samchain/econo-pairs-v1 huggingface dataset:
Contrary to the US, the use of modern technology and communications has made it possible for market operations not to be concentrated at a single geographical location, but to be carried out simultaneously at all of the National Central Banks. The same type of arrangement applies in other monetary areas (cash management, payment systems, etc.). 1.4. The Eurosystem benefits from an efficient operational framework The operational framework is based on two main guidelines: - a range of monetary policy instruments selected in accordance with the principles of an open market economy, a level playing field, simplicity and transparency: these instruments enable the smooth adjustment of banking liquidity and effective steering of short-term interest rates. - procedures guaranteeing a high level of security for all interbank transactions and large-value payments within the euro area and with other countries in the European Union, with in particular the TARGET system, which played a predominant role in the integration process of the euro money market. BIS Review 4/2006  3  2. The strategic framework also contributes to the efficiency of the single monetary policy From the outset, there was a consensus among the designers of the Eurosystem that the Single monetary policy would require a clear strategic framework. This framework can be characterised by two main principles: a quantitative definition of price stability and a medium-term orientation of monetary policy. 2.1.

Sunil Mendis: A brief look at financial information technology Keynote address by Mr Sunil Mendis, Governor of the Central Bank of Sri Lanka, for the Financial Information Systems Seminar, Colombo, 8 September 2004. *  *  *  His Excellency Akio Suda, the Ambassador for Japan in Sri Lanka, Mr Yoshihisa Onishi, Executive Director, FISC, other officers from the FISC in Japan, Ladies and Gentlemen, The Central Bank of Sri Lanka is happy to co-sponsor this programme together with the FISC of Japan (Center for Financial Industry Information Systems), in view of the importance of financial information technology in the financial services industry. Sri Lanka is no exception to continuous changes in the technology used by its financial services industry. In a market driven financial system, for information to be effective, there should be two vital ingredients, that is system integrity and timeliness - both of which are crucial. The more dependable your information systems are, the more efficient and competitive banks can be as a player in the financial services industry. That is why we see banks investing heavily in IT. Globally too, with the interdependence of markets their integration is facilitated through information systems which link these markets which make the world a very small place indeed on a PC monitor where the whole world is virtually at your doorstep.
Now, put yourself in the shoes of a business operator. On the revenue side, you have yet to see a robust recovery in demand; growing your top-line revenue is vexing. You have been driving profits or just maintaining your margins through cost reduction and achieving maximum operating efficiency. You have money in your pocket or a banker increasingly willing to give you credit if and when you decide to expand. But you have no idea where the government will be cutting back on spending, what measures will be taken on the taxation front and how all this will affect your cost structure or customer base. Your most likely reaction is to cross your arms, plant your feet and say: “Show me. I am not going to hire new workers or build a new plant until I have been shown what will come out of this agreement.”  6  BIS central bankers’ speeches  Moreover, you might now say to yourself, “I understand from the Federal Reserve that I don’t have to worry about the cost of borrowing for another two years. Given that I don’t know how I am going to be hit by whatever new initiatives the Congress will come up with, but I do know that credit will remain cheap through the next election, what incentive do I have to invest and expand now?

Five of the top six foreign exchange holders in the world are now Asians. 10. The strong fundamentals -- a young, educated, flexible workforce, stable government, good natural resources and communications infrastructure, openness to trade and innovation, and high savings and investment rates -- these have not basically changed. Asia is still outward-looking, with open markets and openness to technology and innovation. The aspirations of Asia are also real: an entrepreneurial approach to innovation, competition and better standards of living for the rising urban population. Where Asians have perhaps kept their eyes off the ball is the need to develop the services sector in complementary step with the manufacturing or export sectors. Delays in opening the financial sectors to global competition make them vulnerable to real sector excesses or imbalances, such as the overconcentration of risks in certain areas, including the asset markets. 11. The momentum of growth depends critically on continued vigorous trade reform, fiscal prudence and improvements in finance, health and education policies. Increasingly, exports are changing from labour-intensive industrial production, and more toward higher value-added industries and services. This poses the challenge of sustaining productivity growth. 12. The Asian turmoil being a financial turmoil on the surface, let me focus on the interesting way Asia recycles its surplus savings. As my colleague Joseph Yam has consistently pointed out, a large portion of Asian foreign exchange reserves is invested in assets of the OECD countries, which provides safe and liquid instruments.
The upper half illustrates the effect of the repo rate on inflation and resource utilisation during the forecast period, and the lower half illustrates the effect of the repo rate on indebtedness and risk in the longer run.6 In the situation we have had in recent years – with inflation undershooting the target – a lower repo rate and repo-rate path has typically meant that inflation will approach the target faster, but also that household indebtedness – and thereby the risks in the longer run – will increase more. Our most recent assessment assumes that household indebtedness, measured as debt in relation to disposable income will increase from an already high level, and moreover increase somewhat faster than in the previous forecast (see Figure 9). At the same time, the percentage of loans at a variable rate is increasing. This is natural in a situation where the Riksbank is signalling that interest rates will be low for a long time. However, the combination of high indebtedness and a large percentage of variable-rate mortgages makes households more sensitive to changes in interest rates. The low inflation is motive for lower interest rates – indebtedness must mainly be managed within other policy areas As on so many previous occasions in recent years, the monetary policy balance in July concerned balancing the low inflation against the high household indebtedness and the risks this entails.

As the financial stability authority we are also responsible for monitoring stability at the level of the sector as a whole. While we have multiple policy hats the common denominator in this space is ensuring that the sector has adequate operational resilience – that is that firms can continue to provide critical services that are important for their own integrity and the functioning of the sector. If a firm’s operations are interrupted, we want to be sure that they can be recovered quickly and reliably especially where they are systemically important. Three observations at this point: a)  First to stress our accent on financial stability. Our efforts target first those firms where operational failures may result in disruption to the provision of vital financial services to the real economy or in dislocation to the rest of the sector. That does not mean the failures in customer facing applications do not matter. It is just that, where no immediate systemic dislocation results from such an outage, any consumer detriment will be a concern for our colleagues at the Financial Conduct Authority (FCA) more than it is for us. b)  Second, operational resilience is different from operational risk. In operational resilience we are describing a policy outcome we want to deliver in terms of the system functioning. This may be a by-product of effective operational risk management.
But also from the supply side developments were, for a period at least, positive, partly because there was an increase in the working-age population. In recent years, however, it has become evident that many people have ended up outside the labour market, partly as a result of a rise in sick leave. As regards productivity growth, the trend in recent years has been more positive. At GDP level it has been approximately 2 per cent per year or slightly above. This differs from the situation in the 1970s and 1980s. It is likely that the changes in monetary and fiscal policy and increased transparency with stiffer competition have been important in this regard. So how should we feel about developments in the near future? When it comes to productivity, there is reason for optimism, even if the high figures seen in the 1990s partly reflect both rapid growth in the private sector compared to the public sector and robust growth in the ICT sector. Our economy is more open and has greater competition and downward price-pressure in many sectors. The cost pressures in the public sector also have a similar impact. The outlook is considerably gloomier for the labour supply. As I mentioned, developments are now on a downward trend. One cause of this is that economic policy in some respects has become less focused on raising labour force participation. In terms of both transfers and taxes, changes have been implemented that reduce the incentive to work.

Long-term yield spreads on Germany and central government debt in 2002 as a percentage of GDP for Finland, Italy and Sweden 250  250  120  120  200  100  100  150  80  80  100  100  60  60  50  50  40  40  0  0  20  20  -50  0  Finland  200  Italy Sweden  150  -50 1997  1998  1999  2000  2001  2002  2003  0 Finland  Italy  Sweden  Sources: Eurostat and the Riksbank. Chart 2. Productivity growth in the corporate sector and the output gap in Sweden 8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  Productivity, corporate sector Output gap  -6  -6 -8  -8 75  78  81  84  87  90  93  96  99  02  Sources: Statistics Sweden and the Riksbank. BIS Review 42/2003  5  Chart 3.
Although a negative nominal interest rate is not more unnatural in economic terms than a negative real interest rate, it is evident that the former, unlike the latter, is perceived as going against social and economic conventions. I therefore strongly suspect that it would be difficult to foster understanding for a policy that means that individuals have to “pay to save”. This is perhaps a limitation that one must simply accept. Ultimately, the legitimacy of, and confidence in, an independent institution like the Riksbank is based on the general public understanding the policy conducted, or at least not considering it to be illogical and unjust. This does not mean that I am saying we should refrain from using the scope that there seems to be for holding the repo rate at a negative level in situations where this is necessary to avoid major costs for the economy. But there are limits as to how far the rate can be cut. And, as I said, my view is that it would be difficult to cut the rate so low that people were forced to pay to have money in the bank. Do expectations affect the future repo rate? If one has cut the repo rate as far as one considers possible, one can also try to affect expectations of the future repo rate among economic agents in a way that 7 Jansson (2016). 5 [24]  stimulates demand.

The Governing Council therefore supports the implementation of the ambitious objectives described in the evaluation report.” In terms of the broader service to Spanish society we have just mentioned, let me remind you that three CEMFI faculty members currently participate in the Council of Economic Advisors of the Spanish Ministry of Economic Affairs, two have recently been appointed members of the Advisory Committee of the Ministry of Inclusion, Social Security and Migration, one is a member of the Advisory Board of the Spanish Independent Agency for Fiscal Responsibility, and another one is chair of the Scientific Committee of the Spanish State Research Agency. In addition, last December, CEMFI signed an agreement with the Ministry of Inclusion, Social Security and Migration to collaborate in the evaluation of 34 pilot projects to improve the design of poverty reduction policies. CEMFI will participate both in the design and the evaluation of the projects, and researchers will be able to use the data generated by these evaluations for the production of papers publishable in scientific journals. Carrying out these evaluations will allow CEMFI to take a qualitative leap forward, positioning itself as an academic institution of reference in the evaluation of public policies in Spain. I would like to thank Samuel Bentolila and Mónica Martínez-Bravo for leading this important initiative.
Yet, at around 1%, they are still close to the long-term average inflation rate. Interest rates, too, have remained very low across all maturities in the past few quarters. Mortgage rates have declined further, reaching a new low in October. Government bond rates have also fallen to new lows. My colleague, Fritz Zurbrügg, will discuss developments on the financial markets in more detail. Despite falling mortgage rates, mortgage lending growth slowed again. At the same time, real estate prices continued to rise. However, as in 2013, price momentum is weaker than in previous years. This suggests that the measures to contain developments on the mortgage and real estate markets are starting to have an impact. Yet the imbalances that have built up on these markets in recent years remain the same. It is still too early for an all-clear. The SNB will continue to monitor the situation closely. My colleague Jean-Pierre Danthine will discuss this topic in more detail in his presentation. 2  BIS central bankers’ speeches  Since the last monetary policy assessment, the Swiss franc has moved closer to the minimum exchange rate, and has thus strengthened against the euro once again. At the same time, both it and the euro have depreciated against the US dollar. Overall, the exportweighted real external value of the Swiss franc is virtually unchanged compared to last year, and thus continues to lie considerably above its long-term average. The Swiss franc is still high.

In view of the elevated deflation risks, the minimum exchange rate remains the key instrument for ensuring appropriate monetary conditions. A further appreciation of the Swiss franc would have a major impact on wages and prices, and would push inflation well into negative territory. Companies in Switzerland would once again be forced into drastic price cuts, in order to remain competitive. In such a scenario, price stability would be seriously compromised. The minimum exchange rate helps to reduce such deflation risks. SNB monetary policy Let me close with a few additional explanations of SNB monetary policy. On 30 November, the Swiss voters rejected the gold initiative. The initiative demanded that the SNB hold at least 20% of its assets in gold, that it sell no more gold and that it store all its gold in Switzerland. We are relieved that the gold initiative has been rejected. As we have pointed out on several occasions, had the initiative been accepted this would have seriously impaired the implementation of a stability-oriented monetary policy. Let me just take this opportunity to reiterate that, in an international comparison, the SNB’s gold holdings are high. Gold has always been, and will remain, an important component of our currency reserves and we have no intention of selling gold. In the prevailing international environment, the monetary policy challenges facing the SNB remain considerable. The situation is still particularly difficult in the euro area.
This in turn means that the board and the senior management are now placed with greater accountability and responsibility in this area. This approach also benefits the industry as they are not hamstrung to introduce new and innovative products and services. The intent is also to improve the time-to-market. However, it comes with a responsibility. Financial institutions are expected to apply the standards judiciously and proportionately. This should take into account risks within their business activities and strategies, and the role and relationships within the broader financial system. Another issue organisations face in the conduct of their businesses arises from principal-agent relationships. Establishing clear behavioural norms with the right combination of controls and incentives, to shape the desired behavior is key. For all the above, the compliance function can play a meaningful role in this process. Compliance in the context of broader responsibilities to society As the theme for this conference suggests, compliance is a responsibility. What I have said so far has focused on perspectives from the point of view of individuals within the industry. However, compliance must also be viewed in relation to the broader financial system and society itself. A key lesson from the global financial crisis in 2008 was that individual behavior, even though well intended and rational from an individual’s point of view, can cause massive damage at the aggregate level. In many ways, the complexity of rules that apply to the financial system is a reflection of its important role in the economy and society.

Three points are worth mentioning on compliance: First, it is not the end, it is a means to an end; Second, it should be viewed within a broader context of a financial institution’s responsibilities to society; and Third, it should be approached in partnership with other key participants in the financial system. Compliance as a means to an end The past decade has been a turning point for compliance. Arising from major systemic failures of governance, regulators have since elevated the importance of compliance. For good reason, this has led to tighter regulations, greater scrutiny and stronger enforcement. The industry has in turn, invested heavily in their compliance function. It is estimated that some firms could spend up to 10% of their revenues on compliance within the next few years. This is by no means an insignificant amount. Yet, as we have seen over the recent years, this has not put a stop to money laundering and terrorism financing. A case in point is a major bank in the Asia Pacific region which is being investigated for more than 50,000 violations of money laundering and terrorism financing. Perhaps we need to take a step back and question if the industry has the right understanding of compliance. If the motivation for the increased compliance is merely to abide strictly by the rules and follow the book, thus avoiding scrutiny from regulators, this is misplaced.
At the other, some countries have opted for full insulation from exchange rate fluctuations by renouncing monetary independence. Consequences of the new international monetary order What are the consequences of this new international monetary order? The first positive consequence is undoubtedly the increased stability of the international monetary system. Indeed, one of the paradoxes of our times is that the apparent disorder of today is far more stable than the apparently ordered system of the past. In the presence of high capital mobility, the two most resilient exchange rate regimes are those that today dominate the planet: very flexible regimes and very hard pegs. The move away from intermediate regimes has reduced the probability of costly financial crisis. Thus the priority given by central banks to price stability and the abandonment of the exchange rate anchor has resulted in more – rather than less – foreign exchange stability. Evidence of this are recent potentially destabilising events, like the recent war in Lebanon, which have passed without major international financial turmoil. This brings me to the new division of labour between private and public agents that I mentioned in the introduction. The increased stability is based on a new contract between society and monetary authorities: Those countries that, like Switzerland, have chosen the flexible exchange rate regime, base the success of their monetary policy on the credibility and transparency of their central banks. We are no longer – thankfully – attempting to construct a kind of Maginot line to contain international capital flows.

Jean-Pierre Roth: Implications for business of the new international monetary order Address by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the Annual Conference of the International Business Academy, University of Fribourg, Fribourg, 8 December 2006. This address has been prepared with the help of Mrs Maria Rueda Maurer, International Research and Technical Assistance Unit, Swiss National Bank. *  *  *  It is a pleasure for me to be here discussing one of the most important issues of our times: financial globalisation and its implications for international business. Globalisation, the landmark of the dawn of the 21st century, has opened up new opportunities for growth and prosperity on the planet. It has created fantastic investment perspectives to those firms that can compete internationally. But it has also changed the rules of the game and brought about new challenges. Today, the success and the survival of international business are determined more than ever at the private level. Because goods and capital are free to move across national borders, protection from risks emanating from globalisation can be a matter for private strategy only, rather than public policy. This, I think, is the main difference between the globalised world of today and the partitioned world of separated nations in the past.