samchain/econo-pairs-v1 huggingface dataset:
Participant or member discipline should complement the work of payments system overseers, in a role analogous to the market discipline applied by counterparties to financial institutions. Clearing and settlement arrangements for OTC derivatives As we look at the evolution of the global payments system, one critical area that deserves further attention by market participants and central banks is the clearing and settlement arrangements for the over-the-counter derivatives market. This is an area where the innovation that has driven rapid growth has not been matched by a comparable investment in the infrastructure for post-trade processing. Because of the relatively slow development of clearing and settlement services for the OTC derivatives market, dealers and their counterparties have been forced to assume and manage risks that are largely avoidable. Unexecuted confirmations create unnecessary legal risk for counterparties and can add to replacement cost risk. Delays and errors in settlement add cost and liquidity risk. There are a number of important efforts by the private and official sectors that offer the promise of progress. The effort underway by the industry to standardize documentation, automate confirmation  BIS Review 59/2004  3  procedures, and match and reconcile payment flows is very important. The Fed has played a role in shaping recommendations for close-out netting on a cross-product basis, and has been strongly supportive of efforts to put these provisions into U. S. law.

And we will work hard, as we have in the past, to try to find the right balance between the broad objectives of stability and security and the efficiency of the system. BIS Review 59/2004  5
Policymakers learned from the mistakes of past crises and capitalized on globalization and technological change. However, while the rise of the EMEs is due mainly to the efforts of the EMEs themselves, the reaction of the developed countries in maintaining an open global trading system and resisting calls for protectionism has also been essential. Even before the financial crisis, the sustained dynamism of the emerging economies was bringing about a profound shift in the role of the EMEs within the global economy. The traditional distinction between the industrialized “core” of the system and the emerging “periphery” was becoming harder to justify as an analytical construct – still less an organizing framework for policy – as the periphery took on more weight and became a much more important driver of global economic developments. However, the crisis and its aftermath accelerated this transition. Although many emerging market economies contracted sharply following the peak of the financial crisis in late 2008, economic activity in the EMEs has since rebounded powerfully. In contrast, the recovery for the developed economies has been anemic. Economic output for the BRICs this year will be about 31 percent higher than it was in 2007; for the G7 just 1 percent higher.2 The rapid rebound of the EMEs occurred mainly because the locus of the financial crisis was elsewhere and that helped limit the damage to their financial system and balance sheets.

1  Chart 1 shows the “fever curve” of the money market, i.e. the difference between the three-month Libor and the three-month (T)OIS rate (tom-next/overnight indexed swap). This difference reflects the credit and liquidity risk premium on unsecured money market trades. It is a barometer of the health of the money market and, in the broader sense, also for that of the financial markets in general. 2  The five crises in the comparison are the stock market crash of 1929, the oil crisis of 1973, Black Monday in 1987, the bursting of the IT bubble in 2000, and the current crisis. In each case, we look at price performance in and around the index’s highest recorded level prior to the crisis, which does not necessarily coincide with the onset of the turmoil. The highest levels were reached on 3 September 1929 (Black Tuesday was on 29 October 1929), on 11 January 1973 (oil crisis), on 25 August 1987 (Black Monday was on 19 October 1987), on 14 January 2000 (IT bubble), and on 9 October 2007. 3  For annual data and the Case-Shiller Composite 20 Index, cf. Robert J. Shiller, Irrational Exuberance (2006, 2nd edition). BIS Review 157/2008  1  These financial losses alone will continue to have a major impact on the real economy for some time to come, owing to the fact that their full effect is not generally felt immediately. Despite the historic disruptions in the financial markets, this is not the 1930s.
As a result, this tool should be carefully considered for resolution scenarios, and should perhaps be ruled out of the recovery toolkit altogether. A third option would be to set up a cross-CCP resolution fund, much like the Federal Deposit Insurance Corporation or the Single Resolution Mechanism recently established for banks in Europe. This fund would be financed by risk-based contributions from CCPs and clearing members, but could also be financed by other stakeholders who may benefit (directly and indirectly) from the risk-management services provided by CCPs. While this idea is conceptually appealing, it may be very demanding to implement. Such a resolution fund would need to be established on a cross-jurisdictional basis, which implies significant coordination challenges, and it would have to be phased in over a large number of years. I frankly don’t see the political momentum for such a solution. BIS central bankers’ speeches  7  A fourth option would be for each CCP to establish its own dedicated recapitalisation fund, funded mainly by clearing members, with a proportional contribution from the CCP itself. The recourse to this recapitalisation fund would certainly create many challenges. The resolution authority must be able to identify certain clearing services which are still viable, and these must be insulated from the losses affecting the non-viable clearing services. However, if we are to go in the direction of new requirements for CCP resolution, I believe this could be a promising avenue to explore.

At the heart of the answer to this question is the Eurosystem’s monetary policy strategy. Indeed, this strategy is designed to make both our objective and the monetary policy aimed at achieving this objective credible, transparent and comprehensible, and thus make our decisions predictable. However, let me be very clear. Being predictable in no way implies that the central bank intends to follow the market. On the contrary, the causality should run in the other direction. Markets should be in a position to anticipate monetary policy decisions based on a credible strategy of the central bank. This does not exclude that certain monetary policy decisions may sometimes surprise the markets, but this is not our aim. As was argued in an article in the most recent issue of the ECB Monthly Bulletin, a stability-oriented monetary policy contributes to reducing certain risk premia in interest rates and thereby to increasing the efficiency of the allocation of capital, thus enhancing overall welfare. This shows that it is very important to give clear guidance to the markets by conducting a credible monetary policy focused on price stability. As you know, the strategy selected by the Governing Council of the ECB comprises a quantitative definition of price stability, which should contribute to anchoring long-term inflation expectations, as well as the two so-called pillars. The quantification of the primary objective, combined with the transparency and the credibility of the Eurosystem, provides the most important guidance to financial markets. Our monetary policy should contribute to keeping inflation expectations safely below 2%.
It is nevertheless conceivable that in a situation where a very high rate of inflation is accompanied by sluggish economic growth, Norges Bank may decide to apply a somewhat longer time horizon than two years to reach the inflation target of 2½ per cent. The choice of monetary policy time horizon reflects the fact that there are real economic costs associated with bringing inflation rapidly back to the target. This horizon is thus an indirect expression of the trade-off between the objectives of, on the one hand, stable output, and on the other hand, low and stable inflation. Historical data for Norway and other countries show that interest rate changes affect aggregate demand fairly quickly. Using the RIMINI model, we have estimated the effects of a 1 percentage point increase in interest rates over a period of two years. The chart shows that, in isolation, an interest rate increase of this magnitude may reduce mainland GDP by ¾ -1 per cent after two years. The effect will depend on a number of factors, such as household loan debt and corporate profitability. Household and business expectations may also play a part in determining the impact of interest rates. The band in the chart illustrates some of this uncertainty as shown by our models. In practice, it is often difficult to determine how long the interest rate will be kept at high or low level.

Two elements are vital in this process. The first is to ensure that the domestic intermediation process remains strong so as to support domestic demand. And secondly, the fiscal stimulus is key to containing the effects of the external developments and to placing Malaysia in a position to resume growth once conditions in the global economy stabilises. During this challenging period, financial institutions including Islamic financial institutions have an important role to ensure the continuous access to financing by the private sector. Key to this, is the forward looking business strategies being adopted by banking institutions, the organisational structure and the operational capability that is put in place. I would like to take this opportunity to highlight two other important dimensions in the development of Islamic finance, going forward. For more than two decades, the Islamic financial system in Malaysia has gradually transformed into a comprehensive Islamic  BIS Review 25/2009  1  financial landscape. This has been reinforced by a legal and regulatory framework, the essential financial infrastructure, and an environment conducive for product innovation. Notwithstanding the success of Islamic finance, the global ramifications of the crisis also calls for more concerted efforts to bring the industry to a higher level of resilience. Of importance, in this process, is to embrace the values of Islamic finance of justice and fairness that benefits the society and the system. It is thus important for Islamic finance to transcend beyond just the pursuit of growth and monetary performance but also to emphasise ethical market conduct practices.
Domestic banks report the activity of all offshore branches with more than $ billion in assets, while FBOs report activity of offshore branches that are managed and controlled by offices based in the United States. Additionally, both domestic banks and FBOs report the activity of their IBFs. Prior to the revisions, only domestic banks reported Eurodollar transactions, and there was no reporting by IBFs. 33  In addition to enhancing the Eurodollar collection, the revised reporting instructions, effective October 20, 2015, modified and clarified the definition of federal funds transactions and expanded the number of reporting entities. The effect of these changes was an increase in the amount of reported federal funds activity. 34  The data file for this speech, available on the New York Fed’s website, includes a historical calculation of the OBFR based on data provided by federal funds and Eurodollar brokers until October 19, 2015 and based on FR 2420 data, from October 20th, 2015 until February 17th, 2016. 35  See “Responses to Survey of Primary Dealers,” December 2015, and “Responses to Survey of Market Participants,” December 2015. 36  One such exceptional period was in mid-October 2015, amid some market concern about the debt ceiling that eventually abated. 37  The Treasury has recently begun to ramp up its issuance of Treasury bills in part to support the maintenance of a larger cash balance, which it keeps in its “checking account” at the Federal Reserve.

Have financial institutions taken structural and technological efficient steps to improve their cyber defense? Is cyber-crime insurance effective and how is it pricing the risk? What type of public communication to we need to fight those new threats? We expect such important questions to be addressed in this context. Besides, overseers and supervisors should ensure that at an individual level, risk management is efficient. A normative framework has been established set up by European institutions to fight cybercrime and ensure the robustness of the financial markets (in particular through the adoption by the European Parliament of the Network Information Security directive); a BIS committee, the CPSS, is currently reflecting on cybersecurity for market infrastructures. Two prominent speakers will share their views on whether the existing regulatory framework provides sufficient guarantee against cybercrime. Lastly, as a central bank it is of utmost importance to make sure that the marketplace is resilient when facing cyber-threats. The purpose of the last roundtable should be to assess to what extent financial centers resilience should evolve under the influence of cybercrime threats: do increasing cross border interdependencies between financial centers (use of common market infrastructures, existence of international financial actors and cross border providers) call for an international approach? Should a multi-sectorial approach also be worth reflecting on as reliance on common service providers (such as telecoms) create a large community of interest when cyber-security is at stake?
The low inflation in recent years has of course also made its mark on our internal work and we have invested considerable resources in trying to understand which factors lie behind it – both from a short-term perspective and in a more structural perspective. So, to conclude by returning to the question of whether everything will go back to the way it was before the financial crisis, I think the answer depends on what one is talking about. When it comes to analysis and working methods, the answer is very clear: they need to be adapted to new experiences and changed conditions to remain relevant. This type of change can be difficult to see for outsiders, but I can assure you the changes are taking place. With regard to major changes in the actual inflation-targeting policy, the answer is not so clear-cut. This remains an open question that spans legislation, research and all those working with monetary policy. References Ball, Laurence M. (2014), The Case for a Long-Run Inflation Target of Four Percent. IMF Working Paper WP/14/92. Bernanke, Ben S. (2015), Why are interest rates so low, part 2: Secular stagnation. Ben Bernanke’s blog, Brookings, 31 March. Billi, Roberto and Vredin, Anders (2014), Monetary policy and financial stability – a simple story. Sveriges Riksbank Economic Review, 2014:2, Sveriges Riksbank. Blanchard, Olivier (2015), Contours of Macroeconomic Policy in the Future. Blog post on iMFdirect 2 April 2015, http://blog-imfdirect.imf.org/. Blanchard, Olivier, Dell’Ariccia, Giovanni and Mauro, Paolo (2010), Rethinking Macro Policy. IMF Staff Position Note SPN/10/03, International Monetary Fund.

As you may know, Paris EUROPLACE brings together the whole range of market participants – issuers, investors and intermediaries – in order to contribute to the development of European capital markets and promote the Paris financial center. The financial industry in India, as in Europe, is expanding significantly. And we have already seen in the past few years the flourishing of partnerships between French and Indian financial institutions: such as in the asset management industry, the joint venture between Sundaram and BNP Paribas Asset Management, or the SGAM and SBI Mutual Funds partnership; in insurance services, the Bharti and Axa Life Insurance partnership, and the joint venture between SBI Life and Cardiff; and in online brokerage: current developments involving Cortal Consors and Geojit. It is for this reason that it was decided by Paris EUROPLACE to focus our program on the development of opportunities and potential new partnerships between Mumbai and Paris, as well as to review how the expertise of the Paris financial marketplace can be used and leveraged. Let me highlight the following questions: -  Why has the European financial market become a major pillar of international finance? -  And what are the key advantages offered by the Paris financial market place? 1. First, why has the European financial market become a major pillar of international finance to compare favourably with the other large markets of the world?
Should all authority and responsibility related to financial stability be centralized and vested in central banks? On the one hand, the benefit of vesting the decision making power and responsibility under one institution, which happens to be the central bank, is clear: no coordination problem, more effective communication under one voice, and swift response to emergencies. There are also downsides to such approach. The distinction between “goal independence” and “instrument independence” lies at the foundation of what we call central bank independence today. If central banks assume all regulatory and supervisory activities regarding the financial system and becomes the only authority responsible for its oversight, the instruments needed to achieve that goal may reach to a point where the principles of democracy necessitates a much closer coordination and cooperation with the government, blurring the central bank’s independence. Expanding the role of central banks in the economy has the potential to create a strong and out of the ordinary entity in a democracy that emphasizes accountability and the responsibility of elected officials. Central banks played a vital role in maintaining financial stability in the past and they are likely to do so in the future. The optimal use of policy rates and macro-prudential tools to achieve both the price and financial stability would define the criteria for assessing the success of central banks in the post crisis era. During the crisis, new monetary tools have been explored by the central banks.

Now, in addition to continuing to explore such monetary policy tools, policy makers would have to elaborate on the uses of regulatory rules for limiting the risks threatening financial stability and designing the optimal institutional structure for that purpose that finds the perfect balance between the risk of losing central bank independence and the risk of creating coordination problems (between the central bank and the regulatory and supervisory agency). Financial stability in Turkey and the monetary policy In the second part of my speech, let me turn to financial stability in Turkey and the monetary policy we have started to implement in the aftermath of the global financial crisis. Turkey used to be among emerging economies with high volatility and particularly sensitive to global risk perceptions throughout the 1990s and early 2000s. However, this time the headwinds from the global crisis has remained relatively subdued thanks to the resilience of the financial system and prudent macro policies. Of course, the growth rate of the economy has dropped sharply, but neither price nor financial stability has been seriously jeopardized. In fact, Turkey was one of the few emerging countries that ended up with higher credit rating than pre-crisis level. A combination of several factors made the difference, but lack of excessive borrowing turned out to be the key.
In terms of regulating crypto-assets, France pioneered the establishment of a legal framework in 2019, with two objectives: Creating legal certainty and trust to promote the development of a healthy and innovative ecosystem; Preserving innovation by being careful not to curtail further development opportunities and risk depriving the economy of beneficial innovations. With these two objectives in mind, we also support the European project for Markets in CryptoAssets (MiCA), which will, in particular, provide a first harmonised EU-wide regulatory framework for stablecoins. (ii) be involved as a player in financial sector developments However, adapting the regulatory framework is not sufficient. At the Banque de France, we believe it is necessary for us to also be a factor in the evolution of the financial sector by pursuing two objectives at this stage: to facilitate and experiment. Under the first objective, one of our aim is, for example, to foster the emergence of European projects capable of strengthening Europe’s payments system, building on the major integration projects we have seen in the past. Pursuing this objective also leads us to set up a forum, the Fintech Forum, which brings together players from our national financial ecosystem, to identify needs for regulatory developments related to innovation. As part of the experiment, at the Banque de France we are currently conducting a programme on a digital central bank currency for the settlement of interbank transactions.

Denis Beau: What will shape the future of crypto-assets? Opening address by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Banque de France webinar, 15 June 2021. * * * Good morning Ladies and Gentlemen, Crypto-assets is a stimulating topic for a Central Banker and one that cannot leave him indifferent! It should be remembered that, historically, crypto-assets have been designed to be issued in a decentralised manner, with the ambition to replace legal currencies: the very denial of the Central Banker’s functions. Clearly, the initial objective was not achieved. So far, crypto-assets have proven to be much less efficient than our traditional currencies, for different reasons, starting with price volatility, transaction costs and delays, which make them difficult to use as a means of payment, not to mention the risks they expose their users and service providers. However, we cannot ignore the potential for innovation of crypto-assets and their underlying technology, the technique of distributed ledgers or blockchain. Already in 2017, with the Madre project, the Banque de France was one of the first central banks in the world to use this blockchain technology for an interbank use case. At the rate of innovation, it is a long history, but since then we have been closely monitoring the development of this vibrant blockchain and crypto-assets ecosystem, the opportunities it creates and the risks it carries.