  BIS central bankers' speeches
BIS central bankers’ speeches  13  These positive moves have prompted new proposals. Some are not so innovative, including the use of role-based allowances as part of fixed pay, to link more explicitly reward to responsibility. But others are more pioneering – for instance the proposals being pursued by some banks to pay certain staff in “performance bonds”, which they would forfeit in the case of the bank receiving a large fine. These could include Contingent Convertible bonds (CoCos), which either get wiped out when a bank runs into trouble or get exchanged into equity. All of these measures align personal incentives with the interests of creditors, and the longer-term wellbeing of the firm. 25 A final area where progress has been made is shareholder control of remuneration policies. Since 2013, shareholders have had a “Say on Pay” in both the UK and US. Remuneration policies now need explicitly to be approved by a majority of shareholders (in the UK) or advised on (in the US). And in Europe, a Shareholder Rights Directive granting a “Say on Pay” is moving through European Parliament. It is too early to tell whether these initiatives will signal a “Shareholder Spring”. Taking pay issues together, progress on restructuring executive compensation has been made, particularly in the EU and particularly for banks. Elsewhere, however, progress has been relatively piecemeal and modest.

In other words, shareholder primacy was not just retained but now made legally explicit in Section 172 of the UK Companies Act (2006): “A director of a company must act in a way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole…” The Group also suggested that directors’ duties be defined in law. They were to serve the interests of shareholders, first and foremost, but also had to “have regard” to wider interests, including employees, customers, suppliers and the wider community. This “enlightened shareholder value” objective was to be supported by public accountability, with annual reporting on how companies were meeting their wider interests. 15 The findings of the review were drafted into legislation, with the Company Law Act of 2006. Under it, shareholders were given new legal rights to initiate proceedings against directors if they breached their responsibilities. And the precise role of the “have regards” provisions  13  Empirical evidence appeared to support this case. Companies in which shareholders had stronger rights relative to management had higher stock returns and relative to the market (Gompers, Ishii and Metrick (2003)), while acquisitions involving companies where there were stronger takeover defence measures tended to have lower shareholder returns (Masulis, Wang and Xie (2007)). 14  See Chapter 1 of The Company Law Review Steering Group (1999). 15  See paragraph 3.2 of The Company Law Review Steering Group (2000).
Miguel Fernández Ordóñez: Financial crises – impact and challenges for Spain Opening speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the “XIX Encuentro del sector financiero”, organised by Deloitte-ABC, Madrid, 10 April 2012. *  *  *  Good morning, Four years have gone by since the Federal Reserve had to bail out Bear Stearns and what was then known as “turbulences” began, ultimately turning into the most serious crisis the developed countries have faced since the Great Depression in the 1930s. A year earlier, Spain had begun to feel the effects of the exhaustion of a long phase of disproportionate expansion, in the form of a build-up of private debt and a loss of competitiveness. The latter, under way before Spain joined the euro, was fuelled by the low interest rates that suited the euro area as a whole, prompting an extraordinary deficit on the current-account balance. The joint outbreak of these two crises, the international one and the domestic one in Spain, led output to fall and public revenue to collapse. And this, together with a further increase in public spending aimed at softening the recession, meant that the budget surplus run from 2005 to 2007 turned into a deficit in 2008 and came to exceed 11% of GDP in 2009. If this were not enough, in April 2010 a third crisis hit Spain: the sovereign debt crisis or the euro crisis.

The strategies pursued have involved using the least possible amount of public funds, concentrating on cleaning up bank balance sheets by demanding additional provisions, raising capital requirements, encouraging mergers, transforming savings banks and improving their governance, reducing capacity, increasing efficiency by bolstering the size of banks, making the worst managed banks disappear and minimising the time the State has a presence in banks in which it had to intervene. The results mean we can be encouraged by what we see Spain has been able to do during these difficult years of crisis. As regards cleaning up bank balance sheets, since late 2007 to the end of last year provisions have been increased by € billion. Once this year, thanks to the recent legislation, an additional write-down of € billion is completed, a figure of € billion will have been reached, namely 14% of GDP. As regards capitalisation, deposit institutions have during this period increased their capital both in absolute terms and in relation to their assets, thanks partly to the fact that the legislation passed in 2011 and 2012 has imposed on Spanish banks capital requirements greater than those required by the Basel III calendar. As regards capacity, although the plans are not complete, there have been reductions of 12% in the number of branch offices and 10% in the number of staff, with sharper falls at savings banks (of the order of 16% and 13%, respectively).