samchain/econo-pairs-v1 huggingface dataset:
Stablecoins and CBDC are not necessarily mutually exclusive. Depending on design choices, they could sit alongside each other, either as distinct payment options, or with elements of the stablecoin ecosystem, such as wallets, providing consumers with access to a CBDC. So there will likely be a role for the private and public sector working together in the future of payments. Brookings, July 2020, ‘Design Choices for Central Bank Digital Currency – Policy and technical considerations’. https://www.brookings.edu/wp-content/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf 9 Bank of England, 12 March 2020, ‘Central Bank Digital Currency: opportunities, challenges and design’. https://www.bankofengland.co.uk/paper/2020/central-bank-digital-currency-opportunities-challenges-and-design-discussion-paper 8  8  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  8  As well as not being exclusive, stablecoins and CBDC are not the only ways to meet changing demands and reducing frictions in payments. We need to continue to enhance existing infrastructure, including by renewal and harmonisation of RTGS systems. This work will continue in parallel with other developments. There are also initiatives like the UK’s New Payments Architecture, which offers a consolidated and open retail payment infrastructure. Public policy questions raised by digital currencies  The rise of stablecoins and the emerging proposition of CBDCs pose fundamental questions about the role and responsibilities of private firms and central banks in the world of payments.

Digital payments could entail greater data on users’ identities and transactions being centrally visible. The data generated could have huge opportunities for the detection and prevention of financial crime, but this must be balanced with the risk of surveillance into private financial matters. These questions, as well as issues of encouraging inclusion and promoting competition, are not ones for central banks and regulators alone to answer. They go the heart of how we use money and who should be responsible for safety and security. There needs to be a wider debate between policy makers, governments and society as a whole. 9  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  9  Conclusion  We have reached the point in the cycle of innovation in payments where it is essential that we set the standards and thus the expectations for how innovation will take effect. It should not happen the other way round, with the standard setting playing catch up. The answer is not to strangle innovation, and it does therefore require a strong dialogue between the parties, which I think we have. It also requires the sort of thoughtful input that Brookings scholars have made. If I can end with one overarching point, I think the public expects its payments to carry the assurance of value that comes with money. At this point, my mother would have said firmly to me, “Thank you for that statement of the blindingly obvious”.
It is also now conventional wisdom that the public good of price stability is best safeguarded by delegating monetary policy to independent central banks 2 , which are not subject to interference from short-sighted political concerns. These consensual points – which are laid down in the Maastricht Treaty and, hence, have a constitutional character in the case of the EU – are a reflection of the painful, central bank led disinflationary processes that in many countries followed the so-called “Great Inflation” era of the 1970s and early 1980s 3 . They are also a sign of a more general dissatisfaction with the experience during those years of stop-and-go policies, where policy-induced booms proved later on to be unsustainable and short-lived. In keeping with the primary objective of price stability, a number of central banks – following the lead of the Reserve Bank of New Zealand – adopted a strategy of inflation targeting during the 1990s. The key element is the public announcement of an inflation rate to be maintained over a more or less defined time horizon. Pioneers of inflation targeting were joined later on by a number of developing countries (for example Brazil, South Africa and Thailand) as well as by some East European transitional economies (such as Poland, the Czech Republic and Hungary). With hindsight, the policies pursued within this framework have been a success, particularly in those countries which – starting from a relatively high inflation level – needed to bring inflation expectations back into line with the central bank’s objective.

It also permits appropriate account to be taken of the endemic pro-cyclical characteristics of the financial system and of boom-bust cycles in asset prices, and to consider under very specific, exceptional circumstances a policy of carefully leaning against the wind, despite the wellknown intrinsic difficulties of identifying misalignments in real time. The role of forecasts in policy making Inflation forecasts are at the centre of inflation targeting strategies. Policy discussion and communication are organised around the forecast process, and decisions are often explained on the basis of deviations of the inflation forecast from an inflation target at a  5  See, for instance, W.R White (2006): “Is Price Stability Enough?” BIS Working Paper, No 205. 6  Remarks at the Conference on Central Banks in the 21st Century, Banco de España, 8-9 June 2006. 4  BIS Review 132/2007  specific time horizon. The numbers, including the baseline scenario and risks, are owned by the policy-setting committee. The Eurosystem also produces macroeconomic projections. These are based on a combination of models and experts’ technical judgments and are owned by staff, rather than by the Governing Council. Twice a year, in June and December, projections are produced by the staff of the Eurosystem under the responsibility of the Monetary Policy Committee, which is one of the Eurosystem Committees composed of senior staff from the ECB and the national central banks.
In view of the fact that risks to financial stability could increase further over the short to medium term, the capital surpluses of domestically focused banks are of particular significance. When defining their appetite for risk and their capital plans, the banks should continue to ensure that they are also able to absorb the losses associated with highly unfavourable but possible scenarios in the future. Even under scenarios of this kind, they should be able to perform their core functions for the Swiss economy – in particular, the supply of credit. The SNB will continue to monitor the situation on the Swiss mortgage and real estate markets closely, paying particular attention to developments in the residential investment property segment as well as to banks’ risk-taking in mortgage lending. As hitherto, the SNB will regularly reassess the need to adjust the countercyclical capital buffer. New banknote series: successful launch I would like to finish my presentation today with a few words on the new 50-franc note, which was released on 12 April 2016 as the first denomination in the ninth banknote series. From the SNB’s perspective, the launch of the new banknote series was an all-round success. First, the changeover at bank counters and ATMs went as planned. According to our information, the general public also encountered no major problems when withdrawing or paying in money at cash machines. Second, reactions to the new banknote were predominantly positive among the public and experts alike.

This means that all parties in the blockchain can be sure that no one can unilaterally make changes without the signature of the others. Third, data are generated by smart contracts which always execute in the same expected way. The smart contract acts as an impartial judge. It executes contracts faithfully in accordance with the pre-defined contractual terms that all parties on the blockchain have agreed to. A blockchain is essentially a database that provides proof of who owns what at any given moment and an immutable record of all transactions. It is, in other words, a distributed ledger. Distributed ledger technology, or DLT, has the potential to transform many industries and economic activities. This goes well beyond the original application of blockchains to Bitcoins and cryptocurrencies. In fact, although crypto-currencies have attracted the most public attention, it is the broader applications of DLT that hold more promise over the short to medium term. Industry applications of distributed ledger technology DLT is particularly suited for industry applications where it is important to know the histories of ownership but there is no trusted central party or reliance on the central party is inefficient or costly. Take supply chain management for instance. DLT can provide the means for registering, certifying, and tracking the supply chain process at low cost. All goods will be uniquely identified and transferred through the distributed ledger, with each individual transaction verified, time-stamped, and encrypted in a transparent process. In financial services, DLT is being experimented with for a variety of applications.
The second factor contributing to rising intra-regional trade is the reform efforts and liberalization policies undertaken by the Asia-9 economies. These reforms which came out of the collective efforts of government and the private sector, include significant trade reforms and progressive liberalization and opening up of markets to greater trade and foreign investment. The outward oriented policy has allowed East Asian firms to be well integrated with the global trading system and ready to participate actively in intra regional trade when the opportunities arise. As important are the structural reforms that encompass the legal, regulatory, and institutional reforms to provide a conducive environment for foreign investors. We have also strengthened the banking and financial sectors so that they are in a position to provide efficient financial services in support of intra regional trade. International standards and best practices are also being adapted in many disciplines such as in the areas of governance, accounting, and taxation to ensure credibility and transparency to our foreign counterparts. These constitute important ingredients of East Asia’s success stories. But most important is the willingness of the governments to open up their economies and the understanding of the business sector on the need to cooperate with their foreign counterparts. Against this background it is interesting to note that growing intra-regional trade has not been the result of the rise in exports to final destination markets in the G3 countries alone, but also the result of stronger domestic demand growth in the region itself.

CPI inflation still reflects the effects of the previous repo-rate increases on housing costs. Various measures of underlying inflation show that inflationary pressures are moderate (see Figure 21). As economic activity recovers, underlying inflation will gradually rise towards 2 per cent in the years ahead. Continued low repo rate will facilitate stable development Our forecast for the repo rate is that it will remain unchanged until sometime next year and that monetary policy will continue to be expansionary — the repo rate is low in an historical perspective (see Figure 22). This will contribute to a gradual normalisation of inflation. Apart from stabilising inflation, monetary policy also aims to stabilise the real economy. Stabilising the real economy means, in more concrete terms, stabilising resource utilisation, that is the deviation of production and employment from long-term levels. Resource utilisation can be measured in many ways, but our overall assessment is that it is somewhat below normal at present. An ongoing expansionary monetary policy may also help to normalise resource utilisation during the forecast period. As resource utilisation and inflationary pressures increase, the need for an expansionary monetary policy will decline. There will be a need to gradually raise the repo rate to bring inflation close to the target and to stabilise resource utilisation. As the situation is highly uncertain, however, things may develop in a different direction than we expect. We see two main risks at present.
And third, a reinterpretation of central banks’ financial stability mandate towards a more active role in crisis prevention is necessary to reduce the need for another round of extensive crisis management in the future. This, in a nutshell, is the main argument of my speech today. In what follows, I will elaborate on the rationale behind the conventional and unconventional measures that central banks have adopted to mitigate the crisis, and explain why central banks need to play an active role in the new regulatory framework which is being implemented in response to the crisis. Central banks may not exactly have a reputation for being big innovators. But just as the Foire du Valais has developed into French-speaking Switzerland’s pre-eminent fair over the past 50 years by successfully combining innovation with its core strengths, central banks have evolved over the past few decades by remaining focused on their core mandate – price stability – while adapting to a changing environment and being open to learn new lessons when they present themselves. The financial crisis was such a moment, and a reinterpretation of central banks’ financial stability mandate is an important lesson to take away from it. Preventing the collapse: conventional monetary policy The economist John Kenneth Galbraith quipped that financial memory is brief and that “there can be few fields of human endeavor in which history counts for so little as in the world of finance”.

At times, we adjust our purchases when certain market functioning indicators suggest that particular securities are less readily available for settlement relative to other securities.11 As it has always done, the Desk closely monitors how its activities impact financial market functioning. Good market functioning is integral for the successful implementation of the FOMC’s directive and for the effective transmission of monetary policy to the real economy. When evaluating market functioning, we consider measures of market activity, such as trading volumes, bid-ask spreads, trade sizes, quote sizes, financing costs, and settlement fails, as well as other indicators. We also monitor the performance of our operations (for example, the prices at which we can execute in comparison to prevailing market quotes or the total amount of competitively priced propositions), the concentration of market participants’ holdings in securities with certain characteristics, the extent and concentration of dealer participation in operations, and the pace of settlement of our MBS purchases. Based on these types of measures, purchases of both Treasury securities and MBS have gone smoothly so far, and market liquidity seems to be holding up well. In addition to this monitoring, we have developed active policies to help prevent market dysfunction as a result of our operations. In the Treasury market, the Desk ceases purchases of a specific security once SOMA holdings of that security reach 70 percent of the outstanding stock.
The opposite applies if the output gap is negative. For a central bank with a price stability target, it is thus useful to have a good idea of the long-term production capacity. If, for example, it is believed to be higher than is actually the case, an excessively loose policy may be being conducted, in the belief that there are spare resources in the economy. This may cause inflation to rise. One hypothesis about why inflation in the United States increased so much during the 1970s is indeed that the Federal Reserve believed that the economy’s long-term production capacity was higher than was actually the case. 3 To a certain extent, this is a “traditional” challenge in the sense that, after each deep recession, it must be asked whether potential output may have fallen and, if so, by how much. Potential output may fall as a consequence of permanent loss of real capital when companies are forced into liquidation or when dismissed personnel have difficulty in finding new work when economic activity turns upwards again. Following the crisis at the start of the 1990s, assessments of this nature were a central feature of forecasting work. Of course, estimating the extent of the output gap is no easy task. As I have already mentioned, it is possible to arrive at fairly disparate estimates even under normal circumstances when there is no reason to suspect a fall in potential output. Looking forward, another aspect also exists that may be more specific to this crisis in particular.

4  BIS Review 68/2010  Figure 4 Inflation and inflation expectations Annual percentage change 16  16 CPI Historical mean  14  14  12  12  10  10 1993-2010 M ean 1,5 Std dev 1,4  8  8 6  6 4  4  1971-1992 M ean 8,3 Std dev 3,0  2  2  0  0  -2  -2 71  74  77  80  83  86  89  92  95  98  01  04  07  10  5  5 CPI Inflation expectations  4  4  3  3  2  2  1  1  0  0  -1  -1 -2  -2 94  96  98  00  02  04  06  08  10  12  14  Note. Inflation expectations refer to money market participants. Sources: TNS SIFO Prospera, Statistics Sweden and the Riksbank  More or less at the same time as inflation decreased and started fluctuating less, growth also became more stable. This increased macroeconomic stability was a more or less worldwide phenomenon, being generally known as “The Great Moderation”. There exist various hypotheses on what may lie behind this increased stability. One of them is that monetary policy had started to be conducted in an improved manner, in which an emphasis on low and stable inflation allowed inflation expectations to be better anchored.
Likewise, the Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past this first interest rate hike and, in any case, for as long as necessary to maintain ample liquidity conditions and an appropriate monetary policy stance. As concerns the PEPP, the Governing Council intends to reinvest the principal payments from maturing securities purchased under the programme until at least the end of 2024. In any case, the future rolloff of the PEPP portfolio will be managed to avoid interference with the appropriate monetary policy stance. As was to be expected, the monetary policy normalisation that began in December has translated into higher short and long-term interest rates in the euro area. Specifically, the 10-year OIS rate, which proxies the euro area risk-free interest rate, has risen by 143 bp since the beginning of the year, while the 12-month EURIBOR has increased by 170 bp. Over the same period, the risk premium on Spanish 10-year government bonds has increased by 44 bp. 4  The new Transmission Protection Instrument (TPI) The TPI is necessary to support the effective transmission of monetary policy. While we continue normalising monetary policy, the TPI will ensure that it is transmitted smoothly across all euro area countries. The creation of this new instrument stems from the conviction that the singleness of our monetary policy is a precondition for the ECB to be able to deliver on its price stability mandate.

I should emphasise, however, that the Eurosystem projections are built on the assumptions that the sanctions against Russia will remain in place over the full projection horizon, that the intense phase of the war will continue until the end of the year with no further escalation, that disruptions to energy supplies will not lead to rationing in euro area countries, and that supply bottlenecks will gradually be resolved by the end of 2023. 1  The reduction owed to the fall in both the services sector component (down 2.4 points to 50.6, a 15-month low) and the manufacturing PMI (down 3.2 points to 46.1, the second consecutive month in contraction). 1  However, a prolongation of the war in Ukraine remains a significant downside risk for growth, particularly if energy supplies from Russia are suspended and result in rationing for firms and households. Likewise, the war could also further dampen confidence and aggravate supply-side constraints, while energy and food prices could remain persistently higher than expected. A faster deceleration in global growth would also pose a risk to the euro area outlook. Indeed, given the high uncertainty surrounding the outlook, the June projections are complemented by a downside scenario that reflects the possibility of a severe disruption to European energy supplies, leading to further increases in energy prices and production cuts.
So this is an extraordinary time for the world financial market and probably most suitable for an international symposium on the subject of financial globalization. Ladies and Gentlemen, Financial globalization has certainly made the international financial landscape look very different today compared to just a decade ago. And almost every day, new events continue to re-shape it even further. One aspect among these changes, however, remains constant. That is, despite the complexity and sophistication of today's financial institutions as well as instruments that are developed to manage all kinds of risks, the remarkable degree of global financial linkage still makes financial turmoil transmit from one country to another at an ever faster pace than we have previously anticipated. Like all financial crises of the recent past, several weaknesses and excesses were initially submerged and only later found to be much larger than the initial estimates, contributing to the permanent boom-bust cycle that seems to always accompany modern business and finance. Understanding the various causes of the crises is only the initial step towards resolving its short-term impacts and preventing its recurrence, if entirely possible, in the longer-term. In the meantime, we will probably continue to have to witness an intensification of the financial crisis. As mortgage-related assets deteriorate further, economic growth will inevitably slow down even more, along with the downside risks of financial and the economic outlook.

These changes are speculated to lead to a marked decline in U.S. influence throughout the world and as a result the much talk about subject of the “new world order”. In our view, however, it might be more fruitful to discuss about the new global framework as a check on global imbalances rather than a new world order. This is because the ultimate winners or losers from globalization are yet to be decided. A long historical perspective is, therefore, needed in order to put the net social cost and benefit of globalization into a proper context. A new wisdom from financial globalization, however, is emerging. As Professor Rodrik will probably agree, reaping the benefits from globalization is by no means automatic. Globalization, financial or trade liberalization, all need supporting institutions for their gains to materialize. Furthermore, past experiences according to Professor Michael Bordo of Rutgers University, also indicate that although the globalization winners appear to outnumber losers in an increasingly integrated world, it is still possible that the losers (even temporary ones) can create a backlash that will once again cause a retreat in the globalization process. Ladies and Gentlemen, It is obvious that a global financial crisis will need a global solution. This symposium on financial globalization is thus very timely and come at a time when policy makers and market participants are in dire need of a better solution. And this year, we are honored to have with us many distinguished speakers from well-regarded institutions to discuss this important topic.