samchain/econo-pairs-v1 huggingface dataset:
Any central banker’s ears will prick up at this, given the importance of an earlier literature – associated with Kydland & Prescott, Barro, Fischer 24 – in helping to explain the inflation problems of the past and to make the case for central bank independence. The ‘old’ problem was about the incentive of a monetary authority to cheat, or renege on promises, by generating surprise inflationary booms in order to secure an increase in output and jobs. This was, indeed, pretty tempting for politicians when they had their hands on the interest rate lever. In a rational world, the result was no permanent increase in jobs but a higher-than-desired steady-state rate of inflation. And the solutions variously offered by the academy included appointing a ‘conservative central banker’ more averse to inflation than society at large, or writing a ‘contract’ that incentivises the monetary authority to do the right thing 25 . In practice, the solution has amounted to a combination of central bank independence, clear goals, and transparency. These real-world central bankers care about ensuring that nominal magnitudes do not distort economic decision taking, and they care about their reputations. But they are not ‘conservative’ in the sense of being ‘inflation nutters’. Rather they are ‘dutiful’ in the sense of sticking to a clear, symmetric mandate. That, many would argue, has been a necessary condition for achieving credibility. But now it is argued that a monetary authority does, after all, still have an incentive to cheat.

On the basis of this rationale, it is my view that regional financial cooperation should move progressively forward, with the process being further strengthened and the work becoming more focused, aimed at producing more tangible results. Let me now spare with you my thoughts on the way forward. On this issue, I should say at the outset that the points I am going to make here are not new, and some of them are probably already familiar to you. The first is the Chiang Mai Initiative or CMI. CMI was created conceptually as a short-term financing facility to help participating members manage their balance of payments shortfalls at a time of financial distress. Although the economies of East Asia are now much stronger than five years ago, CMI should continue to remain a key pillar of regional financial cooperation. This is because it is important for the region to have its own liquidity arrangement that can be called upon when the need arises. With the crisis now behind us, we do have time to think on how best to improve the existing facility. And, one way we can approach this is to look for ways we can credibly turn the existing arrangement into a facility that emphasizes a greater level of resource commitment by participating members. This is to say that requesting members should be in a position to count on this facility when the need arises. Looking at the improvement from this angle, I think there are three ways we can reflect upon.
In central clearing, in settlement, in payments if we wish to maintain the infrastructure to sustain an open and integrated global capital market, we will need to build upon the arrangements we have developed for supervisory cooperation and co-ordination. These are not insignificant challenges. But the history of the development of this infrastructure is one of both private and public sector co-operation to provide international plumbing that is both efficient and safe. Conclusion  And these challenges may be older than we think. th  Less than a mile from here stands the Temple church, built by the Knights Templar in the 12 century. Originally established to protect pilgrims en route to Jerusalem, the Knights Templar soon developed complex international financial operations to store assets and move money across borders. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  In London, pilgrims depositing assets in the Temple church received a note that could be redeemed for money when they arrived in the Holy City. The Templar’s wealth and infrastructure grew enormously – aided by the fact that the Pope exempted them from all regulation, supervision and taxes. One historian has categorised them as the first multinational corporation. In the end, however, they grew too powerful and the ‘authorities’ of the day in Rome, Paris and London withdrew their ‘authorisation’ and disbanded the order. Today’s infrastructure, developed to support financial globalisation, exceeds by far anything the Templars – or the first Deputy Governor of the Bank – might have imagined.

Securitisation is not the silver bullet but it can thus be seen as a seed instrument to reshape the European economy funding, whereby long‐term investors such as insurance companies, pension funds among other real money investors are given a more important role in the funding of the economy, while preserving the clients/banks relationship. These real money investors are natural investors in securitization also because they have long-term liabilities that ought to be matched by long-term investments. However, it seems now clear that the changes in the regulatory treatment of ABS in the aftermath of the crisis, which were to a great extent a response to events in the US, may arguably have hindered the development of the European ABS market. These postcrises regulatory proposed reforms (CRD IV and Solvency II) lead to a substantial increase of the capital charges for investments in securitisations. It is worth mentioning that risk weighted assets calculated on ABS tranches can be several times the risk weighted assets of the constituting pool. Further, the due diligence process that must be put in place to invest in ABS represents a considerable burden. The common practice in the US of full derecognition of assets also led to regulatory changes with impact on the supply side, and may have been a main cause of depression in the European ABS market, which in many cases already had provisions against lack of “skin in the game”.
But one thing is clear to me: unless the degree of diversity in the Euro area is smaller, unless economic divergence (that is illustrated by dynamics after the introduction of the euro) is reduced, further troubles will arise. Jacques de Larosiere, one of our doyens and a former president of EUROFI, never tires of pointing out this fact. Economic convergence is badly needed in the monetary union, where policy space for undertaking the correction of large external imbalances (deficits) is much diminished. I think that proposals made by the EC, by various governments, offer hope that better policies will be articulated in the not too distant future. Romania and other New Member States are bound (by the treaties of accession) to join the Euro area. And we care enormously that the Euro area, through its policy arrangements and tools, will enable economic convergence. 1/4  BIS central bankers' speeches  Coming from Romania, speaking today in Bulgaria, let me take this opportunity to share with you some of the challenges faced by non-euro Member States, in particular the ones in Central and Eastern Europe. Much has been said about growth and inflation in the euro-area, as well as about stage of the banking union. Less attention has been paid to Member States which want to join the banking union and the euro-area in the foreseeable future, but still need to implement structural reforms to get there.

That would be a change with profound economic consequences. Central Bank Digital Currencies  The rapid decline of cash, the rapidly changing nature of payments and, potentially, of the assets used to make payments, raise the question of whether central banks should leverage new technologies to provide new electronic forms of central bank money – the creation of Central Bank-issued Digital Currencies (CBDC) – as a complement to existing physical banknotes? A CBDC could ensure that the public has continued access to a risk-free form of money issued by the central bank. It could also potentially be designed in a way that contributes to a more resilient, innovative and competitive payments system for UK households and businesses. But, while CBDC poses a number of opportunities, it also raises challenges for the way in which we maintain monetary and financial stability. The potential benefits to financial stability could include more access to and utility of central bank money, including greater public access to a risk free asset enhancing a resilient payments infrastructure. There could also be positive benefits to monetary policy, such as more direct control of the monetary transmission mechanism. But for all the opportunities, there are also some significant potential implications.
In terms of composition of banking retail credit, housing credit represents almost two-thirds, reflecting the household’s holding of assets mainly in the form of housing real estate - a common feature prevalent in Asia. Credit cards and commercial credits take up 7.2 and 6 percent of total retail credit, respectively, while the remaining 21 percent are credit for other consumption purposes such as electrical appliance, education and so on. Among all types of retail credit, there are three fast growing segments in the past few years that deserve our attention. First, housing credits with accelerating growth. Second, credit card advance with tapering growths close to 40 percent. And third, automobile hire purchase with record growths of well above 50 percent. The booms in these segments commonly rest on the strong economic recovery, coupled with solid performance of the stock exchange - after all the Stock Exchange of Thailand recorded one of the best performing bourse in 2003. The government spending programs such as the village fund has fuelled further consumption, especially at the grass-root level, to ensure firm recovery. Moreover, against the backdrop of persistently low interest rate environment, consumers find it easier to part with their money acquired from liability assumption. This is particularly relevant for the build-up of debt in housing and automobile segments by households that simply mirrors an accumulation of assets on the other side of their balance sheet.

Mark Carney: Jane Austen to feature on Bank of England banknotes Remarks by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at Jane Austen’s House Museum, Chawton, 24 July 2013. *  *  *  Good afternoon, and welcome to Chawton, home in her final eight years to Jane Austen and her family. This cottage occupied a special place in Jane Austen’s life, as a return to the countryside brought contentment after an unhappy spell in Bath. All six of Jane Austen’s best known novels were published after she moved to Chawton, and three of them were written in their entirety here. It therefore gives me great pleasure to be here today to announce that Jane Austen will be the next character to appear on the Bank of England’s £ note, replacing Charles Darwin. Jane Austen will become the 17th historical figure to feature on our banknotes. She merits her place in this select group as one of the greatest writers in English literature. Her novels have an enduring, timeless and universal appeal – they have never been out of print since first being published, have inspired numerous modern adaptations and are loved by people around the world. Austen’s combination of sharp wit, engaging narrative, knowing satire and social commentary has ensured her place among the country’s favourite authors. I am delighted now to unveil the image for the new Jane Austen note.
I hope they will absorb the lesson that specialisation in production and trade across the world are the way to improve living standards in all countries – rich and poor alike. And perhaps when they return home they will press their own politicians to support the opening up of trade which has been at the heart of the British Government’s efforts to reform the world economy. So you should be proud of your famous son who, despite being “an absent-minded professor” who led a “quiet, uneventful life”, influenced the way the whole world thinks about the route to economic prosperity. 20 Let me conclude by returning to the words of Jacob Viner: “In these days of contending schools, each of them with the deep, if momentary, conviction that it, and it alone, knows the one and only path to economic truth, how refreshing it is to return to the Wealth of Nations with its eclecticism, its good temper, its common sense, and its willingness to grant that those who saw things differently from itself were only partly wrong”. 21 Truly, Adam Smith was a man of the Scottish Enlightenment, and I am delighted that from next year his face will look out at us from our banknotes. References Blinder, A and Morgan, R (2000), 'Are two heads better than one? An experimental analysis of group vs individual decision making', NBER working paper no 7909, September. Buchan, J (2006) Adam Smith and the pursuit of perfect liberty, London: Profile Books.

We can choose to store our savings in the form of cash or in a current account. The price we pay is the return other alternatives would have provided. Bank deposits and bonds are examples of investments that provide a reliable return – interest income. If we choose to store money, we lose this income. But in contrast to bonds, money can be used directly to purchase goods and services. Interest is therefore also the price we pay in order to have liquid holdings. The interest rate is also used as an instrument in economic policy. Setting the interest rate to achieve a monetary policy objective, often price stability or low and stable inflation, is usually the responsibility of the central bank. The central bank sets a very short-term nominal interest rate. In Norway, this is the interest rate on banks’ overnight deposits in Norges Bank, the sight deposit rate. This rate determines the very short interest rates in the money market with maturities from one day upwards, normally up to Norges Bank’s next monetary policy meeting. Longer-term rates are determined by expectations concerning Norges Bank’s use of instruments in the future and by the degree of confidence in monetary policy. The real interest rate, that is the nominal interest rate minus expected inflation, is the rate that influences decisions concerning saving and investment. BIS Review 46/2003  1  The interest rate influences inflation indirectly via domestic demand for goods and services and via its effect on the exchange rate.
Eddie Yue: Opening remarks on regtech Opening remarks by Mr Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, at the HKMA's "Unlocking the Power of Regtech" event, 30 June 2021. * * *  Introduction 1. Good morning, good afternoon and good evening everyone. A very warm welcome to all the participants of today’s event, “Unlocking the Power of Regtech”. 2. Just a few years ago, a virtual conference like this would have been a near impossibility. I am sure you would also remember the days of expensive international travel, but today, advances in technology have transformed our ability to communicate and share with others in every part of the world. Similarly, technology has also fundamentally revolutionised the way banking business is undertaken. HKMA’s banking technology goals 3. One of the HKMA’s key policy goals is to encourage the application of innovative technology in the banking industry. Our recently announced "Hong Kong Fintech 2025" strategy, which goes far beyond our Smart Banking Initiatives which were announced a few years back, is an ambitious plan for getting Hong Kong’s banking sector to embrace and adopt new technology and rise to a high level of sophistication. 4. And within that Fintech journey that we are promoting, Regtech constitutes an integral and important driver within our strategy. On that, we have developed a vision that by 2025, Hong Kong will become a leading hub for developing Regtech solutions and cultivating Regtech talents.

The SNB therefore backs up the VaR calculations with stress and scenario analyses. These simulate extreme market fluctuations and examine the impact of such fluctuations on the assets. Scenarios that have an especially severe impact on the SNB’s assets include a fall in the gold price and a depreciation of the dollar and euro. Such scenarios show that serious losses could potentially be sustained. The volatility of the SNB’s earnings therefore remains high despite the new investment universe. Experience has shown, however, that major losses tend to even themselves out in the medium term, i.e. over a period of three to five years. 2  BIS Review 46/2005  BIS Review 46/2005  3
The relevant risk for the SOMA portfolio instead has to do with movements in interest rates at different maturities. BIS central bankers’ speeches  5  controls. The interest paid on reserves can be thought of as the “funding cost” of the portfolio. Today, because short-term interest rates are low relative to longer-term interest rates, this mismatch produces a very elevated stream of net income. In particular, the SOMA portfolio has a weighted average coupon yield of about 3.5 percent, which, if applied to a $ trillion portfolio, produces about $ billion of income at an annualized rate. 14 In contrast, the annualized funding cost of the portfolio at this time is only around $ billion. This cost is relatively low because of the near-zero level of the interest rate paid on reserves. In addition, the private sector holds nearly $ trillion of currency, which are liabilities of the Federal Reserve that bear no interest. 15 Thus, the SOMA portfolio should produce a considerable amount of net income over the near term. 16 Beyond the near term, though, the income that will be produced by the SOMA portfolio is uncertain. If short-term interest rates were to rise, the funding cost of the portfolio would increase relative to the fairly steady yield earned on the assets held, reducing the amount of net income from the portfolio. In addition, if longer-term yields were to shift higher, the Federal Reserve could realize capital losses if it were to begin selling assets.

They could, for instance, pay rent for children studying abroad, pay for a holiday home, or pay for services provided by European companies, e.g. mobile telephone services, insurance companies, utilities, etc. People who live, work or study outside their home country will no longer need one bank account at home and another one abroad. The use of payment cards will be more efficient, as consumers will be able to use the same card for all euro payments. This will reduce the necessity for people to carry cash. Innovative services can be offered to consumers irrespective of national borders. The long-term goal of the banking industry is that the SEPA payment instruments will only be used in electronic form. Payments can then be easily combined with other e-services in the case of both individual and corporate clients. These include e-invoicing, mobile or internet payment initiation, airline e-tickets, credit advice or e-reconciliation. As a consequence, consumers will spend less time handling payments. Everything will be easier, faster and cheaper ... in the long term. Payment cards are becoming a favourite payment instrument with consumers, and are increasingly replacing cheques and cash payments. The use of cards is thus expected to grow in the future. Thanks to the creation of a single euro payments area, acquirers will be able to process all SEPAcompliant card payments, even across borders. In the SEPA environment, merchants will be able to choose any card payment processing entity in the euro; this will increase competition and reduce costs.
These figures show not only that the absolute level of the euro area’s deficit is half what it is elsewhere, but also that the pace of fiscal consolidation is actually faster. While these efforts are absolutely crucial, there are concerns that too abrupt an adjustment in public finances will be detrimental to growth and, ultimately, to fiscal consolidation itself. In the current circumstances facing Europe, I believe these concerns are misplaced. We have to look at the counterfactuals: delaying consolidation would expose our economies to even greater risks. At current debt levels, economic agents are very “Ricardian” and would react to fiscal permissiveness by delaying their own private expenditure. Financial markets would continue to impose very punitive interest rates on our countries to compensate for the uncertainty in the fiscal outlook. Overall, the confidence and financial benefits of fiscal consolidation far outweigh its negative effects on effective demand in the short run. In addition, everyone knows that there are ways to boost growth strongly and durably even in times of fiscal consolidation: through structural reforms. Here as well, the progress already made in many countries is impressive. In recent history, European economies have never reformed so extensively in such a brief period of time. I could cite many examples: the labour market reform in Spain and now in Italy, the pension reforms in Italy and France, privatisations, public wage decreases in Ireland, etc. Some positive effects from these measures are immediate, but naturally, most of the impact on competitiveness and growth will take time to materialize.

It is high time therefore that we made progress on reinforcing the regulatory framework for NBFIs, both on a micro and macroprudential level. As an example, in the case of money market funds, in times of extreme liquidity stress, the competent authorities should be able to release liquidity buffers for funds that are in difficulty, but should also be able to activate appropriate liquidity management tools. I would also like to draw your attention to three other non-bank risks: cyber risk, the frequency and cost of which are very likely to rise with the war in Ukraine. In the EU, the DORA regulation will come into force in 2025 and will at last provide a solid and common framework for making the financial sector more resilient to cyber attacks and for monitoring critical third parties such as cloud platforms. real estate markets, where housing prices had risen by close to 9% (year-on-year) in June 2022 in the euro area, much faster than household income. At this stage, the risks linked to a turn in the cycle are limited in France, thanks, among other things, to our macroprudential measures to make housing loan production sounder. We remain very vigilant, however, including with regard to the other segments of the market such as commercial real estate. crypto currencies, with the successive collapses, the most recent being FTX, that have triggered sharp market corrections and a "crypto winter" that has lasted for nearly a year: their recurrence shines a stark light on the need for stronger supervision.