samchain/econo-pairs-v1 huggingface dataset:
And this year, we will consult on giving greater access to our balance sheet as well as our infrastructure to non-bank payment providers. There is also still considerable opportunity to improve the domestic retail payment systems. FPS is not available, unlike in some other countries, at the till. And while the card schemes offer instant transaction it can take a number of days for merchants to receive the value of the transaction. These add to costs which are eventually borne by consumers. Two years ago, the 3 main scheme companies in the UK were consolidated into one entity that now is developing a new single ‘instant payment’ interbank system - the ‘New Payments Architecture’. The aim is to provide a faster, more resilient, and more efficient interbank system that is open to bank and non-bank payment service providers, and one that will enable and encourage innovation and competition including instant payment at the point of sale. Innovation and competition can lead to better, cheaper, payments services in the economy. But, the payment systems on which we depend have to be reliable and robust, prudentially and operationally. Regulation, therefore needs to keep pace with the changes in the payments landscape and the proliferation of new actors. The same risks have to be subject to the same regulation. The current regulatory regime focusses on the banks and core payment systems that have traditionally performed most of the functions, the ‘chain of actions’, involved in making transactions.

The Black Swan: The Impact of the Highly Improbable. Random House. 1  As the recent IEA report3 stresses “the global pathway to net‐zero emissions (…) requires all governments to significantly strengthen and then successfully implement their energy and climate policies. Commitment made to date fall short of what is required”. Meanwhile, the world has been hit by the Covid 19 health crisis. This is a crisis that is due to lack of prevention, unpreparedness at national levels and flaws in international cooperation. This is a crisis that has forced governments to lock down hundreds of millions of people and has stopped or reduced economic activity. This is a crisis with huge macroeconomic costs and which has forced governments to provide substantial fiscal support and central banks to intervene with bold monetary policies, in order to preserve favorable financing conditions. As regards climate change and the environment, scientists as well as the authors of the Green Swan try to explain to us what could happen if we don’t act. On the health front, we experienced “skin in the game” what an unexpected, severe, global crisis can be, because we did not collectively act on time. In advanced economies, thanks to vaccinations, we are seeing some light at the end of the tunnel. This is a relief. However, other crises could occur; there is no vaccine against climate change and environmental risks. This tangible experience makes the Green Swan even more interesting to read and to meditate upon now, than when it was published.
Norman T L Chan: The future of Asia’s finance Welcome remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the IMF-HKMA Joint Conference, Hong Kong, 28 February 2014. *  *  *  Good morning, Deputy Managing Director Zhu Min, Counsellor Jose Vinal, Ladies and Gentlemen, 1. It gives me great pleasure to welcome you to this Conference jointly organised by the IMF and the HKMA. The theme of this Conference is “The Future of Asia’s Finance”. In order to predict the future, one must understand and learn from the past. If we don’t understand where we are and what has brought us here, it is very hard to predict where we will be in the next 5–10 years. 2. Asia’s finance is now at a crossroad. We have to decide where we want to go and how to get there. This is not the first time and won’t be the last that Asia’s financial markets are facing this situation. 3. The last time Asia was at a crossroad was 1997/98 after the eruption of the Asian Financial Crisis. In the two to three decades before mid-1990s, Asia produced a couple of economic miracles: the emergence of the Four Asian Dragons and four Asian Little Tigers, all of which went through phenomenal economic growth and significant rise in living standards. However, unlike the developed economies in the West, Asia’s growth in this period was propelled mainly by bank finance.

For instance, a seemingly credible threat by one party to take actions that lead to mutual disadvantage can prompt concessions from the other, (or not). A former American President, 1/3  BIS central bankers' speeches  Richard Nixon, called this his “mad man” theory when applying it to the war in Vietnam and there are echoes of this idea in current international trade disputes. Such behaviour undermines multilateralism which has been an important source of stability and growth over many decades. If strategic uncertainty is a source of unilateral advantage, it will not dissipate but remain a source of latent policy risk. Last, “Structural change and monetary policy” uncertainty There are fundamental structural changes occurring, notably in the euro area economy but also elsewhere, that are poorly understood. The ongoing demographic transition, for example, is changing employment, investment and saving decisions, which will probably lower the natural rate of interest. The monetary policy transmission mechanism also seems to be changing. A sustained period of accommodative monetary policy has boosted growth and employment and is finally showing up in nominal wage growth: this first part of the Phillips curve is at work. But higher nominal wages have not yet been passed through to core inflation. It should eventually, but the more pertinent issues – of when and by how much – are unclear. There is, thus, not a single mechanical relationship between monetary policy instruments and inflation, rather a distribution of likely responses.
The remainder has been in areas such as project and trade finance. The French banks haven’t exited from these businesses altogether, because they have very strong franchises in these areas which are a good source of revenue. But they have managed to liquidate a number of operations that were weighing down their balance sheets. That has helped them to reduce their financing needs. They did not reduce their leverage through imposing some kind of credit crunch – absolutely not. Actually, the change in the volume of bank lending in France has been less rapid than in almost all other eurozone countries – or almost all other European countries, including the UK. I don’t believe there has been any constraint on the supply of credit to the economy. If there has been a decline in lending volumes this has been a reflection of reduced demand, rather than any decline in supply. Possibly in the future there may be a relative decline in the importance of bank lending, because we have worked a lot on developing simple and transparent alternative financing instruments such as securitisation. These may attract more attention from institutional investors and would therefore be a way of providing more credit to the economy without putting as much pressure as there may have been in the past on the balance sheets of the banks.

This is understandable considering the fact that the latest empirical research confirms the positive influence of the transfer from currency to electronic payment instruments on consumption, trade and economic growth, with the effects of card usage being the greatest, compared to other payment instruments1. Third, besides novelties in the field of payments, this conference traditionally includes the trends in securities settlement systems. Therefore, the discussions will be aimed towards the implementation of the “TARGET2 Securities” project, which is expected to facilitate realtime cross-border settlement of transactions in securities on the “delivery versus payment” principle, by integrating transaction accounts and securities accounts on a single platform. This project is aimed towards strengthening the integration of the financial market infrastructure, which is expected to contribute towards increasing competition, lower costs for settlement and greater financial stability. Discussions related to this topic will also include the latest trends in collateral and liquidity management taking into account the latest changes in the monetary policy setup in the euro area. Fourth, this conference will especially focus on the novelties in the proposed revision of the Payment Services Directive. The proposed amendments to the directive aim towards increasing the competition in the field of online payments related to e-commerce, by removing the barriers that the interested providers of these services face to enter the common market of the European Union, reducing the costs for the consumers when conducting card payments, as well as by raising the security level for online payments.
The end result was a sharp tightening in the availability of credit that served to exacerbate the downward pressure on economic activity. 2  Some dealers were further weakened by having provided significant amounts of funding to failed investment funds, which reduced the amount of funding that was available to meet other needs. 2  BIS Review 143/2009  In the case of the tri-party repo market, the stress on repo borrowers was exacerbated by the design of the underlying market infrastructure. In this market, investors provide cash each afternoon to dealers in the form of an overnight loan backed by securities collateral. Each morning, under normal circumstances, the two clearing banks that operate tri-party repo systems permit dealers to return the cash to their investors and to retake possession of their securities portfolios by overdrawing their accounts at the clearing banks. During the day, the clearing banks finance the dealers’ securities inventories. Usually, this arrangement works well. However, when a securities dealer becomes troubled or is perceived to be troubled, the tri-party repo market can become unstable. In particular, if there is a material risk that a dealer could default during the day, the clearing bank may not want to return the cash to the tri-party investors in the morning because the bank does not want to risk being stuck with a very large collateralized exposure that could run into the hundreds of billions of dollars. Overnight investors, in turn, don’t want to be stuck with the collateral.

These buffers would help protect the firm against having to liquidate assets under duress, and would therefore help prevent the probability distribution from sliding left toward the zero line in Figure 2. But there is a cost to the firm from holding greater liquidity buffers in terms of lower returns on capital. So, requiring greater liquidity buffers would also tend to drive up intermediation costs. And, just as in the case of higher capital requirements, banks could respond by taking greater risks. Third, regulators could implement changes that would reduce the degree of dispersion in the potential value of a firm, pushing the right tail of the distribution in Figure 2 to the left. For example, we could require greater transparency about the composition and quality of the firm’s assets and liabilities. Or, regulators could increase transparency by forcing greater disclosure of the sale price of assets and/or by pushing for greater homogeneity and price  6  This problem has been largely addressed in the banking sector by deposit insurance and by providing access to lender of last resort facilities. In addition, supervisory and reporting requirements address transparency issues. 6  BIS Review 143/2009  discovery for products such as OTC derivatives. We could improve the quality of regulation and supervision, which would increase confidence in regulatory measures of capital and financial firms’ soundness. Fourth, the central bank could provide a liquidity backstop to solvent firms.
For this purpose, we interacted with the IMF, which had already begun reflecting on the issue, and had ended setting up, in collaboration with the World Bank, the Bali Fintech Agenda, presented during the last annual meetings held in October, in Indonesia. 2  It was then an opportunity to converse with the staff of the department headed by Mr. Tobias, with whom I agreed to organize a regional meeting to follow up implementation of this agenda, which the Fund had initiated in Vienna early this year. Today, this agenda has become a reference used to address the problem in a structured and standardized way. I will not go through the details of this agenda, first because I think that Mr. Tobias is better placed than me for this, and second because the issue will be discussed thoroughly in the different sessions of this conference. Rather, my aim is to focus on the technological revolution, particularly its impact on the financial sector, then to discuss the challenges it poses for public authorities in general and for central banks in particular. Ladies and Gentlemen, In the aftermath of the 2008 crisis, while public authorities and international institutions, including the IMF, were concerned about the repercussions of the crisis, a different evolution was taking place and began to gradually transform the economic, financial and social landscape.

To increase the competitiveness of financial institutions, the BOT seeks to improve the financial system infrastructure, such as developing the payment systems to promote efficient business dealings and to prepare for cross-border transactions involving regional currencies. We also work toward raising the standard of Thai financial institutions to become Qualified ASEAN Banks (QAB), which is a standard used within the region to allow qualified financial institutions to expand their business within the region. The BOT has already formulated action plans for all of these aforementioned initiatives, and plan to accelerate implementation in tandem with Asia’s growth and regional economic integration. Ensuring financial institutions’ role as effective financial intermediaries will help promote inclusive growth, which would lessen unequal access to financial services. To this end, the BOT will ensure that financial institutions provide quality financial services that meet various needs at a fair price especially for risk hedging instruments. Along with greater provision of financial services, better consumer protection to create financial immunity for financial services users also tops our priority. To help consumers understand available products to better choose one that suits their needs, the BOT has set up the Financial Consumer Protection Center (FCPC). This center currently provides onetouch service through the hotline number 1213. The center also offers financial education to the public. Conclusion I would like to reiterate that the Bank of Thailand’s policy direction for 2012 will focus on making the Thai economy more resilient and improve the people’s standard of living.
figures 2 and 3 in Frankel, Jeffrey A., Carlos Végh and Guillermo Vuletin (2011): “On graduation from fiscal procyclicality”, NBER Working Paper 17619. 6  Chen, Yu-Chin. and Kenneth S. Rogoff (2003): “Commodity Currencies”, Journal of International Economics 60, 133–169, documents that commodity exports have a strong and stable influence on the floating (real) exchange rates of Australia, Canada and New Zealand. Ferraro, Domenico, Barbara Rossi and Kenneth. S. Rogoff (2012): “Can Oil Prices Forecast Exchange rates?” NBER Working Paper 17998 extends the analysis to higher frequency data and out-of-sample forecasting and finds that both contemporaneous and lagged oil prices have significant predictive ability for the NOK/USD-exchange rate and oil prices. BIS central bankers’ speeches  3  Inflation targeting with interest rate forecasting Chart: Inflation When the fiscal rule was introduced in 2001, Norges Bank was charged with the task of keeping consumer price inflation low and stable. The value of the krone exchange rate was allowed to float freely. The operational target of monetary policy is annual consumer price inflation of close to 2.5 percent over time, under a regime of flexible inflation targeting. In the conduct of monetary policy, the aim of reaching the inflation target is balanced against the aim of stabilising output and employment. In addition, monetary policy should be robust by seeking to mitigate the risk of a build-up of financial imbalances. Over the past ten years, average inflation in Norway has been somewhat below, but close to, 2.5 percent.

On the other hand, it is also possible that the different paces of recovery between emerging and developed economies and the exchange rate tensions in place result in a delay in the withdrawal of the monetary stimulus, causing an immediate increase in global inflation and calling for more aggressive monetary policy responses later on. Conclusions Today monetary policy conduct is facing an important challenge. Headline inflation is near the target and trend inflation is back to above-zero figures, albeit still substantially below 3 percent. However, inflationary pressures have increased globally raising inflation forecasts, spreading concerns about future inflation in the different economies, including our own. The recovery process of the Chilean economy has consolidated and output gaps are closed. As I said a while ago, the increases we have seen in international prices of foodstuffs and oil will result in total inflation surpassing the upper bound of the tolerance range during some quarters. Our main task today is to ensure that the convergence of trend inflation to the target occurs with as few setbacks as possible. Monetary policy conduct will aim at the inflationary trend remaining in levels consistent with the tolerance range, so that towards the end of the projection horizon headline inflation stands around 3 percent. There are important risks, though. The recent experience with international price shocks has shown that preoccupation per se will not solve their inflationary consequences.
This is a role the Bank has endeavoured to play consistently, and for good reason. The more people understand how our economy works, the challenges it is facing and the limited options available to overcome them, the greater the likelihood that policymakers will feel comfortable to take the required decisions promptly, leading to a faster pace of wealth creation, which is one thing we all want. 11. The adoption of the euro will greatly reduce the role of the Central Bank of Malta. What will you be doing in January 2008? Your question reflects a perception that is commonly held but which is not borne out by the experience of the current members of the euro area. It would be more correct to say that the Bank’s role will be greatly changed rather than reduced. Some existing functions will become less important, others more so, and yet others created. On the institutional level, the transfer of responsibility for monetary policy to the ECB would be replaced by the Governor’s participation in the Governing Council where interest rates are set for the euro area. For this purpose, we will need to strengthen our capacity in the areas of economic research, forecasting and statistics and redirect its focus. This also applies to our activities in support of monetary policy, such as open market operations, which would be conducted within the parameters set by the ECB.

Exploiting the new market opportunities takes time because institutional structures and  BIS Review 16/2006  1  operating practices need to be adapted. Some of the funds Malta is getting from the EU are being used precisely to strengthen the economy’s export potential. At the same time, it is also true that the EU economy did not grow as rapidly as anticipated in 2005. It expanded by 1.6 per cent, compared with 2.3 per cent in 2004. A higher proportion than ever of consumer demand, moreover, was satisfied by imports from more competitive producers at the expense of established suppliers. Finally, as I have already observed, the persistence of sluggish growth in the Maltese economy cannot be explained exclusively in terms of a cyclical downturn. Delays in implementing effective competitiveness-enhancing reforms were also a factor. As a result, the economy was not fully prepared to exploit the single market. 3. In these circumstances, isn’t this the worst time to be strait-jacketed by the conditions for euro adoption? Wouldn’t a fiscal boost speed up economic growth, now that your already limited monetary policy tools have been put in the shed? Allow me first to correct two misconceptions implicit in your second question. For a start, our monetary policy tools have not been put away but are available for use if needed, as was the case in April last year when the Bank’s central intervention rate was raised by 25 basis points.
My view is that there is a strong case for making, on a periodic basis, comprehensive and transparent assessments of the distributional impact of monetary policy. This would help people understand the purpose and impact of monetary policy, both on the economy in general and on them as individuals, on “their GDP”. I give some illustrative examples of a “Monetary Policy Scorecard” summarising the impact of monetary actions on particular cohorts. Greater transparency of this type would not, by itself, reduce any distributional effects of policy. But it could help in explaining the impact of these actions, in a localised and personalised way, as a means of improving understanding and trust in central banks. Both have been a casualty of the crisis. Why Distributions Matter  Let me start with a bald statement: all public policy is distributional, be it monetary, fiscal, structural or social. The reason I know this is because redistribution is the way public policy works; it is what policy does for a living. Some policies redistribute resources between agents at a point in time. Others redistribute resources between agents over time. If policy is not working through one of these channels, it is not working. If all policy is distributional, it does not take much of a leap of imagination to see that policymakers may wish to understand and explain its distributional impact. In some policy settings, that already happens – in fiscal policy, social policy, climate change policy, pension policy.

This should probably be considered an upper bound. 16  All speeches are available online at www.bankofengland.co.uk/speeches  16  These sorts of evaluation also have greatest value when conducted at times of significant change in the monetary policy stance or when this change is not expected. That is to say, they are probably best undertaken periodically rather than regularly. One important point is that the interpretation of these evaluations depends greatly on the reasons monetary policy is changing in the first place. For example, the loosening of monetary policy in the case study was positive for most households. But that does not imply a tightening of monetary policy would thus be negative for household finances and welfare. For example, if this tightening came in response to a stronger economy, and helped avoid inflation overshooting its target requiring higher-still interest rates, its effects are likely to be positive too. This suggests these scorecard exercises are likely to be context-specific and hence are best done periodically at times of significant change to the monetary stance. Reporting its effects in a disaggregated way should not call into question the purpose of monetary policy which, as set in statute, is to stabilise aggregate economic activity and prices. Nor does it imply monetary tools should be used to meet distributional ends. Rather, its purpose would be to improve public understanding of the effects of monetary policy. This would hopefully help close the public perception gap 46  about the effects of monetary policy and the trust deficit facing monetary policymakers.