samchain/econo-pairs-v1 huggingface dataset:
(If only a single firm needed support they could be directed to the DWF.) Consistent with all the Bank’s facilities, only firms judged to be solvent and viable would be eligible to participate. Subject to that, all counterparties that have access to DWF would be eligible to participate in any ECTR operations. Although the facility has been announced, the Bank has not yet offered any operations under the ECTR. That reflects our judgment that market conditions have not yet been consistent with a likely demand for its use. The Bank would revisit this decision in the event of any marked deterioration in market conditions. Conclusion In this speech today, I have set out some of the principles behind the Bank of England’s revised, permanent and public facilities for providing liquidity insurance to the banking system. We expect banks to self-insure for most of their liquidity needs – and while there has been encouraging progress to date, more is needed on that front. But if necessary, the Bank of England stands ready to provide support to solvent and viable institutions, against sufficiently good collateral, for an appropriate fee. It is important that commercial banks preposition their collateral so that due diligence can be performed and the maximum benefit achieved. The new Sterling Monetary Framework, which has been reformed almost in its entirety since 2007, reflects our experience during the crisis and lessons from some of the temporary measures that had to be put in place.

We are quite far from the creation of a global private currency. But stable coin projects reveal gaps in existing cross-border payment systems. Hence, at the European level, we should aim at promoting a genuine European strategy for retail payments. Payments are no longer a mere boring back-office technicality. They are innovative, and they provide two strategic assets: data, and daily customer relations. The raw truth however is that the European payments market is already dominated by non-European stakeholders. Furthermore, the growing role of non-European digital firms – be they American or Chinese – offering payments solutions should be taken seriously. Despite the creativity of the European ecosystem of payments, our  Page 4 sur 5 market remains too fragmented. Against this background, I call for the creation of pan-European payment solutions, building on a common brand and on the technical success of the Target Instant Payment Settlement infrastructure (TIPS) managed by the Eurosystem. We don’t have much time left, but regulators – starting with the Banque de France – and market players should work hand in hand to create a momentum. III. Green finance, “a new frontier for the 21st Century” Let me now conclude with some words on green finance. As I once said, it is “a new frontier for the 21st Century”. Much has already been undertaken over the past few months. We are currently witnessing a growing awareness from central banks, supervisors and financial institutions about climate-related risks.
9 For a recent discussion of these issues, see https://www.bankofengland.co.uk/speech/2020/anna-sweeney-moodys-the-resilience-ofinsurers-in-a-changing-climate 10 For a recent central banker’s perspective on these points, including the case for establishing a global price for carbon, see the speech by Isabel Schnabel of the ECB at https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200928_1~268b0b672f.en.html 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  that Mark Carney has called the ‘tragedy of the horizon’.11 But here, too, things are changing. Climate risk doesn’t seem so hypothetical or far off to those gazing at red skies over San Francisco, fleeing their burning homes in the Australian outback, baling out flooded villages in the UK, or contemplating big writedowns in the value of their businesses (as the boards of Ford, VW, BP and Shell, to name but a few, have done). Here, a combination of consumer action, government policy, and financial market pricing are bringing the future into the present. The final issue is the most prosaic, but perhaps also the most important from a financial markets perspective – and that is the historic absence of robust measurement. Measurement of how much pollution specific companies, their supply chains and consumer markets, produce. And measurement of the extent, and efficacy, of remedial action. While financial performance and risk is measured, and audited, to the nth degree, climate risk has historically been a void. What isn’t measured can’t be priced, traded or risk managed. This is perhaps where change has been most profound, as I will discuss shortly.

I want first to review why that historical performance has been so sluggish, before turning to look at how things are changing, and fast, under the influences of shifting public policy and consumer behaviour, and the physical realities of a changing planet. I will focus mainly on developments in private financial markets, but will also touch on some of the ways that we in the UK public sector can contribute, as market participants in our own right. Why markets have struggled to price climate risk: externalities, horizons and opacity Given the sheer scale of the climate challenge, it is at first glance surprising that financial markets have struggled to reflect it in asset pricing. The reasons for that failure are threefold. First, it is in the nature of climate change that many of the costs of failing to address it, and the opportunities for positive change, fall to society as a whole, rather than specific individuals or companies. The freedom to emit unlimited amounts of carbon is one example. Markets are notoriously poor at pricing such ‘externalities’. Not all climate risks are externalities, of course. Investor activism can bring consequences to bear on firms viewed to be responsible for climate harm.8 And climate-related natural disasters – already three times more frequent than 40 years ago – fall on real individuals and real companies.
The type of auction for the injection of liquidity changed to fixed-price auctions, the collateral base for repo agreements expanded, the use of the required reserve increased from 20 to 40 percent, and the spread between the Bank of Albania’s key interest rate and overnight loan dropped from 175 to 75 basis points. Third, through a special act, the Bank of Albania required higher capitalization of banking activity from the banking sector, adding to the guarantee of the banking sector’s financial soundness. Making a generalization, I deem that the measures adopted over this period are unusual, extraordinary and contrary to the “constitution” of modern central banks as regards the liquidity, money market and monetary policy transmission channels. However, we well  BIS Review 146/2009  1  understood the philosophy that “the purpose justifies the ways”. For the sake of financial stability, all the measures taken are justifiable and have proved effective. So far so good. However, I think that the current situation makes the central bank more vulnerable from the viewpoint of monetary policy independence and efficiency. Liquidity by all means, whatever the size, whatever the maturity, and whatever collateral for an indefinite period of time, would damage irremediably the monetary policy and the financial stability in a second round. Preserving balances is more complex, if we take into consideration even the other major vulnerability related to high degree of euroisation (high share of foreign currency component to money supply structure) and lack of convertibility of our national currencies.

Ardian Fullani: Cooling down the liquidity situation in Albania Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the 6th Vienna Economic Forum, Regional Cooperation – Challenges and Chances: "20 Years after the fall of the Iron Curtain", Vienna, 9-10 November 2009. *  *  *  The argument the organisers have found is very relevant, particularly when it comes to central banks of the Western Balkan. Actually, as far as I am informed from my colleagues, constrained liquidity (especially in foreign currency) and lending tightening are two fragile points, which may put us in a difficult position in the months to come. This set of two arguments carries over a dual problem: the short-term one, which puts banking system stability at risk, while providing its own implications even on the economic activity and on macro stability in a broader sense. The second problem is related to the financial support of the country’s economic activity in the future, given the recent years, when lending to the economy has constituted one of the main contributors in this regard. So far I deem that we have been effective in short-term management of these problems. Similarly to the European Central Bank and other central banks of the developed countries, we (the central banks of our region) have succeeded in supplying the market with ample liquidity, combining a variety of operational tactics and instruments.
This is the case in the securities business, which comprises a network of many different participants trading, settling and managing securities. Examples of these market participants – brokers, banks, settlement service providers and custodians – are shown on the slide 3. With every transaction, a wide array of booking information has to be reconciled bilaterally between the parties involved (slide 4). For example, banks have to reconcile and monitor their securities holdings at custodians against their own internal accounts. The coordination requires considerable effort, which in turn leads to high operating costs. DLT could help in this regard by ensuring that all of the involved parties have the same information at the same time. The slide 5 illustrates this step. Thanks to the synchronised distribution of information, the aforementioned, highly complex reconciliation would no longer be necessary. The potential for efficiency gains is indeed considerable, which is why extensive research is now being conducted in this area. And innovations that enhance the efficiency of the financial system or the economy as a whole are certainly worthy of closer inspection. The Australian Securities Exchange ASX, for example, has recently announced that it is to use DLT in redeveloping its core system for clearing and settling of equity transactions and recording shareholdings. In addition to the securities business, potential uses of DLT are also being envisaged in the field of cross-border payments. The latter are slow, costly and lacking in transparency compared with domestic payment transactions, and so the potential for efficiency gains is particularly high.

The contribution of the core inflation and food and energy prices to the overall inflation rate in the countries of the CESEE region in the last six years on average is generally balanced, with core inflation weighing slightly more. In the euro area, 76% of the average inflation dynamics was driven by the core inflation, and the rest by the more volatile prices. Compared to the 2002-2012 period, on average, in the last couple of years, the importance of core inflation for the dynamics of the headline inflation is much more pronounced, both in the region and the euro area. It either indicates that demand pressures and cost-push factors are becoming more prevalent, or that the pressures from the global commodities prices are becoming lesser. 13  Chart 15: CESEE and euro area headline inflation and core inflation developments 8.0  Chart 16: Contribution of core inflation and food and energy component to headline inflation in CESEE and Euro area (in p.p.) 6.0  CESEE inflation, %  7.0  5.0  CESEE core inflation, %  6.0  Euro area inflation, %  4.0  5.0  Euro area core inflation, %  3.0  4.0  2.0  3.0  1.0  2.0  0.0 2002-2008  1.0  2015-2019  2002-2008  Euro Area  2009-2014  2015-2019  CESEE  Core inflation, average (contribution to inflation, in p.p.) 2018  Source: IMF WEO Database, Eurostat and National Statistics.
Households' total financial assets Percentage of disposable income 550  550  Ireland Spain Denmark United States  500  500  United Kingdom Sweden  450  450  400  400  350  350  300  300  250  250  200  200 96  98  00  02  04  06  08  10  Source: OECD  18  BIS central bankers’ speeches

In response, banks managed to optimise their operational costs and improve their capital ratios. In this regard, the Bank of Albania has emphasised the accurate identification of the credit portfolio situation, asking the banks to take firm action and recover their non-performing loans value. This may be realised through support to qualitative borrowers in temporary difficult situations as well as through execution of collateral in the case of hopeless borrowers. Execution of collateral and the need to improve the relevant legal and operational framework are considered as a priority by the Bank of Albania. Following recommendations from an earlier  BIS central bankers’ speeches  1  forum organised on this topic, the Bank of Albania is fully committed so that other public authorities address the issue with priority. Furthermore, in cooperation with the banking sector, the Bank of Albania has identified and undertaken a number of other supervisory and regulatory actions, aiming at improving operational capitalisation situation and minimum liquidity requirement both in the national and foreign currencies. Next, some amendments to the Law “On banks in the Republic of Albania” were drafted and approved, which, in essence, complete and improve banking activity supervisory framework. These actions were pivotal for addressing an added risk perception due to international and regional financial developments. I take this opportunity to thank you for your cooperation and concrete actions with regard to the implementation of these new requirements, confident that you will fully accomplish them within the required timeframe.
Over the past 15 years, there have been two important instances in which the relationship between the fed funds rate and financial conditions have diverged significantly. The first was the late 1990s technology stock market bubble and its aftermath. The second was the mid2000s credit market bubble that culminated in the recent financial crisis. During these episodes, the relationship between the fed funds rate and financial conditions was particularly unstable. As a result, developments in the financial markets became very important in the conduct of monetary policy. 1  In my comments, I am going to assume that inflation expectations are always well anchored so that I do not need to distinguish between the real and nominal fed funds rate. BIS Review 23/2010  1  In this respect, I would note that financial conditions indicators have implications for “Taylor Rule” formulations for monetary policy. As you all know, Taylor-type rules provide a shorthand metric for the appropriate stance of monetary policy. In such rules, the fed funds rate is set at a level equal to the equilibrium real fed funds rate, plus the inflation objective, plus the weighted deviation of output from its potential and of the inflation objective from actual or, if forward looking, expected inflation. Often, analysts and economists assume that the equilibrium real fed funds rate is equal to 2 percent, its long-term historical value. Although, in principle, such rules allow the equilibrium rate to be time varying, it typically is assumed to be constant.

True, some of them had to do with political change and policy uncertainty to the heart of the developed world, but on top of that, major empirical and theoretical puzzles are challenging central tenets of monetary policy. In particular, inflation appears not to be responding to monetary policy as expected in advanced economies. Despite record- low interest rates over many years and massive liquidity injections by central banks through asset purchase programs, inflation has not picked up as expected. Explaining the apparent unresponsiveness of inflation has become a theoretical and empirical challenge that has drawn great attention from academia and policymakers in the last couple of years. Inflation dynamics and the way they interact with other economic variables are, of course, crucially important to central banks that have price stability as their core mandate. Most of them currently deliver on this mandate under a forward inflation targeting framework, whereby the stance of monetary policy seeks to achieve convergence of forecasted inflation to the target over a medium-term horizon. This prevents central banks from having to respond to short-term price volatility, but if inflation does not respond to monetary impulses as predicted by models, policymaking may become a much more complex game. If price responses get delayed in a highly accommodative environment, financial imbalances may build up, fiscal discipline may be eroded and inflation risks may get underpriced by markets, exposing themselves to reversals with data surprises in the future.
Proposals to reinvigorate the Fund’s oversight of the international monetary system – surveillance – lie at the heart of the Medium Term Strategy endorsed at this year’s Spring Meeting of the IMF. Together with the more widely publicised, and politically charged, commitment to reform the Fund’s governance, by rebalancing the quotas that determine member countries’ voting rights, they represent a serious attempt, in the words of the Fund’s Managing Director Rodrigo de Rato, to ‘meet the challenges posed by globalisation.’ The main purpose of my lecture tonight will be to explain the role which a refocused Fund could and should be playing in promoting international monetary stability, and to outline some steps to build on the agreements reached at the Fund’s Annual meetings in Singapore in September. The next six months will be critical. It is important that we use them to think hard about what the Fund does, as well as to push forward the second stage of the governance agenda. The changing role of the IMF The IMF was originally set up at the end of the Second World War ‘to promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems’. The collapse of the system of pegged exchange rates in the early 1970s precipitated a lengthy debate between those, led by the French, who favoured a return to managed exchange rates, and others, led by the Americans, who favoured floating exchange rates.

In short, what is now needed is a new decision which will provide a comprehensive framework for surveillance; which will approach members’ obligations explicitly from the perspective of external stability; and which will do so in terms which can readily be made operational. And it must be written in clear and unambiguous language. This is a tall order I know – so here are some suggestions. One very simple way of keeping surveillance focused would be to include a ‘selectivity principle’ in a new Decision. This would say that the scope of all surveillance activities should be based on their relevance to external stability: and that what matters is how a member’s policies could affect the rest of the world. The most difficult challenge will be to state members’ commitments in terms that are both general enough to take account of their very different economic circumstances, and specific enough to provide a clear focus for IMF surveillance. Striking the right balance is essential if a new framework is to provide a useful basis for assessing industrialised countries, emerging markets, and developing countries alike in a way that will be accepted as even handed. A good way of meeting this challenge would be to ground surveillance in a more structured analysis of the policy frameworks which countries themselves choose to adopt. The Fund could then focus on identifying areas where a member’s policy frameworks might be unsustainable or inconsistent with external stability, and then offer policy recommendations tailored to the circumstances of the country or countries concerned.
and R.H. Thaler (1990), “Anomalies: Foreign Exchange”, Journal of Economic Perspectives, 4 (3), pp. 179–92. 13 See also Cœuré, B. (2017), “The transmission of the ECB’s monetary policy in standard and non-standard  times”, speech at the workshop “Monetary policy in non-standard times”, Frankfurt am Main, 11 September. 14 This is apparent when the first two quarters of 2014 are put together in the chart on slide 5. 15 See Engel, C. and K. West (2010, op.cit.). 16 See Gabaix, X. and M. Maggiori (2015, op.cit.). 17 See e.g. Rogers, J., C. Scotti and J. Wright (2014), “Evaluating Asset-Market Effects of Unconventional Monetary  Policy: A Cross-Country Comparison”, International Finance Discussion Papers 1101, Board of Governors of the Federal Reserve System; Fratzscher et al. (2016, op.cit. ); and Georgiadis, G. and J. Gräb (2016, op.cit.). 18 See Sarno, L. and M. Taylor (2001), “Official Intervention in the Foreign Exchange Market: Is It Effective and, If So,  How Does It Work?”, Journal of Economic Literature; and Blanchard, O., G. Adler and I. de Carvalho Filho (2015), “Can Foreign Exchange Intervention Stem Exchange Rate Pressures from Global Capital Flow Shocks?”, NBER Working Paper21427. Non-sterilised interventions, which in spirit are closest to central bank asset purchase programmes, are widely considered to be effective through both channels (see e.g. Chinn, M. (2017), "The Once and Future Global Imbalances? Interpreting the Post-Crisis Record", paper presented at the annual central bank symposium in Jackson Hole, August). 19 See Cœuré, B. (2017, op.cit.). 11 / 11  BIS central bankers' speeches

If the bleak prospects for the world economy translate into lower prices for oil and other export goods, this may also lead to a depreciation of the krone. We have already observed that investors sell NOK in periods of turbulence. If the krone depreciates, the interest rate will then have to be set higher to keep inflation at bay unless a slowdown in activity has a dampening impact on inflation. The opening of the labour market to the new EU countries has provided us with access to a reserve of labour. There has been a substantial flow of labour into Norway. Labour migrates to locations where potential earnings are highest. Growing numbers of workers are moving to Norway and establishing residence here. Many workers are only here on short-term assignments and will perhaps move on when the job is done and when there is an economic turnaround. In 2007, Norway’s population increased by about 55 000, with net inward migration coming to 35 000. This is the highest population increase ever registered. Employment has grown rapidly over the past two years, the highest rate recorded over the past few decades. Even though there has been an ample supply of labour, unemployment is low and the number of job vacancies is record high. The labour market is tight. High pay increases have often been awarded in the late phase of an expansion, and been followed by rising inflation.