samchain/econo-pairs-v1 huggingface dataset:
One of the priorities defined in this regard is to invest in education and human resources’ training, while taking account of the changes occurring in the job markets due to technological innovations. The challenge is huge, considering the now strong need for a digital skilled labor. Many countries, more particularly emerging and developing ones, are now faced with the additional issue, besides having to meet their needs, of dealing with the "brain drain" phenomenon, which seems to record an upsurge in recent years. Against this backdrop, strengthening regional and international cooperation, with a view to pooling efforts and exchanging experiences, will essentially avoid worsening the digital divide between these countries and advanced ones. That being said, the actual benefit of those policies and the efforts required depends on the responsiveness of the population, the economic and financial 7  operators as well as of the politicians, to the adoption of digital technologies. After all, it is an issue of a real change of culture. It is true that during last years, initiatives have increased, reflecting a raising awareness about the challenges posed by this revolution. Several countries have developed cross-cutting or sectoral strategies to promote the development of digital technologies and their use. By way of illustration, I will first give the example of my country which has set up a digital development strategy, and created an agency dedicated to this area.

The UK’s major markets in Europe are benefiting from strong demand for their exports; and the latest news suggests that domestic demand in most of these countries is finally picking up, though consumers probably still remain a little wary. As the news from abroad has steadily improved, we have also seen a marked strengthening in demand at home. After a fairly weak first half, retail sales bounced back, the housing market took on a new lease of life and investment began to recover. It now looks as if the UK economy has been growing around or above trend since the middle of last year. It was against that background that the Monetary Policy Committee raised interest rates in three further stages to 4.5%. Meanwhile inflation remains low, well below the Chancellor’s target of 2%. This might seem to bear out the old taunt, that central bankers are the sort of people who want to close the bar as soon as the party starts to go with a swing. It would be fairer to say that we want to be sure that the party remains under control. We don’t want to encourage binge behaviour any more than you do, and for much the same reason; it makes life unpleasant for other people, and it leaves a nasty mess behind. That points to taking action at the first sign of trouble, and preferably before. In current circumstances, strengthening demand is beginning to put upward pressure on costs.
These are the areas that institutions need to focus on to avoid becoming a “problem bank case” themselves. Let me move on now to consider the role of the banking supervisor in ensuring that an institution’s internal controls are adequate and effective. This is an area on which there has been greatly increased emphasis in recent years. Of course supervisors, like the management of financial institutions, have always been concerned with the quality of control systems. However, the approach has been rather piecemeal, and has focused on certain types of risk which are easily quantifiable, rather than the more intangible types of risk. What we are trying to do nowadays is to move towards a more systematic identification and assessment of the risks facing a bank across the whole range of its activities and the adequacy of the controls over these risks. This “risk-based” approach is intended to focus our attention on what we see as the institution’s key risk areas. Of course, the correct identification of the institution’s key risk areas is crucial in this. For most of Hong Kong’s local banks, credit risk, liquidity risk and perhaps BIS Review 48/1998  -4-  reputational risk remain the highest risk areas, but for individual institutions other forms of risk such as interest rate risk and market risk also come into the equation.

Mr. Carse gives a banking supervisor’s perspective on control issues in financial institutions Speech by the Deputy Chief Executive of the Hong Kong Monetary Authority, Mr. David Carse, at the BanComp ’98 conference in Hong Kong on 25/5/98. I am pleased to be here this morning to speak to you at the start of this conference on internal controls and anti-money laundering. The advertised title of my speech is “Understanding the role and needs of the regulator in all authorised financial institutions”. This is a very broad subject and I have therefore narrowed it down to focus on the banking supervisor’s perspective on control issues in financial institutions. I am sure there are many compliance and audit professionals in the audience today, so I trust I should not have too hard a hard job persuading you that good internal controls are not only important, but crucial to the success of financial institutions. Just consider, for example, what poor internal controls did for BCCI, Daiwa Bank and Barings. So what advice can I offer you today to help you ensure that your institution will not meet the same fate? Well, what I will do is to share with you my thoughts on the key elements of a financial institution’s control systems, and highlight some of the areas where other institutions have gone horribly wrong. I will also talk about one of the key areas of a financial institution’s controls its controls against being used for money laundering.
In the past, it has been argued that some transformations, such as globalisation, digitalisation and population ageing, may have contributed to the low-inflation environment during the pre-pandemic period. However, the pandemic and the war could disrupt the globalisation that the world economy has experienced in recent decades, which, together with the need to implement measures to fight climate change, could be consistent with higher inflation rates in the future. Economic policies in the short term In the context described, economic policies must continue to play a key role in minimising the impact of the war in Ukraine on activity and inflation. Fiscal policy First, domestic fiscal policy should help to counter the war’s adverse effects on activity. In fact, the European Commission has recently proposed postponing the activation of the Stability and Growth Pact for another year, until 2023. That said, there are two reasons why the design of the measures should be very much geared towards meeting the needs of the most vulnerable agents. The first is the high government indebtedness, which limits the available scope for action. The second is the fact that the impact of the war is proving highly asymmetric across sectors, firms and households. Thus, the efforts should focus on  10  supporting lower-income households, who bear the brunt of inflation, and the firms most vulnerable to this new shock. Moreover, any measures implemented should be temporary so as not to drive up the structural budget deficit.

01.06.2022  Parliamentary testimony: presentation of the Banco de España Annual Report 2021* Economic Affairs and Digital Transformation Committee Pablo Hernández de Cos Governor *iEnglish translation to the original in Spanish  *  Mr Chairman, ladies and gentlemen: I appear before this Committee to present the Annual Report 2021 of the Banco de España. The report offers an analysis of recent developments in the Spanish economy within the global setting, as well as how it is likely to perform in the future and the challenges it faces. I should like to begin by describing how the Spanish economy performed and the role played by economic policy in 2021. Next, I shall present the economic outlook following the new shock triggered by the Russian invasion of Ukraine, before going on to describe the key aspects of the sharp rise in inflation and outlining my thoughts about the role that economic policy must play to meet the short-term challenges. I shall then discuss the main mediumterm challenges and the recommendations that, in the Banco de España's view, it would be desirable to implement, to tackle them. Lastly, I shall address the situation of the banking system, by summarising the main messages from our latest Financial Stability Report, published in April. Performance of the Spanish economy in 2021 The recovery in activity that started in the summer of 2020 continued at the global level during 2021.
In the last 3 years, there has been significant progress in the identification of several instruments designed: •  to address the rapid expansion and concentration in lending activity;  •  to ensure that banks have sufficient liquidity to cope with different shocks;  •  and to discourage risky behavior by financial institutions by increasing demand for capital for such activities. These measures may have countercyclical nature and could apply to financial institutions based on their systemic importance. These standards require building an institutional framework with clear identification of the authority /authorities that will have macro-prudential powers, in accordance with the structure  BIS central bankers’ speeches  1  and level of market development. Central bank appears to be better positioned than other authorities to perform the macro-prudential role. In addition to its exclusive responsibility on formulating and implementing monetary policy, central bank has other advantages related with: •  its involvement in developing the payments systems infrastructure;  •  its access to wide market and financial system data;  •  and, many times, its role as a regulator and supervisor of banks. Nowadays it is widely accepted that there has been huge progress worldwide in ensuring legal and operational independence of the central bank and this is another important reason why it can be entrusted with macro-prudential policy. In order to correctly define the macro-prudential function of the central bank, it is important to establish the right relationship with monetary policy.

Next in line is the Asset Quality Review by the ECB. Our hope and belief is that this time, concerns of the SEE countries regarding potential further deleveraging, will be considered more carefully and more specifically, to avoid further potential deleveraging. Let me reiterate that the economies in our region currently rely heavily in bank financing and there is a growing need to make credit flow again in the economy. To conclude, allow me to point out the importance of establishing a sound framework for macro-prudential policy, both in terms of tools and institutional approach, in order to deal effectively and timely with prevention of systemic risk. They should be accompanied however, by measures related with the strengthening of crisis management framework. If designed properly, macro-prudential policy should avoid any conflict with monetary policy, and instead should complement it appropriately. Countries in the SEE should benefit from synergies related with the adoption of the Single Supervisory Mechanism. These benefits could be larger if we manage to strengthen our regional cooperation. We are still concerned with potential further deleveraging following the forthcoming Asset Quality Review process and we hope that ECB and other authorities in the Eurozone and EU, could design it to limit these impact in maximum. Thank you very much for your attention! 4  BIS central bankers’ speeches
All kinds of regulatory arbitrage, which would enable firms to relocate to other jurisdictions to bypass national regulations, should be avoided. In this regard, the European Union is currently building a harmonized regulation. Last September, the European Commission launched its proposal for a “Markets in Crypto-Assets regulation” (also known as MiCA). If this proposition is adopted by the EU, companies that issue crypto-assets or provide additional services will be subject to the same requirements, under the watch of supervisory authorities. For example, the crypto-assets intended as a means of payment will have to provide a predictable redemption right in sovereign currency for asset holders, which is deemed necessary for the protection of consumers. At the international level, a cooperative framework is gradually setting up in order to deal with the challenges raised by stablecoins. 2. Supporting initiatives to strengthen Europe’s sovereignty in payments such as EPI The second response is to support private initiatives that can have a constructive impact on market functioning, payment systems efficiency and help address European sovereignty in payments. The best example of this is the European Payments Initiative (EPI), a project led by a set of major European banks and processors aiming at creating a unified, innovative and autonomous European payment solution. The Eurosystem, as well as the European Commission, has been in support of this work right 2/4  BIS central bankers' speeches  from the start. 3.

Third potential impact: the launch of a CBDC could also raise questions related to modalities of access to central bank balance sheet. - Depending on its attractiveness and detailed specifications, a CBDC could trigger a demand from financial actors which usually do not have access to central bank money (money market funds, investment funds, insurance companies …) to be able to settle in CBDC. It would in particular be the case in a broader wholesale CBDC access scenario. The remuneration of the CBDC held by these financial actors – in case access were to be granted – would also matter for monetary policy implementation, as it would play the role of a ceiling for these institutions on the money market. - Beyond these settlement and detention aspects, expanding the counterparty framework (i.e. for central bank refinancing or asset purchases operations) as a response to the implementation of CBDC does not strike me at this stage as being particularly useful nor necessary. In any case the usual requirements related to counterparty eligibility criteria, including financial soundness assessment and supervision, would need to be taken into account. To conclude these introductory remarks, let me stress three points: - Digitalization is a major supply/technology shock, whose implications are multifaceted, and which have been intensified and accelerated by the Covid crisis - As central banks, in the context of our monetary and financial stability mandate, we have a role to play to make sure that digitalization becomes a blessing and not a curse.
But, we must, at the same time, collectively address the ever growing constraints arising out of the inflexibilities and restrictions imposed in the transfer of capital, wealth, skills, knowledge and the imposition of new standards, which may consciously or unconsciously act as subtle barriers to poverty alleviation. Your Excellencies, Honorable Ministers, Distinguished Guests, In order for all of us to appreciate the fact that what I am saying is not something new, let me now quote a Principle as set out in the Singapore Declaration, and affirmed in Harare. “Our aim is to achieve the freest possible flow of international trade on terms fair and equitable to all, taking into account the special requirements of the developing countries, and to encourage the flow of adequate resources, including governmental and private resources, to the developing countries, bearing in mind the importance of doing this in true spirit of partnership, and of establishing for this purpose in the developing countries, conditions which are conducive to sustained investment and growth”. 2  BIS Review 83/2006  While this Principle enunciates a very laudable and noble philosophy the unfortunate reality may be that the plethora of what we may call “worthy restrictions”, (albeit they may be for the greater good of mankind), may be actually but unwittingly assisting to keep the same developing countries in a tighter trap of poverty. The powerful message that emerges from this situation is clear.

And today, perhaps even on your way here, you listened to a streaming service on your phone or watch using voice commands. There's been much innovation over the years, and many improvements in terms of convenience and costs, but at the most basic level we are still doing the same thing: enjoying music. It's how we're doing it that's changed. The same is true with money and payments. Both are fundamentally changing through technological transformations. As happened with the delivery of music, the pace of technological advancement is accelerating, and it's clearing the way to do things faster or more efficiently. On top of that, the development of digital currencies has boomed. This includes cryptocurrencies that are not fully backed by other assets. It also includes stablecoins that are fully backed by safe and liquid assets, and central bank digital currencies (CBDC). Both stablecoins and CBDC that are fully backed by safe assets have the potential to be a new way to hold money and make payments. While all of this innovation opens up possibilities to do things differently than the past, it also carries risks. Just like listening to music, the "how" may change, but the "what" will remain the same. As we look ahead, it's important to remember that even as the technology changes, the role of the central bank has not. It is and will always be to supply money and liquidity to bring stability to the economy and financial system.
Let me proceed, then, by showing you what has been happening in the world and in Chile and how we can observe the increase in uncertainty in agents’ expectations and its propagation around the globe. The global crisis of confidence I will start by listing the main aspects I will be focusing on: •  The synchrony of this crisis is unprecedented. The drop in output made no distinction among economies’ strengths or weaknesses. •  Global uncertainty and distrust were particularly acute towards the end of last year. •  The severe drop in demand was concentrated largely in durable goods. Investment and consumption of these products collapsed by the end of 2008. To contextualize this episode, I will begin by recalling that a debate about the accumulation of strong global imbalances had been going on for several years, focusing on their implications and ways to correct them. The Central Bank of Chile identified them as a significant risk in many of its Monetary Policy Reports. Meanwhile, the world proceeded with very unusual dynamism. World GDP grew by an annual average of nearly 5 percent between 2004 and 2007, while commodity prices increased manifold. Copper, for instance, went from selling at about $ per pound in late 2003 to approaching and even briefly surpassing $ during April and July 2008. Oil went from trading at around 30 to 35 dollars per barrel in late 2003 to close to 150 dollars last July.

This correction has also affected the establishment of more steady balances of the demand and supply for foreign currency in this period. Notwithstanding these encouraging developments, lending activity at home remains far from its potentiality, responding to the lower demand for banking loans and the tightened lending conditions as applied from banks. Lending to private sector marked an annual growth of 4% in real terms, providing an annual growth of 7.8 percent of monetary supply in January. All denominated credit continues to rule the lending activity, which mainly covers the businesses’ needs for circulating capital. January 2010 embodied a particularity, that is the improved state of the banking system assets denominated in foreign currency, has started to be mirrored on the growth of credit denominated in foreign currency. Notwithstanding, the stable increase of lending should be assisted by the re-activation of the demand for loans and the parallel easing of lending conditions as applied from the banking system. Bank of Albania deems that banking system should reveal more visionary in assessing potential sectors of economic growth and to take a more active role in encouraging the economic activity. Annual inflation in February 2010 pointed to 4.4%, exceeding by 0.4 percentage points the upper limit of the Bank of Albania target’s tolerance. The annual average inflation pointed to 2.6%.
4 As banks usually lend at long maturities while their funding is short term, liquidity risks are a natural part of their operations. In the years prior to the crisis, we could see that many banks, including the Swedish banks, exposed themselves to increasing liquidity risks, partly by increasing their lending and partly by choosing to fund their lending on the markets to a greater extent rather than basing it on their deposits. As market borrowing is often short-term in nature, the banks became very sensitive to disruptions on the financial markets. This became obvious during the crisis. The banks lost confidence in each other and they became extremely cautious about lending money to other banks. Market rates rocketed and a large number of banks experienced an acute liquidity crisis. Several central banks, including the Riksbank, chose to supply liquidity to the interbank markets to ease the stressed situation. It is of course not reasonable that government authorities should have to provide massive loans to ensure that the markets work properly. With hindsight, it is easy to see that the regulations have focused too little on liquidity risks. The procyclical effects of Basel II contributed to the crisis Finally, it has also been noted that the procyclical tendencies in Basel II contributed to the crisis. The explanation for this is the regulatory framework’s strong links to risk.

Under the new regulations, a bank will only be able to include debt instruments that can be converted into share capital if the responsible supervisory authority believes that the bank has problems that threaten its survival. 8 Leverage ratio One of the more discussed elements of Basel III is the introduction of a leverage ratio. The aim of this measure is to restrict the banks’ total indebtedness and to set a limit for how large a part of the balance sheet the banks may fund with debts. To comply with the new regulation, the banks must retain capital corresponding to at least three per cent of the value of their total exposures, or assets if you like. In contrast to the minimum capital requirement, the leverage ratio is not a risk-weighted measure. This means that the banks should not take into account to whom or for what they are lending when they calculate their total assets. In addition, most of the items off the balance sheet should be included at their full nominal value. One reason why this new type of measure has been developed is that a number of banks – not least the US investment banks and UBS in Switzerland – experienced major problems when the financial crisis began because of their high level of indebtedness. 8  For a debt instrument to be included as Tier 2 or Tier 1 capital the contract must clearly state that it can be converted into share capital if the responsible supervisory authority finds this necessary.