samchain/econo-pairs-v1 huggingface dataset:
Ida Wolden Bache: FinTech, BigTech and cryptos – will new technology render banks obsolete? Speech by Ms Ida Wolden Bache, Deputy Governor of Norges Bank (Central Bank of Norway), Oslo, 11 May 2021. * * * Accompanying charts of the speech. Introduction “No state can endure without a well functioning monetary system.” The quote comes from the Constitutional Assembly at Eidsvoll in 1814.1 At that time, it was imperative to restore the monetary system and establish our own national currency. Two years later, Norway saw the birth of its first bank – Norges Bank. For many years, it was the country’s only bank. Today, more than 200 years later, Norges Bank is the bankers’ bank and forms the core of a network of small and large banks spread throughout the country. But the number of physical premises is steadily declining, and our national currency – the krone – is predominantly a number on a screen rather than a physical handheld object. And if things develop as some might believe, tomorrow’s financial system will not be made up of banks, central banks and national currencies – but of electronic signals that transfer cryptocurrencies – from one digital wallet to another. To quote a well know Norwegian businessman: “The direction is clear: finance will be disrupted as surely as fossil fuels will be. The question is not if, but when. "2 I think there is little chance that cryptocurrencies will make banks and Norwegian kroner obsolete anytime soon, but the financial system will change.

But, I would be very cautious about extending last resort liquidity provision to financial institutions not engaged in banking activity, and where the particular justification for it, based upon banks’ distinctive functions and the distinctive characteristics of banks’ balance sheets, did not clearly apply. While I do not think such intervention can, realistically, be excluded altogether, I am concerned that an unduly liberal interpretation of systemic risk would increase the scope for moral hazard and ultimately weaken the safety and soundness of the financial system as a whole. Conclusion Mr. Chairman, my answer to your question Are banks still special? is essentially that while in some respects they may be less special than they were, they remain special nonetheless. They remain special in terms of the particular functions they perform - as the repository of the economy’s immediately available liquidity, as the core payments mechanism, and as the principal source of non-market finance to a large part of the economy. And they remain special in terms of the particular characteristics of their balance sheets, which are necessary to perform those functions - including the mismatch between their assets and liabilities which makes banks peculiarly vulnerable to systemic risk in the traditional sense of that term. Perhaps the day will come - and I do not at all exclude the possibility that other financial activity will continue increasingly to be carried on alongside banking activity, even on the same balance sheet, indeed I expect that to happen.
We must not again find ourselves in a position where the authorities in different countries are developing as they go along how capital support should be provided: what triggers it, its terms, and who pays. I have aired the possibility of eventual losses falling on the surviving banking system, as a way of avoiding burdening the general taxpayer and as an incentive for firms to recognise and act upon their interest in the health of the system as a whole. But the more important point is the need to have a plan. And of course the fiscal support comes after drawings in any private sector provision of contingent capital. Banking and the credit system: might there be macroprudential instruments? At this point, I should issue another caution: that however all those issues are resolved, the banking-structure debate is resolved, I doubt they could prove sufficient to rule out bouts of instability, even crises, in the future. That is because I am doubtful that the tendency to excess can be curbed solely by addressing the circumstances of individual firms. Booms are spurred by plausible illusions and collective-action problems. The current crisis has, in my view, been at root a crisis of liquidity – of an over abundance of liquidity in the upswing, succeeded by a drying up of liquidity during the crash. Usually, material rises in asset prices are initially triggered by reasonable perceptions of a favourable shift in fundamentals.

The network of trade unions and branches would provide the life insurance co-op with a clear advantage over private enterprise. 4. To ensure that the co-op would succeed, the realist in Dr Goh laid down a few principles for its operation. First, the co-op must be fully competitive with private enterprises and cannot expect privileged treatment from the Government. Second, the co-op must have effective management. Third, all levels of staff should be recruited based on merit and not affiliations with the labour movement or government. It was the steadfast adherence to these sound principles that has kept INCOME successful over the past 40 years. The growth of Singapore’s insurance industry 5. At INCOME’s 30th anniversary celebration, I had sketched out the changes in the global financial landscape, and how MAS had to liberalise the domestic insurance industry. Reputable foreign insurers were allowed to set up in Singapore or enter into strategic alliances with existing local insurers. The hope was for the entry of new players to engender competition, which would in turn promote greater innovation and raise the efficiency of the incumbent insurers. MAS also worked on deepening the local talent pool and fine-tuned the already prudent regulatory framework. 6. Ten years on, these efforts have yielded significant results. The Singapore insurance industry, which saw a number of acquisitions, consolidations and new entrants, experienced strong growth, with total assets tripling to $ over the past decade. The industry has also matured in terms of the breadth and depth of products and services offered.
Central bank responses have also tended to adapt themselves to the structure of the respective financial systems, and to the specific dysfunctions and tensions. For instance, the fact that the banking sector plays a predominant role in channelling credit in the euro area economy — compared with the Anglo-Saxon model which is underpinned to a greater extent by the capital market — was from the outset a distinguishing feature in the design of the ECB’s response. Also, set against the strategies deployed by the Federal Reserve or the Bank of England, based principally on “quantitative easing”, the Eurosystem’s response has been more complex over time, adapting itself to the difficulties that have arisen at the  BIS central bankers’ speeches  1  different stages of the euro area crisis, though seeking always to act on the segments of the transmission monetary policy mechanism that were seen to be most impaired. The perception that the interbank market had ceased to operate as an efficient liquidity distribution mechanism between banks meant that the liquidity-provision policy had to become more flexible. And, when the crisis worsened in September 2008, far-reaching changes had to be made to the monetary policy operational framework, to allow the ECB to meet the system’s gross liquidity needs, with a substantial expansion of the size of its balance sheet.

Ex post assessments of policies are admittedly much further along in their development at the practical level, and their benefits as a part of the overall public policy process are wellestablished in the most advanced democratic societies. Yet they also come up against theoretical and empirical limitations that we cannot conceal. On this front, Spain is lagging behind our peers. And this is not because of a lack of know-how but rather, in my opinion, on account of the existing limitations in the current administrative, political and social ecosystem which do not sufficiently encourage the insertion of the assessment process into the public-policy-programme design and review cycle. True, there have been some promising developments of late, such as the mandatory periodic evaluations to assess the functioning of the minimum income scheme. Yet in much of the Spanish administrative apparatus there are still significant technical hurdles to building potential ex ante or, at least, ex post assessments into the design of public programmes. These impediments not only limit the general government’s own ability to conduct thorough assessments, but also prevent the findings of external assessments from being fully harnessed. Political action to address them is also an important long-term policy; for example, the creation of technical posts and hiring mechanisms that attract people with adequate training. Setting up agencies without long-term hiring plans does not work. Nor is it just a question of public-sector shortcomings.
Citizens and markets are too often unsure about our capacity to act jointly in a spirit of common responsibility. We should prove them wrong. Let me conclude and come back to the subject of our debate, your resolution on our Annual Report for 2014. Let me assure you that we are reading this document closely. It reminds us of our duty as a public institution to conduct our business in a transparent and accountable manner. The publication of the diaries of Members of the Executive Board that starts this month is only one example of this. I am now looking forward to the debate and thank you for your attention. BIS central bankers’ speeches  3

The majority of the key measures relating to securities market in the Action Plan are expected to be adopted before the end of this year or the spring 2004. Discussions and consultations continued in several crucial areas such as the overhaul of the Investment Services Directive - a cornerstone of the FSAP and a key area in terms of European financial integration and investors protection, post trading activities (clearing and settlement), the review of the capital requirements that apply to financial institutions and a framework for the supervision of the reinsurance sector. 2. Financial integration is an ongoing process with renewed challenges in a constantly changing environment  We can easily measure the significant progress that have already been made in terms of financial integration. However, and this is the second topic I wanted to touch upon, in a constantly changing environment, and as the integration process deepens, new challenges arise that need to be addressed and taken duly into account in our reflection on the integration of European financial markets. Preserving financial stability is obviously among those challenges. In that regard, there are two specific and crucial issues on which we need to concentrate our efforts: the deepening of co-ordination among financial supervisors and the restoration of public confidence in financial markets. 2.1 Central banks, as well as public authorities and market participants, have a collective responsibility to find the ways to ensure that market globalisation goes along with financial stability. Financial stability is a complex concept.
Overall, some of the main floating currencies may end up bearing a higher share of the adjustment on their shoulders than they should. Maintaining integrated global capital markets in an environment where such differences persist might not be sustainable over the long term. An orderly unwinding of global imbalances might therefore imply greater flexibility from countries with large current account surpluses and fixed exchange rates. I will conclude on a matter of debate for international financial stability for the future. As I have said, financial systems have become more efficient as a result of globalisation and innovation. But have they become more resilient, that is, more capable of absorbing shocks? None of us has the answer to that question now, but it will be interesting for central banks  BIS Review 140/2007  3  and regulators to monitor financial developments in the coming months, in search of clues. Ladies and gentlemen, thank you for your attention. 4  BIS Review 140/2007

The Zero Bound on Interest Rates and Optimal Monetary Policy, Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, 34(1), pp. 139-235. Fiorentini, G., A. Galesi, G. Pérez-Quirós and E. Sentana (2018). The rise and fall of the natural interest rate, Working Paper No 1822, Banco de España. Galesi, A., G. Nuño and C. Thomas (2017). “The natural interest rate: concept, determinants and implications for monetary policy”, Analytical Articles, Economic Bulletin 1/2017, Banco de España. García-Posada, M., S. Mayordomo and S. Ongena (2018). Holston, K., T. Laubach and J. Williams (2017). “Measuring the natural rate of interest: international trends and determinants”, Journal of International Economics, No 108, pp. 59-75. 18
have also co-ordinated international efforts to tackle the problem in a comprehensive manner. This is essential given the trans-national nature of the threats. 8. The FATF – which is the international standard setting body – has also sought to develop more guidance relating to various sectors and entities. Many of you will be familiar with the FATF Recommendations on money laundering, terrorism financing and proliferation financing. In 2012, 1/5  BIS central bankers' speeches  the FATF enhanced its Recommendations to put emphasis on effectiveness. That is, merely having rules in place is not enough. FATF also developed a more systematic framework for peer reviews. 9. Let me turn to developments in Singapore. 10. We have a comprehensive legal and regulatory framework, in line with global standards. We will continue to enhance our Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regime. 11. Last year, the MAS decided to consolidate some of our supervisory resources into a single AML department so that we can further deepen our technical expertise and focus in this area. This will allow us to better streamline supervisory efforts across various sectors of finance such as banking, insurance and capital markets. At the national level, the AML Department coordinates AML/CFT strategies across all economic sectors, together with other government agencies. 12. The financial sector is a critical component of our national AML/CFT defences. MAS’ framework involves four key elements: (a) Progressive Regulations (b) Intensive Supervision (c) Rigorous Enforcement (d) International Co-operation and Industry Partnerships 13. Firstly, on Regulations.

Zeti Akhtar Aziz: Key issues confronting the financial sector in Malaysia Keynote address by Mrs Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Financial Industry Conference 2009, Kuala Lumpur, 17 November 2009. *  *  *  It is my great pleasure to welcome you to our financial industry conference for this year. This conference takes place at a time when the global financial landscape is experiencing fundamental change. Even as we meet, events continue to unfold in directions that are likely to fundamentally alter the way in which financial institutions conduct their business. Reforms to strengthen the foundations of financial stability are wide-ranging to improve the supervision and regulation of financial institutions, and the institutional arrangements for coordination and cooperation in the area of surveillance and crisis management within and across jurisdictions. This Conference is organised by Bank Negara Malaysia to engage in constructive dialogue with the industry on developments affecting the international and domestic financial industry, focusing in particular on implications for financial institutions in Malaysia. Economic developments and outlook After a challenging beginning to this year, Malaysia is now gradually moving on a path of recovery supported by strong macroeconomic fundamentals and a sound financial sector. Economic activity has continued to show a marked improvement in the third quarter, with positive growth expected in the fourth quarter.
The arrival of the euro marks a profound and almost certainly irrevocable change to the financial landscape – perhaps the most important event in the international monetary system since Bretton Woods in 1944. Instantly, a major new reserve currency has appeared; indeed the euro is already being used in international transactions more extensively than any currency other than the dollar. As the most international financial centre anywhere in the world, London’s business has already been profoundly affected by the euro. This is because, although the UK is ‘out’, London is ‘in’. The conversion weekend – the changeover from participating national currencies to the euro in wholesale  BIS Review 43/1999  2  markets at the beginning of this year – was one of the biggest logistical operations that the London market has ever undertaken. It was also arguably more complex in London than in some countries in the euro area, because London traded in all the euro area national markets, and they all changed over to the euro in slightly different ways. And, though hard numbers are difficult to come by, we are confident that London is maintaining its market share. In exchange traded short-term interest rate derivatives – one of the few areas where we have precise figures – LIFFE has around 80% of euro business. On the London Stock Exchange, over 40% of turnover in the first two months of this year was in stocks of firms in the euro area.

For that purpose, they will still want low cost trading and settlement mechanisms that minimise their exposure to counterparty risk and the impact on their balance sheets. So there are perhaps some tensions between the various forces at work here. To take another example, economies of scale in trading, clearing and settlement suggest that to minimise costs firms should encourage consolidation and integration of these activities within a market. Yet the major firms have, understandably, been very reluctant to allow the dominance of a single supplier. For example, EBS (Electronic Broking System) was set up by the major banks to offer an alternative system for foreign exchange trading. Ladies and Gentlemen, let me finish by saying that it is difficult to draw firm conclusions about the future structure of the financial services industry. If it was, strategic decision making would be easier than it seems to be. But financial service businesses based in the UK start from a strong position, and are well placed to thrive in an environment that will evolve at an increasing pace, become even more competitive, and place an even greater premium on innovation. The Bank of England will monitor and analyse the developments very carefully – both because we want UK financial services to thrive, and because in the pursuit of our financial stability responsibilities we need to be able to spot potential problems as quickly as possible. BIS Review 43/1999  6
Household debt has increased at a faster pace than income in the last ten years. Norges Bank’s calculations indicate that the sharp rise in house prices in recent years may explain a large share of debt growth. Higher house prices have a fairly long-lasting effect on household debt growth. As a result, credit growth will remain high for a fairly long period even though the rise in house prices is expected to slow. Given the assumptions underlying our projections, it is likely that debt will continue to grow at a faster pace than disposable income through the entire projection period. As a result of high credit growth, the household debt burden has increased over the past year. The debt burden is currently record high. Due to unusually low interest rates, the interest burden is, nevertheless, relatively low. A normalisation of interest rates will increase households’ net interest expenses, but according to the projections the interest burden will not be higher than it was at the end of the 1990s. If there are expectations of persistently low interest rates, there is a risk that the debt burden may increase more than assumed in the projections. Net interest expenses will then also be higher than assumed. In addition, households will be vulnerable if unexpected disturbances result in higher than expected interest rates. Challenges ahead Oil gives us an economic base that is not available to many other countries.

If oil prices remain as high for the foreseeable future, the funding requirement will be somewhat lower. To base decisions on this, however, would be a very risky strategy. Even though Norway’s petroleum wealth is substantial, it is our human resources that account for most of our national wealth. Even a small increase in the “return” on human capital might generate considerable gains. The return on this capital partly depends on our pension schemes and the application of social security rules. These should be designed in such a way that they provide incentives and opportunities to work. Labour market legislation must also promote production and employment. In May, the Storting (Norwegian parliament) deliberated the Pension Commission’s proposals for reforming the national insurance system. There was agreement on the main points but the specific design remains. If we succeed in reducing the growth in pension expenditure through a modernised national insurance system and other reforms, this will be an important contribution to addressing the fiscal challenges we are facing. This BIS Review is available on the BIS website at www.bis.org.