samchain/econo-pairs-v1 huggingface dataset:
This dynamic is augmented in jurisdictions like Malaysia, where the central bank is responsible for promoting both monetary and financial stability. If we were to go completely cashless, central banks might lose this traditional means of maintaining a strong brand. The policy calibration in Malaysia At present, Malaysians still transact mostly via cash. While Malaysia endeavours to accelerate the migration to e-payments, we see that cash is necessary and will always be in demand. Although e-payments per capita nearly doubled in the past five years, the ratio of cash in circulation to GDP rose by 17%. We are therefore committed to ongoing enhancements in the way we manage cash and its circulation. To this end, we have invested in a new Automated Cash Centre, which most of you will be visiting as part of this Conference. We are also in the process of building a new modern Mint. 3/4  BIS central bankers' speeches  The next page for physical currency As we consider the future of physical currency, it is crucial that we bear in mind the sensitivities of the users of cash. We live in an increasingly aware and empowered generation. For this reason, issues of environmental footprint cannot be an afterthought. Similarly, banknote production must carefully consider the public interest and legitimate ethical concerns across society – including special interest groups. In addition, the industry must be run with manifest integrity. The Banknote Ethics Initiative is a welcome step forward in this regard.

The ability to make retail payments reliable is crucial for the effectiveness of the financial system. As discussed earlier, we have come a long way in developing a reliable way of transacting electronically – through solutions such as credit cards, mobile transfers and prepaid balances. Central banks are now carefully monitoring newer developments, particularly digital currencies based on the use of a distributed ledger. Digital currencies have tended to be volatile and subject to speculative hoarding. This raises the potential for runs on the digital currency, triggered for instance by a loss of confidence in the currency itself or a third party provider like an exchange. This risk is likely to be augmented where the digital currency is not backed by an issuer, and where there is no lender of last resort function. If digital currencies are widely used, such a shock could have systemic repercussions. At the same time, some of these concerns may be addressed if the digital currencies used are issued by a central bank. Many policymakers are studying this option. In addition to facilitating payments, cash has been a powerful instrument for central banks to build trust and credibility with the public. The notes issued by central banks provide us with a direct and tangible link to the people – making it a key branding tool. Trust and confidence in the central bank are crucial for us to effectively deliver our mandate.
If we can succeed in implementing the reforms that are still outstanding, there is a chance that economic growth can be propelled to a level beyond the current economic upswing. BIS Review 100/2006  1

The exhibition was previously on display to the public in Bratislava to mark the cash changeover in Slovakia. It was also shown in Barcelona until last week. Other locations on its journey throughout Europe will follow. BIS Review 44/2009  1  The primary objective of the Euro Exhibition is to give the public at large the opportunity to gain a thorough overview of the euro banknotes and coins and to raise its awareness of their security features. It features, inter alia, modules on the history of money, the design elements of euro banknotes and coins and the functioning of banknote security features. It also includes a range of interactive elements to raise the visitors’ attention via touch screen applications such as games, films or security feature showcases displaying counterfeit banknotes. You are cordially invited to make use of all the elements which will contribute to make your visit a learning, interesting and amusing experience at the same time. You will certainly notice that the Euro Exhibition features a common design: the “Ages and styles of Europe”. As you know, there are windows and doorways depicted on the front of each euro banknote and bridges on the back. These architectural elements symbolise communication and connection between the people of Europe and between Europe and the rest of the world. Furthermore, bridges are regarded as a means to connect the past with the future, symbolising thus the way to a common European future. A children’s corner has been established to meet children’s special expectations.
Page 1  Global action to enhance cross-border payments − speech by Victoria Cleland Given at Global Payments Summit in Cape Town  Page 2  Published on 29 June 2023  Enhancing cross border payments to make them cheaper, faster, more transparent and easier to access would make an enormous difference to people and economies worldwide. Victoria Cleland sets out some recent achievements on this journey, including changes to the UK's RTGS service, and highlights future priorities. Success relies on cooperation and action from the public and the private sector. Speech It is a pleasure to be speaking here in Cape Town to open the Global Payments Summit: an event that brings together representatives from over 30 countries across five continents. What better audience to address about enhancing cross-border payments: a global challenge that requires global solutions. The more countries that participate, the greater the difference we can make. Almost three years ago to the day, the Committee for Payments and Market Infrastructures (CPMI) published the 19 building blocks[1] to enhance cross-border payments. The building blocks were the foundation for a clear action plan endorsed by the G20 – the Roadmap[2]. This set out a vision and steps to achieve it, bringing together central banks, public authorities, standard-setting bodies and the private sector around the world. And to provide measurable focus, the G20 endorsed clear and ambitious targets for 2027[3] to unite everyone around the same vision: to make cross-border payments faster, cheaper, more transparent, and more accessible.

Its main elements now include: The Financial Stability Advisory Council (FSAC): a consultative body comprising the minister of finance, the governor of the Central Bank, and the chairman of the Financial Supervision Commission; The Central Bank as the designated resolution authority for banks; the resolution function of the BNB is outlined in the Law on Recovery and Resolution of Credit Institutions and Investment Firms, adopted in mid-2015, which transposed the BRRD in the Bulgarian legislation; A mechanism to fund resolution measures by the newly established Bank Resolution Fund (BRF) which is funded by contributions from the banks; the target level of the resources collected in the BRF is 2% of the amount of covered deposits of all banks licensed in Bulgaria and must be achieved by end-2024; A comprehensive resolution toolkit directly transposed from the BRRD comprising: (1) the resolution tools (sale of business; bridge institution, asset separation, and bail-in), and (2) the government stabilization tools (public equity support and temporary public ownership). Progress has been already made in operationalizing the crisis management framework in Bulgaria.
It is the duty of the financial institution and its representative to help the customer understand what he is buying and what risk he is taking. Disclosure alone is not enough. Ask any consumer of financial products having to go through hundreds of pages of product disclosure written in unintelligible legalese. Financial institutions must make the information they provide more transparent: transparent about risk, especially the circumstances under which the customer could lose all or most of his money; transparent about the assumptions underlying return projections or estimates; and transparent about fees, charges, and commissions. Financial institutions must ensure that their sales representatives have sufficient knowledge and skills. In Singapore, prospective financial advisory representatives are required to pass relevant examinations before they are allowed to offer advisory services. They are tested on not just product knowledge but also the skills to effectively engage their customers to understand their financial needs and risk profiles. Going forward, they will be tested on their understanding of ethical principles. More specifically, their ability to assess situations where there might not be explicit rules, but which nevertheless present potential conflicts of interest. Those who sell financial products should recommend what to buy based on what is most suitable for their customers, not what will maximise their own commissions or rewards. MAS worked with the industry a few years ago to put in place a “balanced scorecard” as the basis for remunerating financial advisory representatives.

Mary will say a lot more about this in her keynote address, so let me highlight briefly some of what MAS has been doing on this front. MAS has conducted a stocktake of culture and conduct practices across selected financial institutions. Our supervisors had extensive one-on-one conversations with not just the management of these financial institutions but staff across the ranks. These conversations allowed our supervisors to gain insights on the staff’s perceptions of culture and their level of risk awareness. They helped us develop a keener sense of: whether the tone-from-the-top echoed from the bottom; and whether the organisational values plastered on the walls of the board room were practised on the ground. What have we found? Culture and conduct practices are uneven in the industry. Many financial institutions still struggle to articulate the conduct risks they face. Many are only starting to develop tools and indicators to obtain a holistic, cross-functional view of the culture within their organisation. What’s next? MAS with the banks have set up a steering group to identify emerging trends in conduct and behaviour as well as share best practices in “getting the culture right”. MAS has also set up a small behavioural sciences unit to build up our capabilities in this 4/5  BIS central bankers' speeches  area and support our supervisors with methodologies to get a better understanding of culture and conduct issues in the institutions they supervise. Let me conclude. Financial institutions have restored their capital, but not public trust.
The repo rate was cut to almost zero and the Riksbank announced its intention to let the repo rate remain at this level for a relatively long period of time. The turbulence on the financial markets also meant that monetary policy had less of an impact than normal. The Riksbank responded to this by complementing monetary policy with extensive lending to the banks. In this way, monetary policy has helped to dampen the fall in production and employment. It has also helped to keep inflation in line with the target in the longer term. This is what I intend to talk about today. First, however, I would like to say a few words about some of the principles that are important when assessing monetary policy. What should we consider when we assess monetary policy? When can one say that the monetary policy conducted over the past year has been good? The answer to this question naturally depends on what the target for monetary policy is. The Riksbank has an explicit inflation target according to which the annual change in the consumer price index (CPI) should be 2 per cent. As monetary policy acts with a time lag, it should be based on forecasts. The Riksbank’s forecasts are based on the assumption that the repo rate – the Riksbank’s policy rate – will develop in such a way that monetary policy can be regarded as well-balanced.

All in all, it can be noted that the Riksbank overestimated the outcome for inflation in 2009 to approximately the same extent as the average for other forecasters, although with the exception of July and September 2008 when the Riksbank’s forecasts overestimated the prospects for inflation to a higher degree than other forecasters (see Figure 8). This was because energy prices increased more than expected during the spring, which led to inflation reaching over 4 per cent in the summer of 2008. The Riksbank thus saw a risk that the substantial increases in the prices of food and oil would also lead to rapid increases in other prices. Unusually high inflation expectations also contributed to this assessment. With regard to the outcome for GDP growth, the Riksbank’s overestimation was approximately the same as the average of the other forecasters. All of the forecasters continued to overestimate GDP growth for 2009 even during the first quarter of 2009. In other words, no forecaster predicted the economic downturn sooner than any other. How accurate are the Riksbank’s forecasts? As monetary policy is based on forecasts it is important that the Riksbank’s forecasts are acceptably accurate. However, it is not possible to assess accuracy by analysing the forecasts for a single year. Even forecasters with a good average accuracy may be less successful in an individual year. A fairer assessment requires a longer observation period.
Monetary policy needs a more long-term focus As I see it, we need to make it clear in the monetary policy analysis how monetary policy affects the risk of a financial crisis arising and how such a crisis scenario would look. As financial imbalances usually build up over a long period of time, this means that, in practice, we need to look beyond the three-year perspective that normally forms the base for our forecasts. Monetary policy is already forward-looking, but with a more long-term focus we could also include target attainment in the longer run. So, to what extent can monetary policy affect the probability of a crisis occurring? Well, it is mainly the effect of the repo rate on debt that is important in this context, as the probability of a financial crisis increases when indebtedness is high or when debt increase at a faster rate than normal.2 As the interest rate entails the cost of taking on debt, monetary policy has an effect on indebtedness. In the short-term perspective it seems as though the relationship between the repo rate and household debt is not very strong. However, if households expect the prevailing low interest rates to persist, and therefore increase their debts to unsustainable levels, the effects can be substantial.

Potential growth will then be at a higher level. On the other hand, increased demand from countries such as China and India combined with a synchronised economic upturn could contribute to the global output gap being closed more rapidly than we at present assume. In this case, inflation could rise earlier than anticipated. The major question is, of course, whether the low international price pressure will endure, and, if so, how long. One factor indicating that the developments we see now are a more lasting phenomenon is the combination of more independent central banks with inflation-targeting and increased global competition. In addition, rapidly-growing low-wage countries like India and China still have some way to go before they are completely integrated into the global economy. Events that could radically alter the picture are, for instance, increased protectionism and introversion, extensive armed conflicts and irresponsible fiscal policy. Protectionism may lie close to hand as a response to increasingly troublesome competition and difficulties in adapting national labour markets and production patterns, which is indicated, for instance, by the present US debate prior to the presidential elections. However, there is little that now indicates that these factors could grow sufficiently to outweigh the trend towards increased integration and globalisation. The conclusion is therefore that the low-inflation economy appears to have become established, although we cannot take it for granted. What consequences will this have for monetary policy in the future? Monetary policy in a low-inflation economy The target for monetary policy is price stability.
Among these new standards are expectations that financial market utilities, including those that act as central counterparties (CCPs), be more resilient to shocks – with a particular focus on enhancing liquidity and liquidity risk management. While CCPs reduce aggregate risk, they also concentrate the remaining risk. That is, CCPs create potential single points of failure in global derivatives markets. Thus, CCPs need adequate capacity to absorb potential losses from the default of one or more of its members, and they need to have access to liquidity so that they can always fully settle their obligations. The new risk management standards include requirements that CCPs have pre-funded default arrangements, that CCPs measure and collect initial and variation margin even in extreme stress scenarios, and that CCPs be able to withstand, again in a plausible stress scenario, the failure of a member having the largest exposure to the CCP. In some cases, this last element is enhanced to require the ability to withstand the failure of the two largest members. As these standards are fairly new for the global population of financial market utilities and in many jurisdictions the standards have yet to be issued in new rules and regulations, progress across the industry in meeting these standards is mixed. •  In some cases, liquidity risk management frameworks are underdeveloped, with needed additional focus on measurement and monitoring to make the frameworks more robust.

Financial institutions must be well-managed. Governance structures need to be in place to establish the appropriate decision-making processes, behaviors and incentives within these organizations. •  And, third, complexity. Financial institutions must become less complex. This objective speaks to the need to reduce the level of interconnectedness among large financial firms and to ensure that there are credible mechanisms for resolving even the largest firms without causing systemic disruption across the financial system. BIS central bankers’ speeches  1  Resiliency Much has been said about the U.S. and international set of regulatory reforms aimed at making global banking organizations more resilient – particularly in the areas of capital and liquidity. The importance of robust capital requirements for financial stability and the serious shortcomings of the pre-crisis regulatory capital regime have been well documented. A lot of work has been done on the capital front through a range of both domestic and international efforts. These efforts have addressed – in most cases – both the quantitative and qualitative elements of capital, and have also addressed the important management processes around capital. The Basel standards – and resulting U.S. regulation – address both the quantity and quality of capital and raise the bar on both elements for large firms. As well, the new capital rules will also require a capital buffer that increases with a firm’s size, complexity, interconnectedness and global footprint. Implementation of these new standards should significantly increase the safety and soundness of the financial system.
Conclusion In conclusion, my goal here today was to leave you with several things we need from you to help us achieve a stronger supervisory framework for foreign banks operating in the U.S. and also recognize that there are things that supervisors need to continue to work on to strengthen our oversight of global firms. We want to ensure we are doing everything we can to be an effective host supervisor, including ensuring consistency and equivalence in how we approach all global firms. We also have a responsibility to facilitate, to the greatest extent possible, the job of the home country supervisor, and we expect the same from our supervisory colleagues around the world who are our eyes and ears on the ground in those other jurisdictions. While this is very important in our routine day-to-day operations, it becomes even more important in effectively dealing with crisis situations. We have a common interest – a safe and stable global financial system. In pursuing this common interest, there are three fairly simple – yet important – things we need you to do: •  ensure robust communication with host supervisors;  •  continue to build out your risk reporting and broader MIS capabilities; and  4  BIS central bankers’ speeches  •  encourage deeper and more intensive dialogue among your senior leaders and directors with key host supervisors.

While some progress has been made to address some of these weaknesses, there is still quite a bit more work needed in firms to achieve a robust risk reporting infrastructure. From a host supervisor’s point of view, significant improvements in MIS are necessary to demonstrate that firms have clarity about their businesses and risks and have the tools necessary to manage the risks both here and abroad. At the same time, the challenges in implementing effective MIS across a global firm are made more daunting by the complex legal and organizational structures of most firms today. As the financial crisis highlighted, risk reporting by business line alone isn’t sufficient to effectively manage a global firm. Firms need to be able to segment  2  BIS central bankers’ speeches  data not just by business line, but also by legal entity. Firms with simpler legal entity structures tend to be able to do this more readily on both an as-needed basis, but also on a more routine basis. Simplifying your organizational structure in the U.S. – and globally – would facilitate enhancements in MIS and risk reporting, while at the same time facilitating our understanding of your organization. •  Third, encourage and provide better access to key executives and directors. As I indicated at the outset, one of the enhancements we’ve made to our broader supervisory program is deepening our engagement and interactions with senior leaders and directors of the firms we supervise.