samchain/econo-pairs-v1 huggingface dataset:
paper, the monetary and non-monetary signals were reconciled through an analysis of portfolio shifts driven by the near-zero interest rate policy at that time. Understandably, some of you might be concerned that not giving a prominent and distinct role to monetary aggregates could lead to relegating money to an insignificant role in the decision making process. This is not the case. To the contrary, I would argue that the SNB’s "plurality of approaches" concept guarantees that money will retain an important role in policymaking, as long as money provides useful information for subsequent inflation fluctuations. There are theoretical as well as empirical studies which indeed suggest that money provides useful additional information for subsequent price developments. 4 Using Swiss data, empirical work conducted at the SNB show that money growth rates and deviations from an estimated money demand equilibrium contain useful information for both short- and long-term Swiss inflation developments. 5 Similarly, a more recent study, again drawing on Swiss data, finds that money growth adjusted for changes in the equilibrium interest rate has a significant and proportional influence on subsequent inflation developments relative to information in output and interest rates. 6  4. Money and long-term financial imbalances  Let me conclude by stressing a final point, which strikes me as being worth emphasizing more prominently in the Fischer et al. paper: the role of money beyond a medium-term inflation forecast. Clearly, the relevance of money extends beyond the medium-term. Several recent studies have discussed the relationship between monetary aggregates and asset prices.

In that context, both the ECB and the SNB conduct a careful analysis of monetary aggregates partly in an effort to assess the risks of long-term financial imbalances. Moreover, acknowledging the monetary source of long-term inflation helps avoid the build-up of excess liquidity in the first place. In closing, let me therefore repeat that the Fischer et al. paper could benefit from focusing more extensively on the admittedly complex but nonetheless important link between money, asset prices and long-term inflation perspectives. In the  4  For example, Nelson (2003) argues that movements in monetary aggregates provide useful indications regarding different yields usually not incorporated in economic models  5  Baltensperger, Jordan and Savioz (2001), Jordan, Peytrignet and Rich (2001)  6  Reynard (2006)  7  For example, Issing (2002) provides evidence of a close relationship between excess money growth and real asset prices, a relationship that does not appear by looking at a standard Taylor rule as a measure of monetary policy stance. Similarly, Friedman (2005) showed that pre- and post-financial market crash evolutions of stock prices and gross domestic products were strongly related to the pre- and post-market crash evolutions of monetary aggregates. White (2006) pointed to the need of pushing further the frontiers of economic research in the direction of incorporating financial variables to assess longer-term macroeconomic developments.
12.07.2019  Youth knowledge and financial education in Spain BBVA EduFin Summit 2019 Pablo Hernández de Cos Governor  Good morning, ladies and gentlemen. I would like to begin my address by expressing my satisfaction at the organisation of this conference. Its aim is to make society and market participants aware of the significance of financial education and of the importance of improving citizens’ financial literacy. I also wish to thank the organisers for this invitation. It gives me the opportunity to set out the Banco de España’s view on such a relevant topic. It is not overstating matters to say that, in my opinion, the level of financial literacy directly affects citizens’ welfare, their capacity to choose, and the capacity of the financial sector to offer their products and to strengthen their reputation. The goal of financial education is, precisely, to ensure that people are able to take responsible financial decisions throughout their lives, in awareness of their rights and obligations as financial product users. Financial education is thus a vital tool for the authorities that oversee the protection of financial users. It adds to and complements the traditional tools of bank regulation and the supervision of bank solvency and conduct. And ultimately it also contributes to financial stability. I would like to focus today on certain aspects of financial literacy in Spain, from an internationally comparative perspective. Further, I would like to offer some conclusions in relation to youth in society.

The Bank of England now has extensive powers as a micro supervisor of individual firms and a macro supervisor of the financial system as a whole. Parliament has set objectives for both – primarily, safety and soundness for the PRA,  4  BIS central bankers’ speeches  and the resilience of the system for the FPC. But unlike in monetary policy, we do not have a quantified target – and, to be clear, we do not think that that would be possible. To have such power with limited transparency would be uncomfortable. If nothing else, it would leave the Bank in a position where supervision was of interest only when it obviously goes wrong. We need to engage society – public, Parliament – in debates about the resilience of the financial system and how we are supervising it in the good times as well as in bad times. The FPC and PRA have already taken various steps to help with this – the six-monthly Financial Stability Review, the published Record of FPC policy meetings, the Committee’s statement on the use of its directive powers, the PRA’s Approach document and annual report, and so on. But stress testing can provide a quantum leap in transparency and accountability. For example, the FPC will need to be able to defend its choice of stress against questions and criticisms that the scenarios are too extreme or not tough enough. That will implicitly be a healthy debate about objectives.
This sounds quite straightforward but actually it would be quite a step because, of course, all of us are answerable to our national parliaments. But nor do I think it is realistic for countries to engage in or embark on what one might think of as unilateral disarmament, where a country that acts as host to financial institutions says to the home countries “I will let you lead in the resolution of all banks in all circumstances, notwithstanding whether you take account of the interests of my country”. So countries probably need to reserve some powers for themselves but should eliminate from their regimes any automatic triggers that can cut across sensible resolution led by a firm’s home country. The other step that we could sensibly take, I suspect, is for there to be much closer planning on a bilateral basis between host and home countries in respect of particular banks. I mean at the level of entering into more or less binding agreements on who would do what in the event of distress. That, again, sounds easy, but actually it would be embarking on quite a change from where we are right now.

This has perhaps surprised many, just as they have been surprised that the financial turmoil of the region could so suddenly erupt with such severity and contagion. 4. Indeed, not long ago, stories about the Asian miracle abounded. Asia had been the fastest growing region in the world and the economic numbers had been generally sound. Asian economies had low inflation rates and exchange rates had been stable, at least until recently. Current account for the region as a whole had been broadly in balance, although understandably the situation for individual economies varied. The fiscal account excluding Japan had been in surplus. Asia also had exceptionally high savings rates of over 30% of GDP and investment rates were equally high. Official sector savings of the Asian economies, in terms of their foreign currency reserves, were very substantial, accounting for about 40% of the world’s foreign exchange reserves. Now five of the top six foreign reserves holders in the world are in Asia. The work force in Asia was young, educated and flexible. The political situation was stable. Policies were outward-looking with a commitment to open markets and free trade. 5. So what went wrong in Asia? What turned the Asian miracle into what is now referred to, quite unkindly in my opinion, as the Asian myth or the Asian mirage? A few months into this fall out, there have been many explanations offered. The most talked about was the rapid growth and volatility of international capital flows. 6.
Further institutional developments have since followed. Thus, without going into the details of the organisation of macroprudential regulation and supervision in the euro area, the member countries are moving ahead with the creation of national macroprudential authorities, while the ECB has been assigned responsibilities in European regulation. The institutional form of the national macroprudential authorities depends on the specific characteristics of each country, although, on the recommendations of the European Systemic Risk Board, their common feature has to be the major role played in one way or another by the central banks. Challenges for the banking sector posed by changes in international regulation and supervision Let me conclude by looking at the challenges for the banking sector derived from the major changes in banking regulation and supervision in the international sphere. I shall briefly describe the basic matters being discussed by the Financial Stability Board, or, as we all call it, the FSB. In November 2008, the G20 agreed on an ambitious “action plan” and asked the FSB to overhaul international financial regulation, a reform which was to go to the root of the crisis and pave the way for a sounder and safer financial system allowing sustainable financing of economic growth. The task has been both extensive and intensive. A substantial portion of the reforms needed to fulfil the mandate from the G20 have already been agreed, particularly with regard to the banking industry.

The FSB has set in train two courses of action to prevent an excessive concentration of banking risk off the balance sheets of banks: first, it monitors their size, activities and risk characteristics; and second, it is working on the introduction of measures both for institutions (particularly closed-end money market funds) and for activities (particularly certain forms of alternative funding, such as securitisation or the funds obtained through the repo market or securities lending). Lastly, increasing emphasis will be placed on monitoring the implementation of reforms. One of the lessons learned during the crisis was that international standards must not only be appropriate, but also effectively and uniformly implemented across jurisdictions to avoid situations of lack of competitiveness, regulatory arbitrage or creation of systemic risk. I am sure that, as in previous years, your Meeting will be extremely interesting and informative. There is no shortage of issues and problems. Thank you. BIS central bankers’ speeches  5
In advanced economies, public investment has been on a gently downwards path for the past three decades (Chart 17). In the UK, public investment relative to GDP is a third of its level in 1970. There has been no deepening in the global capital stock for a generation, if anything the opposite. Given the role public investment has often played in the past in supporting private innovation, this is not an entirely comforting picture. 71 In sum, if history and empirical evidence is any guide, this cocktail of sociological factors, individually and in combination, could restrain growth. They could jeopardise the promise of the fourth industrial revolution. Pessimists’ concerns would be warranted. Conclusion Growth is a gift. Yet contrary to popular perceptions, it has not always kept on giving. Despite centuries of experience, the raw ingredients of growth remain something of a mystery. As best we can tell historically, they have been a complex mix of the sociological and the technological, typically acting in harmony. All three of the industrial revolutions since 1750 bear these hallmarks. Today, the growth picture is foggier. We have fear about secular stagnation at the same time as cheer about secular innovation. The technological tailwinds to growth are strong, but so too are the sociological headwinds. Buffeted by these cross-winds, future growth risks becoming suspended between the mundane and the miraculous. 67  Mischel (2014). 68  Urminsky and Zauberman (2014). 69  For example, Davies, Haldane, Nielson and Pezzini (2014).

If that is the cause, bring out the bodies. For this would imply low returns to innovation and low future growth. Falling real rates would instead signal secular stagnation. The pessimists would have it. 42  Hansson and Stuart (1990). 43  There are less optimistic interpretations of this rise in savings, including that it reflects a “savings glut” among in particular emerging market economies (Bernanke (2011), or that is reflects a shortage of supply of safe assets for investors (Caballero (2013)). BIS central bankers’ speeches  9  I want to argue, in a typically two-handed economist way, that both sides of this argument are right. There are good grounds for believing technological forces are driving innovation and hence growth, in a classic Neo-Classical cycle. But there are equally-good grounds for believing sociological forces are retarding growth, in an endogenous-growth pattern. Let me start with the secular innovation side of the argument, the Neo-Classical account. It contends that future growth will be forged in the white heat of a digital revolution. All GPTs take time to reach their melting point.44 Even very rapid, or exponential, rates of technological growth take time to become truly transformative at an economy-wide level. 45 Given past trends, it could take 30–40 years or longer for GPTs to reach critical velocity. That was the case with earlier GPTs, including the steam engine and electricity.
13 Just as when we based our forecasts on market expectations, publishing our own interest rate forecast does not involve any commitment from the Riksbank that the repo rate will then actually follow this path. It is important to bear this in mind. A further argument that has been put forward against publishing a forecast for the development of the repo rate is that the financial markets, if given access to the central bank’s views on the interest rate level in the slightly longer term, would stop trying to find other information that is significant for longterm interest rates. The central bank would then lose an important source of information, namely how market prices reflect the markets’ views on economic prospects in the longer term. Neither do I find this argument particularly convincing. The financial market agents know that we live in an uncertain world and will continue to look for other sources of information on long-term developments via other channels than the central bank and make independent assessments. What defines a good interest rate path? When we make our forecasts of the repo rate, we must of course consider what would be a wellbalanced monetary policy given the developments we foresee. What is meant by a well-balanced monetary policy? Let me answer this by briefly summarising how we describe our monetary policy strategy in the special document on monetary policy published in May 2006. 14 Our new assumption for the interest rate does not change the way we conduct monetary policy.

We have moved from a time where cash was king; in 2010 56% of payments were made using cash, this fell to 45% in 2015 and further declined to 17% in 2020.1 It is predicted that by 2028 just 9% of all payments will be made by cash.2 Transitioning through an era that has seen the continued decline in popularity of cheques and a rapid increase in card usage, we are now in a world where many of us today will have paid for a summer iced-coffee or groceries using our smartphones or even watches. This evolution in payments in the UK and globally is delivering transactional capability that is more reliable and quicker than ever before. But customers want more and there is a continuous drive for further improvements in speed, cost, transparency, safety and resilience. In Shakespeare’s A Midsummer Night’s Dream, some characters are transported to a new world and new, not always desirable, experiences. But this was merely temporary, and an illusion 1/6  BIS central bankers' speeches  rather than reality. Here a payments transformation is under way that could render the next decade almost unrecognisable from the transactional landscape of the past: but is a real and lasting change, bringing benefits to many. It is an environment where future generations will benefit from a new world of possibilities: one in which fast, frictionless and future proofed payments “just work” invisibly behind the scenes to unlock individual and commercial potential.
Indeed, it will take only a few seconds to authenticate our currency notes. For example, to apply the simplest “Look” technique, what is needed is only for us to hold the currency notes against a light. This will allow us to verify simultaneously at least four important security features in all of our currency notes; the 3D Agong’s watermark, bright electrotype numeral, perfectly register see-through mark or windowed colour shifting security threads with texts. This technique is the easiest and the simplest manner as no special gadget is required. Coupled with a few other techniques contained in the My Ringgit apps we can make a firm conclusion on the authenticity of the currency notes. BIS central bankers’ speeches  1  Similarly, our new coins are also sufficiently protected by unique security features. In the course of designing the coins, the Bank had engaged with various stakeholders to ensure that the new coins are not only practical but sufficiently protected as well. Each coin denomination is unique in term of size and security features to ensure no fake coins can pass through the coin authentication machines. As part of our financial education effort, Bank Negara today is launching a mobile application called My Ringgit. This application enables the general public to learn about the most practical and easiest techniques to authenticate our currencies and learn in greater detail the security features found in our currency notes.

This is in line with the growth in the activities of the two existing cross border PvP links recorded by us. Since 2010, the combined average daily turnover of the links with Malaysia and Indonesia has doubled, reaching a new record of $ billion last month. This is equivalent to an annual growth of about 23%. Other economies in the region, especially those with significant FX transactions, can similarly be benefited from a reduction in settlement risk and increase in efficiency in the settlement of FX transactions by establishing a PvP link with the USD RTGS system in Hong Kong. 9. The HKMA will continue to watch out for opportunities to collaborate with Asian neighbours to develop infrastructural solutions to meet growing regional demand for more efficient and robust settlement solutions. 10. Lastly, I would like to thank BOT again for the Bank’s commitment and professionalism leading to the successful launch of the PvP link. Based on the solid foundation laid through this project, I keenly look forward to working with BOT in other areas of central bank cooperation to contribute further to regional financial stability and prosperity. 11. Thank you. 2  BIS central bankers’ speeches
However, with monetary policy geared at safeguarding the recovery while keeping sight of external stability, and fiscal discipline imposing limits to further government spending, there is not much room to maneuver on the domestic front. To substantially improve long term profitability, increase investor confidence, and enhance the success of economic recovery, the nation also needs to be unified in the pursuit of real corporate restructuring, improved financial sector discipline and reform, as well as stronger legal framework for the resolution of debt negotiation and restructuring. Need for closer regional cooperation In addition, the growth outlook remains dependent, importantly, on a revival in world demand and improved global financial environment. In this respect substantial risks and uncertainties persist, as the world remains vulnerable to further unexpected developments. This is a possibility that we must consider and be prepared for. We must therefore consider other possibilities in meeting the challenges that may arise in the face of deteriorating external environment. Such alternatives would ideally incorporate increased and closer cooperation among governments at the regional level. This makes good sense since the countries in the Asian region are very open by nature and would all feel the impact of further slackening in world demand. There certainly seems to be some scope for closer coordinated efforts to improve the resilience of our economies to external shocks. As previously mentioned, one of the major vulnerabilities lies in the area of capital flow, especially for developing countries.

You may take this as an official response, as I have already discussed this issue with our Minister of Finance. Conclusion Ladies and gentlemen, Before ending, I would like to emphasize again that Thailand has gained significant ground since the aftermath of the 1997 crisis. Macroeconomic stability has been restored, progress has been achieved in financial restructuring and strengthening bank supervision, and external vulnerability has been substantially reduced. At this juncture, however, there is no room for complacency. The key challenge facing the authorities is to maintain macroeconomic stability while accelerating the pace of reforms amidst the global slowdown and heightened market uncertainty. Through careful management of domestic policies, greater regional cooperation, as well as consolidation of restructuring efforts, Thailand and the surrounding region should weather the global slowdown and return to a sustainable growth path. I would like to thank you once again for the opportunity to address this distinguished forum and wish you all the best. Thank you. 4  BIS Review 99/2001