samchain/econo-pairs-v1 huggingface dataset:
The PoC will examine the extent to which DLT based systems can be configured to enable privacy amongst participants, whilst keeping data on a shared ledger: one of the holy grails of DLT design. RegTech: data storage and analysis (4 PoCs)  As central bankers, we have always needed to process, store and analyse data to inform our policy and operational responsibilities. But that need has grown enormously in recent years, reflecting the increased reporting requirements on supervised firms since the financial crisis, greater availability of high frequency and qualitative data from public and private sources, and new policy responsibilities (eg for macro-prudential supervision). Making sense of such large and diverse data sets is not straightforward. But central banks need to do so to discharge their responsibilities, whilst respecting increasingly demanding data protection requirements. Of course regulated firms face a similar challenge marshalling all of these data in the first place – and a sub-branch of FinTech, sometimes known as ‘RegTech’, has grown up to facilitate the associated monitoring, compliance and reporting demands. More recently, that term has expanded to cover the use of similar technology on the regulatory side, and a good number of the Accelerator’s PoCs have been in this space, looking either at data analysis or the more advanced field of machine learning.

Let me discuss each in 9  turn . Distributed ledger technology (DLT) (3 PoCs)  DLT has in many respects been the poster-child for FinTech. Thrown into prominence by the advent of bitcoin and other cryptocurrencies, the attraction of DLT to central banks really lies in the potentially highly attractive resilience characteristics of the underlying technology. In its purest form, a DLT network operates with no centre, and every node in the network holds a full copy of the ledger. So the failure of a node has no impact on the overall resilience of the system, with transactions simply rerouting elsewhere. A single ledger could also eliminate the need for costly reconciliations between market participants, increasing efficiency and reducing operational risk. For central banks currently operating centralised payments and settlements systems with only limited redundancy and facing growing cyber and operational threats, such a model has obvious attractions. Our first DLT PoC, undertaken with PwC, proved it was possible to build a multi-node scalable DLT environment enabling the transfer of ownership of a fictitious asset. But it also demonstrated that the technology was some way from being sufficiently robust or scaleable to form the core of live central bank infrastructure such as the Bank’s Real-Time Gross Settlement (RTGS) service – a conclusion that helped inform the Bank’s plans for its RTGS renewal programme. PoCs by other central banks have reached 10  broadly similar conclusions . 9  More detailed write-ups of completed PoCs can be found at: http://www.bankofengland.co.uk/Pages/fintech/default.aspx.
However, the corporate sector faces major challenges down the road. Against a backdrop of lower expected cash flows and higher debt, the solvency position of some firms has worsened, especially in the case of those operating in sectors more adversely affected by the pandemic that are still facing some restrictions. Thus, with the crisis stretching out, concern has now shifted from liquidity risk to the deterioration of the solvency position of firms. Therefore, economic policies should now focus on supporting viable businesses whose solvency has worsened as a result of the COVID-19 shock, given that the potential liquidation of these firms would be a drag on economic recovery via different channels. First, due to the loss of employment and capital that follows the closure of any company. Second, firms’ solvency problems may end up affecting the health of lenders if these problems are significant and widespread within the corporate sector. And third, in extreme scenarios, the ability of of some banks to provide new lending could be affected, generating negative financial loops. We should take into account as well that a high level of corporate debt, even if not leading to defaults, can still be a drag on investment in the following years, lowering productivity and economic growth, as the experience from the global financial crisis indeed shows.

Muhammad bin Ibrahim: Pilot platform for cross-border investment and settlement of debt securities Remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the press conference for the launch of the pilot platform for cross-border investment and settlement of debt securities, jointly with the Hong Kong Monetary Authority and Euroclear Bank, Hong Kong, 13 March 2012. *  *  *  The world as we know is changing. Many aspects of how the global financial landscape will change have been discussed. One key area of focus has been the uneven growth momentum across the world, which is expected to persist for some time, and this development will have an impact on the trends and direction of the flows of trade and capital across the world. In essence, the nature of trade and capital flows will be significantly different from what we have experienced in the past decades; gross capital flows from across the globe between the east and the west, the north and the south, will be larger in size and more robust, going forward. These developments may pose risk in particular, to open economies like Malaysia and Hong Kong. A key safeguard to manage the risks that may arise from this transformation would be by strengthening our financial systems, to further develop the capital markets and to strengthen the regulatory and supervisory frameworks. In the Asian region, accentuating this global transformation are the rapid regional economic and financial integration and the expansion of domestic demand.
In fact, most of our non-standard measures have focused on providing adequate liquidity to financial institutions and did not require changes to our operational framework. The adjustments were merely on the parameters of the existing framework. Yet, the provision of liquidity by central banks needs to be linked to a clear assessment of solvency of the counterparties. Only by being able to distinguish solvent from insolvent financial institutions can central banks continue to fulfil their mandate of being lenders of last resort to the financial system. Detailed information on the health of financial institutions and the capacity of the central bank to resolve insolvent banks would ensure that liquidity provision is kept to the circle of solvent banks. Conclusion Let me conclude. During the financial crisis central banks assumed an active role as crisis managers. The ensuing episodes from the subprime crisis with the collapse of Lehman Brothers to the debt crisis has left the ECB as one of the few actors in guaranteeing stability over the past five years. One may argue that central banks are in an extremely difficult position, that they may suffer from the outcome of the recent crisis and that “paradise is lost”. 11 If paradise is lost, it may however be the right time to take on a new and a pro-active role in “the real world” or in the “new normal”. We will not turn the clock backwards. 9  The contribution by Kyotaki and Moore on credit cycles in 1997 served only recently to numerous macroeconomic extensions.

This helps spread lending capacity across the country, further contributing to balanced growth and a sustained economic expansion. Trade Good domestic policy cannot, on its own, guarantee balanced growth in an open economy like the UK’s. Our fortunes are also tied to those of our trading partners. In recent years those fortunes have been modest. Demand from the UK’s traditional markets, such as Europe, is a staggering 25% below a continuation of its pre-crisis trend. This is because the UK relies heavily on the slow-growing advanced economies (Chart 1). In contrast, the Commonwealth countries, which account for only a tenth of UK exports, have grown over three percentage points faster on average each year than our major trading partners between 2008–13. The need to diversify trade to faster-growing economies in the Commonwealth and emerging markets is clear. This will require both the continued initiative of UK businesses and a determined trade strategy. In short, we all need to be inspired by another great Scottish figure, David Hume. Hume brilliantly showed that free trade was beneficial to all; that it acquainted nations “with the pleasures of luxury, and the profits of commerce”, spurring them on “to further improvements in every branch of domestic and foreign trade.” 2 His ideas helped usher in the first great era of globalisation during the 19th century. In this wave, the British economy grew twice as fast as during the preceding century (Table 1).
In addition, we at the SNB are very carefully monitoring the risk to financial stability inherent in the rise of mortgage debt in Switzerland. As you can see, the topic of the Collegium generale’s lecture series has played a major role throughout my career. I was therefore very pleased to be invited to deliver a speech today on credit and debt. I’m deliberately using these terms in conjunction here. Because ultimately they refer to the same thing. They describe an agreement between two parties. One party, the creditor or lender, entrusts money or other goods to the second, the debtor or borrower, who promises to return the money or goods at a later stage. The borrower’s financial debt represents an asset of the lender’s. And yet, although the terms refer to the same concept, the associations they generate go in opposite directions. In common speech, the word debt usually has a negative connotation. Debt sounds like something to be avoided. Whereas the word credit gives rise to positive associations. Credit opens up new possibilities and is a bedrock of growth. The different way in which the two terms are perceived is also reflected in their etymology (cf. slide 2). Debt comes from the Latin debitum, from the verb debere, which means to owe something, or to have an obligation. The word thus has a moral overtone. Credit for its part goes back to the Latin words credere, meaning to believe or to trust, and creditum, referring to something entrusted in good faith. So which is it?

And it give lenders the opportunity to invest their accrued assets in an optimal way. Individuals benefit from this mechanism, and so does the economy as a whole. As the examples show, the credit system can support prosperity and economic growth and enhance the growth potential. 8  Under what circumstances is lending detrimental to an economy? Given all the positive aspects, the possibilities and opportunities linked with the credit system – why then the negative image associated with the notion of debt? As mentioned at the beginning, the term ‘debt’ emphasises the borrower’s obligation to repay the loan in future. Each credit/debt relationship is therefore fraught with the risk that the borrower might incur financial difficulties and be unable to repay the loan. The cartoon here makes a tongue-in-cheek reference to this credit risk (cf. slide 8). Naturally, credit risk is also inherent in the case of our university graduate’s start-up. There is a rule of thumb in the start-up scene that says only one in ten start-ups succeeds. If her product idea fails, our University of Berne graduate will lack the funds to repay her loan and interest. And the Miller family’s mortgage loan is not exempt from credit risk, either. Payment difficulties could arise if, for example, a divorce or rising interest rates lead to an unexpected hike in current expenses, or if the family’s future income is reduced by unemployment or illness.
For example, amendments were introduced to the Exchange Fund Ordinance and the Bank Notes Issue Ordinance in 1995. The Coinage Order was revoked and the Coinage Ordinance was promulgated in 1994. One significant amendment common to this exercise was the removal of the need to refer matters to the Secretary of State. Let me give a few examples: (a) the investment of the Exchange Fund in securities; (b) the determination of the limit for borrowing using the assets of the Exchange Fund or fiscal revenue as security; (c) the transfer of assets from the Exchange Fund to the fiscal and other government accounts; (d) the authority to appoint note issuing banks; and (e) the authority to proclaim coins as legal tender, mint coins and appoint minting agencies were all subject to the prior approval of the Secretary of State before amendment of the relevant ordinances. 6. After amendment, these powers formerly rested in the Secretary of State are now rested in the Chief Executive in Council or the Financial Secretary. This means that, in terms of the management of monetary and financial affairs, Hong Kong enjoys even greater autonomy after the transfer of sovereignty. 7. The high level of monetary autonomy enjoyed by Hong Kong, as provided in the Basic Law and the monetary legislation, is not just something written into laws: it is also realised in our actual implementation of monetary policies. The financial turmoil that erupted just after the transfer of sovereignty has subjected Hong Kong’s monetary autonomy to a rigorous testing.

But even a snail can make remarkable progress if it keeps going. I am told that the quick species - I suppose they are the Model T snails - travel at a speed of three inches a minute - say 5 yards an hour. In that case a quick snail could have travelled quite easily from Cranfield to the borders of Scotland since the collapse of the Berlin Wall! And if you look back over a decade rather than at the outcome of just the latest meetings, then there really has been remarkable progress within the developing, emerging and transitional economies as well as the industrial world - towards a broad international consensus on approaches to economic management. That consensus can perhaps be summed up essentially as macro-economic stability and supply-side flexibility - but that needs some elaboration. On the macro-economic side we have learned - and it has taken some countries longer than others - that you cannot achieve what we are all trying to achieve - sustained growth, high levels of employment and rising living standards - simply by pumping up demand in our economies through expansionary monetary and fiscal policies without regard to the underlying supply-side capacity of our economies to meet that demand. Short-term demand management through monetary policy too often led just to accelerating inflation, which had then eventually to be brought under control through recession - an absolute recipe for short-termism in both financial and business BIS Review 36/1998  -2-  behaviour.
2  BIS central bankers’ speeches  These reforms will impose higher costs on systemic institutions compared to their nonsystemic (smaller) peers. The logic makes perfect sense when one considers each reform separately, since the objective is to eliminate/compensate the competitive advantage that these institutions derive from expectations of public support. However, the result of adding up all measures may be to turn a gross competitive advantage into a net competitive disadvantage. Although one might see this as a welcomed outcome, I see at least two reasons that could mitigate this view: •  First, this cumulative regulatory cost could lead banks to operate below the economically optimal scale and scope, and withdraw from the provision of activities important for international firms and globalized financial markets. I have no preference for big systemic banks. But I simply do not believe that these large financial institutions became large and complex simply to benefit from the implicit subsidy. •  Alternatively, this could lead to even more concentration among systemic institutions themselves, as some attempt to secure higher public support probabilities to compensate for the higher regulatory burden. Unless public authorities suddenly find a way to credibly commit to no bailouts whatsoever, we may well end up at some point with a world with fewer but more systemically important systemic players. And I am not convinced that a world with five G-SIBs instead of the current list of thirty would necessarily be more stable.

Second, one would also like to ascertain whether the presence of an implicit subsidy does lead to higher risk taking, and the quantitative importance of this effect. The third question has to do with regulation, i.e. : “what can be done to address this issue?” It seems that there are three main approaches: •  Some regulatory measures try to eliminate possible symptoms of the implicit subsidy. For instance, proposals on restrictions on bank market activities have been justified by the objective of limiting the implicit subsidy to non-traditional banking activities. •  Another approach is to directly target the underlying cause of the problem, for instance by making easier the resolution of problems at large banks without resorting to taxpayer money. Some progress has been achieved in the US (through the Orderly Liquidation Authority), and in Europe (through the Recovery and Resolution Directive). •  A third approach, illustrated by the G-SIBs framework, is to offset the implicit subsidy with additional capital and bailinable debt requirements the so called TLAC or other regulatory measures. Concluding remarks To conclude, I would offer two remarks which you may want to keep in mind. The first remark has to do with the comparative advantage of too-systemic-to-fail institutions, and in particular of global systemically important banks. In reaction to the crisis, many regulatory reforms have been put in place on capital and liquidity, credit exposure to counterparties, supervision, and trading activities.
In this respect, I would like to thank the organization committee for their efforts in bringing these very interesting and enlightening studies under this conference. I wish the conference a complete success and I would like to thank all our guests for their participation. 2  BIS central bankers’ speeches

Central bank responses have also tended to adapt themselves to the structure of the respective financial systems, and to the specific dysfunctions and tensions. For instance, the fact that the banking sector plays a predominant role in channelling credit in the euro area economy — compared with the Anglo-Saxon model which is underpinned to a greater extent by the capital market — was from the outset a distinguishing feature in the design of the ECB’s response. Also, set against the strategies deployed by the Federal Reserve or the Bank of England, based principally on “quantitative easing”, the Eurosystem’s response has been more complex over time, adapting itself to the difficulties that have arisen at the  BIS central bankers’ speeches  1  different stages of the euro area crisis, though seeking always to act on the segments of the transmission monetary policy mechanism that were seen to be most impaired. The perception that the interbank market had ceased to operate as an efficient liquidity distribution mechanism between banks meant that the liquidity-provision policy had to become more flexible. And, when the crisis worsened in September 2008, far-reaching changes had to be made to the monetary policy operational framework, to allow the ECB to meet the system’s gross liquidity needs, with a substantial expansion of the size of its balance sheet.
I would like to emphasise, however, that calculations of this sort are uncertain. Chart 7 Probability distribution for NOK/EUR in one month  On the basis of the prices for various currency options, we can calculate the implied probability distribution for the krone exchange rate. In simple terms, one can say that the further to the left in the diagram the figure is, the higher a future appreciation of the krone is priced. A narrow, symmetric curve - or a bell - indicates that the uncertainty surrounding the future krone exchange rate is considered to be relatively slight, and that the risk of a depreciation or appreciation is priced  BIS Review 67/2000  8  symmetrically. The chart shows that the implied probability distribution for the krone has changed over time. Uncertainty surrounding the future krone exchange rate appears to have diminished. Chart 8 Probability distribution for USD/EUR in one month  The corresponding bell for the exchange rate between the euro and the US dollar indicates that there is considerable uncertainty surrounding the future exchange rate between the two currencies. Since autumn 1999 this uncertainty has mounted, while at the same time the euro is expected to fall against the US dollar. Chart 9 GDP mainland Norway Projections for 2000 from Inflation Reports December 1998 to June 2000  The assessment of the economic outlook has changed over the past 18 months.

This would enable us to surprise market participants, and in the short term this might allow interest rate changes to have a greater impact. But enterprises and financial operators would gradually learn from experience and take positions to guard their interests. The long-term results would be weaker confidence in monetary policy, higher interest rates and risk premia, lower investment and an unstable exchange rate. Economic developments Chart 4 Effective exchange rate for EUR Nominal and real. Index 1995=100  There have been substantial fluctuations between the major currencies since the introduction of the euro. In general, the euro has depreciated against other currencies. Some academic papers suggest that the euro is undervalued. For instance, calculations in a working paper published by the IMF indicate  BIS Review 67/2000  6  that the nominal equilibrium exchange rate at the time of the introduction of the euro at the beginning of 1999 was USD 1.26 per euro.3 Forecasts Norwegian krone Market makers’ estimates  Expectations in money and foreign exchange markets seem to suggest that the euro is also considered to be undervalued in relation to the Norwegian krone. Estimates from market-makers indicate that the krone is expected to weaken against the euro over the next three to twelve months. Chart 5 Other exchange rates Index. January 1999=1000  The krone has depreciated against other currencies since the beginning of the year. It has weakened considerably against, for instance, the US dollar and pound sterling, but less against the Swedish krona.