samchain/econo-pairs-v1 huggingface dataset:
25 The declining cost of technology has also been a key driver of the rise of electronic trading in recent years. Almost 60% of trade in foreign exchange is now executed electronically and close to 50% in repo. BIS Review 130/2007  3  26 Automated and algorithmic trading strategies are becoming more widespread across asset classes. The London Stock Exchange (LSE) reports that the proportion of the order flow on the exchange that is automated has risen from negligible amounts just four or five years ago to approaching half today. This not only has implications for the scale of trading activity – volumes have tripled on the LSE’s SETS system over the past five years – but also the design and location of the trading infrastructure. For many algorithmic trading strategies, processing speed is critical. The faster systems can process trades in just one or two milliseconds: a tiny fraction of the blink of an eye. But ultimately speed and thus the ability to gain a competitive advantage depends on proximity to the platform; hence, the old geographical pull of markets has begun to re7 emerge with exchanges selling space near their trading platforms to those who want to be first in the queue. 27 Many new entrants to the trading arena are therefore competing with incumbent exchanges on the basis of processing speed. These new platforms are also looking for lower cost post-trade solutions.

In an effort to continue to shed light on the important issues, last week we published in our Liberty Street Economics blog a five-part series entitled “Restoring Economic Growth in Puerto Rico.” Some important conclusions emerged from our analysis, and I want to emphasize those today. First and foremost, Puerto Rico’s current level of public debt is unsustainable. Achieving fiscal sustainability requires real reforms and a significant adjustment to the Commonwealth’s debt burden, as Congress and the Administration have recognized. To illustrate this point, our analysis demonstrates that even if growth were to return to between 2 and 2.5 percent per year – an optimistic scenario – debt as a share of GDP would continue to rise under the 2  BIS central bankers’ speeches  current fiscal balance and debt structure. This underscores that the current regime is not sustainable. Second, while fiscal reform is definitely needed, restoring economic growth remains a crucial ingredient to achieving a sustainable fiscal regime. Puerto Rico slipped into recession in 2006, and a decade later a recovery has yet to materialize. Any fixed level of debt will grow even more burdensome if the economy is shrinking. Consequently, this long deep recession has exacerbated the Island’s fiscal woes. Much of last week’s analysis focused on a key contributor to economic growth – the labor force – so let me point out a few conclusions that I drew from that work. Puerto Rico’s outmigration remains an important concern, and is both a cause and an effect of the economic decline.
We have to look for solutions in the regulations that we impose on the financial sector and try hard to make them strict enough to prevent circumvention and excessive risk-taking. We must also make sure that our system is liberal enough to promote innovation and growth. I am sure that we will be able to confront the challenges brought by globalization in the new century if we clearly acknowledge the two issues: –  first, what globalization means for economies and particularly for financial systems; and  –  secondly, how we, as public and regulatory and supervisory authorities, should react to the challenge of globalization. I am of the opinion that only in this way can we extend the benefits of globalization to wider parties involved in the process. We must seize the opportunities to build a healthy global financial environment. The challenges are great, but the ways to confront them are quite clear. I would like to thank you for the invitation and your audience. BIS Review 79/2000  6

This is not surprising because other countries’ currencies also fluctuate. The krone exchange rate is the price of our currency measured in a foreign currency. Developments in other countries are just as important for the krone as developments in the Norwegian economy. Capital flows freely and flows can change rapidly. This can spill over to exchange rates and interest rates as well as output and employment. The chart shows the effective exchange rate for Norway and a number of other small countries with inflation targeting. Exchange rate fluctuations are approximately the same for Norway, Sweden and Canada, whereas the krone exchange rate fluctuates less than the exchange rate for Australia and New Zealand. Therefore, the krone does not stand out as particularly unstable compared with other countries’ currencies. The forward exchange and options markets have expanded in recent years. A deeper market reduces transaction costs and it is easier to find counterparties. This has provided companies with greater scope for hedging against foreign exchange risk. Instruments that reduce the risks associated with a floating krone are increasingly being used, also in Norway. Hedging against fluctuations in the krone involves costs for businesses. A krone that is stable - but too strong - also entails costs to the economy in the form of low activity. Similarly, a krone that is stable but weak - is a source of high inflation. Petroleum revenues generally provide substantial, but uneven currency inflows into Norway.
Our resolve on this agenda has not changed since the crisis. On the contrary, it has served to sharpen our focus in contemplating measures to place our financial systems on a firmer foundation. This crisis has focused attention on some important issues that calls for wide ranging regulatory responses. The degree of consensus on the spectrum of recommended reforms by the international community has however been mixed. Nevertheless, on some areas there has been a clear consensus. There is agreement that the regulatory framework needs to be  more responsive to risk. Equally, there is agreement on the need to materially improve risk management in financial institutions, and to strengthen the role of supervisors in the oversight of financial institutions. The need to enhance safety nets, in particular, in the liquidity support arrangements and deposit insurance, has also been widely acknowledged, as is the need for greater disclosure and transparency, particularly on off-balance sheet exposures. These have also been the areas of focus of most of the authorities in emerging Asia as we set to modernise our financial systems post the Asian financial crisis. In other areas, there has been substantial debate by the international community. The first concerns the degree of balance of regulation. This crisis has shown that market discipline needs to be complemented by regulation. The question however has centred on how far the pendulum should swing towards greater regulation. Should regulatory constraints be imposed on size, leverage and activities of financial institutions?

Islamic finance is predicated on Shariah, the Islamic law which requires that an Islamic financial transaction be supported by an underlying economic activity, thus ensuring that there is a close link between financial and productive flows. This fundamental principle is all about the basic banking function of providing financial services that adds value to the real economy. Financial flows in Islamic finance are therefore accompanied by the expansion of genuine productive activity. Under this arrangement it also avoids over-exposure to risks associated with excessive leverage. Secondly, Islamic finance is based on profit-sharing and therefore risk sharing. Islamic financial transactions, clearly defines the arrangements at the onset, and provides the incentive for the Islamic financial institutions to undertake appropriate due diligence to ensure that the profits are commensurate with the risks being assumed. Aspects of governance and risk management are therefore strongly emphasised in the arrangements. In particular, such contracts demand higher standards of disclosure and transparency to be observed which, in turn, act to strengthen market discipline and minimise informational asymmetries. There are also clear value propositions in Islamic finance for both investors and issuers. For investors, Islamic financial products offer portfolio diversification and new investment opportunities as they avail themselves to this new asset class. For  issuers, Islamic finance allows access to a new source of funds and liquidity in addition to providing new risk management options.
Changing anchors for money market rates Changes in central bank policies and regulation have also had a significant impact on money market rates, leading, in particular, to changing anchors for money market rates. The financial and sovereign debt crises saw a heightened volatility of money market rates (left-hand side of Slide 2). Unsecured rates and repo rates secured by stressed sovereign collateral were particularly affected. Prior to 2008, short-term money market rates had been anchored to the ECB’s Main Refinancing Operations (MRO) rate. Following the shift to a fixed-rate full-allotment approach, which led to an unprecedented increase in excess liquidity, these rates moved towards the Deposit Facility Rate (DFR). This gave rise to an effective shift from a corridor system with scarce liquidity to a floor system with ample (excess) liquidity. [9] After 2015, another shift occurred. Repo rates gradually moved below the DFR, starting with repos backed by German and French government bonds. These movements reflected a shortage of safe collateral assets, particularly around regulatory reporting dates such as quarter- and year-ends (right-hand side of Slide 2). Two factors contributed to a growing scarcity of safe collateral: asset purchases by central banks and regulatory reforms that required banks to increase their holdings of safe and liquid securities. Until more recently, these factors were exacerbated by the absence of an effective securities lending programme. The € rate, which also includes transactions with non-banks, has also edged below the DFR.

First, the availability of collateral in secured markets will remain decisive for market functioning, particularly against the backdrop of ongoing central bank asset purchases, even if collateral scarcity is mitigated by the broad fiscal policy response to the COVID-19 pandemic. Second, a high level of excess liquidity may further reduce cash-driven activity in some market segments, potentially raising challenges for setting money market benchmark rates. And third, non-bank financial institutions play an increasingly important role in money markets. Their market activity has a bearing on the formation of some money market rates, including the € Unlike banks, these market participants often do not have access to central bank operations. Were the transmission across money market rates to weaken, or rates to decouple from policy intentions, this could have implications for monetary policy implementation in the future. Understanding the changing forces that affect money market activity is essential for policy makers. To foster an improved understanding of recent trends in money markets, this conference brings together some of the best academics, central bankers and practitioners. I look forward to many insightful discussions over the next two days. Thank you very much for your attention. https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp201123~8d9573b1b1.en.html  5/7  24/11/2020  Shifting tides in euro area money markets: from the global financial crisis to the COVID-19 pandemic  [1] I would like to thank Marie Hoerova for her contributions to this speech.
This programme provides banks with funding under particularly advantageous conditions, provided that they achieve certain goals in terms of lending to firms and households (the latter excluding loans for house purchase). The programme was made more attractive still to banks at the outbreak of the pandemic, allowing them to obtain funding at an interest rate that could temporarily be as low as -1%, on the condition that they do not reduce their volume of eligible lending in light of the pandemic crisis. These revised terms and conditions have been a success: in the June TLTRO III operation, participating banks received a total of € trillion, an all-time high for the Eurosystem’s refinancing operations. More importantly, the evidence available suggests that banks have indeed used the financing received to lend to the real economy. 5  In conclusion, in the face of a deteriorating outlook for activity and inflation, the ECB Governing Council must increase monetary accommodation and head off problems of fragmentation in the transmission of monetary policy, primarily through the instruments that have proved most effective during this crisis. The ECB's strategy review  In the second part of my address I will take a longer-term perspective and reflect on the changes occurring in the implementation of monetary policy in the advanced economies, which have led the ECB, like other central banks, to review its strategy.

The infrastructure that an e-krona would require could also be open to private agents willing to offer payment services linked to the e-krona. The Riksbank would cooperate with the market, both payment suppliers and fintech companies, when offering an e-krona to the general public. In this way, an e-krona system could also provide a platform that promotes competition and innovation. E-krona is a possibility Almost three months ago, the Riksbank published a first interim report which contains much of what I have talked about today. There is also a general description of how an e-krona might look. It should be available to all, banks, public authorities, companies and households. It should be possible to use it in real time, 24 hours a day and 365 days a year. It should be possible to use off-line, which means it could be used even where there is no access to a mobile network, for instance. Perhaps it could contain some element of anonymity, and perhaps it could be designed so that even groups who currently find digitalisation difficult to handle can easily use the e-krona. These are our initial thoughts and the reason why we published the report before we have thought it all through is that we want to have a dialogue with the market and other interested parties, as it is such a complex issue. The dialogues have now been initiated. We have already identified a number of questions that require further analysis.
And it works by setting clear limits on the role of governments themselves. This is of course a caricature. But it is certainly true that the 1990s were a period of considerable reform and innovation in central banks across the world; many new central banks were established and many established central banks were given greater independence from their governments, often in exchange for a clear commitment to meet specific targets for inflation. From the time when we left the Exchange Rate Mechanism in 1992, the UK has led this wave of change. Looking back, the adoption of formal inflation targets in 1992 marks a decisive break with the past. The other key date is 1997, when the Bank of England was granted operational independence; the institutional framework then put in place entrenched and enhanced the credibility of inflation targeting, and has been widely admired. Moreover, in the UK, as in many other inflation targeting countries, a  1  I would like to thank Jens Larsen for research support and Luca Benati, Melissa Davey, John Power and Sally Srinivasan, whose work I have drawn on extensively. I have also benefited from comments from many colleagues at the Bank, especially Peter Andrews, Charlie Bean, James Proudman and John Keyworth. The views expressed here are mine, and do not necessarily reflect those of the Bank of England or the Monetary Policy Committee.

Its members, individually and collectively, are publicly accountable for the way in which that responsibility is exercised. The supply-side agenda, under successive governments has inevitably been more diverse. It has included a strong commitment to free markets and competition as the motive forces for productive efficiency, and as the essential means of allocating financial and real resources. It includes an equally strong parallel commitment - both regionally within the European Union but also more broadly - to international free trade in goods and services and to the global free flow of capital. The supply-side agenda has included an extensive program of “privatisation”, bringing market disciplines to bear on commercial activities previously undertaken within the public sector, but often involving new forms of regulation in areas of activity that might otherwise be dominated by natural monopolies. It has included extensive deregulation - for example in relation to financial services, including banks and building societies, though this has been accompanied by improvements in the financial infrastructure and by enhanced prudential supervision. It has included measures of labour market deregulation and Trade Union reform. And it has included increased emphasis on education and training; measures to encourage business enterprise - especially among smaller businesses; and reforms to the welfare system to improve incentives to work. The list could go on.
9  All speeches are available online at www.bankofengland.co.uk/news/speeches  9  Rather, and in line with the way in which global governance has developed, it requires a relationship built on the assessment of similar outcomes, in a non-discriminatory way, paying due respect to home country regimes in line with FSB norms. Both the EU and UK have I think recognised principle. Second, future regulatory and supervisory arrangements between the EU and the UK need to be stable and built on good faith. This is not primarily because cross border activity beneficial to both sides will not be maintained in an unstable environment – true though that is. It is because abrupt disruption of cross border activity in the financial sector is in itself a source of risk. Of course, even in a relationship grounded on similar outcomes and deference, it must be possible for supervisory and regulatory arrangements to change over time – for one side or the other to conclude that due to changes in the regulatory framework or new challenges handled in different ways, financial stability risk cannot no longer be managed in the current framework. In such a case, additional controls and restrictions on cross border activity may be needed. But these need to be clear and transparent regulatory and supervisory decisions, grounded in evidence and applied within agreed procedures to ensure that their implementation itself does not become a source of risk.

A raft of measures have moved shadow banking into the light, eliminating its toxic elements and ensuring more resilient market based finance. And, perhaps most importantly, the crisis led to a reformed governance structure with the creation of the Financial Stability Board (FSB), accountable to both the G20 Finance Ministers and Governors and to the G20 leaders. The FSB brings together the central banks, regulators, and finance ministries of jurisdictions representing around 90% of the global financial system. It has a broad mandate to promote financial stability, monitor and assess risks, and coordinate standard setting bodies to ensure no regulatory gaps. The FSB has driven the great reform programme to address the fault lines exposed by the crisis. That programme is largely complete and in its implementation phase. We cannot and do not need to be forever in a post crisis reform phase. But, looking forward, there is always the danger that we fall behind again. The progress we have made in governance since the crisis gives us the ability to prevent this from happening. We have far better institutional machinery today, through the FSB and G20 to bring governance into line with new risks and challenges before rather than after a crisis. The FSB’s work on cryptoassets in 2018 is a good example. The G20 identified the rapid growth of cryptoassets as a potential problem and tasked the FSB with analysing the risks posed. In the space of less than a year the FSB concluded that cryptoassets did not currently pose financial stability risks.
Although the outcomes were not caused by currency arrangements per se, it is hard to avoid the conclusion that regimes with limited exchange rate flexibility linked to the dollar at undervalued exchange rates frustrated one channel through which relative prices might otherwise have adjusted in a way to induce more balanced global growth. It is clear that the pre-crisis formula for global growth was not sustainable. This is obvious in the case of industrialized nations where private consumption and fiscal deficits reached unsustainable levels and needed to be cut back. Less obviously, this is also the case for EMEs, as growth strategies that rely on excessive consumption elsewhere in the system are no longer viable. Put simply, we now have a problem of arithmetic – particularly for China as the largest and most dynamic EME. BIS central bankers’ speeches  3  As China becomes increasingly weighty in the global economy, it will not be able to sustain export growth in the high teens annually3 in a world that is growing (ex China) at less than 4 percent a year on average. For China, the business fixed investment side of the ledger also appears unsustainably high as a share of GDP. In this context, China’s ongoing rapid accumulation of foreign exchange reserves, which carries real economic costs, seems less a sign of strength than an indication of how difficult it is to shift to a different growth path. The financial crisis did not cause the old growth patterns to become unsustainable. They already were.

Inflation reached at 8.3% in October, continuing to remain the main threat to the macroeconomic stability and to both the stable and long-term growth of Albania. Given these circumstances, the Bank of Albania has undertaken a gradual monetary policy normalization process, ensuring that the speed of this normalization will return inflation to target within a reasonable period of time and with the lowest cost possible to the economic activity. Our efforts to control and contain inflation have also been helped by the appreciation of our currency vis-à-vis the euro. During 2022, our currency, the lek, has appreciated by 2.5% on average against the euro, due to significant revenues generated by tourism, high FDIs, and stable risk premia in our domestic financial markets. This was further strengthened by the convergence of our monetary policy cycle with that of the euro area. In parallel, the regulated energy price for Albanian households has helped in absorbing the foreign pressures. This conclusion is well documented by previous and recent research conducted by our staff at the research and policy departments and by the econometric models that support our monetary policy. Foreign price pressures helped by persistent domestic demand are already feeding to inflation of domestically produced goods and services, thus driving to the increase of production costs, and most importantly, of inflation expectations. This is evident in the labor market, capacity utilization rate and the capital markets, which seem to have already internalized these expectations in their decision making.