samchain/econo-pairs-v1 huggingface dataset:
Bank of England reserves) and, crucially, by requiring all private money to be exchangeable for Bank of England money, cash, on demand by the holder and without loss of value. Alongside regulation, the provision of Bank of England money to the public and reserve money to commercial banks institutions anchors the confidence, uniformity and interchangeability of money in the UK. Our assessment is that future developments in payments and money will make it likely that, alongside regulation, we will in future need a digital pound, issued by the Bank of England to perform this anchor function. The experience of digitalisation is that new products and services, enabled by new technology, can be adopted rapidly at scale. The Government has identified several characteristics of digital markets that may lead to concentration. Such characteristics include network effects, economies of scale and scope and data advantages, which can act as barriers to entry. This suggests that the future development of private money issuance could tend towards a small number of firms taking a significant market share. While concentration and market power are not inherently harmful and may reflect innovative products and services, they can damage consumer choice, competition and innovation. Dominant issuers of new forms of private digital money may create ‘walled gardens’ - payment systems that are not fully interoperable or restrict the development by smaller firms of payment services using the money they issue.

Private commercial banks issue predominantly digital money in the form of electronic transfers between bank deposit accounts[3]. Page 4  We have seen major changes in recent years in the form of use of money to make payments. In the mid-1960s, most workers were paid weekly in cash, and around 70% of the population did not have a bank account. [4] Very few had access to credit or debit cards. Consequently, for every £ of funds that people held to make payments, over a third would be held as cash. Nowadays, less than 5% is held as cash. Even 15 years ago, 60% of transactions in the UK used physical cash; pretty much everyone in this room would have carried enough for everyday transactions. In 2021 only 15% of transactions involved physical money. Technology and the increasing digitalisation of everyday life has transformed the way we use money. Private commercial bank money accounted for 85% of the payments made by the public. Within that, debit and credit card transactions accounted for 69% of transactions. Contactless payment has made such transactions much easier for everyday life. And the growth of internet commerce has required the use of digital money. It is always challenging to forecast how technological advances and social trends will play out. Few at the turn of this century would have predicted the development and growth of a massive and dominant market and social platforms.
Compared to some countries at this time, the banking sector in Thailand is functioning normally, with the financial markets remaining relatively stable despite greater volatility and uncertainty in the global economy. At the Bank of Thailand, we are optimistic that policy efforts at the global level will be successful in stabilizing the financial markets and in providing a comprehensive solution to the current crisis. Nevertheless, our view is that the adjustment that follows, and hence the process of global recovery, will probably take time. More importantly, in the Thai context, given the global nature of the crisis, and the fact that our economy has been affected mainly through contagion, it will be difficult for an economy like Thailand to achieve a sustained recovery on our own, if the global economy does not recover. Therefore, in the context of policy, the focus of policy response in Thailand should be on helping the economy and the private sector to adjust to the impact of the crisis, while ensuring that the key economic institutions and systems 6 most importantly the banking sector 6 continue to function normally, so that the economy will be in a position to move forward quickly once the crisis storm passes. BIS Review 45/2009  1  It is in this context that the Bank of Thailand has been shaping our response to the current economic downturn.

Before I respond to these claims, let me make three points very clear. The first is that I have no objection to an open and informed public debate on the merits and disadvantages of the Link - and on possible alternative exchange rate systems. It is absolutely right that a policy that forms the keystone of our financial system should be open to scrutiny. The strong public and market confidence in our currency can only be sustained if the reasons for adopting the monetary policy we choose are properly understood, and if the limitations, and the merits and demerits of possible alternatives, are examined through informed and reasoned debate. We encourage this process in the various publications we put out, in our educational programmes, and through the presentations and discussions that my colleagues and I take part in with people from all walks of life. Secondly, the benefits and disadvantages of the Link - its effects on the economy, the experience of similar systems elsewhere, the possible alternatives - are, and always have been, subject to continuous and critical review. This process has been considerably strengthened in recent years with the creation of a dedicated research department within the HKMA, the establishment of the Currency Board Sub-Committee, and the opening of the Hong Kong Institute of Monetary Research. A very large part of the output of these institutions is made public, so that the range and depth of the research they carry out is available to anyone who is interested.
Yet, with hindsight we know that there was no underlying convergence in labour productivity. In particular, strong capital accumulation in catching-up economies did not translate into faster total factor productivity (TFP) growth. TFP actually diverged between higher and lower income countries in this period. In fact, there was a positive correlation between the initial level of GDP per capita and average TFP growth rates: the highest TFP growth rates were found in Germany, Austria, Netherlands and Finland. A special case here is Italy, where initial GDP per capita was high but TFP converged downwards the catching-up economies. This seems to be because falling real interest rates eased fiscal constraints and reduced the incentive of governments to focus on structural policies. In other words, the apparent economic convergence in the pre-crisis period was largely illusory. There was a cyclical convergence in GDP levels, but it was not structurally anchored. This poses two questions that can help inform policy choices in the euro area today: first, why did capital flows not lead to productivity convergence? And second, why did more observers not see through the illusion of convergence prior to the crisis? Why did real convergence not happen? Starting with the question of why TFP in particular did not converge, an important explanation seems to be that – contrary to the assumptions of the neo-classical growth model – foreign capital flowing into catching-up economies was allocated to sectors where the marginal product of capital was low and falling.

This is precisely why, the role played by data labs, such as the BELab of the Banco de España, is of paramount importance. Our BELab has been created with the aim of providing the research community with greater access to high-quality microdata, in a controlled environment that ensures data confidentiality, through on-site or remote means, depending on the sensitivity level of the data. In any case, although there has been some progress, the truth is that Spain is still lagging behind this global trend that is a genuine “data revolution”. To change the situation in Spain it is crucial to make citizens and governments aware that there is a cost to restrictions on access to data by the research community, as they will eventually result in less effective public policies. I trust that discussions of the papers to be presented at the conference over the next two days will bring us up to speed with the most advanced practices across the globe. Thank you very much and enjoy the sessions! 2
This is perhaps an early signal that a prolonged period of erosion in global manufacturing activity and investment will eventually have some knock-on effects on services. The bottom line: consumption and services will provide some buffer to global growth but will not be entirely immune to persistent weakness in trade and corporate investment. SINGAPORE ECONOMY The Singapore economy is being clearly affected by the global slowdown in manufacturing, trade, and investment. The economy grew by 1.2% in Q1 2019, compared to 3.1% for full-year 2018. Recent indicators suggest that growth in Q2 could be lower than in Q1. Non-oil domestic exports have contracted by 9.3% since the beginning of this year. The manufacturing sector is in a downturn. GDP growth for the year as a whole is likely to be weaker than earlier envisaged. MTI and MAS are reviewing the 1.5-2.5% forecast range for this year’s GDP growth. Growth in the first half of the year is looking to be quite weak, particularly in the trade-related sectors. Currently, the full-year forecast is premised on the economy stabilising in the third quarter of 2019, with a modest pickup thereafter. But the strength of this pick-up, given the softer external environment and ongoing trade conflict, is unlikely to offset the weakness in the first half. And downside risks have clearly increased. As with the global economy, it is important to look beyond the headline growth numbers and assess the composition of growth in the domestic economy.

if the spot falls below the strike), the owner of the underlying security loses money but the owner of the option does not. That’s simply because he or she can always choose not to exercise the thing. Thus the fundamental value of a financial call option arises from the ability to pick one’s moment and avoid the downside risks that come with owning the underlying security. 6  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  6  Anyway, with these simple ingredients – and assuming, critically, that its prospective investment is irreversible – it turns out the firm’s decision rule is also simple. It will invest if and only if R ≥ ρ + qλL  [2]  This is just the version of [1] that applies in this particular case. 5 If there were no uncertainty (q=0) the investment would be justified so long as it offered any sort of excess return (R > ρ). But, given the uncertainty hanging over the decision, and in particular the risk that it might come to regret it, the firm needs an extra margin of safety – the “option value of waiting” qλL – before taking the plunge. What can we say about this term and what are the implications, if any, for Brexit uncertainty? The first thing to note is that, in common with all these models6, only the downside risk matters.
The optimal way to reduce the ratio of the deficit to GDP is through economic growth. In turn, faster growth calls for improvements in productivity. In this respect, there needs to be a greater degree of public awareness of the importance of productivity and competitiveness, and a consensus on steps that can be taken with minimal social disruption to enhance the country’s international competitiveness. 5  Thomas F. Huertas, Crisis Cause, Containment and Cure, 2e, Palgrave Macmillan, 2010. 6  Andrew W. Lo, “Reading about the financial crisis: A twenty-one-book review” Journal of Economic Literature 2012, 50:1, pp. 151–178. 7  6  Stefan Walter, “Basel III: Stronger Banks and a More Resilient Financial System”, Financial Stability Institute, 6 April 2011. BIS central bankers’ speeches  As you know, competitiveness depends on the relationship between changes in productivity and changes in costs, including wages. I have to note that unit labour costs (ULC), which are based on the relationship between compensation and productivity, have generally moved in line with those in the euro area. However, in recent quarters, Malta’s unit labour costs have pulled ahead of those in the euro area, as shown in Chart 6. In this respect, the wage setting process and efficient labour market practices are of critical importance. The fact that collective agreements in Malta are negotiated at the level of the individual firm helps to ensure that wage growth is compatible with the realities of the markets where the firm sells its products.

Still, further steps could be taken to improve productivity levels and increase the employment rate. Also, as I argued recently, COLA increases should not be superimposed on wage increases agreed in collective agreements, but should form part of the negotiation process, so as to ensure that firms are able to match all wage increases with productivity increases. Faster productivity growth depends on many factors, including investment, the infrastructure, the quality of the human resources and  BIS central bankers’ speeches  7  hence the quality of the educational system and its ability to meet the skills requirements of a growing economy. Measures that increase the employment rate could include further policies that incentivise a higher female participation rate, as well as measures that facilitate more flexible work conditions, including part-time employment. A further requirement for economic growth is the smooth functioning of the financial system. Particularly during these turbulent times, continued economic growth depends also on the uninterrupted supply of credit by the financial sector to firms and households, and to that end the stability of the financial system is essential. It is important to note that although its rate of growth has declined, bank credit has continued to increase in Malta, unlike the situation across the euro area, where widespread deleveraging by financial institutions has led to a contraction in the volume of credit, as shown in Chart 7.
This development is also beginning to appear in Sweden, at least in the larger cities. Abroad the ATMs often have independent owners, who charge a small sum (SEK 10-15) to customers wanting to use their ATMs. The customers are happy to pay this for the benefit of being able to withdraw cash on the spot rather than having to go several blocks to find a bank and stand in line there. One may wonder why both the use and distribution of cash show different patterns in Sweden than in other countries. Evidently, we like cash, even if it is difficult to get hold of. So although developments  4  BIS Review 51/2002  are clearly moving towards increased use of cards and paperless payment instruments, the cashless society still lies some way in the future. IT reduces the risks IT makes the payment system more efficient in a number of different ways, some of which I have already indicated, but technology can also contribute to reducing risks. Trade in shares, bonds and currencies with the accompanying derivative products entails, for instance, that large credit risks arise between the banks managing the payments, what are known as settlement risks. The necessity of reducing these risks has become increasingly clear. Let me take foreign exchange trading as an example. The foreign exchange market has a huge daily turnover. On two occasions the credit risks in foreign exchange trading have become uncomfortably evident; when Bankhaus Herstatt was declared bankrupt in 1974 and when Barings Bank fell in 1997.

We must all be able to pay our bills in a secure manner, preferably also in a simple and speedy manner, i.e. we must know that the  BIS Review 51/2002  1  party to which we are sending money actually receives it. There are many countries in the world where this does not function and this is as much of an obstacle to development as when roads and railways do not function. The banks are the institutions that handle the major part of the payments. It is because they are so important to the financial sector that they are subject to such comprehensive legislation and that they are the companies most closely monitored by Finansinspektionen (the Swedish Financial Supervisory Authority). We may have views on how the banks should set charges, handle their customers and so on, but without them our lives would certainly be more complicated. In this context it is worth noting how much IT in a broad sense has helped the banks to develop and simply means of payment. It is not so long ago that one received a weekly wage in the form of a brown envelope containing banknotes, handed out on a Friday afternoon. Nowadays our wages are paid directly into our bank accounts and we receive notice of this in a bank statement. Nor do we have to go very far to pay our bills; we can sit at our desks and fill out giro forms or - even easier - pay through the computer.
According to the data for 2020, the level of payments (the ratio of payments to accrued premiums) is extremely low: 10% in life and health insurance for mortgage borrowers, and no more than 5% for car and consumer loan borrowers. The level of payments in bank card insurance and mobile device insurance is also ultra-low — 4% and 1%, respectively. We have analysed cases in other countries — their payment levels are several-fold higher. This raises the following question: what are the benefits of these insurance policies and why should people pay for them? Of course, we comprehend that the level of payments is not the only criterion of the customer value. Nonetheless, it is an indicator that there are issues here to be addressed. What are we going to do? In the first place, we would tighten the requirements for disclosing information, specifically, the terms for receiving insurance compensation and the conditions for receiving returns on hybrid deposits and structured products, etc. Our regulation will set the benchmarks. First of all, the real terms of a product should conform to a customer’s expectations. For instance, insurance compensation should cover insured events that might actually occur in practice. Secondly, the execution of documents should not be excessively complicated for customers. Thirdly, the procedure to receiving insurance compensations and returns should be simple and convenient. We hope that the financial sector will itself seek to develop long-term trust-based relations with consumers and become customer-focused. The financial market requires trust.

* * * These questions aside, one thing is clear in the case of France – and 2016’s too-feeble growth of 1.1%, as published yesterday, confirms it: estimates from national and international institutions all point to low levels of potential growth, at around 1.2%, and relatively high levels of structural unemployment (the equivalent of the NAIRU in English-speaking countries), at around 9%. Clearly, we cannot be content with these levels. All of which brings us back, overwhelmingly, to our four key focuses for reform: Enterprise, Education, Employment and Expenditure reduction (public sector). Our northern European neighbours have shown by example that these reforms 2/3  BIS central bankers' speeches  are not incompatible with our shared European social model. Studies by the Banque de France show in particular that reforms to the goods and services market could boost the productivity of the French economy by between 3% and 5% in the long-term. Without further ado then, let me pass the floor to Fabrice Lenglart, and I wish you all a fruitful and enjoyable conference. 1 www.banque-france.fr/en/secular-stagnation-and-growth-measurement-conference-organised-banque-de-  france-and-college-de  3/3  BIS central bankers' speeches
“Nothing is so boundless as the sea, nothing so patient.”1 So begins Alexander Kielland’s first novel. Kielland, who was born and raised in Stavanger, could scarcely suspect the inconceivable wealth the sea was so patiently concealing under the sea floor. The discovery of oil was the start of an amazing era for the Norwegian economy. When the first oil was brought to the surface in 1971, income levels in Norway were low compared with other western countries (see Chart 1). The picture has reversed since then. We have gradually caught up to the wealthiest nations. Measured by GDP per capita, Norway now ranks at the top (see Chart 2). The large revenues from the oil industry have been managed soundly. Norway’s economy is in good order. Well-functioning institutions and a high degree of trust between different groups in society provided a good starting point. At an early stage, it was established that the oil and gas resources belong to the Norwegian people. The tax system and framework conditions for the petroleum industry were designed so that the large revenues would accrue to the state. The stage was set for greater prosperity, with prospects for growth in both public and private consumption. The discovery of oil in the North Sea provided ample opportunities for Norwegian business and industry. The extraction of oil at great sea depths would require the development of new technologies.

Because the quantity of funds to be injected is known in advance, this mechanism poses fewer complications for our ability to reduce volatility in the fed funds rate around the target. The auction facility and other measures we have taken to address market liquidity problems do not directly address the balance sheet or capital constraints facing financial institutions. Nor can they be expected directly to reduce the perceived risk in exposure to other financial counterparties. But by providing a more effective form of access to liquidity, these new measures can help reduce the uncertainty that gives institutions the incentive to secure liquidity in ways that might lead to a further deterioration on market conditions. Major financial institutions in the United States and elsewhere entered this period of adjustment with capital substantially above the various regulatory thresholds. These capital cushions have enabled banks to expand their balance sheets as they have met contingent commitments and as the economics of other non-bank financing vehicles have deteriorated. This has been an important part of the adjustment process in markets. We have also seen some early steps by a range of different institutions to bring new capital into the banking and financial system. This is a healthy development. It reduces the need for further asset sales to preserve capital ratios. And it gives those institutions that acted earlier and on a more substantial scale the flexibility to play a greater role in markets and in the economy going forward.