samchain/econo-pairs-v1 huggingface dataset:
Clearly, then, there has been a rapidly rising tide of banking information. Or has there? The Godfather of information theory, Claude Shannon, defined information in terms of its ability to reduce our uncertainty. 60 But page length and certainty are not synonyms. As even professional investors find banks’ annual reports somewhere between undigestible and unfathomable, it seems possible more banking information, in the conventional sense, may have made for less banking information, in the Shannon sense. One interesting diagnostic comes from looking at the nature of the information provided by banks’ annual reports, rather than its quantum. Linguistic analysis provides a range of metrics for determining the complexity of a language, including word and sentence length. 61 By taking a range of measures of linguistic complexity, and applying them to banks’ annual reports, we can get a window on Shannon’s measure of information-content. Chart 3 plots six metrics of linguistic complexity, as applied to the annual reports of the four largest UK banks. 62 It compares them with a series of alternative publications, specifically a UK broadsheet newspaper, a UK tabloid newspaper, a set of recent Bank of England reports, a selection of my own speeches, and a selection of speeches by the leaders of the UK’s main political parties. These comparators have no significance beyond the fact that they are examples of material written for a general audience. What this demonstrates is that banks’ annual reports rank highly on the linguistic complexity scale, well above even a broadsheet newspaper.

Decisions were now taken by the Bank’s MPC and were accompanied both by published minutes of MPC meetings and a quarterly Inflation Report. This pushed the wordcount per decision up to around 20,000. Fast forward to today. Monetary policy decisions are still made by the MPC and communicated through Minutes and the Inflation Report. But there have been additions. A Monetary Policy Statement now accompanies every policy decision. And, after a lag of eight years, transcripts of the policy meetings themselves will in future also be published. By my rough estimates, that will push the word-count per monetary policy decision up to around 30,000 to 35,000. These are big steps forward from an openness perspective. The key question, from a Shannon perspective, is how far they have helped understanding of monetary policy by the general public. The evidence here is mixed. On the upside, around 60% of the general public believe the Bank has a good understanding of the economy. On the downside, despite the raft of transparency initiatives, only around a third believe the Bank operates with openness. And, perhaps most tellingly of all, only around a quarter believe the Bank explains its actions and decisions in terms they can understand. 63 What explains this mixed message? Perhaps, as with banks, some of the explanation lies in the nature of communications, rather than their quantity. Chart 4 puts Bank of England reports and speeches on the linguistic complexity map.
We are taking a four-pronged approach to building the digital asset ecosystem. first, explore the potential of distributed ledger technology in promising use cases; second, support the tokenisation of financial and real economy assets; third, enable digital currency connectivity; and fourth, anchor players with strong value propositions and risk management. EXPLORE POTENTIAL OF DISTRIBUTED LEDGER TECHNOLOGY IN PROMISING USE CASES The most promising use cases of digital assets in financial services are in crossborder payment and settlement, trade finance, and pre- and post-trade capital market activities. There are several promising developments, including in Singapore. In cross-border payments and settlements, wholesale settlement networks using distributed ledger technologies such as Partior – a joint venture among DBS, JP Morgan and Temasek – are achieving reductions in settlement time from days to mere minutes. In trade finance, networks like Contour – formed by a group of trade banks – are establishing common ledgers with traceability to automate document verification, enabling faster financing decisions and lower processing cost. In capital markets, Marketnode – a joint venture between SGX and Temasek – is leveraging distributed ledger technology to tokenise assets, which reduces the time needed to clear and settle securities transactions, from days to just minutes. SUPPORT TOKENISATION OF FINANCIAL AND REAL ECONOMY ASSETS The concept of asset tokenisation has transformative potential, not unlike securitisation 50 years ago. Tokenisation enables the monetisation of any tangible or intangible asset. It makes it easier to fractionalise an asset or split up its ownership.

Yet others see MAS as having struck the right balance, that “the crypto winter is proving MAS’ policies to be right”. What does MAS really want? Well, we know what we want but I think we need to do a better job of explaining it. Before I get to that, it is important to be clear what we are talking about. Public and media attention has tended to focus on cryptocurrencies. But cryptocurrencies are just one part of the entire digital asset ecosystem. To understand the issues more sharply and what the benefits and risks are, we need to be clear what the different components of this ecosystem are. I can understand why there is confusion about cryptocurrencies, blockchains, and digital assets. The inherent complexity of this ecosystem has made it difficult even for MAS to get its messages across. So, today, we will try to do a better job of explaining the ecosystem and its different components – and what MAS is actively promoting; what MAS is discouraging; and what are the risks MAS is seeking to manage. My apologies if the next couple of minutes sound like a tutorial but it is important that we are clear about the concepts we are dealing with. A good place to start is with digital assets. A digital asset is anything of value whose ownership is represented in a digital or computerised form.
In Chart 7, the greater the number of years spent in school, the darker the green in which the country is colored. In Asia, there are a number of dark green areas, such as Japan, Korea, Malaysia and Sri Lanka. As you would expect, Hong Kong and Singapore also belong to this group, although it is not shown clearly on this map. One may get the impression that Asia as a whole is not as green as North America or Europe, and is more or less similar to South America. This would seem to indicate that there remains significant potential for further accumulation of human capital in the region. At the same time, there are some interesting figures relating to U.S. universities, which are generally acknowledged as providing the highest standard of education, attracting talented people from all over the world. If you look at the data for U.S. university students by their country of origin, you can see that students from Asian countries dominate, as shown in Chart 8. Those students returning to their home countries will no doubt have a profound impact on the human capital there. It is well known that Bangalore, the IT hub of India, benefited from returnees from Silicon Valley. Moretti’s study shows that innovative, highly skilled workers contribute not only directly to the higher quality of human capital, but they also have a positive effect on the skills of those around them – a sort of positive externality.

2 Unemployment peaked at nearly 12% in the eighties and over 10% in the early nineties – after smaller falls in output. 2  Labour force data were published after the date of this talk: unemployment has dropped to 7.9% in the three months to April. 2  BIS Review 91/2010  Throughout the recession we have heard many reports from firms about how they and their workforces have responded to recessionary pressures. Those reports are from our Agents or MPC members talking directly to business contacts across the regions and in all sectors – a truly invaluable source of information for the Committee. It has been clear that there has been an unusual response from companies and their employees. Many firms have sought to retain staff wherever possible, rather than shed them as in previous downturns – hours have been shortened and wages frozen or even cut where possible, rather than making people redundant. Large firms with smaller suppliers have tried to work with suppliers to keep their supply chains intact, which has helped smaller firms to survive. Many employees – at least in the private sector – have been willing to forgo income in order to retain their jobs. Tax officials have worked very hard with firms to give them the time for tax bills to be paid.
In the early years of the MPC there was an intense debate about these imbalances, and how they should affect monetary policy. 24 In a speech in April 2000, I argued that “it is important not to let domestic demand grow too rapidly for too long. The longer the correction is left, the sharper the required adjustment will be”. 25 The question was how much to stimulate domestic demand, at the cost of exacerbating the imbalances, in order to compensate for weak external demand, and the minutes of the MPC in 2001 and 2002 explicitly discussed the case for accepting inflation below target over the two-year horizon. 26 The Committee rejected the case, and during that period most of the dissenting votes on the MPC were for lower rates (see Table 3). The dilemma, and the MPC’s resolution of it, was summed up by my predecessor Eddie George in 2002 when he said “So in effect we have taken the view that unbalanced growth in our present situation is better than no growth – or as some commentators have put it, a two-speed economy is better than a no-speed economy.” 27 Was that the right choice? As in some other industrialised countries, asset prices, including house prices, had been pushed up by falls in long-term real interest rates (see Chart 7).

In February 1929, Josiah Stamp went to Paris as a member of the Young Committee to assess whether the reparations debts run up by Germany could be repaid – the similarities with the present situation in Europe are too poignant to dwell on. In a letter to Keynes, Stamp compared these international meetings to a conjuror trying to pull a rabbit out of the hat: “It is still a madhouse, in a way – but all are mad in a very genteel way, the main occupation being elaborate proofs, from different angles, of sanity. One half sit round a hat saying with Coué reiteration: there is a rabbit – there is. The other half try to make a noise like a succulent lettuce. There is a general conviction that the more eminent the conjurors convened, the more certainty is there of the existence of the rabbit”. 33 The only escape from madness is the power of ideas. Today, we understand less than we would wish about how the economy works. The challenge of trying to understand more, and of developing those new ideas, belongs to you – the next generation of students and academics at the LSE and elsewhere. Go to it! 33  Stamp’s letter is reprinted in the collected works of J.M.Keynes volume XVIII, p.306-7, Macmillan 1978. Émile Coué was a French psychologist who developed a popular method of psychotherapy based on optimistic autosuggestion. He would have been right at home in modern economic policy debates.
None of this means financial institutions are excused from the need to manage their balance sheets prudently. But as Bill Winters observed, more exacting liquidity requirements mean the conditions for using central bank facilities can be less stringent (and more effective). This is one example of the synergies that arise from the return of banking supervision to the central bank. With our announcements today, we are building a liquidity framework for the markets of tomorrow. In the markets of today, initial usage of these facilities is likely to be limited. The MPC’s stock of asset purchases and the Funding for Lending Scheme currently provide all the liquidity and collateral that the sterling system needs. But as these operations are wound  small relative to the global supply of assets capable of meeting this demand. As the CGFS has recently shown, the stock of non-cash collateral eligible for derivatives transactions is some $ trillion, and the supply of AAA– and AA– rated government bonds alone has risen by nearly $ trillion since 2007. See the CGFS report, “Asset encumbrance, financial reform and the demand for collateral assets” available at http://www.bis.org/publ/cgfs49.pdf. 10  Bagehot, W. (1873) “Lombard Street”, particularly pages 205–207. 11  See “Liquidity insurance at the Bank of England: developments in the Sterling Monetary Framework”, available at www.bankofengland.co.uk/markets/Documents/money/publications/liquidityinsurance.pdf. The Winters Review is available on the Bank’s website at http://www.bankofengland.co.uk/publications/Documents/news/2012/cr2winters.pdf. 12  BIS central bankers’ speeches  5  down over time, we expect to see banks making increasing use of our new permanent facilities.

Mark Carney: The UK at the heart of a renewed globalisation Speech by Mr Mark Carney, Governor of the Bank of England and Chairman of the Financial Stability Board, at an event to celebrate the 125th anniversary of the Financial Times, London, 24 October 2013. * 1. *  *  Introduction  When the Financial Times opened for business in 1888 London was the world’s preeminent financial centre. It had the most international banks, the largest capital markets, and the deepest money and gold markets. It backed projects all over the world, and most of world trade was financed by bills drawn on London. Supporting the critical mass of banks, insurers and investors was an army of solicitors, accountants and clerks.1 What London had lacked, at least until the FT’s great rival Financial News was founded in 1884, was a ready provider of financial news. The FT famously set out to report “Without Fear and Without Favour”, and declared itself to be the friend of the honest financier, the respectable broker and the legitimate speculator; and the enemy of the closed stock exchange, the unprincipled promoter and the gambling operator. Perhaps as a consequence, its initial circulation was modest. The preoccupations of 1888 were not very different than today. Editions of the FT 125 years ago contained stories on economic development in China, the health of Spanish government finances, and the state of Irish banks.
Many of Norges Bank’s activities within this area are linked to our role as issuer of banknotes and coins; these activities are a public service, and costs are covered by the central bank. However, Norges Bank is also often in competition with others when it performs a number of other payment system services for banks and the postal system, which incur either no charges or no cost-covering charges for these services. This practice is currently under internal evaluation at the Bank. Consequently, we must anticipate that pricing for processing cash will approach full cost over time. It will be interesting to see if this has any affect on the public’s use of cash. 3.2. Interbank systems (clearing and settlement systems)  I would now like to look more closely at risk and efficiency in interbank systems and, particularly, at our standing internationally. 3.2.1. We have made a fair amount of progress  The establishment of NICS and NBO8 provided us with a modern clearing and settlement system in Norway, which we managed to implement at approximately the same time as the G10 countries and the EU. Our systems have certain positive properties, such as the possibility of releasing a gridlock situation in gross settlement (in NBO) and centralised information on banks’ liquidity (in NICS). Our central bank lending arrangements are generally similar to those found in other countries, where it is commonplace for collateral to be furnished for all loans in the central bank.

A transition to a so-called “Y-copying” - also in the Norwegian SWIFT system - should be a long-term objective.10 Foreign exchange settlement We must assume that the Norwegian payment system is also vulnerable to a fairly substantial amount of foreign exchange settlement risk. This risk arises because the parties to a trade must usually send the currency sold long before they know whether the currency they have purchased has been received. We know that the krone portion of foreign exchange turnover makes up a very large part of the turnover in the gross settlement system, and that such trades can amount to NOK 90bn kroner daily. The transition to gross settlement has thus reduced settlement risk in the Norwegian system, but at the same time this transition may not have addressed what may represent the largest risk. Norges Bank intends to identify foreign exchange settlement risk among Norwegian banks in the same way as has been done for G10 countries. Norges Bank also supports the inclusion of Norwegian kroner in the  10  Y-copying: the payer bank sends a payment order to the data centre, which first sends a settlement order to the settlement bank and then, when the settlement bank has confirmed that settlement has occurred, sends the payment order on to the payee bank. 9  BIS Review 7/2000  foreign exchange settlement system CLS.11 Ties to the CLS will be in line with international recommendations and will greatly reduce the foreign exchange settlement risk of trading in NOK. 3.2.3.
So far this year, it has bought currency for 30 b.kr., as opposed to 21 b.kr. over the same period in 2014. If it maintains that pace, it will buy more currency in 2015 than in 2014. As a result, the reserves exceed the outstanding foreign-denominated loans taken to finance them – by 65 b.kr. as of the end of February. But we mustn’t rest on our laurels; we need sizeable reserves as we prepare to lift the capital controls. I mentioned uncertainty surrounding the estimation of potential FX outflows once the controls are lifted. But one thing is certain: if the failed banks’ estates were given a green light tomorrow and could convert all of their krónur to foreign currency, and the same happened with the offshore overhang, there is no way we could safeguard stability, let alone bolster confidence, except perhaps after a long time has elapsed. The Central Bank of Iceland has designed a model intended to assess the impact of various developments in the balance of payments over a long horizon, including capital account liberalisation measures. When applied to this instance, the model reveals that our entire foreign exchange reserves would be wiped out – and more besides – if they were used to shore up the exchange rate. This would never be done, of course, and therefore the currency would depreciate sharply.

The initial foreign currency mismatches in their balance sheets have been reduced are now within the limits provided for in Central Bank rules, and their domestic and foreign liquidity positions have improved. But the banks are operating in the shelter of the capital controls, and looking ahead, questions concerning their size and efficiency remain to some extent unanswered. Many factors have been favourable for us in spite of global headwinds, which were initially reflected in a marked deterioration in terms of trade and are still reflected in a weak economic recovery among our trading partners. Looking back at the three challenges I mentioned a moment ago, we can say in broad terms that the macroeconomic goals have been met thus far. The financial system now stands on much more solid ground. It is primarily in connection with the third challenge, of reintegrating Iceland into international capital markets, that more work needs to be done. But even in this area we have made significant progress. GDP growth, a balanced economy, a Treasury surplus, and the Central Bank’s foreign currency purchases have created good conditions for the liberalisation of the capital controls. The credit ratings of the sovereign and the commercial banks have improved. The sovereign regained access to foreign credit markets some time ago, and the banks have opened a crack in the door. But even though we have made significant progress, the game is not yet won. Debt levels are high, rendering borrowers vulnerable to shocks, and the capital controls are still in place.
Norman T L Chan: Responding to the financial crisis – financial reform impacts and regulatory regime changes Opening remarks by Mr Norman T L Chan, Chief Executive of Hong Kong Monetary Authority, at the Asian Financial Forum 2010, Policy dialogue: “Responding to the financial crisis – financial reform impacts and regulatory regime changes”, Hong Kong, 20 January 2010. *  *  *  1. “It has often been said that history, especially financial crisis, tends to repeat itself. Notwithstanding the disturbingly frequent occurrence of seemingly similar financial crises, I am inclined to believe that history does not repeat itself because, upon close scrutiny, no two crises are exactly the same. It may be more correct to say that mistakes will be punished by the market. If people do not learn from their mistakes, then the market will continue to repeat its punishment. The only difference between the major financial crises is that the punishment is getting more and more severe, if not violent.” 2. “Going forward, I can see two possible ways to learn more about the financial markets. One is to learn from past mistakes and do something now. The second is to wait until the next disaster strikes and try to do something there and then.

In any case, there are several key questions that need answers to properly identify NPOs and their activities in a country. These questions include: i)  What is an NPOs sector ? ii)  How many NPOs are in operation? iii)  What types are they (religious, cultural, educational, sports). iv)  What activities do they perform? v)  Are there registration requirements and record keeping requirements for NPOs? vi)  Are there reporting requirements? vii)  Are there mechanisms to verify funds are spent as advertised and planned? So it is fair to say that there are major challenges and practical issues that need careful consideration when the issue of money laundering and terrorist financing is discussed from the perspective of NPOs. The global concern Let me now briefly highlight some of the concerns that have emerged globally in the area of money laundering and terrorist financing. The goal of a large number of criminal acts is to generate a profit for the individual or group that carry out these acts. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardizing their source. Illegal arms sales, smuggling and the activities of organized crime, including, for example, drug trafficking, human trafficking and prostitution rings, can generate huge amounts of cash. Embezzlement, bribery and computer fraud schemes can also produce large profits and create the incentive to “legitimize” the ill-gotten gains through money laundering.