samchain/econo-pairs-v1 huggingface dataset:
•  In essence, an API documents how a system operates, what inputs it will accept, and what outputs the system will provide. •  APIs allow different systems to interact with one another without the need for human intervention. •  In effect, APIs allow users to seamlessly merge multiple data sets from different sources into a single rich data set. Using APIs, systems can be linked to create a system of systems, where the whole is greater than the sum of the parts. Smartphones are a good example. •  Every notification you receive from Twitter or Facebook comes through an API and is displayed on your screen by another API. More efficient transactions Financial institutions are already making use of APIs to enhance efficiency in transactions. •  SWIFT itself is a good example. Previously, international fund transfers were a manual process. Banks sent telex messages to each other to debit funds from one account and credit it to another. The speed of response depended on whether someone was waiting by the telex machine! •  Now, transferring funds only requires banks to send a SWIFT message containing payment instructions to another bank for funds to be moved, at any time in the day. Some banks are selectively opening up their systems to customers, employees, and others. BIS central bankers’ speeches  5  •  Silicon Valley Bank plans to offer an API for payments by the end of the year.

In particular, mashing together diverse data sets offers the possibility of new types of insights. New software algorithms crunch the enlarged Big Data sets to make more reliable predictions on repayment and hence improve performance of loan portfolios. •  For example, a lender to small businesses requires access to the company’s bank and credit card accounts, to constantly monitor the company’s cash flow and hence ability to repay the loan. Application programming interfaces Despite the greater availability of data and the possibilities for harnessing this data opened by technology, financial institutions continue to face challenges on the data front. •  More data means more cost. •  While technology has significantly reduced the unit costs of data gathering, it has ironically also raised the potential total cost of data by opening more possibilities for data mining and analysis. One way to improve access to data without raising costs significantly would be for the industry to pool relevant data together. •  The benefits of aggregating data across the industry can be seen from our experience with the credit bureau, which has allowed banks to make better credit underwriting decisions. •  However, concerns over confidentiality and market sensitivity have held back data sharing among financial institutions and restricted public access to data. One effective way to achieve seamless data sharing is through the publication of open Application Programming Interfaces, or APIs, by financial institutions for data submission.
Moreover, while these feedback loops were important in setting into motion self-reinforcing losses and deleveraging, it was also the interactions amongst them, through joint exposure to common risk drivers and network linkages, that contributed to the multiplication of losses. Let me now turn to the second part of my talk which I will focus on the policy approach to deal with procyclicality. 2  BIS Review 160/2009  A good starting point to discuss policy is to recognize that business cycles are a normal feature of market economies and their existence – especially the interaction of the three cycles – can not be eliminated. The best we can do is to recognize the cycles and find ways to manage them in a way that markets continue to function without risking systemic instability. Reflecting this, it is clear that the objective of policy is to reduce the amplification of the cycles and their interactions by limiting the build-up of excesses. A common wisdom at this time is that policy should aim to limit the build-up of excess in the good time and ensure that the system has adequate capacity or buffers to manage the downturn in the bad time. But because the build-up of financial excess tends to be a result of many factors, some of which are not related to financial institutions, therefore, a broader approach to policy is needed so that many measures, both macro and micro, are used to help solve the problem.

It is only when confidence improves, typically following a major policy intervention, that the downturn both in the business and financial cycles begin to stabilize. With reference to the current crisis, there were at least two specific features of the financial structures in the advanced economies that amplified the procyclical tendencies in the three cycles I have just described, thereby making the situations worse than might have been. First, the duration of the upswing in the financial cycle was made longer by changes in the financial structures that resulted from financial innovation, misplaced incentives, and the way businesses had expanded by circumventing financial regulation which allowed risk to be underrecognized for a long period. A case in point is the originate-to-distribute model, the CDO derivatives, and the use of SIVs as a vehicle for taking risk out of banks’ balance sheets. Second, in this crisis the downturn of the cycles were particularly damaging partly because of the interactions or feedbacks within the financial system, as opposed to the interactions between the financial system and the real economy. These within-the-system interactions took the form of positive feedback loops in various market segments that were set in motion in the downturn as market participants responded to the emerging problems and distress. Such feedback loops included the SIV shutdown and its compounding effects on CDO losses, the asset fire sales driven by risk management response by banks, and heightened concern about counterparty risk that precipitated the hoarding of liquidity.
Finally, there was an emerging recognition of the potential for conflict between the central bank’s necessary concern with systemic financial stability (you cannot hope to deliver monetary stability if the financial system is crashing about your ears, while monetary stability is itself a primary condition for financial stability) and consumer or depositor protection, which if carried too far can itself undermine the strength of the financial system. These profound changes in underlying philosophy - which, as I say, spread across much of the political spectrum - were in our case fundamentally important in opening the way to a more clearly defined and distinctive role for the Bank of England and a necessary condition, in my view, for the delegation by the Government to the Bank of greater independent, technical, responsibility. Even so, although those changes were a necessary condition, they were not in themselves sufficient, and greater independence did not come all at once. As often happens, sadly, a big step forward came after a major setback. In 1992 after we had been driven unceremoniously out of the European Exchange Rate Mechanism (following the boom and bust of the late 1980s / early 1990s), the Government of the day adopted an explicit inflation target as the nominal anchor for monetary policy. Interest rate decisions in pursuit of that target remained with the Chancellor of the Exchequer after consultation with myself as Governor and my senior monetary policy experts at the Bank. But the really novel feature of the new arrangements was their transparency.

Short-term interest rates – which are currently at 5½% – actually peaked last year at 7½%. For much of my 37 years at the Bank I’d have given my eye-teeth for them to trough at 7½%. Long-term interest rates, which have recently been at around 4½%, are lower than they’ve been since the late 1950’s. That’s certainly good for the economy as a whole, though I recognise that it does not necessarily feel good to people living on interest on their savings, even though those savings keep their real value far better than during the earlier period of high inflation. The public sector’s balance sheet is in excellent shape compared with most of the rest of the world – and the Government’s borrowing requirement position is strong and sustainable. And  3  BIS Review 19/1999  the same is true of the balance sheets of the banking system, and of both the household and corporate sectors. And on top of all that, England beat the Springboks at rugby – even if our cricketers didn’t do so well down under! Yet all that one reads about – all that anyone wants to talk about apparently – is the bad news. So let me not disappoint you this evening, and now come on to the bad news. Where are we now? By around the beginning of 1997 it was becoming clear that we were once again in danger of having too much of a good thing.
BIS Review 69/2004  5  Figure 2 Oil price average level and volatility  40 35 30 25  2 8 U SD +/- 4 .5  20 15  18 U SD +/- 3 .5  10 5 86  88  90  92  94  96  98  00  02  Mean [Median]  S.D.

The key challenge for monetary policy authorities - in Switzerland and elsewhere - will be to continue to firmly anchor these longer-term inflation expectations. As I mentioned earlier, notwithstanding high oil prices, circumstances are favorable. Price stability has been all but achieved in much of the developed world. Even developing countries are enjoying relatively low and stable inflation rates. Various forms of credible monetary policy frameworks are anchoring future inflation expectations. Higher oil prices appear to feed through to higher headline inflation more rapidly than in the past but the magnitude of the effect appears to have declined. Finally, the world economy is hardly overheating. Indeed, judging by the OECD’s global leading indicator, the recent growth momentum is abating. Moreover, to the extent that the recent oil price shock is to a significant extent demand driven, dampening global growth will at least to some extent be self-stabilizing with regard to underlying inflation pressure. Compared to the time of the last great oil shock in the late 1970s, monetary authorities operate under a different paradigm to the extent that they can afford to “look through” what are likely to be temporary spikes in headline inflation associated with what is likely to be a demand driven level shift in the equilibrium price range of oil. Indeed, in some cases, monetary policy may find itself in a position to be able to respond to the output loss associated with higher oil prices. “Looking through”, however, must not be confused with being complacent.
These may lead to significant changes in trade relations between countries in the coming years. On the other hand, the uneven impact of the crisis across different sectors, types of business and population groups is becoming visible in this phase. As the crisis continues, some of the damage may become permanent. In this respect, despite the wide range of measures adopted, there has already been a very significant drop in the number of firms 15  registered for Social Security. Specifically, almost 84,000 fewer firms were registered for Social Security at the end of September, compared with the end of February, a year-onyear decline of 6.1% in September.4 It is very likely that Q3 data will also show an increase in long-term unemployment. And, as I have already mentioned, the crisis is affecting workers on low wages and with more fragile finances more severely, which may increase inequality. We can also expect the public sector and part of the private sector to emerge from this crisis with significantly higher levels of debt. It is crucial that these changes and this structural damage are identified promptly and that their implications for the economy as a whole, as well as for specific sectors, firms and segments of the population are understood. Economic policy cannot indefinitely sustain a sector that is set to undergo a structural reduction in its level of activity.

In the short term monetary policy can influence developments in the real economy. Norges Bank can do this through two channels. First, Norges Bank will proceed gradually when the krone’s value moves outside the initial range and instruments are oriented to returning it to this range. We seek to avoid a situation whereby monetary policy contributes to abrupt shifts in the economy. Second,  13  BIS Review 20/1999  developments in the labour market and product markets influence wage growth and inflation, and thereby the krone exchange rate. Norges Bank takes this into account when evaluating economic developments and when setting interest rates. However, monetary policy is not a suitable instrument for influencing production and employment in the long term. Nor can it be used to influence the size of the internationally exposed sector over time. It is primarily wage and income determination, the use of oil revenues over the government budget, and the adaptability and efficiency of the economy that determines this. Nor is monetary policy an effective tool of incomes policy. Interest rates cannot be used to influence the negotiating climate of the income settlements. This could act as a highly negative constraint on the freedom of manoeuvre. Long-term fiscal policy challenges The fall in oil prices has obvious and immediate implications for monetary policy. But what about long-term balance in the Norwegian economy? What if oil revenues remain low in the longer term as well? Norway’s government finances are sound thanks to the large surpluses of recent years.
2 While the form of this policy was “unconventional”, the ultimate goal was identical to any normal reduction in Bank Rate – namely to stimulate nominal demand in the economy, and hence help the MPC achieve its remit of targeting 2% CPI inflation. The UK was not alone in adopting unconventional measures. Both the Federal Reserve Board in the United States, and the European Central Bank undertook a range of alternative measures too. Although the precise nature of the  1  In the central bank community, asset purchases are known as an example of an “unconventional” monetary policy. 2  See Fisher (2010) “The corporate sector and the Bank of England’s Asset Purchases” available at http://www.bankofengland.co.uk/publications/speeches/2010/speech423.pdf . BIS Review 135/2010  1  programmes differed from country to country, all three central banks saw their balance sheets expand, funded by an increase in commercial bank reserves. 3 At the time we started the asset purchases, it was far from clear how successful the policy would be. None of those involved had ever personally experienced a financial crisis as big as this, nor a recession so deep. And no one had direct experience of conducting a major asset purchase programme in the UK. In the press and amongst other economic commentators there was a lot of scepticism expressed about the likely efficacy of the policy.

Jean-Pierre Roth: Real estate crisis in the United States – similar risks in Switzerland? Summary of a speech 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 Banque Cantonale Vaudoise, Lausanne, 9 June 2008. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  In the past few months, developments in the mortgage and real estate markets have attracted increasing attention. Europe, and Switzerland in particular, have been indirectly affected as a result of commercial bank activities in US mortgage markets. Over the past few quarters, the European real estate market has also been affected, with a number of countries experiencing a downturn in prices similar to that in the United States. By contrast, other countries, such as Switzerland, have seen real estate prices rising at a steady pace. In some respects, what the United States went through is a classical property crisis of the type that Switzerland experienced in the early 1990s. However, the US real estate crisis spilled over to encompass the international financial markets, endangering their stability and prompting the intervention of several central banks. These events confirm the importance of sound real estate market developments for the economy. It is important to recognise that the Swiss mortgage and real estate markets are very different from their US counterparts.
The increasing competition in Sri Lanka’s banking industry has widened the scope of the IT infrastructure development to meet diversified demands made by numerous users. Today, customers of some banks enjoy services through Internet banking, Telebanking, Mobile telephone banking and Visa/Master Credit and Debit card facilities. The growing competition and expectations have also increased awareness amongst banks of the role and importance of technology in banking. 3. Worldwide Outsourcing and Service Improvements  3.1 An even more recent area in which the advancement of ICT facilities has had a significant impact is in the outsourcing of financial services. By 2010, it is projected that more than 20 per cent of the global financial services industry might shift offshore. In 2005, 70 per cent of world financial institutions used outsourcing compared to 26 per cent in 2003. For developed countries, outsourcing financial services offer cost reductions, while IT companies in many developing countries, such as India, Sri Lanka, China, South Africa, the Philippines, Singapore and Malaysia got opportunities to use their IT skills and profit from it. Similarly, the outsourcing of business processes, such as call centres, general processing for human resources, finance and accounting, back office services has also taken place. This trend has influenced some banks in Sri Lanka also to form their own subsidiaries to handle IT operations within the group. 4.

Central Bank initiatives  4.1 In the interest of the wider financial system stability, the Central Bank of Sri Lanka is responsible to ensure smooth, speedy and safe operations of the nation’s payment, clearing and settlement systems. Since 2003, the Central Bank has taken the lead to introduce an efficient and safe payment and settlements for both high value and time critical transactions by introducing the Real Time Gross Settlement (RTGS) system for interbank and third party customers. The RTGS system is a computer-based fund settlement system, which processes and settles each payment instruction individually and irrevocably on a real time basis, using funds in the participants’ RTGS Settlement Accounts or Central Bank funds provided under an intraday liquidity facility. At present, the value of transactions settled in the RTGS system accounts for about 81 per cent of the non-cash high value payments in Sri Lanka. The majority of RTGS transactions are on account of the inter-bank call money market, the government securities market, open market operations, the Rupee leg of transactions in the foreign exchange market, urgent and time critical payments of customers and net obligations under the clearing system operated by LankaClear Ltd, a venture jointly  2  BIS Review 13/2008  owned by the Central Bank and commercial banks. In early 2004, the Central Bank implemented the Scripless Securities Settlement (SSS) System for settlement of government debt instruments in electronic or scripless form and settlement of trades of such scripless securities on a Delivery Vs. Payment (DvP) basis.
I would also like to recall the unanimous recommendation we submitted on the voting modalities of an enlarged Governing Council, which has been accepted by the EU Council and is about to be ratified within these days by all Member States. This will allow the ECB to maintain efficiency and timeliness of decision-making in an enlarged euro area. Eventually, enlargement of the EU will lead to the extension of the euro area, as the new Member States are expected to adopt the single currency at some point in the future. In fact, upon EU accession, they will be committed to striving towards the eventual adoption of the euro. The main aim of the Eurosystem in the process towards euro adoption is to ensure that the monetary integration of each new Member States proceeds in a smooth manner and in line with Treaty provisions. In view of this challenge, at the end of last year the Governing Council of the ECB adopted a policy position paper on exchange rate issues relating to the acceding countries. The Treaty foresees that at some point following accession, new Member States will join the Exchange Rate Mechanism II (ERM II). To ensure a smooth participation in ERM II, however, it would be necessary that major policy adjustments - for example with regard to price liberalisation and fiscal policy - are undertaken prior to participation in the mechanism and that a credible fiscal consolidation path is being followed.

[23] For instance, workers may accept some loss in real income as demand softens, costs can no longer be passed on easily to consumers and risks to job security increase. In some euro area countries, wage negotiations focus on core inflation rather than headline inflation. This can be seen as a recognition that the terms of trade loss has to be borne – at least to some extent – rather than retrieved. Also, in this setting, households may choose to reduce consumption – instead of smoothing it and mitigating the hit to spending – because a permanently lower potential output would also permanently reduce their future income and wealth. Recent research using endogenous growth models shows that, if supply shocks cause “scarring”, the prospect of lower potential output reduces investment and productivity growth. By compressing households’ future income and their current spending, it can cause demand to drop by as much as – or even more than – supply. [24] All told, these effects imply that, even in the face of lasting consequences of supply shocks on potential output, the implications for the output gap, inflation dynamics and optimal policy calibration can only be  derived over time. And this reinforces the case that, for as long as inflation expectations remain anchored, monetary policy should adjust but not overreact. [25] ECB staff projections published in September 2022, which foresee inflation close to 2% at the end of their horizon, are consistent with a withdrawal of monetary policy accommodation.