samchain/econo-pairs-v1 huggingface dataset:
The main reasons for changing payment habits include the increased convenience of the electronic payments, for example increased limit on the amount of contactless payments, the perceived risk of infection from banknotes, governments’ recommendations to use cash less, as well as more difficult access to and lower acceptance of cash at the points of sale. This trend in payments is unlikely to be reversed. Almost 90% of the respondents stated that they would continue to use cash less once the pandemic is over. Similar trends in payment habits can be observed in our country as well. Consumers have shown strong preferences for using cashless instruments such as cards. For example, the number of payment transactions initiated on the virtual point of sale last year doubled and continued to raise at double-digit growth rates this year. Also, the volume of contactless card payments increased by about 50% in 2020 and this trend has continued this year. Obviously, advancement in technology opens the doors to innovative digital services, but to unlock its true value for businesses and consumers, we as regulators have a role to play. In this context, clear example is the Payment Services Directive 2 (PSD2) that opened up EU payments market to higher competition, by establishing a level playing field for traditional players and new entrants, while providing higher protection for consumers. The new concept of open banking was conducive to richer payment landscape with numerous new entrants (third party providers) and numerous new customer-centric services.

Ambassador Iimura has agreed – and I thank him profusely for this – to make the introductory speech to remind us of the importance of this anniversary and the celebrations that will take place throughout the year. In order to celebrate this historic anniversary, we decided to organise this symposium in a place that itself has a very rich history: the Golden Gallery of the Hôtel de Toulouse. I will mention in passing that 200 years ago this year the Banque de France chose the Hôtel de Toulouse for its head office. I will not, this morning, go into great depth about the history of this place. Nevertheless, on a day like this, given over to History, I will just say that this gallery was designed in the early 17th century by François Mansart for M. de La Vrillière, a minister of Louis XIII, and was then renovated in the style of the day at the beginning of the following century by Robert de Cotte, the First Architect of Louis XIV, for the Count of Toulouse (the legitimated son of the Sun King), its new owner. Although this symposium is being held in Paris in the most prestigious part of the Banque de France, it is, nonetheless, a joint symposium of the Banque de France and the Bank of Japan. Indeed, without the remarkable efforts of the Representative Office of the Bank of Japan in Paris, which has played a leading role in its organisation, this symposium would never have seen the day.
The idea behind this statement was that we should have an appropriate action plan to reach our vision, the target. In fact we did have a plan! Over the last 5 years, we have proved that our post-conflict policies and the strategies implemented under the “Mahinda Chintana” have produced desired results, enabling us to reach our expected targets. This was even endorsed by the Asian Development Bank Chief, Takehiko Nakao during his visit to Sri Lanka in June 2014. He said, I quote, “Sri Lanka is on the path to becoming another Asian Economic Success Story”. Last year, we invited the well-known emerging market portfolio manager and eminent writer, Ruchir Sharma for the Central Bank’s 63rd Anniversary Oration. He also highlighted the possibility of our economy becoming another “Breakout Nation” as he has already written in his book, “Breakout Nations: In search of the Next Economic Miracles” in 2012. The encouragement provided to the global investors by the renowned investment banking and equity markets specialist and investment Guru Fraser Dinnis to “Sell Singapore, Buy Sri Lanka” further reiterates the steady and impressive performance of our economy which has turned Sri Lanka around to a more attractive investment destination. Honourable Minister and distinguished guests, all above statements made by world renowned personalities prove that we are actively involved towards making our dream a reality. Ladies and gentlemen, having raised our economy to greater heights in the post-conflict period, today, we are on the threshold of a new era for our country.

The Governing Council at its meeting yesterday reaffirmed its intention to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of our net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation. This will reinforce the stock effect channel and, as a result, is likely to also help to mitigate abrupt changes in the direction of capital flows. The second factor that may help explain the persistence of cross-border capital flows relates to our forward guidance. By clearly spelling out the Governing Council’s reaction function, and the sequence by which we would adjust our various policy instruments, markets were able to better anticipate our actions based on the progress made towards a sustained adjustment in the path of inflation consistent with our inflation aim. They understood that, even as we were gradually reducing the monthly pace of purchases in response to growing confidence in the convergence of inflation towards our aim, our key policy rates would remain at current levels “well past” the horizon of our net asset purchases. This transparency has contributed to reducing policy-induced uncertainty on the rate outlook, thereby extending the planning horizon of investors and, ultimately, moderating volatility. More recently, the enhancement of our forward guidance in June has provided a similar sense of the direction of the rate outlook in the euro area beyond the expected end of net asset purchases in December.
In summary, the authorities are going to need to establish minimum standards for the amount of bonded debt – or gone-concern LAC – SIFIs have in issue, with a requirement that they are capable of being bailed-in by the RA of the jurisdiction in which the issuing entity is domiciled. Containing contagion (1): holders of bank bonds The purpose of resolution regimes is to contain disorderly disruption of the financial system. Equally, in order to avoid taxpayers providing solvency support, losses must fall to creditors. It is therefore important to ensure that the imposition of losses on creditors does not itself cause systemic distress through contagion. That will depend heavily on who within the financial system holds bank bonds. It would be impractical to identify individual holders of bonds on the eve of resolution, applying case-by-case discretion. This needs to be addressed through regulatory policy. Most obviously, regulators need to ensure that banks do not hold each other’s bonds, except for example in small amounts as part of market-making. Secondly, regulators are going to need to ensure that some investors, for example lifeinsurance companies, do not have concentrated exposures to bonds issued by single banks or to banking sectors. 7  For groups with a pure holding company, senior debt issued from holdco is structurally subordinated to claims on the group’s operating banks and dealers.

Any separate group-service companies need to maintain sufficient capital and liquidity to continue to support the principal operating companies before they are wound down or sold to third parties. And it would probably be useful to have governance arrangements that give some form of control rights to the operating companies over the service companies during that transition. In broad summary, it will be apparent that, even once the statutory resolution regime is in place in all key jurisdictions, many financial groups are going to need to restructure themselves in order to achieve resolvability – financially, legally, organisationally. Indeed, a group’s choice of financial and operational structure will influence which of a SPE or MPE resolution strategy is preferred by the home and key host authorities. These will be bespoke restructurings – and will be on top of the plans for systematic structural reforms of banking around the world (Vickers, Volcker, Liikanen, and so on). Cross-border co-operation The final precondition for success I want to highlight is, of course, effective cross-border co-operation. For a SPE strategy, successful implementation will depend on the home authority providing assurances to the key host authorities so that they refrain from taking independent action. Instead the host authorities would rely on the home authority to give effect to a group-wide resolution and, where necessary under the law, would take local action to help the home authority. Host authorities are going to need to be clear about the assurances they need – ahead of time and during the execution of the groupwide resolution.
First, while exchange rate policy is effective against imported inflation and domestic cost pressures arising from rapid economic growth, it is less so against inflation in housing rentals and car prices. Even so, housing prices and car prices cannot keep rising rapidly in an environment of weakening economic growth. The measures taken to address supply-side issues in the housing market and public transport will also help to ease price pressures in these two areas. Second, too rapid a rate of appreciation of the Singapore Dollar can significantly hurt our economic performance, especially in light of heightened uncertainty in the external environment. In sum, exchange rate is taking longer than usual to moderate inflation, but it remains our broadest and most effective anti-inflation tool. MAS will continue to keep a close watch on developments in the global economy and price pressures in the domestic economy. The next Monetary Policy Statement will be released as scheduled in mid-October 2012. MAS remains focused on anchoring inflation expectations as economy undergoes restructuring to reduce dependence on foreign labour Looking at medium term, the domestic economic environment will remain challenging for monetary policy. The Singapore economy is making a transition towards productivity-driven growth. This will help to reduce our reliance on foreign labour and raise the wages of low-income Singaporeans. But rising wages must mean rising costs and rising prices, at  BIS central bankers’ speeches  3  least until productivity improvements kick in.

For the financial channel, it will be mainly through a spike in risk aversion and drying up of bank credit, quite similar to 2008. Already, we have seen some retraction in the Eurozone banks’ trade finance activities in Asia, but the local and global banks have stepped in to fill the void. Financial market stresses will be felt most keenly in capital flows, currency markets, and interbank funding. There could be larger and more volatile capital flows. We must be prepared for both excessive inflows as well as outflows. This could in turn have either upward pressures or downward pressures on the Singapore Dollar. Interbank funding could tighten further. We are keeping a close watch on market liquidity conditions, especially in the availability of US Dollar funding. Finally, the impact on safety and soundness of financial institutions. Financial institutions operating in Singapore have limited direct exposure to peripheral Europe. But if the crisis spreads to core Europe, the contagion could be larger. MAS is closely monitoring banks’ lending exposures and funding profiles. Given our close links to global financial networks, we will not be unaffected. But our financial system is sound and we should be able to weather the storm. Our local banks – at the core of the financial system – have strong capital and liquidity positions. They have very good asset quality, with non-performing loans ratio at just 1.3%. We have been carrying out periodic industry-wide stress tests.
News conference  Berne, 13 June 2019 Andréa M. Maechler  Introductory remarks by Andréa M. Maechler  I would like to start by outlining developments in the financial and foreign exchange markets. I will then make a few comments regarding the SNB policy rate and the replacement of Libor. Finally, I will provide some background information on the SNB’s recent decision to join the Network for Greening the Financial System. Financial and foreign exchange markets  In Q1 2019, the risk markets – especially the equity markets – recovered from the downturn in Q4 2018. This was partly due to the Federal Reserve signalling its willingness to be ‘patient’ on further interest rate hikes, and partly to the fact that economic data for Q1 2019 painted a more benign picture than the markets had expected at the end of 2018. In April, equity market indices briefly rose to new highs in several countries. In May and early June, many of these indices declined in response to a weaker economic and inflation outlook and, in particular, the abrupt escalation of the trade dispute between the US and major trading partners like China and Mexico. In aggregate, the major equity markets in North America and Europe have gained over 5% since the last news conference in December 2018. By contrast, over the last six months, yields on government bonds have fallen significantly overall in most advanced economies.

Current economic and monetary policy outlook Today, a mild recession in the euro area around the turn of the year is quite plausible, as ECB President Christine Lagarde recently highlighted.1 Today, we face euro area inflation that continues to be far too high, having reached double digits in October. Today, long-term interest rates in the euro area are around 2.5 percentage points higher than when I was first due to speak to you last year. Today, as Bundesbank President Joachim Nagel said just last week, - "muss die Geldpolitik auf der Hut sein".2 Monetary policy must be on its guard. And monetary policy is not just on its guard but is taking action. The increase in interest rates reflects several steps in the monetary policy normalisation which the ECB started in December 2021. These were the phasing-out of our pandemic support measures, the subsequent full phasing-out of our net asset purchases, and three consecutive policy rate hikes across our July, September and October monetary policy meetings totalling an unprecedented 200 basis points. Today, it is not evident that the observed turn in macroeconomic sentiment will substantially alter the inflation outlook, even if a mild recession were indeed to materialise. Against this backdrop, we have communicated that we will continue to promptly withdraw monetary policy support and move policy rates further to a level that is consistent with inflation reverting back to our 2% target in the medium term.
It is said that a central bank must have foresight, so that it can take action in time and contribute to the stability of the economy. Foresight on a different level was demonstrated by Nicolai Rygg long before the invasion of Norway. Two years earlier, in 1938, Rygg had assigned a secret mission to the 21-year old Ivar Borg. Every morning for several months, the young man was locked into the Bank’s vault to pack up the gold reserves. When German troops were approaching Oslo, the gold was ready to be quickly loaded onto pre-requisitioned lorries and, after a dramatic escape, was safely shipped out of the country. The gold reserves gave the government-in-exile in London the financial freedom to pursue its activities. A central bank safeguards value. Norges Bank no longer guards the nation’s gold. The gold was sold long ago. Today, the Bank manages the nation’s income from the black gold beneath our seas. This will provide financial freedom of action for future generations. A well-functioning monetary system with stability in the value of money is still at the core of Norges Bank’s public mission, as it has been for the past two hundred years. Inadequate access to reliable means of payment affects trade in goods and services and can cause the economy to stall – now, as then. At the same time, the role of the central bank has evolved over time, requiring it to adapt to a constantly changing stage.

So, there is a risk that central bank may cut interest rate by too much, hence, sowing the seeds for inflation and an asset price boom down the road as well. On the other hand, sterilized intervention also entails quasi-fiscal costs, as well as adding to inflation risk from the build-up of local currency debt should there be future fiscal stresses. Moreover, international reserves accumulation can also risk damaging central bank credibility as they can incur balance sheet loss when reserves are marked to market in local currency. These are all important and delicate points for policy consideration. The second challenge is the ability of emerging market central banks or financial supervision authorities to identify and quantify risks of potential financial instability in advance. On this, we find stress testing to be a powerful tool to assess financial stability ex-ante. Unfortunately, financial institutions and regulators in emerging markets have significantly lagged behind their counterparts in advanced economies, especially on credit and liquidity risk stress testing. Therefore, regulators in emerging markets should move faster to increase the use of macro stress testing. They should also push financial institutions to invest in human resource and technology to conduct macro stress testing at least on an annual basis. And regulators and monetary policymakers must increase coordination in order to arrive at more relevant and convincing macro stress testing scenarios. The third challenge is the role of prudential measures.
The European Central Bank can also be said to target inflation in practice, without a formal commitment. Broadly speaking, all these central banks have a similar approach. Inflation targeting requires careful preparation of forecasts for economic aggregates – not least inflation – a high degree of central bank transparency and effective instruments and transmission channels for policy measures. Iceland moved onto an inflation target under fairly difficult conditions. The króna had weakened substantially and was close to the lower tolerance limits when the new policy was adopted. It then depreciated rapidly in spring 2001. The consequence was a surge in inflation, which peaked at around 9½% at the beginning of 2002. Subsequently it declined sharply, not least on account of the tight monetary stance, and the 2½% target was attained later the same year. For some time inflation remained below or around target, but since the first half of 2005 it has overshot, and was well above target for a while. The various reasons  BIS Review 111/2007  1  for this development have been described in detail in recent Central Bank publications and I shall not elaborate them upon over and above the causes I have already mentioned. In order to attain its inflation target, the Central Bank has a single instrument: the policy interest rate. The policy rate applies to Central Bank facilities for financial companies and its impact is transmitted through them into the economy.

A longer time horizon can contribute to clarifying monetary policy considerations and thereby enable us to better explain the way we work. If, for example, we see that inflation is slightly above two per cent at the end of the forecast horizon, our policy rule says that we should raise the repo rate to hold back demand and thereby inflation. However, if demand nevertheless falls and inflation beyond the forecast horizon is below the two per cent level, the conclusion is not so obvious. Then it may be time to discuss lowering the interest rate. Extending the forecast horizon may in some situations explain why increased flexibility is needed in monetary policy. These are some reflections on the time aspect and the monetary policy operational framework. However, there are also other important factors indicating that the inflation target and the policy rule must be interpreted with a measure of flexibility. It is easy to have a blind faith in monetary policy’s scope for economic fine tuning, but we should be sceptical of this for at least two reasons. One is that our forecasts and other reports on which the interest rate decisions are based contain a large measure of uncertainty, because of gaps in statistics, information lags regarding economic trends, incomplete knowledge of how companies and households will react and structural changes, such as increased globalisation. Reactions to monetary policy may also vary considerably over time, partly, but not completely, due to economic activity.
In principle, the question is whether and to what extent automatic balancing mechanisms should be invoked on the EU general fiscal stance level and be targeted at the smoothing of regional disparities with automatic income transfers from the wealthy to the less-wealthy regions - thus, in fact, compensating for the lack of the exchange rate mechanism within the single currency regime. Also in recent months the question has been raised whether or not the requirements of the Stability and Growth Pact are too rigid. By way of general comment, I should say that there are sufficiently many examples of great disparities between different regions of a federal state. Regional policy is crucial also for states with high labour mobility. Ultimately, the success of regional economies depends primarily on the efficient resource management and extensive income transfers can even slow down the adjustment process. In my view it is obvious that as long as the European Union remains to be the alliance of independent member states, there will be neither need nor possibility for any additional communitisation. Exceptions could include precisely defined circumstances when an intervention on the EU level would be justified in order to ensure the uninterrupted functioning of the internal market. Harmonisation of the fiscal policy on the macro level would be automatically accompanied with the tax rate equalisation. At that, taxation policies of any given member state reflect principal choices of their internal policy and preferences of the entire society.

D.  Concluding remarks  To date the European Union faces several complicated but well-known economic policy problems from the recent past. Estonia as the future EU member state must take this into account. It is not enough to be able to overcome challenges on the WAY to the European Union. We must become equal partners to other European states, be able and willing to participate in the discussions on the monetary and fiscal policy issues, perceive Estonia in Europe and Europe in Estonia. Today the European Economic and Monetary Union within which 12 states have adopted the single currency, offers a historic chance to create a truly strong, flexible and efficient economic area. I believe that potentials of the single currency will be exploited in the best possible way. It would serve the interests of the current as well as future member states and the whole of Europe. BIS Review 51/2002  7