samchain/econo-pairs-v1 huggingface dataset:
Falling cash usage and the possibility of more profound structural changes in the monetary and payment system mean that we need to consider whether it would be wise also to issue a central bank digital currency. A working group at Norges Bank has looked more closely at the purpose and relevant forms of a central bank digital currency. The group finds that a central bank digital currency could function as a back-up solution in the event of a disruption in banks’ payment systems. This contingency aspect may gain importance if banks’ systems become more international. Moreover, a central bank digital currency may help to maintain competition in the payments market and offer the characteristics of legal tender. Looking ahead, Norges Bank will assess further how well the solutions being considered are able to offer the necessary and desirable characteristics. Then we will decide whether to proceed with testing. This is a long-term undertaking, and it is still too early to draw any conclusions. This work also interfaces with other measures to ensure a sound payment system and confidence in the monetary system. We must consider the combination of measures, by both public and private entities, that can best enable us to perform our social mission. The payment system is changing. New structural features like vertical integration, internationalisation, new market entrants and increased concentration of providers suggest that Norges Bank must assess how it will perform its role. Our ambition must be to maintain a payment system that is at least on par with comparable countries.

(i) First, a Capital Markets Union should be structured along a clearly defined and articulated framework and focused on a limited set of operational deliverables. As an overall priority, we believe that the initiative should seek to promote equity instead of debt financing for long-term financing. Equity financing is crucial for firms to grow and operate over the long run, all the more since we must pay attention to the high level of indebtedness in Europe with respect to both the public and private sectors, including SME borrowers. The current ratios of debt-to-income are indeed to be adjusted to a more sustainable path. Notwithstanding this primary objective, debt instruments remain an indispensable funding tool. As far as operational deliverables are concerned, we share the view of the European Commission that the development of both Simple, Transparent and Standardized (STS) securitization and Private Placements is achievable in the short to medium run. 2 Securitization is indeed a useful tool to help fund the economy, as a means to free regulatory capital and to create liquid assets, particularly in the context of tightened capital requirements for banks. The CMU could for instance promote initiatives such as that carried out in France, where banks, with the support of the Banque de France, have taken steps to monetize their pools of credit claims. Banks now have the option of structuring these loans into marketable debt securities which are issued by a securitization vehicle (called Euro Secured Note Issuer or ESNI), in order to raise funds over the medium term.
Important to quantify the risks Normally, all risks that may have significance for the monetary policy decisions have been gone through by the Monetary Policy Department or the Financial Stability Department. But events may of course occur that are impossible to predict, or risks may arise at a later stage in the process that are very difficult to evaluate, such as the effects of the Lehman Brothers bankruptcy in autumn 2008. One central issue with regard to how the monetary policy decision-making process is set up is what stance the decision-makers, that is, the Executive Board, should take with regard to risks that for various reasons are not directly incorporated in the forecasts. If individual Executive Board members consider that there are observable risks and suspect that these may have significant consequences, the Riksbank will of course try to analyse these in depth. But it is not always easy to quantify such risks, and thus it may be difficult to include them in the actual forecast. The question then is how these risks should be taken into account in the monetary policy decisions. I consider it important to try to quantify as far as possible the risks deemed relevant to the monetary policy decisions. This is particularly so when it comes to risks with a low probability, but which would have substantial consequences for the way the economy develops, such as a burst housing bubble, so it is important to try to quantify how the risks are affected by the various alternative actions.

2 It was on the whole greater than during the recessions at the beginning of the 1990s and 2000s and, above all, it lasted longer this time. Statistics regarding this are only available from 1995 for Sweden, but they nevertheless show  1  See the article “Policy expectations and policy evaluations: the role of transparency and communication” by Lars E.O. Svensson in Sveriges Riksbank Economic Review no.1 2010 (p. 62). 2  This applies regardless of whether one calculates the uncertainty in terms of standard deviations in the forecasts, or the difference between the highest and lowest assessment. 2  BIS Review 65/2010  that the uncertainty rose rapidly and was high in Sweden during the most recent financial crisis. In recent months the uncertainty that can be measured in the CF has declined somewhat with regard to the United States and even more with regard to Sweden, where it has returned to the historical average level. If one does not have anything else to go on, a forecast can be based on what is known as an autoregressive model. What this means is a model where the forecasts for a variable are solely dependent on its earlier outcomes and a random error term and where one assumes that the variable tends to return to a normal level according to historical patterns. However, forecast evaluations carried out by the Riksbank show that on average there is an added value in making active and more sophisticated forecasts for at least up to 1–1 ½ years ahead.
In general, banking competition brings very positive aspects for the real economy and to welfare, and there is no doubt that liberalisation of the banking sector in Spain has been very positive for the country. However, we should bear in mind, as some chapters of the book point out, that too much competition may significantly increase bank risk-taking and that this may have negative implications and that  BIS central bankers’ speeches  1  this may undermine financial stability.1 The recent very intense competition for retail deposits may also be a notable example in this regard. Another important aspect of liberalisation has been the internationalisation of the banking sector, which is very well explained in the book. I would like to stress two aspects of this phenomenon: i) the foreign expansion by Spanish banks (particularly Santander and BBVA), and ii) the significant dependence on foreign liquidity (mainly through international wholesale markets), especially after the introduction of the euro.2 Expansion abroad, when it is well executed, definitely brings benefits in terms of geographical diversification, which have become clear during the crisis, however a reliance on funding from abroad may bring some fragility if that source of liquidity dries up, as the crisis has shown.3 In previous banking crises, banks typically suffered from runs on retail deposits, whereas nowadays these runs are wholesale-based.4 In the light of this, the sector should aim to diversify its sources of funding liquidity.

José Manuel González-Páramo: How will historians judge our handling of this crisis? Speech by Mr José Manuel González-Páramo, Member of the Executive Board of the European Central Bank, in the occasion of the presentation of the book titled “Un Siglo de Historia del Sistema Financiero Español”, Bank of Spain, Madrid, 10 June 2011. *  *  *  Ladies and Gentlemen, It is a great pleasure to have the opportunity to speak today at the Bank of Spain about the Spanish financial sector. The book being presented today consists of a distinguished collection of essays providing a wealth of information on Spain’s financial sector over the last century. Not only does it summarise the key data and the main developments, but it also provides deep analyses. It will definitely become the work of reference on the history of the financial sector in this country in the 20th century. Let me then congratulate the contributors and the editors, José Luis Malo de Molina and Pablo Martín Aceña for their excellent work. Reading the book, notably the chapter by Raimundo Poveda, we can draw some interesting parallels between the current crisis and the banking crisis in the late 1970s and early 1980s. In particular, given the current circumstances, the main message I would like to emphasise today is that certain changes in the banking sector that are implemented in response to crises are essential to guarantee a strong, robust banking sector in the future.
First, there is the tendency for individuals to seek to economise on money holdings if inflation rises, referred to informally as “shoe leather costs”. Second, there is the suboptimal allocation of goods and services, reflecting the fact that the variability in relative prices tends to increase average inflation, induced by typically disperse menu costs to change individual prices. Third, there are distortions in tax systems which are typically not indexed to inflation. And, fourth, there are costs arising from a de-anchoring of inflation expectations, which reflects the fact that inflation is typically more difficult to predict in high inflation environments. The second insight is that in advanced economies central bank independence and inflation traditionally show a significant negative correlation. Regressions in support of this finding measure central bank independence by various indices which capture, inter alia, appointment and dismissal procedures of central bank board members, the degree to which the central bank is mandated to achieve price stability as its primary objective, and the extent to which the government is able to influence, or even veto, decisions of the central bank. This  http://www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html[03.04.2017 15:53:14]  Central bank independence revisited  empirical relationship did not receive much attention before the early 1990s. [1] Historically, it needs to be viewed primarily against an understanding of how central banks in different institutional settings “managed to opt out of the great inflation after the break down of Bretton Woods”, to paraphrase a title used by Otmar Issing and co-authors in their account of German monetary policy in these years.

The picture is rather different if the UK were to opt out of monetary union - at least for the time being. In that case the euro will be a foreign currency in the UK, and businesses, where appropriate, will need to cope with it from the 1 January 1999 just as they cope now with transactions and contracts denominated in deutschemarks, dollars, yen and the like. But the huge difference between the ‘in’ and the ‘out’ scenario will be that notes and coins would not be introduced in this country if we are an ‘out’, so that for most of us life would go on very much as normal. Mr. Chairman, I have dwelt on the practical side of monetary union very briefly this evening, because I fear that the practicalities may be overlooked in the passion of the debate about the principle. But in my youth - which seems a very long time ago now - I was a boy scout, brought up with the motto “Be Prepared”. It is vital in this context that we are indeed prepared, whatever the outcome, and the Bank is determined to do all that we can to ensure that we are. And provided we have properly prepared ourselves I do not believe that monetary union need hold great terrors for this country whichever way the decision goes when the time comes.
On the other hand, they were not certain that it would end in tears and they were worried that if they left the field too early, their customers would cross the street to their competition, destroying their franchise. 11 Central banks can help to solve that collective action problem, as Federal Reserve Board Chairman McChesney Martin highlighted more than half a century ago when he explained our role as being to take away the punchbowl when the party is getting going. Chairman Martin was talking about monetary policy, and monetary policymakers do sometimes need to take the long view. But often it will fall instead to the FPC temporarily to adjust capital or liquidity or margin requirements to build system resilience and lean against the exuberance. When we reach that point, as we shall, turning down the music will be unpopular. That is why the current debates in the UK Parliament about the Bank of England’s new Financial Policy Committee are so very important: in a word, legitimacy. Concluding remarks When the financial tide goes out, it lays bare problems that had been gathering during the “good” times. Work by the international central banking and regulatory community to make  9  The single strategic objective of the FCA will be to ensure that financial markets and markets for regulated financial services function well.

That is supplemented by three operational objectives, including “protecting and enhancing the integrity of the UK financial system” which is in turn defined in the legislation to include “its soundness, stability and resilience”. This is in line with Principle 6 of IOSCO’s objectives and principles for securities regulation: “the Regulator should have or contribute to a process to monitor, mitigate and manage systemic risk, appropriate to its mandate”. 10 See Tucker (2011), “Building resilient financial systems: macroprudential regimes and securities market regulation”, International Council of Securities Associations. 11 This was highlighted by the Bank of England in 2006 Financial Stability Review p. 8: “Many may have believed that the price of certain assets had become too high and the premium for taking risk too low. But there are business risks associated with acting on that view when others are not; it may not only reduce profitability in the short run, but may also risk losing market share or failing to establish a foothold in a rapidly expanding market. These concerns often seem to have outweighed the risks to balance sheets associated with potentially overpriced assets. As a result, in the early part of this year, there appears to have been an extension of risk-taking activities by financial institutions, including some UK banks. “  BIS central bankers’ speeches  7  the system safe and sound has made real progress in recent years, but it is not complete and absolutely must continue with energy.
William J McDonough: Toward greater financial stability Remarks by Mr William J McDonough, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Bank of Thailand, Bangkok, 5 February 2001. *  *  *  It is my pleasure to accept the invitation of the Bank of Thailand to speak to you tonight on how we can promote greater financial stability. In the wake of the Asian crisis, authorities in the region have done much to promote increased financial stability, through a variety of measures to strengthen domestic banking systems and corporate sectors, and institute broader improvement in accounting, legal, and supervisory systems. Thailand has taken a number of such actions, including efforts, among others, to close troubled financial institutions, attract significant private sector capital (including foreign capital) into the banking system, and improve the legal framework. Macroeconomic policy adjustments, including the move to flexible exchange rates, have also furthered greater stability. These actions have helped countries recover from large-scale banking crises, and restore solid growth generally. That said, in Thailand and elsewhere, the recovery is not yet complete, and much remains to be done. Moreover, the restructuring and reform agenda will be challenged by slowing global and regional growth, which may contribute to already apparent signs of increasing reform fatigue within the region.

The next step inevitably is the correction to the real economy, interest rates and/or the exchange rate, that can sharply worsen asset quality and expose the accumulated weaknesses in the financial system. Role of central banks in promoting stability and growth A central bank’s most important role in achieving stable, long-term growth involves promoting price stability. Achieving long-run price stability is a difficult and continuous challenge, as it requires constant efforts first to detect, and then to correct the building up of internal and external imbalances. Moreover, because of time lags in policy effectiveness, authorities often have to take action based only on partial evidence, well before adverse symptoms are fully evident. The principal reward for forward-looking policy is that changes in policy, and the associated stresses they engender, are generally smaller and more easily assimilated by markets. The effectiveness of monetary policy naturally brings us to the question of monetary and exchange rate regimes. A great deal has been said in various forums about the choice of monetary and exchange rate regimes. I believe it is crucial that there be consistency between a country’s choice of currency regime and its other policies. There is no "right" regime that applies to all cases and all points in time. Experience has shown that no currency arrangement can compensate indefinitely for imperfections elsewhere in an economy, such as weaknesses in financial supervision, an excessively loose fiscal stance, or inflexible wages and prices.
2  BIS Review 10/2005  The Federal Reserve is now gradually increasing interest rates and the first measures aimed at reducing the US budget deficit have been announced. This may curb growth in domestic demand and imports of goods and services. However, the US authorities will probably not go as far as to bring economic growth to a halt, with an accompanying increase in unemployment. The US issues the world’s most important settlement and reserve currency. States and agencies in the US have access to dollar-denominated loans in major international capital markets. The exchange rate risk lies with foreign creditors. The US may have a long-term interest in maintaining a stable dollar that is used in international payments. But this may be weighed against short-term interests: If the dollar depreciates, the US trade deficit will be reduced with a limited impact on domestic production. The US is not the only source of trade imbalances. They also reflect very low growth in continental Europe and the largely export-based growth in Asian countries. Countries other than the US must therefore also contribute in order to prevent growth in the global economy from faltering. With limited domestic growth capacity and high unemployment, many industrial countries are poorly equipped to cope with a weaker dollar and lower US demand. The challenges are perhaps particularly demanding in Japan and some large European countries. The situation is not negative across the board. There is solid growth in a number of European countries such as Spain, Ireland and the Nordic countries.

The large volume of international trade in currency derivatives, which is dominated by banks reduces, premiums and costs for other business sectors and thereby promote cross-border trade in goods and services. It is not a good idea to throw a spanner into the works. The impact on household consumption and housing investment has been substantial. Business investment is now picking up. In Norway, household debt is higher than household deposits. The decline in interest rates has thereby freed up funds. Households reacted relatively rapidly, and growth in consumption picked up. The fall in interest rates pushed up house prices. Turnover in the housing market has been high. Higher housing wealth provides increased borrowing opportunities and thereby also boosts demand for consumer durables. Household debt has risen by around 11 per cent over the past year. High resale home prices have made it more profitable to build new homes, and residential construction is rising. The fall in interest rates has also contributed to sustaining the market value of office premises and commercial property even with a high vacancy rate. With the prospect of higher occupancy rates, prices are now rising. Owing to higher productivity and a drop in sickness absence, it may have taken time for the effects to become visible in the labour market. However, higher demand for labour and falling unemployment is gradually leading to a tighter labour market. High interest rates in 2002 and fiscal discipline contributed to a deceleration in wage growth to a more sustainable level.
Marzunisham Omar: Statistical science for a better tomorrow Welcoming remarks by Mr Marzunisham Omar, Assistant Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the International Statistical Institute Regional Statistics Conference 2014 “Statistical Science for a Better Tomorrow”, Kuala Lumpur, 17 November 2014. *  *  *  Good morning, distinguished guests, ladies and gentlemen. I am pleased to welcome you to this inaugural ISI Regional Statistics Conference 2014 on “Statistical Science for a Better Tomorrow”. Bank Negara Malaysia is most honoured to jointly host this event, together with the International Statistical Institute and its South East Asia Regional Network, the Department of Statistics Malaysia, and the Malaysia Institute of Statistics. Today, we have more than 500 statistical researchers, practitioners, policymakers and users of statistics from around 40 countries. With such diversity of participants, I believe the conference provides an excellent platform for the participants to share insights on the application of statistical science for knowledge discovery, innovation and policy. The importance of statistics cannot be overstated. The formulation of decisions – by individuals, businesses and especially policymakers – is as good as the statistics collected and the capacity to interpret the data. While the need for accurate and reliable statistics is common across all fields of study, two other requirements for the compilation and analysis of economic and finance-related statistics can be considered to be rather unique. The first is timeliness, given the rapid pace in which economic and financial developments can change.

Cost efficiency will probably become even more important, meaning there are no grounds to expect that access to cash services in rural areas will improve. I do not conclude that the commercial banks ought to maintain an unnecessarily large network of branch offices and cash machines. There is no real difference here whether such a network is supported by the clients of the banks or by the Estonian taxpayer, in any case it is an unreasonably expensive solution. That said, the commercial banks do need to explain their vision for access to banking services more clearly than they have done so far, and they should themselves arrive at a solution that is acceptable to society. In short, the position of Eesti Pank is that the guiding principle for the provision of cash and banking services across Estonia is that it should make economic sense. At the same time, every person in Estonia must have access to banking services, and so we must find alternative flexible solutions in Estonia. The next question is how those flexible solutions should be supplied.