samchain/econo-pairs-v1 huggingface dataset:
Denis Beau: Navigating the digital transition, maintaining a stable payment system Opening address by Mr Denis Beau, First Deputy Governor of the Bank of France, at the France Payments Forum – Les Rencontres Digitales Conference 2021 – Crypto-payments, 8 April 2021. * * *  Introduction The health crisis that we have all been living through for a year now has affected people’s day-today habits, changing not only how we consume but also how we like to pay. This has sped up the transition towards more digital approaches. This acceleration raises major challenges for Europe’s payment ecosystem, but also for payment regulators and supervisors. Thinking now specifically from the viewpoint of the latter, the central question to be addressed is as follows: how to facilitate and support the transition whilst at the same time maintaining the foundations that underpin a safe and efficient payment system. From a safety perspective, these foundations are built on an appropriate regulatory framework and on the availability under any circumstance of central bank money, which alone has legal tender status and which anchors the stability of the whole system; efficiency, meanwhile, relies on having diverse and competing payment solutions and participants, to ensure inclusivity and competitiveness. I would like to share with you my perspective on the answers to this question.

There are three factors that are key to enhancing our resilience to external shocks. Capacity building: strengthening the economic and financial base The first is strengthening the economic and financial base. A deliberate policy to diversify the economy to achieve a greater balance between domestic and external sources of growth, to avoid excessive concentration in any activity and to reduce over-dependence on any particular market has increased the resilience of the economy. This has required shifting into new areas of comparative advantage and seeking new market opportunities and new areas of growth, while shifting out of those areas where comparative advantage has been eroded. Having flexible labour and capital markets has facilitated this process of adjustment. Of equal importance is the development of a resilient institutional framework and institutions. This includes the promotion of strong private and public institutions. In the public sector, strong institutions can be measured in terms of building efficient and strong delivery systems that promote coordination in the government machinery to provide an enabling environment for operations in the economy. At the same time, sound private sector institutions are crucial. In addition to healthy financial positions, good systems of risk management and corporate governance would ensure better management and a healthy corporate sector. Another important aspect is the availability of timely and reliable financial information and the strengthening of the legal and regulatory framework for enforcement of the laws and regulations. Strong professional organisations can also play an important role to improve and enforce the standards and best practices.
Safeguarding consumers from harm requires a multi-pronged approach, not just MAS regulation. First, global cooperation is vital to minimise regulatory arbitrage. Cryptocurrency transactions can be conducted from anywhere around the world. MAS is actively involved in international regulatory reviews to enhance market integrity and customer protection in the digital asset space. Second, the industry has an important role in co-creating sensible measures to protect consumer interests. MAS has been sharing its concerns with the industry and inviting views on possible measures to minimise harm to consumers. We will publicly consult on the proposals by October this year. Third, consumers must take responsibility and exercise judgement and caution. No amount of MAS regulation, global co-operation, or industry safeguards will protect consumers from losses if their cryptocurrency holdings lose value. UPHOLD THE PROMISE OF STABILITY IN STABLECOINS Stablecoins can realise their potential only if there is confidence in their ability to maintain a stable value. Many stablecoins lack the ability to uphold the promise of stability in their value. Some of the assets backing these stablecoins – such as commercial papers – are exposed to credit, market, and liquidity risks  There are currently no international standards on the quality of reserve assets backing stablecoins. Globally, regulators are looking to impose requirements such as secure reserve backing and timely redemption at par. MAS will propose for consultation a regulatory approach for stablecoins, also by October. MITIGATE POTENTIAL FINANCIAL STABILITY RISKS Financial stability risks from digital asset activities are currently low but bear close monitoring.

Caleb M Fundanga: Financial sector development in Zambia Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the farewell cocktail hosted in honour of the Barclays Bank Zamia Limited Managing Director, Lusaka, 4 February 2010. *  *  *  The Chairman – Barclays Bank Zambia Plc, Mr J J Sikazwe The Chairman – Bankers Association of Zambia, Mr Saviour Chibiya Chief Executive Officers of Commercial Banks Outgoing Barclays Southern Africa Regional Managing Director, Mr Zafar Masud Acting Barclays Bank Plc, Managing Director, Mr Bret Packard Management and Staff of Barclays Bank Zambia Plc Colleagues from Bank of Zambia Distinguished Guests Ladies and Gentlemen Ladies and gentlemen I am privileged to officiate at this farewell cocktail as we say goodbye to Mr. Zafar Masud who has been the Managing Director of Barclays Bank Zambia since January 2008. In the past few years, Barclays Bank Zambia Plc has contributed to making banking more accessible through its outreach programme which saw an increase in its ATM and branch network to over 150 ATMs and 55 distribution points comprising branches and agencies nationwide. Clearly the grass-root population in Zambia has continued to benefit from this initiative. As is the case with a number of other banks, Barclays Bank Zambia Plc has continued to innovate and positively contribute to financial sector development in Zambia.
7/18  Thirdly, population ageing is one of the main medium- and long-term challenges facing developed economies. Illustrating this phenomenon is the substantial increase foreseen in the dependency ratio (percentage of the over-66s relative to the population aged 16-66). Even in the most optimistic demographic projections, this ratio will exceed 50% in Spain by the mid-21st century, far exceeding its current level of 25%. Population ageing will have – and is already having – a significant impact on public finances. The latest estimates anticipate a substantial increase in public spending on pensions, health and long-term care. In the case of the pension system, the 2011 and 2013 reforms included certain adjustment elements that would enable the effect of the expected increase in the dependency ratio in the long term to be offset significantly. This would, above all, be through a likewise significant reduction in the pension replacement rate (defined as the ratio of the average pension to the average wage or average productivity in the economy). However, the latest implemented measures have put back the application of the sustainability factor to 2023, and have reintroduced an annual revaluation system for pensions indexed to the CPI. Against this background, ensuring the financial sustainability of the public pension system and safeguarding inter-generational equity will require additional measures, on both the revenue and expenditure sides. Nor must we forget that population ageing has significant consequences not only for public finances, but also for aggregate supply and demand in the economy.

See Chapter 3 “Growth and reallocation of resources in the Spanish economy”, Annual Report 2014, Banco de España, and Chapter 2 “Financing and investment decisions of Spanish non-financial corporations”, Annual Report 2016, Banco de España. 4  13/18  Despite these positive developments, the Spanish education system has still to face significant challenges. These include most notably the high early school dropout rate (18.3% among those aged 18-24) and the poor performance of our pupils in standardised exams at the international level, indicative of low educational quality compared with that of other developed countries. The evidence available shows that these poor results have not only to do with students’ relative knowledge, but also with their non-cognitive skills (such as the desire to innovate, self-control and the ability to concentrate).5 In light of this evidence, adding to which is the need to address issues such as globalisation and digitalisation, we should reconsider the institutional design of the Spanish education system, learning methods and the content of the educational curriculum. Spanish entrepreneurs also show some disadvantages in their levels of human capital relative to what is seen in other leading economies. For example, according to Eurostat figures, the level of educational attainment of the self-employed is lower than the euro area average. Specifically, in Spain 40.5% of the self-employed and 35.1% of employers have a low educational level, compared with 24.8% and 20.1%, respectively, for their European counterparts.
Without going into detail, we've mitigated this risk, and successfully worked remotely through subsequent severe weather events. Our business continuity planning and testing helped us navigate the early days of the pandemic, but this event was far more extreme than anything we had practiced, and we learned many lessons. I highly recommend a recent paper by the Consultative Group on Risk Management that brings together insights from central bank experiences managing business continuity risks during the pandemic.8 At the New York Fed, as we were changing where and how we worked, the pandemic's impacts spread to the economy and financial markets. From March to May 2020, gross domestic product in the United States fell by nearly one third (on an annualized basis) and employment dropped by 22 million. Equity markets sold off, and credit spreads surged to levels not seen since the 2008 Global Financial Crisis. Financial market functioning deteriorated with significant declines in liquidity; and, in the municipal bond market, underwriters cancelled new deals and municipal borrowing stopped.

We want to define and chart a course toward our desired culture, so that individual decisions reflect the interests of the organization and the intent of the rules.6 To me, there are four central aspects of culture that support effective risk management: learning, listening, helping, and speaking up.7 In a learning culture, we think about and plan for what might happen. And, we learn from experience, what went well and what didn't, so we can improve for next time. In a listening culture, we seek advice, appreciate a fresh perspective, and are open to new ideas and feedback so we can improve. In a helping culture, we work together across the organization, building on each By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement. other's strengths, and helping when we have an opportunity. And, in a speaking up culture, we let our colleagues know when we see a problem or after something goes wrong so that we can get started fixing it. Risk management is a creative, social process. It is a way of thinking, doing, and interacting. To bring it to life, we need to work together across the organization, staying continuously curious about the changing risk landscape and possible futures.
And our goal, in the moment of the transition, was to fully respect the promise made to the people of the euro area namely: “The new currency will be at least as credible and as confidence inspiring as was your own national currency.” In this perspective it was very important to explain in real time our decisions to be as clear as possible on our diagnosis and reasoning with a view to convince observers that the new currency deserved fully this very high level of credibility. Secondly we also had to take into account the fact that we were issuing a new currency for eleven countries, eleven cultures and (soon to become twelve and then later on thirteen and fifteen today) and many languages. In this framework it was indispensable to have extremely clear single terms of reference from the very moment of the collegial decision. Otherwise it would have been unavoidable that various interpretations would have been given through the grid of various cultures and different languages. Had we waited for five of six weeks to give detailed explanations we would have been facing information and communication issues that would have been very difficult to solve. Thirdly, as explained before, and totally independently of the previous two reasons which are specific to the euro area, academic research had, particularly in the 90’s, made important advances in permitting to understand better the decisive role of transparency in establishing and consolidating the credibility of central banks and in helping them to solidly anchor inflation expectations.

As expected, the very diverse European national media are playing a key role in the transmission of the information to the various audiences of the ECB. Experience so far shows that the approach works well and that the media have contributed to a homogeneous understanding of the role and tasks of the ECB. 4 As the “porte-parole” of the ECB and its Governing Council, I think we have shown our capacity to communicate in unison with a high level of team spirit in interaction with a highly sophisticated and complex media network dealing with 320 million European citizens speaking 13 languages. It must be underlined that the European Central Bank decided from the very beginning to embark on a bold concept of transparency. On 1st January 1999, at the moment of the start of the euro, the state of the art of central banking was, not to say anything immediately after each decision on monetary policy, let observers and markets guess what had been the reasoning of the central bank and publish five or six weeks afterwards, the reasons why the decision was made in the form of “minutes of the decision-making college”. We decided from the first day of the euro that we would have a significantly higher level of transparency. First, we thought it was necessary to give to the public the economic and monetary diagnosis of the Governing Council, and the reasons why the monetary policy decision was taken, immediately after the meeting.
Unemployment is instead determined in the long run by how well the labour market functions, for instance, with regard to matching unemployed persons and job vacancies. My main message here is that there is no clear-cut and stable relationship between inflation and unemployment, either in the long term or the short term. Simplified relationships between inflation and unemployment, such as the short-term and long-term Phillips Curves, may function as pedagogical tools. However, this type of simplified relationship is not practicable in determining how monetary policy should be conducted. Nor can such simple relationships be used to analyse to what degree monetary policy has contributed to higher or lower unemployment. Monetary policy is based on forecasts Let me go on to the next issue I intend to take up, namely the conditions under which monetary policy is conducted. This is an important aspect of a discussion of how far monetary policy can be considered to have contributed to higher unemployment. As monetary policy has an impact on demand and inflation with a time lag, the Riksbank must base its interest rate decisions on a forecast of future economic developments. All forecasts are uncertain. One therefore cannot expect that the Riksbank will always be able to exactly predict what will happen in the economy. It is also difficult to quickly bring inflation back on target once a deviation has occurred. This may also be unsuitable for real economy reasons.

We are certainly moving into calmer waters for the banks but there are strong currents, and a few sharp rocks, underneath the surface. The fact is that the competitive environment for banks in Hong Kong is changing radically as it is for all banks around the world. The current competition in mortgage lending is a case in point. Banks are increasingly prepared to lend at margins well below prime. We are getting to the point where it is becoming difficult to earn an economic return from this business once funding costs and other expenses are taken into account. It can be argued that this in part reflects the current excess liquidity in the market and that margins will start to move up again as loan demand and the property market recover in line with the economy. There is some truth in this, but it is difficult to see margins on mortgage business recovering too far. Certainly they will not get back to where they were in the boom years before the crisis. There are too many active players in the market, both domestic and foreign, to allow this to happen. What this means is that the banks are going to have to work harder to earn a profit than they have done in the past. They will have to do this at a time when the last stages of interest rate deregulation in Hong Kong are taking place, starting in the middle of this year and finishing in the middle of 2001.
As a result, at the beginning of the 1990s Sweden and other Scandinavian countries were hit by both a banking and currency crisis. As before the depression in 1930, the crises were preceded by steep rises in asset prices and a very sharp expansion in credit. Reform of a tax system that had fuelled debt and that was changed in such a way that caused a rise in post-tax interest costs, contributed to deepening the crisis. The lack of experience at banks and supervisory authorities of acting in a deregulated environment, in combination with excessively expansionary fiscal policy, were other significant causes of the negative developments. But large financial imbalances had already accumulated before the crisis was triggered. This occurred without the anchor for inflation, that is the nominal exchange rate, giving sufficient indications in time. In spite of the fact that the overheating resulted in a real appreciation of the krona against other currencies due to inflation, confidence in the fixed exchange rate regime appeared to be fairly stable for a long period. This led to substantial, partly short-term, capital inflows increasing demand for the krona at the same time as a growing current account deficit reduced krona demand. The demand for the krona was partly due to Swedish firms demanding loans in foreign currency. Consequently, monetary policy, which targeted the exchange rate, was not tight enough to prevent the build-up of the imbalances.

History has shown that inflation measured in terms of consumer prices has not always signalled when imbalances in the economy have been building up. Many of the countries that were hit by depression and banking crises during the 1930s had beforehand witnessed steep rises in asset prices and a sharp credit expansion without any increase in inflation. In Japan, the recession that followed in the wake of a strong credit expansion and rising asset prices during the second half of the 1980s proved, as we know, very severe and protracted. Neither in Japan had inflation provided signals in time that large imbalances were building up. Also during the latter part of the 1990s we have seen examples of crises with a similar course of events, for example in Thailand and other parts of Asia. Banking crises are not a necessary condition for countries to be hit hard after such a development. This is shown by what happened in the United States and England at the beginning of the 1990s. Focus on price stability and financial stability During the 1990s, confidence in an economic policy aimed at achieving price stability seems to have strengthened in earnest in large parts of the world. World inflation is now back to the levels reached before the 1970s, and monetary policy is again playing the leading role in stabilisation policy. Modern neo-Keynesian1 research based on theories of nominal rigidities has shown that not only real shocks but also monetary shocks can temporarily affect the real economy.
This could refer, for instance, to households who now borrow money to buy a home. In the future the interest rates on these loans can be three or four times higher than the current mortgage rates. I began by discussing the major differences in time horizons in the financial decisions we all need to make. Some decisions apply only here and now. If we make the wrong decision it is not too difficult to put it right. In other cases, we make decisions today that have consequences far into the future. It is then important not to assume that the conditions applying today will apply for decades into the future. References Armelius, Bonomolo, Lindskog, Rådahl, Strid and Walentin (2014) “Lower neutral interest rate in Sweden?”, Economic Commentaries no. 8, Sveriges Riksbank. Ball, L. (2014) “The Case for a Long-Run Inflation Target of Four Percent”. IMF Working Paper WP/14/92, June. Bengtsson E & Waldenström D (2015) “Capital shares and income inequality: Evidence from the long run” CEPR Discussion Paper DP11022, December. IMF (2014) “Perspectives on Global Real Interest Rates”, World Economic Outlook, April. Karabarbounis, L & Neiman, B (2014) “The Global Decline of the Labor Share”, Quarterly Journal of Economics, 129(1), 61–103. King, M, Low, D, (2014) “Measuring the ‘world’ real interest rate”, NBER Working Paper No. 19887. Kryvtsov, O, Mendes, R (2015) “The Optimal Level of the Inflation Target: A Selective Review of the Literature and Outstanding Issues”, Bank of Canada, Discussion Paper 2015–8.

To achieve this, after raising interest rates to close to the "neutral interest rate" of 2% in December, we are now embarking on the second phase towards monetary stabilisation: ideally, it would be good to reach the right "terminal rate" by next summer, but it is still too early to say what that level will be. We need to remain pragmatic and to be guided by observed data, including on core inflation, without getting fixated on overly mechanical rate hikes. We will then be prepared to remain at this terminal rate for as long as necessary: the sprint to raise interest rates in 2022 is now becoming more of a long-distance race, and the duration will count at least as much as the level. In parallel, we shall continue to focus on maintaining financial stability, helped by the strong resilience of French banks and insurers. In Europe, 2023 needs to be the year when Basel III is transposed into EU law and the Solvency II review is completed. Regarding crypto-assets, the disruption seen in 2022 is nourishing one basic conviction: France should switch as soon as possible to the compulsory authorisation of DASPs (digital asset service providers) rather than simply requiring their registration. And this needs to happen well before MiCA enters into force, to create the necessary framework of trust. 2) Less protection and more adaptation. The government can cushion the energy shock temporarily, but it cannot make it disappear.