samchain/econo-pairs-v1 huggingface dataset:
Those who accuse the ECB of an indirect violation of the prohibition on financing public debt with central bank money are making the same conceptual mistake as those who accuse the ECB of not having forced the banks to the use the funds acquired via the LTROs to supply credit to the private sector. In the first case, banks would have had to have been forced not to purchase government  BIS central bankers’ speeches  7  securities, and in the second case, to give credit to the private sector. Both groups of accusers forget that the policy of precise allocation of credit was a norm in various countries until the end of the 1970s. In the 1980s the operational system for monetary policy was radically redefined, principally on account of the heavily distorting effects of such an operational framework on economic activity. Moreover, legal arguments relating to the Treaty and to the current contractual form of repos underlying the LTROs, as well as considerations relating to feasibility, would make it difficult to reinstate such a framework. Finally, the behaviour of credit institutions with respect to households and businesses is not uniform across countries: while some countries saw negative credit developments, others saw growth in credit, in some cases even significant growth.

Risk measurement It will come as no surprise to you that, as a supervisor, I will begin by talking about the second of these elements, namely risks. The process of transition will entail two types of risks to the financial system:  4/9    On the one hand, the physical risks caused by the direct effects of climate change, for example as a result of the gradual increase in temperature, or more frequent or more severe climate events such as storms, flooding or natural disasters.   On the other, the transition risks. These refer to the potential effect on specific bank borrowers of the regulatory measures aimed at sustainably transforming the  economy, technological changes, and changes in customer behaviour and preferences driven by greater environmental awareness. The two types of risk are related: the more ambitious the regulations combating climate change, the greater the transition risk and the lower the physical risk, and vice versa. Environmental risk is a risk in its own right, although its impact materialises through “traditional” banking risks.
The new thing would be to combine those ingredients together, at scale. The question of whether to do so is complex, and beyond the scope of my remarks today. The UK will publish a consultation on this issue later this year. But the implications for central bank balance sheets will also depend heavily on how any CBDC is designed: on who can hold it, where it can be used, how much can be held, and whether it is interest-bearing (Table 1). The Bank of England’s work in this area is available at: UK central bank digital currency | Bank of England. 1  Bank of England  Page 3  Source: Bank of England  Design choices that placed the economic features of CBDC close to today’s banknotes might have relatively limited implications for central bank balance sheets, at least in normal economic conditions. Choices that positioned the economic features of CBDC closer to today’s retail commercial bank deposits could have a more material impact. To give some sense of potential scale, Chart 1 compares two stylised benchmarks – the stock of banknotes; and 20% of retail commercial bank deposits2 – to the size of central bank balance sheets between the period before the Global Financial Crisis and today. In the UK, the upper end of that benchmark range is nearly half the size of the Bank of England’s balance sheet today, and six times that in 2007.

And Tether, sometimes asserted to be the backbone of the cryptocurrency ecosystem, lurched precariously below parity for a period (Chart 3). These gyrations have multiple causes. But ‘stable’ they are not. And the lack of complete, real time, information on the assets backing the promise of convertibility,3 means that holders of such coins must accept at least the possibility of finding themselves badly out of pocket. Such ‘buyer beware’ warnings may be sufficient for coins that are only in niche use. But they cannot be enough for any that reach systemic scale. And that is why the Bank of England’s Financial Policy Committee has recommended that, in the UK, any stablecoin that reaches systemic size should also meet standards equivalent to those  See eg Crypto industry shaken as Tether’s dollar peg snaps | Financial Times (ft.com); ‘We’re Not Revealing Our Secret Recipe’, Tether’s CTO Says (bloomberglinea.com); and Whereabouts of Terra’s Bitcoin Reserve a Mystery After Transfers - Bloomberg 3  Bank of England  Page 6  expected of commercial bank money.4 In practice that is likely to mean being issued by a bank, or by a non-bank that: is subject to rigorous central bank regulation and supervision;5 provides coinholders with a robust legal claim; is insolvency remote; and transparently backs its coins with a precisely defined set of high quality and liquid assets. Source: Bloomberg Finance L.P. Digital Asset Research, Inc.  It’s too soon to say what those assets should be.
The Spanish economy The weakening of the international economy and the loss of buoyancy in the European economy contributed in 2001 to prolonging the gradual slowdown in activity in Spain in train since the previous year, when the first symptoms of the previous lengthy expansionary phase having run its course were discerned. Consumption and investment in construction were the main underpinnings of growth in our economy, while productive investment and exports were the chief components dampening it. That said, GDP increased by 2.8% in 2001, clearly above the figure of 1.5% posted in the euro area. The maintenance of high job creation rates during 2001, set against the slowing trend marked by general developments in the economy, and the favourable financial conditions in place contributed to sustaining household income and helped underpin consumer spending and residential investment. However, the declining course of investment in capital goods steepened in the face of heightening uncertainty, worsening expectations and slowing final demand, which the generous financial conditions were unable to offset. The effects on activity were reinforced by the fall in the growth rate of exports as from the early months of 2001.

As a result, credit institutions' capital adequacy ratio stands three percentage points above the regulatory minimum, calculated in accordance with Spanish rules, and almost five percentage points higher according to the criteria of the Basel Banking Supervision Committee. As a result of the lower rate of banking activity, combined with the impact of the crisis in Argentina, with the consequences of the full implementation of the statistical provision and with the unfavourable performance of stock markets, the growth of net attributable earnings after tax declined to 6.9% in 2001. Although this growth is but one-third of that posted the previous year, compared with our peer countries it may be viewed as satisfactory. This result has been possible thanks to the favourable contribution of the traditional business segment in Spain. Reversing the trend of prior years, the net interest margin picked up slightly while operating expenses fell. As a consequence of the foregoing, the fall in the return on equity was cushioned. Spanish banks have thus successfully negotiated a relatively difficult year. Contributing to this, undoubtedly, have been the improvements during the lengthy expansion in general and risk management, in the containment of costs and in the reinforcement of solvency. These improvements should be built on. Regarding this latter issue, I wish to highlight the significant stabilising role that the  BIS Review 38/2002  7  so-called statistical provision has begun to play.
The targets pertain to consumer inflation and these “point targets” are set jointly with the government. However, with the aim of setting a rule for the Bank’s accountability principle in case inflation deviates from the target or in case a possibility that inflation might deviate from the targets emerges, an uncertainty band has been set as 2 percentage points in both directions. In case inflation figures go outside the band or there is a possibility of inflation going outside the band, the mechanism pertaining to the accountability principle of the Central Bank would be activated and our Bank would explain the reasons of deviation from the target and provide information on the time needed for converging to the target again in an Open Letter to the Government. Such an Open Letter was written and sent to the Government on July 14, 2006 and was also publicized. A lot of ground has been covered in the fight against inflation since 2002. However, price stability is yet to be established. It should be borne in mind that this is a long and tough journey. The developments we have observed in the last few months verify this view and make our efforts even more important. Within this framework, in this part of my speech, I would like to talk about the developments in inflation and the monetary policy responses in the face of these developments since the beginning of 2006 and touch upon the future inflation outlook.

There is no better or more effective policy in the short term for addressing the impact of population ageing and of scant population growth on pensions than to stimulate employment and enhance the system’s overall productivity. Thank you very much. 5
However, the forecast made by the Riksbank and almost all other Swedish forecasters is that the rise in inflation is temporary and is mainly due to various pandemic-related imbalances between demand and supply.18 The same assessment is being made in many other parts of the world where similar developments are being seen, even though the persistence of inflation in the United States in particular is being discussed more and more. However, even if the rise in inflation were to bring us closer to the target after the pandemic, a continued low global real equilibrium interest rate would mean that central banks’ policy rates would still reach the lower bound from time to time. The problem of it being difficult to make monetary policy as expansionary as it would sometimes have to be would thus remain. A new policy regime with fiscal policy in the driver’s seat? According to some economists, the fact that the scope of monetary policy has been restricted has meant that, for some time, we have been in a different regime in which it is fiscal policy instead that has ended up in the driver’s seat of macroeconomic policy.19 If that is the case – and I think there is much that suggests that it is – then this will put higher demands on fiscal policy to be more active in the period ahead than it has been in recent decades. And we could probably have had a better development until now if fiscal policy had taken this more active role even earlier.

I would say it is all about discipline – particularly fiscal discipline, and a changing culture. I am sure that, under the umbrella of this complex topic, all these issues are full of substance so that I strongly encourage participants to debate on the challenges the European Union, in general, and countries like Romania, in particular, face when it comes to economic governance. I wish you success and invite Mr. Gheorghe Ialomiţianu, Romania’s Minister of Finance, to deliver his address. 2  BIS central bankers’ speeches
In other words: if you’re used for payments you should be regulated to the same standard as other entities conducting payments activities. It doesn’t matter what technology you are using. Same risk, same regulation. Nothing new under the sun  The second challenge for regulators is that stablecoins differ from existing payments systems in one fundamental way: Regulation of existing payment chains largely focuses on the resilience of arrangements to transfer money – how money gets from point A to point B. However, the reliability of those chains also crucially depends on the stability of the money they transfer. Existing payment systems transfer money that has been created by other entities — central banks or commercial banks. Stablecoins propose to create the digital tokens or ‘coins’ they transfer. Existing payment systems effectively outsource this issue - they only transfer money that is subject to separate protections and regulations to help maintain stability and confidence. The value of central bank money, which gives holders a claim on the state, is protected by the Bank of England’s monetary stability mandate and inflation targeting regime, while the value of commercial bank money is protected by legal rights that ensure holders can redeem this money one-for-one in the currency they deposited. Robust prudential regulation and deposit insurance in turn ensure that commercial banks can make good on this in all but rare circumstances. 6  All speeches are available online at www.bankofengland.co.uk/news/speeches  6  These protections are important as they underpin confidence in the system.

When I tapped my phone against an ipad to buy my coffee earlier, my payment may have involved as many as four different non-bank entities – in addition to my own bank, the retailer’s bank, and the payment system (in this case, Visa). It is possible that over time, one of these new entities will become so critical that disruption to it could take down the entire chain. And, if they could disrupt the entire chain, the risks these entities could pose would be comparable to the risks posed by the payments systems we currently regulate for financial stability. To safeguard and future-proof our regulatory framework, we need to move away from a system in which how you are regulated depends on the type of entity you are, towards one in which what matters is what risks you  4  All speeches are available online at www.bankofengland.co.uk/news/speeches  4  pose. In other words: regulation of payments should reflect the financial stability risk, rather than the legal form, of payments activities. This should cover the entire chain, end-to-end. This may seem obvious: same risk, same regulation. It is hard to argue that regulation should not reflect risks. And a framework that focused on risks rather than legal form would help level the playing field – ensuring that regulation isn’t unfairly applied to one type of firm but not another as a result of their legal structure or status.
As that year progressed the contribution from Spain began to rise, driven by the recovery in activity and previous labour market reforms. And since the second half of 2015 the employment turnaround has extended into other formerly stressed economies as well, including in particular Italy, Ireland and Portugal. Just as for GDP growth rates, the dispersion of employment growth across euro area countries is now at record low levels. So though the risks to the growth outlook remain tilted to the downside – mainly on account of the geo-political factors I mentioned earlier – the balance seems to be shifting upwards. This is reflected in recent sentiment indicators, which suggest that the recovery may be gaining momentum. The latest euro area composite Purchasing Managers’ Index (PMI), for example, which is a reasonably consistent leading indicator for euro area GDP growth, gave the highest reading since April 2011. 3/6  BIS central bankers' speeches  This was also the assessment of the Governing Council at its last monetary policy meeting in March, where the staff projections for growth in the coming years were revised slightly upwards. And in light of the improving risk outlook, the Council affirmed that it is no longer concerned about deflation risks, nor do we perceive a sense of urgency to take further measures to combat adverse tail risks. Inflation dynamics depend on continued policy support Yet despite these signs of progress, it is clearly too soon to declare success. In important ways the outlook for price stability remains unchanged.

Decomposing the forces that have weighed on wage growth3, we find two principal drivers: first, the still-high unemployment rate and its effect on wage bargaining dynamics; and second, a below-average contribution from past inflation in wage formation, caused by the last few years of exceptionally low headline inflation. As monetary policy has successfully supported demand and stabilised inflation expectations, both of these drivers should wane going forward. Their dragging 4/6  BIS central bankers' speeches  effect on wage growth, however, will take time to fade out. Labour market slack will lessen as unemployment continues to fall, but it is unclear how quickly this will feed through into wage dynamics – especially if the experience of other advanced economies is instructive. A strengthening labour market may attract “marginally attached” workers back into the labour force, or encourage those “underemployed” to seek more hours, causing the effective supply of labour to rise in tandem with demand. Domestic wage pressures may therefore only materialise later in the economic expansion. The influence of the second driver – low past inflation – should also dissipate given the recent recovery of headline inflation. But this may take some time since a number of factors might slow down the reaction of wages to higher inflation. First, wage negotiations in many countries and sectors have largely been concluded for this year, meaning any impact of higher inflation via negotiated wages is likely to be delayed.
The best place to start is the objectives given by Parliament to the PRA, namely the safety and soundness of firms that we supervise, the protection of insurance policyholders and our secondary objective in respect of competition, best described as requiring us to act in respect of the implications for competition of our own actions and inactions but only to the extent that we are not undermining our primary objectives. At the heart of what we do in the PRA is risk assessment. Understanding how firms take and manage risk, the controls they have and the quality of risk management, is at the heart of the job of a prudential supervisor. That’s what we do every day, and the standards of this work have been raised extensively since the crisis, which was very necessary. I never tire of saying that the PRA is a judgement-based supervisor, by which I mean the application of judgement against a framework of rules and regulation. As Mark Carney said recently in the context of the European Union, from which the largest part of our framework of rules and regulations comes: - “Ensuring the Bank of England has the instruments necessary to achieve its financial stability objective will depend on the EU continuing to have regulations of the highest standards, which strike the appropriate balance between harmonisation and flexibility, and which accommodate necessary national responsibilities, including for supervision”. Narrow rules-based approaches to regulation create inflexibility and can be easy to arbitrage.

Encik Abu Hassan Alshari Yahaya: The benefits of online banking services and Inter-Bank GIRO (IBG) in Malaysia Welcoming remarks by Mr Encik Abu Hassan Alshari Yahaya, Assistant Governor of the Central Bank of Malaysia, at the “Experience IBG” Roadshow, Kuantan, 2 December 2013. *  *  *  It is my great pleasure, ladies and gentlemen to meet and welcome all of you to the “Experience IBG” roadshow in Kuantan this morning This roadshow is jointly organised by Bank Negara Malaysia, the Association of Banks in Malaysia (ABM), the Association of Islamic Banking Institutions Malaysia (AIBIM) and the banking institutions to create awareness amongst the small businesses on online banking services, focusing specifically on Interbank GIRO or IBG, which is a payment system that allows a person to conduct transfer of funds between banks. The first roadshow began in Seberang Prai on 22 October 2013, and it will end in Kuching on 5 March 2014, after covering 12 major towns in the country. The first four roadshows have attracted more than 1,500 (1,590) participants, who are mainly the SMEs and micro enterprises and more than 1,000 (1,056) or 66% of the participants have signed-up for the online banking services such as Internet banking and mobile banking. This demonstrated that the explanation and promotional efforts undertaken by the banks during the roadshow’s exhibition has helped participants to understand more about the benefits of using online banking in comparison to cheques.
Its strong fiscal position is exemplary, and the population is relatively young, well educated and quick to adapt to technological and scientific innovations of all kinds. A strong pension system has been built up and – unlike other countries that have great fears about the future of their pension systems and their sustainability – it is clear that Iceland’s pension system is becoming increasingly stronger. Admittedly it is still not mature enough to have begun to pay out a representative proportion of its owners’ lifetime earnings, but this proportion is growing every year and all the pointers indicate that, for the foreseeable future, it will be highly sustainable. Thus the pension system is going from strength to strength in Iceland, at the same time as significant weaknesses are coming to the fore in many comparable economies. Real incomes in Iceland rank with the highest in the world, and unemployment with the lowest. Large-scale investments have recently been made which will generate  BIS Review 42/2007  3  handsome export revenues. Traditional sectors currently enjoy secure markets and high product prices. Undeniably this picture looks very bright and many more positive signs could be cited. But this does not alter the fact that, as I said earlier, the foundation has been precarious in many areas and the medium term will have a decisive significance for the outcome. Uncertainties abound and many households in Iceland thread a narrow path of debt and wages, where if they lose their footing, the fall could be heavy.

They needed temporarily to look beyond their traditional markets for funding, and unquestionably these conditions put their resources and management under strain. It can definitely be said that those involved passed this difficult test. The funding problem that loomed around this time a year ago is a thing of the past, terms in the secondary market have been normalised and market confidence has been restored. This is to be welcomed. What remains, however, is of course that people are now more aware of the  BIS Review 42/2007  1  widespread risks that the future may hold in store. Global market conditions can change suddenly. Credit access, which in recent times has been exceptionally favourable for Icelandic and other banks, may change suddenly if unexpected conditions arise. It is important to be prepared for such a contingency. At the height of this furore, I would venture to say that the Central Bank made a strong contribution with its Financial Stability report, which was deemed to be professional, candid and in line with international best practice. The Bank’s next Financial Stability report will be published towards the end of April. Although these were not enviable times for financial companies, they definitely learned a lesson from this ordeal and are both more cautious and more aware of external influences than before. Rapid and sweeping changes in the financial sector put a great strain on regulatory agencies, which may face an uphill struggle to keep up with the swift pace of developments.