samchain/econo-pairs-v1 huggingface dataset:
Estimates from our recent survey indicate a sharp drop in the use of cash over the last 15 years. Estimates of the exact level of cash use vary according to data sources and methodology. However, it is fair to say that cash is still an important means of payment. Notes and coins will also remain important as symbols of money. I believe that there have been two very important factors behind the rapid transition to electronic payment services in Norway. Banks have cooperated on standards and payments infrastructure while competing on the supply of services, and banks have charged for the use of payment services. Prices that reflect relative differences in production costs encourage users to choose the most cost-effective services. Research (by Humphrey, Kim and Vale) has shown that a  BIS Review 140/2008  1  relatively high price per transaction for paper-based payment services and a low price for electronic payment services have accelerated the trend towards an increasing share of electronic transactions. Without incentives for consumers or merchants to move to more efficient instruments, banks and other payment service providers will more likely be left trying to improve on old solutions. Payment systems are networks for the exchange of values between payers on the one hand and beneficiaries on the other. In two-sided markets like this, the benefit to existing users increases when new users join up.

Safe and efficient clearing and settlement have been in demand as banks’ trust in each other has weakened. In Norway, our systems have had to handle major problems in two Icelandic banks operating in our country. These problems have been handled smoothly. Times of crisis can also be a turning point, providing the opportunity for change. During the Norwegian banking crisis in the late 1980s and early 1990s, Norges Bank and other public authorities put pressure on banks to increase their income from bank charges, including payment services. I believe that as banks have to focus even more on running a costefficient business, the incentives for developing the payment system further will be strong in times to come. For this conference we have received a large number of high-quality papers. I know that the selected conference speakers represent some of the best researchers in this field. We are especially pleased to have as keynote speakers two of the leading scholars in the economics of payments systems: David Humphrey from Florida State University and Jean-Charles Rochet from Toulouse School of Economics. Let me also extend my thanks to the three other members of the programme committee: Gabriela Guibourg from Sveriges Riksbank, Eirik Gaard Kristiansen from the Norwegian School of Economics and Business Administration, and Bent Vale from Norges Bank. As I mentioned earlier, I visit Nice in the South of France quite often. And from my direct observations, I notice that France has developed very fancy methods of processing cheques.
Philipp Hildebrand: Review of the international financial system Introductory remarks by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the end-of-year media news conference, Zurich, 10 December 2009. * 1. *  *  Introduction  At the news conference in June of this year we spoke of a gradual calming in the general financial market environment, although the outlook remains uncertain. Since then we have seen a majority of banks returning to profitability. The horror stories being reported almost daily just over a year ago have now disappeared. It is very tempting just to go back to business as usual. However, we must not forget that – just over a year ago now – the international financial system was on the brink of collapse. Support packages of an unprecedented size were being put together for the banks. Exceptional monetary and fiscal measures were required to combat the dramatic plunge in the global economy – measures which have had to be kept in place to the current time. Only by a narrow margin was a complete collapse of the financial system avoided and the danger of a major depression averted. This experience has clearly shown us all that the principle of sustainability needs to be a much more dominant element in the development of the international financial system than it was previously.

From the point of view of the FSB, the possibility of conducting an orderly resolution of a failing cross-border financial institution is an important element in finding a solution to the “too big to fail” and “too big to rescue” issues. Effective communication between the relevant  2  BIS Review 167/2009  supervisory authorities as well as forward-looking elaboration of emergency procedures are indispensible in this process. Internationally recognised regulations for the dissolution of systemically important institutions that can be enforced under any jurisdiction are no doubt a splendid objective. In the real world, however, different national regulations will continue to exist in this field. From our point of view, reciprocal recognition of national regulations that are mutually compatible, and the associated adjustment of structures and processes, are a more realistic objective. The second element proposed by the FSB is to supplement the increased capital and liquidity requirements with various measures that address the organisational structures of systemically important financial institutions. Measures of this kind could, for instance, create the possibility of extracting operations that were important for the economy and liquidating the remaining operations. The third element in the solution envisaged by the FSB is a financial market infrastructure whose design ensures that, as far as possible, it minimises destabilising effects in the event of a bank collapse. Central counterparties can play a special role in this respect.
A new Client Advisor Competency Standards (CACS) assessment for the Private Banking industry is also slated to be introduced in September this year. These two examinations will allow Relationship Managers – those dealing with either corporate clients or high net-worth individuals – to be independently tested on their product knowledge. We also want to raise the competency levels of professionals dealing with the broader retail investor base. IBF will roll out in the third quarter of this year, new Modules under the MASregulated Capital Markets and Financial Advisory Services (CMFAS) Examination. These  BIS central bankers’ speeches  1  new modules aim at raising the minimum competency standards for CMFAS representatives who wish to sell “structured products”. Despite these efforts, talent remains scarce in the industry. Bankers I speak to express concern about the sufficiency of skilled talent to sustain the growth of the financial industry. PwC’s 2011 Global CEO Survey conducted among 1,200 business leaders world-wide revealed that talent issues are topmost of CEO concerns. Every good CEO knows that it is not just business strategies, processes and technologies which drive new revenue streams. It is people with strong competencies and professional integrity, dedicated to serving the customer, who make the critical difference. Financial institutions must put in place policies and practices to ensure that their staff are well trained before they are allowed to deal with clients. Singapore’s financial sector headcount is expected to grow by 5 to 6 per cent this year.

Ravi Menon: Building talent in the financial sector Opening address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Institute of Banking & Finance Annual Conference, Singapore, 22 June 2011. *  *  *  Ms Kate Sweetman, fellow Council Members of the IBF, ladies and gentlemen, good morning. The financial crisis has triggered a fundamental shift in the global financial landscape. There has been much discussion globally on levelling up regulatory standards to meet the risks of an increasingly complex and inter-connected financial services sector. But there has been less discussion on the competencies that need to be levelled up in financial services – competencies in risk management, corporate governance, and financial supervision. Only if competency standards are raised, will the ongoing financial regulatory efforts bear fruit. Since its inception, the Institute of Banking and Finance (IBF) has been playing a critical role in raising the standards of the financial sector in Singapore. Today, this has become more relevant than ever. Let me give an update of IBF’s efforts. In 2005, IBF launched the Financial Industry Competency Standards (or “FICS”). This is a set of competency standards developed by the industry, for the industry. It provides a practice-oriented approach and a clear roadmap for people working in the financial sector to attain the competencies they need to do their jobs. FICS has taken off quite well. As at end-2010, some 360 training/assessment programmes have been accredited under the FICS framework.
Researchers are already starting to fill this hole (the Gertler-Karadi model employed in Section 5 is but one example) and it is a reasonable bet that the literature will be in a very different place in a few years time. It may be tempting to think that these frictions will become less important when normal times return and therefore that the ability to model the behaviour of intermediaries will only be  BIS Review 111/2010  23  necessary during bad times. That would be, though, an error. Central bankers, as guardians of overall financial stability, need to understand the risks building up in the financial system better than we did during the run-up to the present crisis. That requires greater attention to such issues during good times. 4. Central bank independence. Nothing that has happened over the past decade or so suggests that the thinking behind the delegation of monetary policy to an operationally independent central bank is flawed. But the application of unorthodox policies during the crisis has inevitably forced the central banks concerned to work more closely with finance ministries and sometimes taken them into politically sensitive territory that they would rather not inhabit. Normal times should make it possible to retreat from these unorthodox policies, but a concern to circumscribe the central bank’s powers may well linger. 5. The pursuit of price stability. Because monetary policy failed to prevent the crisis, some have suggested that the emphasis on price stability has been misplaced and that inflation targeting has “failed”.

The idea that periods of economic stability encourage exuberance in credit markets, thus sowing the seeds of their own destruction, is a key part of Minsky’s theory of recurring financial crises (see e.g. Minsky, 1982). The results here provide some empirical evidence for such a dynamic process. Moreover, to the extent that better policy accounted for the Great Moderation, it provides a second, indirect, channel whereby policy may have contributed to creating the conditions conducive to a subsequent financial bust. But it would clearly be a mistake to conclude that policy should aim to induce fluctuations in the macroeconomy in order to prevent financial market participants becoming too confident about the outlook! The right moral is surely that policy makers need to be most vocal about the risks to  BIS Review 111/2010  7  the outlook when things appear to be going well, and to take appropriate restraining action if needed. 3. The instruments of monetary policy  Dealing with the fallout from the banking crisis has pushed central banks in the affected jurisdictions into uncharted waters. The top panel of Table 1 summarizes the wide variety of measures adopted by some of the major central banks, while Chart 5 illustrates the associated expansion in the balance sheets of the Federal Reserve, the European Central Bank and the Bank of England.
Following the bankruptcy of Lehman, contagion spread by many channels, including prime brokerage, OTC derivatives positions, money market mutual funds, tri-party repo and wholesale funding markets. The loss in confidence disrupted the flow of credit throughout the global financial system, generating a global economic downturn and the worst contraction in the United States since the Great Depression. Recognition of the costs generated by the Lehman failure led to extraordinary interventions to prevent further catastrophic failures. These included the rescue of AIG, the FDIC’s TLGP program, the ring-fence of Citigroup’s poorer quality assets, and the TARP injection of capital into the largest U.S. financial institutions. Because this solidified in investors’ minds that TBTF firms – after the Lehman debacle – would be protected, this worsened the TBTF problem. The problem was exacerbated during the crisis by the acquisition of weakened firms by stronger firms, a development that was actively promoted by policymakers in a bid to avoid or temper the consequences of their failure. J.P. Morgan absorbed Bear Stearns and Washington Mutual and its assets grew from $ trillion in 2007 to $ trillion today; Wells Fargo purchased Wachovia and its assets increased from $ billion in 2007 to $ trillion today; and Bank of America purchased Countrywide and Merrill Lynch, increasing its assets from $ trillion in 2007 to $ trillion today. This, of course, made the surviving firms even bigger and more complex. When the smoke had cleared, the situation was clearly untenable.

Caleb M Fundanga: Zambia’s economic overview and its accountancy profession Remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the 2010 Zambia Institute of Chartered Accountants Annual Ball, Lusaka, 24 April 2010. *  *  *  The President – Zambia Institute of Chartered Accountants (ZICA), Mr. Chintu Mulendema The President – Eastern, Central and Southern African Federation of Accountants, Mr. Koos Du Toit The President International Federation of Accountants, Mr. Robert Bunting The Secretary & Chief Executive – Zambia Institute of Chartered Accountants, Mr. Hapenga Kabeta The Chief Executive Officer – Eastern, Central and Southern African Federation of Accountants, Mr. Vickson Ncube Distinguished Members of ZICA Members of the Press Ladies and Gentlemen I am greatly honoured to have the opportunity to join you this evening and to say a few words on the important role that the accountancy profession plays in our economy. The importance of the accountancy profession has indeed been highlighted following the recent global financial crisis in which a lack of appropriate governance arrangements and clarity about the inherent risks taken by financial institutions contributed to the near collapse of financial markets in the developed economies. Clearly the accountancy profession has an important role to play in ensuring that the regulatory response to the crisis leads to more robust and transparent financial institutions that serve the needs of households and firms and avoids the build-up of systemic risks.
In defining the purposes of the IMF in Article I to be, among other things, “to promote international monetary co-operation”, the term “consultation and collaboration on international monetary problems” is used. So it would be appropriate to describe that same monetary end as the prevention and cure of monetary problems. Indeed, the rapid pace of financial liberalization and the associated globalization of financial markets have meant that monetary problems, when they arise, can be highly contagious on the global and particularly on a regional dimension. And if they are to be properly handled, by way of prevention or cure, there is a clear need for international monetary co-operation. 6. As to who should be working together, it is quite obvious that the interested parties would necessarily include the monetary authorities of economies facing or potentially exposed to monetary problems. The increasing realization of this need to work together has led to the formation of various, mostly regional, forums where monetary authorities gather to discuss issues of common interest. BIS Review 91/1997  -2-  7. Insofar as the Asian region is concerned, these forums are proving to be quite useful, but there is regrettably also some resistance in making further and the much needed progress because of, believe it or not, turf issues between ministries of finance and central banks, or perceived excessive rivalry on the part of individual economies in vying for the lead and influence in the co-operative effort.

In this connection, I should pay tribute to the foresight of Bernie Fraser, then Governor of the Reserve Bank of Australia, who called for the establishment of a new regional institution -- for want of a better name, an Asian BIS -- to promote Asian monetary co-operation. Bernie saw quite rightly that “globalisation is elevating the international dimension of monetary co-operation”. In response to his call, EMEAP convened a working group to study the proposals and, at its first Governors’ Meeting in Tokyo in July 1996, further established two working groups and a study group to share knowledge and expertise on financial market development, central bank operations and banking supervision issues respectively. Although the question on the establishment of a regional institution to further Asian monetary co-operation has been put aside for the time being, the progress achieved by the various groups was commendable, with ambitious plans to produce the Asian equivalent of the Green Book on banking supervision, the Red Book on payment systems and a Gold Book on reserve management practices. 20. Meanwhile, greater international monetary co-operation involving the Asian economies was also advanced when the BIS admitted the People’s Bank of China, the Reserve Bank of India, the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Bank of Korea, among others, to its membership in 1996, the first new Asian members after the Bank of Japan. 21. All these initiatives were unfortunately overshadowed by the advent of the Thai crisis, which erupted in May this year.
Turning to Chart 3, the solid line shows that in spite of the various measures adopted by the ECB, whether those operating through the interest rate channel or through credit volumes, the net injection of liquidity remains relatively low. The upper part of the Chart, in blue, shows the liquidity injected by the ECB into the Euro area economies. The lower part, in red, shows the balances deposited with the Eurosystem by Euro area banks. The Chart also shows how a large part of new liquidity was deposited back at the ECB by banks. The objective of the current Targeted Long Term Refinancing Operations (TLTROs) is to inject more liquidity at a low rate that is fixed for four years while the negative deposit rate is to discourage funds going back to the ECB. There are indications that the contraction in credit supply is bottoming out. This signals a potential turnaround in credit dynamics in the Euro area. Also, the latest ECB’s Bank Lending Survey saw banks report a further easing of overall credit standards. The various announced measures are expected to inject liquidity into the system in two different ways, namely through direct asset purchases and through bank borrowing from the Eurosystem. Both routes essentially transfer risks from the financial system to the Eurosystem, and hopefully should lead to a greater ability to fund investment in the economy. In the process, the Eurosystem’s balance sheet will expand. Prudential reform in the Euro area I will now turn to financial stability issues.

This further cut to the negative deposit facility rate increases the incentive for banks not to hold immobilised surplus liquid balances in their accounts with the Eurosystem. In the non-conventional arena, the ECB has set in train a new long-term refinancing operation explicitly geared to make lending to the private sector more buoyant. These operations, which will be launched from September this year to June 2016, may have a term of up to 4 years, at a very attractive cost for banks: 10 basis points above the main refinancing operations rate, which is equivalent at present to only 0.15%. Given that the aim of new long-term injections is to stimulate bank loans to the non-financial private sector, their availability has been linked to both the stock and the flows of lending extended by banks to households and firms, although loans for house purchase have been excluded from these calculations. The non-conventional measures agreed in September also include two new asset purchase programmes, the details of which will be addressed in the next ECB Governing Council meetings. The Eurosystem may acquire financial instruments derived from securitisations that meet various requirements. They must be simple, transparent and based on loans to households and firms in the euro area. The programme is expected to be able to contribute to reinvigorating the securitisations market, a major market that has been greatly affected by the crisis.
The group was also encouraged to work with vendors, notably the Depository Trust and Clearing Corporation (DTCC), to implement solutions providing a framework for ongoing processing efficiency and data integrity. The result was the launch, in November 2006, of DTCC’s Trade Information Warehouse. In parallel, the Basel Committee on Payment and Settlement Systems has been investigating developments in the OTC derivatives space more generally, updating work carried out in 1998 to map the landscape and identify risk issues. The Committee published a report in March 2007. The report recognises that the clearing and settlement infrastructure has been strengthened significantly in recent years, noting, in particular, the progress in automating and centralising key posttrade functions. But the report also highlights that there is more to be done. For instance, while processing backlogs in credit derivatives have been reduced substantially, they remain sizeable in other product lines. Recognising that the group convened by the FRBNY has been effective in resolving co-ordination problems, the report argues that momentum from the credit initiative should be carried across to other products. An initiative is already under way in this regard, with the FRBNY group having been expanded to 17 firms and a broader range of products. Firms are working towards targets for backlog reduction. Automation is a key element of this initiative, although it is recognised that there needs to be interoperability between core vendor services if the benefits are to be realised.

The development and growth of credit information registries needs to be supported by a robust regulatory and supervisory framework. As the recovery in the global economy continues to be weighed down by uncertainties, greater attention is been focused on the role and scope of shadow banking entities in transmitting risks to the overall financial system. Such entities include those outside the regulated banking system that are involved in the extension of credit to borrowers or facilitate the credit intermediation process. Whilst credit information registries are not directly involved in the provision of credit, it plays a significant role in facilitating and enabling the expansion and outreach of credit intermediation by making available credit information to lenders. If the infrastructure is not well-managed and not subjected to appropriate oversight, it could inadvertently result in significant build up in leverage in the economy. In addition, the legislative framework is also critical in facilitating cross-border data flow, an area that I foresee will be the next, if not already, major area of discussion in the credit reporting industry. With globalisation and the increasing ease of movement of human capital and businesses across borders, we cannot deny that there will be an increase in the amount of credit extended across borders as well.