samchain/econo-pairs-v1 huggingface dataset:
And finally, I do worry about diluting overly the focus of the prudential regulator, which was I’m sure one element of what led to the financial crisis. The same logic applies to a competitiveness objective, which surprisingly often gets confused with our competition mandate. 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  Seventh, five years on, I am slightly worried about a looming political economy problem. We have I think taken quite an expansive view of our secondary competition objective, by which I mean that we have been vigorously prowling all parts of the PRA’s terrain actively looking for things we can do to advance the objective. But our terrain is not limitless, so the flow of new initiatives will I think slow, and we will have to spend more time tangling with more difficult questions of the sort I have discussed today. I am worried that people may infer from a lower volume of announcements a reduced commitment to our secondary competition objective. There is no such reduction in commitment – we are simply implementing our commitments thoroughly. Those taking an interest should hold us to account for that, and press us on what we can do in the next five years about the more awkward questions which now confront us. So to sum up: in my view the competition objective has had quite a profound impact on the PRA’s activities and approach over the last five years.

This is largely due to the scarcity of the instruments in the market. In Malaysia, the growing ringgit sukuk market has resulted in an active secondary market. This is largely due to the regular and varied issuances throughout the year. This is supported by the investment in research and development and in talent development to ensure the availability of expertise in the structuring of sukuk instruments and in sukuk documentation. Having the potential to innovate new instruments will depend on having the necessary talent. This is an area of focus in Malaysia to develop the skills, expertise and capability. The Islamic financial system in Malaysia now offers a wide range of financial products and services that are competitive and able to meet the changing requirements of the domestic and global economy. Way forward for the global Islamic financial system As we advance forward, we need to recognise the forces of change and the transformation taking place in the international financial system and global economy. Relentless efforts have been initiated to reform the international financial system by the international community to address the weaknesses that have contributed to the recent crisis. In this environment, Islamic finance needs to continue to evolve to remain effective and competitive. The Islamic financial system does not exist in isolation and will continue to develop as an integral part of the global financial system.
On the other hand, from the perspectives of consumers themselves, greater demand for funds and financial services is often constrained by limited financial access. The appropriate course of policy on financial institutions must take into consideration challenges posed by these trends of changes. In this context, the Bank of Thailand sees three policy priorities going forward: (1) to preserve the soundness of the financial institution system, (2) to enhance the efficiency of financial intermediation, and (3) to place emphasis on consumer protection. The soundness of financial institutions is the major foundation of macroeconomic stability. Currently, financial institutions are in top conditions, with NPL ratio last year as low as 3.6 despite credit expansion of 11.3 per cent. Banks’ capital is also much higher than recommended international standards. This strong soundness must be preserved. The Bank  2  BIS central bankers’ speeches  of Thailand will continue to apply micro-prudential approach to the regulation of financial institutions, to ensure that financial institutions put in place appropriate risk management framework, are prudent in extending credits, and maintain sufficient level of capital according to new international standards such as the Basel III guideline. The recent global economic crisis highlights the importance of extending the coverage of supervision to foster the soundness of system as a whole, in addition to individual institutions. “Systemic risk”, in particular, can pose serious threat to macroeconomic stability at large.

Financial institutions should also educate their customers, and provide financial services that are suitable both in terms of business and risk management capability of the customers, followed by dedicated after-sales services. Improvements along these lines will further strengthen growth inclusiveness. Other policies The Bank of Thailand will also seek to strengthen the economy through its other functions. In managing international reserves, the Bank of Thailand advocates further diversification by expanding the investment asset universe, as permitted by the new royal decree. The Bank of Thailand also supports a speedy repayment of outstanding FIDF debt, based on the principles of monetary policy independence and long-term fiscal discipline. While monetary and financial stability certainly provide a favourable backdrop, the economy cannot prosper on the back of these alone. The nation’s competitiveness, in particular, needs to be strengthened and improved further. The private sector should continue to place greater emphasis on innovation and seek to compete on the basis of quality rather than prices. The public sector, meanwhile, must ensure that a sufficient part of budget is set aside for infrastructure investment on a sustained basis, which will help improve the productivity and benefit all parts of the economy in the long run. Joint efforts by all sides are needed to achieve our common goals of macroeconomic stability and economic strength and prosperity. BIS central bankers’ speeches  3
That could complicate monetary control if it causes banks to bid up for reserves, pushing up on short term market rates relative to official levels. Such effects – ingloriously known as ‘autonomous factors’ in central banking jargon – are nothing new. Increases in physical banknotes or government deposits, for example, also drain reserves – and scaling that historical variation by the sort of estimates for CBDC size shown in Chart 2 suggests that day to day variation in CBDC demand would not pose materially greater uncertainty (the orange bars in Chart 6). Sharper and less predictable inflows, e.g. during a period of stress – proxied in the purple bar in Chart 6 using the extreme tail of existing autonomous flows – could however drive rather larger volatility. Source: Bank of England, Bank calculations. 10  This issue, and others discussed in my remarks, are also well covered in this 2018 report by the Bank for International Settlements’ Committees on Markets and Payment and Market Infrastructures: Central bank digital currencies (bis.org). Bank of England  Page 10  Whether this matters for monetary control depends on the level of reserves at the point digital currencies are introduced, and the type of monetary control regime being operated. As of today, most major central banks use so-called ‘floor’ systems, with a level of reserves (injected via QE) that far exceeds most estimates of aggregate demand from the banking system.

Digital currencies may alter the size and composition of central bank assets Most of my remarks today have focused on the potential implications of digital currencies for central bank liabilities. But of course, for every liability, there also has to be an asset. Whether those assets are, in total, any larger than today depends, in part, on whether new digital currencies cause a net increase in demand for central bank liabilities, or simply substitute for reserves or banknotes. A narrow digital currency that largely cannibalised banknote demand, for example, might have little or no impact. By contrast, a broad digital currency with many attractive payments features could materially increase the demand for central bank liabilities. The impact of any increase in demand on the size and composition of central bank assets depends on whether, and how, central banks choose to accommodate that demand. I’ve already noted that, in systems like the UK’s, digital currencies may cause some banks whose deposit bases have been partially disintermediated to increase their borrowing from market-wide facilities. A more interesting case could arise if the central bank chooses instead to back persistently higher demand with more long-lasting assets, for example to reduce rollover risk. At modest size, that may look little different to today’s banknote programmes.
Trade with the Baltic countries, which used to be minimal, has increased sharply. Petroleum wealth and the krone exchange rate Let me conclude by referring to an analysis that can shed light on long-term developments in the real krone exchange rate. 6  BIS Review 25/2004  In the long term, the exchange rate tends to adjust so that there will be a balance both in the domestic economy and balance in the current account. Petroleum wealth, defined as the value of oil and gas under the seabed and the value of the Government Petroleum Fund, provides the basis for substantial foreign exchange revenues in the years ahead. These revenues will decline as the economy grows. The share of imports that can be financed by foreign exchange revenues from petroleum wealth will be reduced. Export earnings other than petroleum revenues will then be necessary. A substantial improvement in competitiveness will be required over time. Norway’s history as an oil nation goes back to the end of the 1960s. Rough estimates suggest that a real exchange rate that ensures balance in the balance of payments when petroleum wealth no longer has the same significant role in the economy is more in line with the real exchange rate prevailing in Norway prior to the discovery of oil. This is shown in the chart, where the real exchange rate in 60 years’ time, after a sharp appreciation while we phase in petroleum wealth into the economy, will have reverted to the level prevailing before petroleum extraction began.

Exchange market intervention, irrespective of whether foreign exchange is bought or sold, is not an appropriate instrument for influencing the krone over a longer period. We do not wish to act in a way that may trigger a game situation in the foreign exchange market. Foreign exchange intervention rather than a change in the interest rate may give ambiguous signals to foreign exchange operators and a game situation may arise. However, interventions may be appropriate if the krone deviates substantially from the level that the Bank judges to be reasonable in relation to fundamentals, and if exchange rate developments weaken the prospect of achieving the inflation target. Interventions may also be appropriate in response to pronounced short-term fluctuations in the krone when liquidity in the foreign exchange market falls to a very low level. Although the krone may fluctuate in the short term, when inflation is low and stable, it will generally stabilise over time. When inflation has been higher in Norway than among our trading partners for a longer period, the krone has generally depreciated. When inflation in Norway is expected to be broadly in line with that of other countries, the exchange rate will normally also return to its normal range following periods when the krone has been particularly strong or particularly weak. Exchange rate expectations cannot be directly observed, but information from Consensus Forecast, a survey conducted among economists, may be an indicator.
Applying our present scheme, monetary policy, coupled with a fiscal policy based on a structural balance sheet, has achieved its inflation objectives by dampening external and domestic shocks more strongly. The turbulences that in the past caused recessions in Chile, today are manifested only as changes in the pace of growth. To this end, monetary policy operates through several channels. Primarily, it regulates market liquidity and it sets, through open market operations, an interest rate for the provision of liquidity to the financial system at very short terms. By way of these two mechanisms it affects market interest rates, which are the ones that influence asset prices and economic agents’ decisions. The effectiveness of monetary policy therefore depends on the operation of these mechanisms at different levels. First, the Bank's ability to ensure the provision of liquidity is critical, as it maintains market interest rates aligned with the MPR. This is done regularly through open market operations and the Bank itself operates systems that allow these operations to be carried out with the appropriate standards. There may be cases where there is a sudden rise in market rates, because players in the system are faced with potential or actual liquidity constraints. Such a situation occurred in 2008, when events associated with the collapse of Lehman Brothers swept over the world economy. On that occasion, the Bank announced to the market that it would resort to exceptional liquidity provision mechanisms in pesos and dollars, which allowed local rates not to be altered, despite severe external risks.

Otherwise, it will threaten people’s well-being. Last year, we cut the key rate — at the outbreak of the pandemic, inflation was low in Russia, and the key rate helped us support lending and demand. As we all know, companies tend to welcome a policy of low interest rates, which makes borrowings cheaper and thus helps them develop their business. Conversely, it reduces households’ demand for deposits. If this is also coupled with inflation, households’ real incomes decline and savings depreciate. Figuratively speaking, we can say that monetary policy is like seasonal clothing: we wear jackets when it is cold and hang up our dresses in the wardrobe until the next warm season. The same is true for monetary policy: it significantly influences the situation in the economy and current 3/5  BIS central bankers' speeches  developments and helps promote stability, just like adequate clothing keeps us warm without being too hot. Accordingly, now is the right moment to raise the key rate in response to the changed environment and higher inflation. We had been keeping the key rate at a low level for quite a long period in order to make sure we do not clip the wings of the recovering economy. However, now we have no doubt that our decisions have not hindered growth. The economy has bounced back to its pre-crisis level, even surpassing it in many industries, and continues to expand.
As long as the SNB can conduct an autonomous monetary policy, the Swiss franc will remain a crisis-resistant investment currency, and the interest rate bonus will be maintained. 4  BIS Review 60/2002  4. The euro's implications for the SNB's monetary policy  4.1. The monetary policy concept  With the euro now existing in its physical form, some cash transactions will tend to be effected in euros rather than in Swiss francs. This development will, in turn, have a negative impact on the demand for Swiss francs. But as I have set out before, there is no doubt that the large majority of domestic payments will continue to be transacted in Swiss francs. On the whole, the decline in seigniorage, i.e. the profit that central banks achieve with the circulation of money, is likely to be very limited. However, the main point I want to make here is that even if the creation of the European Monetary Union did have a significant impact on the demand for Swiss francs, this would not call the viability of the SNB's monetary policy concept into question. A possible change in the demand for money hampers monetary policy decisions especially if a central bank pursues money supply targets. The steering of the money supply as a monetary policy concept has by now been abandoned by many countries.

Niklaus Blattner: The euro - implications for Switzerland and for the monetary policy of the Swiss National Bank Speech by Professor Niklaus Blattner, Member of the Governing Board of the Swiss National Bank, at the Banking Studies Center Colloquium, Lugano, 22 October 2002. * 1. *  *  Introduction  Where do we stand more than three and a half years after the launch of the European Economic and Monetary Union (EMU) and almost ten months after the introduction of euro notes and coins? On the whole, from the perspective of the Swiss National Bank (SNB), the experience with the euro has been primarily positive so far, even though the Swiss franc has somewhat appreciated against the euro since 1999. First of all, Switzerland is now surrounded by a large currency area that pursues similar goals in terms of monetary policy, and, in particular, with respect to price stability. Competitive currency devaluations are no longer an option for members of the euro area, and the exchange rate volatility of the Swiss franc vis-à-vis the currencies of the European trading partners has declined considerably. For Swiss enterprises, foreign currency management has become easier. Apart from decreasing transaction costs, Swiss firms also benefit from enhanced price transparency and competition in Euroland. At the same time and despite some initial fears to the contrary, Switzerland has been able to retain its advantage of lower interest rate levels.
But it has occurred to the team working on these issues in the PRA that any version of that regime would probably involve, as a first step: the simplest regime, for the smallest firms. We are therefore attracted by the idea of putting such a first step in place early on, rather than waiting until we are ready to implement all the steps of a fully graduated regime. Before coming to design choices, however, it is important to establish one basic principle at the outset. We have absolutely no interest in moving to a weaker prudential regime for small firms. Small firm failures will inevitably occur as part of having a dynamic banking sector. On the one hand, we have been very successful in our efforts to encourage new entry: since 2013 we have approved 25 new UK banks (as well as 24 international ones), including one hardy soul who set sail this week on the choppy seas of the Covid 6  crisis. On the other hand, the PRA does not seek to operate zero failure regime, and we have quietly overseen the exit from the market of 12 small UK banks in recent years. But the key principle is that this process must be orderly, and that principle relies on strong prudential standards. Having had these two thoughts – to start with the simplest step on the ladder, and to keep it strong – the fevered minds of the PRA competition team turned to branding questions.

And on benefits, these may be relatively higher for large firms whose resilience the Basel Committee has had mainly in mind when designing regulation – indeed research by our PRA team suggests that some Basel metrics are more effective for large firms than small ones, whereas supervision of their governance seems to be even more important for small firms than for large ones (See Figures 1A and 1B). At the same time, in addition to the “proportionality” problem we face the “barriers to growth” problem – that if we strip parts of the regime away for small firms this will create new barriers for those firms as they grow out of the “small” category and need to take on additional regulation. 5  4 See: https://www.gov.uk/government/publications/solvency-ii-review-call-for-evidence 5 Another piece of simplification work that we are quietly progressing is a rationalisation of the various regulatory thresholds a deposit taker may find themselves subject to. 5  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  5  Ideally, therefore, and with our competition objective in mind, we should want to move towards a graduated regime in which firms can migrate from a very simple regime, up through a series of steps towards the full Basel regime as they become larger and/or involved in more complex activities (See Figure 2). Strong and simple  Moving to a fully graduated regime of this kind would be a major undertaking.
This document should enable a complete analysis of budgetary projections to be performed and is, in fact, that used by the European Commission as a basis for its assessment of Spanish fiscal policy. 7/9  The importance of budgetary consolidation Before concluding my address, I should like to offer some reflections on the importance of completing the budgetary consolidation process. Spain’s public debt-to-GDP ratio remains very high. Despite its recent stabilisation, it is close to 100% and more than 60 percentage points above its pre-crisis level. Moreover, the budget deficit (both the total deficit and the structural deficit) is also very high and exceeds that of most of our European partners. The outstanding adjustment is still significant, despite the current context of a high pace of growth and low interest rates, that is relatively conducive to reducing the structural budget deficit and the public debt-to-GDP ratio. Reducing fiscal imbalances is important in order to moderate the future financial costs associated with public debt, and also to reduce the vulnerability of the economy to a possible tightening of financial conditions, without forgetting the need to restore scope for a fiscal policy response in the event of possible adverse growth scenarios. For all these reasons, it is crucial to adopt a time perspective that goes beyond the annual budgetary exercise, with a detailed and credible deficit correction plan geared towards gradually reducing public debt.

Or, put differently, consumer spending in the UK is probably already above the level projected to prevail in Q3 in the May MPR scenario. Some of these data cover the opening-up of non-essential retail stores on 15 June. That opening-up was quantitatively significant, representing around 13% of consumption spending and halving the share of goods and services consumers which were previously unavailable (Chart 10b). Initial indications from payments and footfall figures suggest this opening-up has accelerated, perhaps significantly, consumer spending. In particular, CHAPS data suggests spending on delayable goods has now returned to pre-Covid levels (Chart 8), well ahead of the corresponding May scenario profile. Looking ahead, the opening of pubs, restaurants, hotels, cinemas and other hospitality outlets on 4 July will provide further impetus to spending. My own market intelligence suggests considerable pent-up demand. Together, these categories represent around another 10% of consumer spending. Initial reports from businesses in these sectors, including from the Bank’s Agents, suggest advance bookings are brisk. There is less evidence on which to base an updated judgement on the other components of GDP. For net trade, the May MPR scenario suggested around a 40% peak-to-trough fall in gross export and import volumes. Trade and port traffic data suggest a somewhat smaller contraction. With the world economy recovering sooner than in the UK, this implies a slightly larger boost to UK GDP growth from net trade in Q2. For housing and business investment, there are even less data on which to make an assessment.