samchain/econo-pairs-v1 huggingface dataset:
Eva Srejber: New economy - or blend of new and old? Speech by Eva Srejber, Second Deputy Governor of the Sveriges Riksbank, at a meeting arranged by WM-Data ub Tylösand on 23 October 2000. *  *  *  Major technological changes have occurred before. Then as now, many people talked about a new age that would involve better communications, new economic relations and a very promising future. It is therefore important to keep a level head amidst the technological enthusiasm over future opportunities. The fact that I am today emphasising the risks more than the advantages, is not because I consider the risks to be more important than the advantages, but because the risks appear to have been largely forgotten in the general debate on the economy. Let us make a sober analysis of what is happening, and maybe we can avoid repeating the mistakes made during previous technological leaps. Moreover, I will touch on the uncertainty and lack of information regarding the structural changes currently taking place in the economy. In conclusion, I will also indicate to what extent these phenomena have already affected and can be expected to affect monetary policy. It has happened before A nation’s economy is constantly subject to changes that lead to reappraisals or to the development of old economic relations and theories. This is nothing new.

We saw a much calmer development in Sweden in the 1950s and 1960s when electrification became widespread. This contributed to a rapid technical transformation, which largely followed a calm course, although it involved a very extensive migration and in its later stages involved entire industries being wiped out. However, this was a period that was in many respects quite different from our current day and different from the period at the turn of the previous century. Sweden had the advantage of having remained neutral in the Second World War and we were able to benefit from a relatively stable demand from the countries building up their economies from the ruins. We had capital market regulations and the international scene was dominated by the Cold War, which led to a clear bipolar world. The USA dominated our part of the world and provided support for clear international financial structures, partly based on the need for solidarity. What has happened so far in Sweden? To return to today’s situation, we can conclude that the Swedish economy is doing better than it has for a long time. Price stability has been established. Production and employment have increased at a rapid rate and would appear to continue to do so. Looking at the past six years, the economy has grown by an average of 3% per year and at the moment we appear to be in an annual rate of between 3 and 4%.
As investors realised there was a risk they may not receive their original investment in full, or that their holdings in MMFs may be suspended, a run on other funds followed, contributing to the extreme volatility in money markets and broader financial markets observed at the time. Following the financial crisis, considerable work was undertaken to build the resilience of MMFs. In 2012 the International Organization of Securities Commissions (IOSCO) published policy recommendations for the regulation and management of MMFs. Many of the reforms that were subsequently implemented have helped improve the resilience of MMFs, however it is clear they 1/6  BIS central bankers' speeches  did not go far enough in solving the underlying problems. And in some cases they may have had unintended consequences, such as the introduction of a link between the level of illiquid assets held by a fund and the potential use of tools (such as fees or gates) to manage redemptions during periods of stress. While introduced to manage potentially disruptive outflows, these changes have made funds more sensitive to so-called cliff edge effects – thus increasing an incentive to exit before the gate closes. One of the important, broader changes in the financial system post financial crisis has been the shift in the importance of bank and non-bank finance, with the latter growing relative to the former. This is not accidental: the post crisis reforms meant that there were asset classes which were no longer suitable to hold in large scale on the balance sheet of banks.

Given the cross-border nature of MMFs, it is important we work together internationally to ensure that we are aligned in our objectives, and adhering to common principles, even if the precise implementation varies a little to reflect the specific nature of each jurisdiction’s markets. The dash for cash provided an unwelcome reminder that the post financial crisis did not finish the job and left a dangerous gap in our exposure to the risk of financial instability. We must finish the task this time. Thank you. I am grateful to Imane Bakkar, Adam Brinley-Codd, Alice Carr, Geoff Coppins, Edward Denbee, Steven Dodkins, Lee Foulger, Karen Jude, Clare Macallan, Nick McLaren, Jon Relleen and Konstantin Wiemer for their assistance in helping me prepare these remarks. 1 The International Accounting Standard 7Opens in a new window defines cash equivalents as “short-term, highly  liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value”. 6/6  BIS central bankers' speeches
Number of card payments per capita and year 100  100  80  80  60  60  40  40  20  20  0  0 1990  1991  1992  1993  Sweden  1994  1995  Finland  1996 Norway  1997  1998  1999  2000  Denmark  1  Shares of number of transactions with debit, credit and charge cards 100% 90% 80%  Charge cards Charge cards Credit cards Credit cards  70% 60% 50% 40%  Debit cards Debit cards  30% 20% 10% 0% 1997  2001  2  Shares of payment instruments of total number of non-cash payments 2000  1990 direct debits 4%  direct debits 8%  checks 0,2%  checks 15% card payments 29%  card payments 7%  credit transfers 63%  credit transfers 75%  3  M0/GDP Percent 5%  5%  4%  4%  3%  3%  2%  2%  1%  1%  0%  0% 1990  1991  1992  1993  Denmark  1994  1995  Finland  1996 Norway  1997  1998  1999  2000  Sweden  4  Long term M0/GDP trend in Sweden Percent 12%  10%  8%  6%  4%  2%  0% 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 5  Number and value of transactions with Cash card per SEK billions millions year 0,3 4,5 4,2 4,0 0,2  3,5  0,2  3,0  0,2  2,9 0,2  2,5 2,0 0,1  2,0  0,1 1,5 0,1  1,5 1,0  0,1  0,5 0,0  0,0 1998  1999  2000  number of transactions (millions)  2001  value of transactions (SEK billions) 6  Card payments per capita and year and MO/GDP, average 1995-2000 70  numbercard payments per capita  Denmark 60  Finland  50  Norway  40 30 Sweden 20 10 0 0.0  0.5  1.0  1.5  2.0  2.5  3.0  3.5  4.0  4.5  M0/GDP, percent 7  Number of terminals and number of transactions per capita and year, average 1995-2000 Number of transactions per capita  70 Denmark  60 Finland 50 Norway 40 30 Sweden  20 10 0 0  2  4  6  8  10  12  14  16  18  Terminals per 1000 inhabitants 8  Central Bank involvement Legal and regulatory barriers?

Lars Nyberg: The Swedish card payment market - current challenges and future developments Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at Scandinavian Card Markets, Stockholm, on 3 February 2003. *  *  *  To begin with, I would like to thank you for the invitation to participate in this conference. Given the short time at my disposal, I will confine myself to discussing a few of the salient features of the evolution of the card payment market in Sweden, identifying also the forces that appear to have driven this evolution. Judging from the latest innovations in this area, I will touch upon possible future developments. Lastly, in my capacity as central banker, I will talk about some relevant policy issues. The evolution of the card payment market in Sweden Let me start by making a few observations concerning the market development in Sweden. 1. Card payments have grown rapidly, but the use of cards is still far behind that of the other Nordic countries (fig.1). Between 1990 and 1997, the number of card payments per capita in Sweden grew at a steady pace, picking up speed quickly at the end of the decade. Still, when the new millennium started, the number was no more than half of what can be observed in the other Nordic countries. This is somewhat surprising, considering that payments systems and payment patterns are otherwise quite similar in these countries.
As the financial system froze up and demand contracted, central banks around the world had to respond. They did so by slashing interest rates and later launching massive bond buying programmes (QE). Along with large-scale government support to the banking system, these actions helped to shore up the global economy, avoiding a rerun of the Great Depression. And while central bank actions were taken for monetary policy reasons, they supported financial stability. Initially expected to be temporary, low interest rates stayed with us. Between March 2009 and December 2021 Bank Rate averaged less than 0.5%, a tenth of the 1998-2008 average, and the  Page 6  10 year government bond yield fell from 3.7% in 2011 to 0.1% in July 2020. Low interest rates did not just happen in the UK – interest rates across much of the developed world were very low over this period. And while policy rates moved sharply in response to the GFC, long-term trends – a fall in what is known as ‘equilibrium interest rates’ driven by structural factors such as ageing populations and low productivity growth[19] – helped to keep rates low for a long period. While low short-term interest rates were necessary to support the economy and meet monetary objectives, they also created conditions that could affect financial stability. This is where the FPC comes in. Having learned lessons from the GFC, we knew that price stability wasn’t a sufficient condition for financial stability.

The MPC’s remit is broadly the same today – it aims to return inflation to the 2% target while avoiding unnecessary economic costs. Another critical event was the Global Financial Crisis (GFC), which had similarly fundamental implications for the Bank. One lasting image of that crisis is of queues outside branches of a high street bank – Northern Rock. I worked on the Bank’s response – providing liquidity support to Northern Rock as depositors withdrew their cash. In the event that was just the beginning of the crisis. One year later, the US investment bank Lehman Brothers had defaulted and confidence in the financial system had collapsed. As a consequence we saw a credit crunch and economic costs on a huge scale. There were many lessons learned from the GFC. One was that monetary stability is not a sufficient condition for financial stability – more was needed. We needed macroeconomic policymakers to take account of ‘systemic risks’ in the financial system. That means understanding that total risks in the system might be larger than the sum of their parts. Why? Because these risks can amplify each other, particularly in times of stress, and as they do so can harm economic growth. In the UK,  Page 3  this realisation led to the creation of a new committee with clear responsibility for the stability of the financial system as a whole – the Financial Policy Committee (FPC) on which I sit today. The FPC’s primary objective is to pursue financial stability.
François Villeroy de Galhau: The future of the finance industry between austerity and innovation Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Süddeutsche Zeitung Finance Day 2017, Frankfurt am Main, 22 March 2017. * * * I am grateful to Marine Dujardin and Banque de France and ACPR staff for their assistance in preparing these remarks. It is a great pleasure to be with you today and I’d like to thank you sincerely for inviting me. I am here in Frankfurt as a committed European and as a friend of Germany; and not just because I travel here at least once a fortnight for the meetings of the ECB Governing Council! On a more personal level, I am French but my roots are in Saarland. My family has lived there since the end of the 18th century and its porcelain manufacturing company Villeroy & Boch is part of the German “Mittelstand”. But today, to discuss the future of the finance industry, I’m going to be talking in my capacity as a member of the Governing Council and President of the French supervisory authority (the ACPR, which I’m sure some of you know). First I would first to say a few words on the Eurosystem’s monetary policy and our latest decisions. Then I’ll share with you my thoughts on how to respond to the current challenges facing the finance industry.

But if this is the case, then there can be no cherry-picking, no “Europe a la carte”, no “Rosinenpickerei”. It has been nearly ten years since the global financial and economic crisis. We have come sa long way, but there are still challenges ahead of us for the ten years to come. Yet the challenges for the financial industry are gradually changing in nature: they could shift from adapting to the regulatory or monetary policy environment to reflecting on new business model strategies. In this regard, the expected strengthening of the economic recovery will hopefully make the path smoother. Austerity – or rigour – will remain necessary, but innovation will be the game changer. Thank you for your attention. 4/9  BIS central bankers' speeches  Slide 2  5/9  BIS central bankers' speeches  Slide 3  6/9  BIS central bankers' speeches  Slide 4  7/9  BIS central bankers' speeches  Slide 5  8/9  BIS central bankers' speeches  Slide 6  9/9  BIS central bankers' speeches
We’ve done a lot, and our commitment to drive through the changes we’ve brought in is undimmed. But that’s not enough, and as we enter the second five years I’d like to stir up a vigorous debate about the next set of questions, some of which are really very awkward. I’m sure I can rely on the small bank lobby to do some vigorous stirring as well, and between us we will make further progress. 5  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  5

Inflation developments in Malaysia this year reflect the pass-through of some of these costs, as well as the strengthening of domestic demand. Consequently, although headline inflation is still projected to remain low and stable and range within 2.2% to 3.2% in 2022, core inflation increased to an average of 2.2% in the first six months of 2022 compared to 0.7% in 2021. With the economy now on a firmer growth trajectory and no longer in a state of crisis, Bank Negara Malaysia (BNM) through the MPC in May and July this year judged that it was the right time to begin withdrawing the excess monetary support, raising the OPR from its historical low of 1.75%. What’s important is that by acting pre-emptively, we will be in a position to undertake adjustments to the monetary policy settings in Malaysia in a measured and gradual way to avoid hindering economic recovery. Importantly, this is also to restore conditions that will support sustainable growth over the medium and longer term. To this end, the timing, pace, and extent of rate increases will be guided by assessments of how the evolving economic and financial conditions domestically and globally would affect our inflation and growth outlook. Let me emphasise that monetary policy in Malaysia continues to be accommodative to support a sustainable economic growth in an environment of price stability.
In order to avoid excessive regulation you should always ask yourself if the benefits from introducing a new regulation are greater than the costs of implementation. Here I include both financial and non-financial costs and benefits in a broad sense. Admittedly, this is often very difficult to measure with any degree of precision. Regulations should also conform to the way financial institutions and markets operate in practice. Hence, regulation should have a functional rather than an institutional approach. This implies that the same financial function should receive similar treatment, whether it is conducted in a bank or in another institution or market. Market-oriented regulations will cause the least interference to the regulatees and to the development of financial instruments and activities. As an example of modern regulation, the new framework for banks’ management of risks and capital from the Basel Committee, the so called Basel II, allows the banks to apply their own risk measurement methods and other internal bank processes. But the rules also grant strong powers to the supervisors to take remedial action if the banks step outside the boundaries of the allowed framework. BIS Review 111/2006  7  Obviously, regulations must be transparent. There are still many examples of legislation where the institutions and even the authorities themselves must frequently call on legal advice to interpret their meaning. This causes uncertainty and undermines efficiency. Speaking about transparency, there should also be consultations between the authorities and other involved parties when drafting the regulations.

The risks to the banks, particularly credit risk, will diminish. But on the other hand, the risks will instead be assumed by the institutions and the general public which invests in these funds. In the event that the value of the funds decreases the investors will suffer. This may in turn affect their behaviour in the economy, for instance it may reduce their consumption and also the value of property. We have not yet seen any such situation so the outcome is unclear, but we should not neglect the risks. Another form of transferral of risks is taking place in the financial sector. Through the use of new instruments and structures it has become easier to transfer and redistribute risks. For instance, a bank may deem that it has too much exposure to one customer or to a sector. It could then divest itself of this risk through credit risk derivatives or by securitisation. The advantage from a financial stability view is that the risks become more widely dispersed between the various holders and that the individual bank can build a well-balanced portfolio. But at the same time a new risk has emanated – the risk that the new holder of the risk cannot fulfil his obligations. In the event that there is a credit default, the seller of the derivative to the bank may not have the necessary financial means. Or, there could be an unclear legal position about the risk transfer agreement.
The first is that deeper fiscal integration between members can play an important role in smoothing shocks that affect only part of the currency area.23 It is no coincidence that effective currency unions tend to have centralised fiscal authorities whose spending is a sizeable share of GDP – averaging over a quarter of GDP for advanced countries outside the euro area (table 5). That offers scope for a significant degree of stabilisation, much of it happening automatically as slowing growth in one part of the union causes tax revenues there to fall and welfare spending to increase. Those automatic fiscal stabilisers are important within the UK – it is estimated that for every £ that output falls the reduction in taxes and increases in transfers are together worth about 50 pence.24 What matters for individuals is the extent to which this risk sharing insulates their disposable income from shocks. In the UK there is evidence that around a fifth of variation in regional personal income relative to the national average is stabilised by central government transfers. That is probably an important factor in accounting for the close harmonisation of economic performance within the UK. The degree of stabilisation in France and the US is similar, with a slightly lower figure for Canada.25 Fiscal stabilisation is particularly important in a currency union because it helps mitigate the loss of exchange rate flexibility.

Third, a currency union requires a common fiscal backstop for its central bank. Central banks must be able to act as Lender of Last Resort, both to financial institutions that are solvent but experiencing an unwarranted loss of confidence and to provide bridging finance to institutions that are being recapitalised using new resolution regimes. Under the current governance arrangements in the UK, these operations require an indemnity from, and the approval of, the Chancellor, because they would put substantial public funds at risk. The existing banking union between Scotland and the rest of the United Kingdom has proved durable and efficient. Its foundations include a single prudential supervisor maintaining consistent standards of resilience, a single deposit guarantee scheme backed by the central government, and a common central bank, able to act as Lender of Last Resort across the union, and also backed by the central government. These arrangements help ensure that Scotland can sustain a banking system whose collective balance sheet is substantially larger than its GDP. The euro area has shown the dangers of not having such arrangements, as well as the difficulties of the necessary pooling of sovereignty to build them. An independent Scotland would need to consider carefully how to develop arrangements with the continuing United Kingdom that are both consistent with its sovereignty and sufficient to maintain financial stability. 20  That in turn contributed to the divergence in output growth between core and periphery (chart 8).