samchain/econo-pairs-v1 huggingface dataset:
With the right to create money comes obligations. Competition from new participants Chart: Competition from new participants Many of the services banks offer can be provided by others. In recent years, the competition to provide financial services has taken a new turn. The competition comes from both specialised FinTech companies and from global tech giants (BigTech) such as Amazon, Apple and Facebook.7,8 Technological advances are paving the way for new ways of paying. In addition, payment services have become more of a competitive arena. It will now be up to customers, and not banks, to decide which payment solutions will be linked to their bank account. Payment services have become of greater strategic importance for banks as well as other participants. There is increased competition not only for the way we pay, but for the means of payment.9 An example is the e-money offered by PayPal. This is a means of payment that can only be used within closed systems, and that can be converted into bank money at a fixed rate. E-money is often well integrated with other widely used applications and offers efficient payment solutions, for example across borders. Increased use of new means of payment may make banks’ deposit funding less stable. If keeping large sums in new kinds of money becomes more attractive, the money deposited into our accounts will be quickly converted and remain in our current account for a shorter amount of time.

Rather than borrowing against the rising equity in their homes, mortgage balances have instead essentially stabilized and remain well below their previous levels. As my colleagues will describe in more detail shortly, this stabilization reflects an increase in debt paydown due to a combination of lower interest rates, shorter loan terms and aging of mortgages. This trend is reflected in increased household saving and growing home equity, and we expect these trends to continue to help households rebuild their balance sheets over the near term, thereby further increasing the household sector’s resiliency to shocks. Low interest rates have also been important in driving the household debt service ratio to the lowest levels observed in our data. This means that households have more capacity with which to absorb any temporary adverse income shocks. One clear reflection of these improvements is the very significant decline in delinquency rates. At this point, the great majority of the bad debt from the boom years has been charged off and new foreclosures are at the lowest level we’ve seen in our data. The combination of charge-offs and tight mortgage underwriting standards over the last several years has shifted the stock of outstanding mortgage balances toward lower-risk borrowers, who are typically older with more stable incomes. For all these reasons, the household sector looks much better positioned today than in 2008 to absorb shocks and continue to contribute to the economic expansion.
The increase in the current account deficit of the balance of payments has been cause for concern in the latest Reports. As has been noted, this deficit is largely explained by FDIfinanced investment flows into the tradable sector (i.e. mining). In recent months some of the necessary adjustments have begun to take place to correct this situation: the real exchange rate has depreciated and domestic demand has slowed. This will help to reduce the current account deficit in the medium term, beyond the transitory effects of fluctuations in the terms of trade. Still, this risk becomes even more significant if the copper price falls further, external financial conditions worsen and domestic demand remains strong. Our previous Financial Stability Report identified as a risk factor the performance of the real estate sector. Incoming data points to a moderation of some of the trends reviewed at the time. However, factors remain that call for careful monitoring by financial intermediaries and relevant policy makers. No acceleration has been observed in mortgage lending, against our worries in the last Report, while residential home sales have slowed, banks have been more cautious in lending to companies in the industry and the leverage of real estate firms has stabilized. Despite these developments, housing sales are still fairly high and aggregate price indexes maintain their pace of expansion in a context where the standards of mortgage lending have not changed much. Keep in mind that the main factors that have pushed these aggregate prices up (i.e.

If we need a stronger European centre, then to maintain this principle we also need profound improvements in democracy at the European level. The justification for rethinking these principles can be found, I believe, by acknowledging that membership of EMU entails a significant degree of political union. We have seen that preventing crises requires that all countries exercise close and effective mutual surveillance of each others’ policies. We have seen that correcting crises requires that decisions are taken jointly, with a euro area perspective. The need for institutionalised collective decisionmaking is, fundamentally, what defines a political union. And this is de facto the condition of all euro area countries. Third proposition: ECB independence and the prohibition on monetary financing are essential for euro area integration This condition of de facto political union raises questions about the proper role of the central bank in EMU. The ECB is very much in the focus at the moment. Some observers call for it to play the role of a “national” central bank like the Federal Reserve or the Bank of England, and emulate their policies. But these viewpoints are partial. They overlook what is my third  6  BIS central bankers’ speeches  proposition: that the Treaty prohibition on monetary financing by the ECB, over the medium term, is a force in favour of euro area integration and greater stability. The positive effects of the ECB’s policies are fairly obvious in the case of the banking sector.
Zambia has also benefitted from increased support from bi-lateral donors, with the prospect of additional resources being made available in the current calendar year from the European Union amounting to around 13% of all the grants that were scheduled to be received in 2009 from the EU and individual donors. Institutions such as the African Development Bank have also made changes to their procedures aimed at fast tracking the disbursement of critical development finance resources, against already approved projects. However, there are serious concerns that Africa has been disadvantaged in the allocation of resources made available by the international community – particularly to key institutions such as the AfDB. There is also concern that whilst the principle of increased resource flows through Institutions such as the IMF should be targeted beyond the traditional BoP needs has generally been accepted at a political level, there is some reluctance at the institutional level for institutions such as the IMF to venture outside of their traditional confines of their support. In Zambia, the Government has engaged our cooperating partners to ensure that the additional resource provided to help African countries deal with the global crisis can be utilized to do just that – and not be simply kept for a rainy day that ignores the current  4  BIS Review 128/2009  monsoon. In my own personal interaction with the IMF, I believe that in Zambia we do have a good common understanding on this issue.

The tours focused on the following topical areas: –  The role and functions of the BoZ;  –  The need to deal with licensed financial institutions;  –  Getting credit; and  –  The operations of a credit reference bureau. 47. The BoZ is planning to conduct the tours on a regular basis to address public misconceptions about the role of the BoZ in the financial sector. Future tours will also educate the public on how to detect genuine currency and how to invest in Government securities. The BoZ was requested to publish the names of licensed financial service providers in the print media on a more regular basis. Developments in banking, currency and payment systems 48. During the quarter under review, there was a continued improvement in the availability of electronic payment options. The number of Point of Sale (POS) terminals increased by 8.3% to 1,119 (third quarter 2010: 1,033). The volume of POS transactions also increased by 42.2% to 284,145 (third quarter 2010: 199,817). Similarly, the values of POS transactions increased by 32.6% to K113.9 billion (third quarter 2010: K85.9 billion). The  6  BIS central bankers’ speeches  Bank would like to urge members of the public to use Point of Sale terminals as they provide a more convenient, safer, efficient and cost effective way of making payments. 49. Further, the number of Automated Teller Machines (ATMs) increased by 4.5% to 489 ATMs (third quarter 2010: 468).
11  There may in any case be interactions between the two . And even when there aren’t, their effects can be quite similar and therefore difficult to distinguish from one another. To generalise, increases in trade and technological innovations both tend to improve overall well-being but, by producing sharp shifts in relative prices, they can also make some people worse off, at least for a period of time. The early classical economists certainly recognised the parallels between technological improvements and 12  free trade. Aware too that the public tended instinctively to support the former , they used these parallels to persuade people of the virtues of the latter. Here, for example, is lawyer and proto-economist Nassau 13  Senior, writing in 1828 : “If we should think it madness to prohibit, or to tax, the use of an improved steam-engine, because it must be injurious to those employed in raising coal, what pretence is there for prohibiting or taxing foreign ribands or velvets because their importation would be injurious to the English silk-weaver? To prohibit every change which is accompanied by individual injury would be to prohibit every improvement whatever”. This is heavily rhetorical but the question could still be asked today. At least in advanced economies many people are doubtful about the benefits of trade (a Pew Research survey in 2014 found that only 28% thought it helped to lower prices and thereby improve real incomes).

We thank the Fund for its analytical work on assessing reserve adequacy, but we would like to stress that reserve holdings are not an economic policy goal, nor are they driven primarily by precautionary self-insurance motives, but are the outcome of a larger policy strategy for macroeconomic and financial stability. Thus, we view that the Fund’s emphasis on assessing reserve adequacy might be misplaced and would add little value to policy dialogue in the Fund’s surveillance process, the focus of which should be on the broader macro-policy mix in relation to economic policy objectives. Moreover, assessing reserve adequacy remains an inexact science, with theoretical underpinnings yet to be concretely established. The Fund’s recent exercise may therefore be best viewed as an addition to ongoing research on this issue, which would help clarify expectations about what the new metric can and cannot achieve. 8. The Fund cannot hope to establish confidence in the IMS without building adequate financial safety nets to ensure the necessary backstops in the event of global systemic crises. We therefore call on the Fund to strengthen its financing toolkit, including the possible inclusion of a short-term liquidity line, taking into account reinforcing relationships with Fund facilities and other regional financing arrangements. 9. Over the long term, the eventual choice of a global reserve currency, or currencies, needs to reflect evolving international trade and investment flows and be widely accepted by the market.
•  Equality, which is translated into a fair and equalitarian treatment to all minority groups, either of capital or of other stakeholders, where discriminating policies or attitudes shall be deemed unacceptable. 8. Based on the foregoing principles, the Central Bank, in its supervising role, follows the best international practices, materialized in the standards defined by the Basle Committee of the Bank for International Settlements, according to which corporate governance represents a critical issue in the banking environment. Management shall monitor the establishment of corporate objectives, performance of the day-byday operations, defense of stakeholder interests, conformity to applicable laws and regulations, and care for the interests of depositors. 9. Therefore, the directive applied by the Central Bank reaches beyond the mere relationship of the institution with external stakeholders or the concern with the truthfulness of its financial statements, since it considers all aspects related to the institution’s management and to its internal control systems. 10. In fact, the key to secure efficacy in governing financial institutions necessarily implies an effort to build an effective system of internal controls, able to support stability and continuity of individual activities and, consequently, the systemic stability of the financial system itself. 11. Ladies and gentlemen, I referred above to the fact that Brazil faces more challenges to consolidate good governance in corporate practices compared to more mature economies.

Hence, the enactment of the legislation by our country’s legislature is welcomed by all of us who value stable economies and peaceful societies. Due to the scale and magnitude of the heightened global interest in Money Laundering and Terrorist Financing, international obligations too, required many countries to introduce  BIS Review 9/2007  1  legislation. In fact, in terms of their international obligations the legislative approach pursued by many countries, including Sri Lanka, has been in the context of Security Council Resolution 1373 dealing, inter alia, with financing of terrorism and the International Convention on the suppression of financing of terrorism. These agreements have, to a great extent, unified the world in its fight to meet this challenge and, I dare say, the closing of ranks among the countries of the world, would have certainly helped to curtail terrorism which may otherwise have reached unimaginable levels, thereby threatening world peace in general and the world economy in particular. Let me now say a few words about our own efforts in this sphere of activity. The initial phase of establishing a comprehensive framework for anti money laundering and combating financial terrorism in Sri Lanka was focused on the preparation of the draft legislation. With the passage of legislation, our efforts were then directed towards setting up of the infrastructure for the Financial Intelligence Unit (FIU). We now have a fully operational FIU established in the Central Bank, the apex institution in the financial system in Sri Lanka, to meet both its local and international obligations.
The depreciation of the euro has also contributed to easing financing conditions. At its meeting on 3 September 2015, the Governing Council of the ECB expressed its readiness and ability, if required, to allow for more accommodation in its monetary policy stance. To this end, it could – if considered necessary – use the flexibility already embedded in the purchase programme to increase its size and extend its duration or modify its composition. The Spanish economy To conclude, I would like to briefly discuss the Spanish economy and its outlook. During 2015 the Spanish economy has been in what we could call a “virtuous triangle”, by simultaneously meeting three conditions: robust inflation-free growth, job creation and an external surplus. In 2015 we are going to achieve GDP growth of more than 3%, a negative average annual inflation rate, a current account surplus of more than 1 pp of GDP, and growth in employment and social security registrations, prompting expectations of an unemployment rate of less than 20% of the labour force by end-2016. However, the degree of uncertainty in economic projections has widened notably in recent months and the risks of slippage have risen owing to the downturn in the outlook for global growth. However, the Spanish economy is in a position to meet these challenges. The reforms implemented to date promote economic recovery and contribute to increasing Spain’s resilience in the face of exogenous shocks.

Fourth, alongside the Single Supervisory Mechanism, the Single Resolution Mechanism, the Resolution Board and the Single Resolution Fund are also being created and will likewise be pivotal to the construction of the Banking Union. 5. Fifth, this progress has notably coincided with very low interest rates, increasingly stringent regulatory requirements and strong competition, bringing pressure to bear on profitability. This may lead to attempts to achieve greater profitability at a higher risk, something that the supervisory authorities must monitor closely. 6. Sixth, from the standpoint of banking system users and customers, in the last two years a decline in and the practical removal of financial market fragmentation has been achieved. For Spain, the latest data indicate that the deleveraging of households and non-financial corporations is continuing, albeit less intensely. At the same time, there is an increase in the number of firms witnessing how their credit volume is growing (currently more than 40% of non-financial corporations are increasing their borrowing). These firms generally have a better balance sheet position and a brighter economic outlook. The debt-to-GDP ratios of non-financial corporations and households alike have continued to ease and are clearly below the peaks of the previous cycle in 2010, thus bringing Spain’s ratio closer to the average euro area ratio. Although private-sector deleveraging in Spain may yet last for some time, it is reasonable to conclude that most of the adjustment has now been made.
This is why many countries have chosen to put monetary policy – which is the most effective tool for influencing inflation – in the hands of independent central banks and at the same time to give them clear mandates to hold prices stable. Well-anchored inflation expectations also create scope for the central bank to stabilise the real economy. For understandable reasons, focus following the financial crisis has honed in on risks linked to financial imbalances and to preventing these imbalances. There is thus an instinct to also include these trade-offs in monetary policy. As I have tried to explain, I believe there are a number of problems with this. It is difficult to manage the new trade-offs, which in the case of Sweden concern high household indebtedness, both strategically and in terms of communication. And tensions may also arise between these trade-offs and the original framework regarding price stability and the mandate the central banks currently have. One solution to this would of course be to change the framework and give the central banks an extended mandate. But then one would need to have a political discussion on what it should actually include and on the possibility to assess the central banks and hold them to account. I understand and sympathise with the instinct to act to ensure that crises like the one we recently experienced never arise again. But using monetary policy for this purpose creates problems.

The longer inflation is deliberately allowed to deviate from 2 per cent, the greater the risk that one begins to question what target the bank really has. We have seen elements of this in the recent debate on monetary policy in Sweden. This could also have significance for how the central banks’ principals perceive the way monetary policy is conducted, which can ultimately affect the banks’ mandate and position. The Riksbank has a mandate to work independently to maintain price stability and, without prejudice to this, to support the goals of general economic policy. On the one hand, this means that it is up to the Riksbank to determine which risks are relevant for its decisions. But on the other hand, the Riksbank is accountable to the Riksdag, which determines the Riksbank’s mandate. The Riksbank therefore needs to be able to show in a convincing manner that the trade-offs it makes are anchored in its mandate. And given the current mandate, it may be a problem if one accepts deviations from the inflation target over a long period of time. If the trade-offs in monetary policy are not clear and concrete, it will be difficult to assess whether it has been conducted in a reasonable manner and within the mandate. The costs are clear, but what have we gained?
Denis Beau: The current macroeconomic situation in the euro area and monetary policy issues Keynote address by Mr Denis Beau, First Deputy Governor of the Bank of France, at the Official Monetary and Financial Institutions Forum (OMFIF) Conference "The Future of the Euro Area: Navigating Uncertainty", Paris, 5 October 2022. *** Ladies and Gentlemen, I am delighted to be talking to you today at this OMFIF Conference. I would like to express my warmest thanks to David Marsh for organising this event and for the invitation. We are here today to discuss and think about the future of the euro area. But, as Machiavelli once wrote: "to predict the future, one needs to know the past, because the events of this world have at all times links to the times that preceded them". In this respect, reflecting on the history of the euro, it stands out as a remarkable success: More than two decades after its inception, the euro is recognised and used globally, including outside its own borders as a means of payment, a store of value and a means of trade. The internal value of the single currency has been remarkably stable, with inflation averaging 1.7% between its inception in 1999 and 2021, compared with 4.9% during the two decades before 1999. The euro has helped to better protect the purchasing power of European citizens which has increased by 15% since 1999. The euro is also a great success in the area of payments.

At what speed is this move to the neutral rate, which we estimate at the Banque de France at below or close to 2% in nominal terms, likely to take place? In this regard, let me recall the statement made by François Villeroy in his recent public communication on monetary policy: as long as it is about lifting off the accelerator, we have to act for sure, in a determined but orderly way, and we should be there by the end of the year. Here, let me only add that, in the current context, it is of particular importance to be nimble and be ready to adapt the speed of normalisation to changing circumstances. A second important question regarding the normalisation of monetary policy underway in the euro area is the destination of the journey, the so called "terminal interest rates". As regards this question, let me offer a typical economist's type of answer = it depends! Indeed, it is important to keep in mind that it is only beyond the neutral rate that the tightening would properly begin. In my view, the Governing Council of the ECB will then have to discuss and decide, based on its assessment of actual inflation and the future outlook, focusing in particular on its core part and on wage developments. An important role for monetary policy is to ensure that inflation expectations remain anchored, especially when actual inflation is high. Up to now, inflation expectations remain relatively well anchored in the euro area.