samchain/econo-pairs-v1 huggingface dataset:
Rodrigo de Rato: The IMF in a changing world (keynote address) Keynote address by Mr Rodrigo de Rato, Managing Director of the International Monetary Fund, at the Joint IMF-Bundesbank Symposium “The IMF in a changing world”, Frankfurt, 8 June 2005. *  *  *  Thank you, Mr. Stark, for that opening and introduction. Good morning – It is a great pleasure to be here today among this impressive gathering of experts from many countries. Let me first thank the German authorities for graciously hosting this conference. Their organization of this event is much appreciated. As you know, the IMF was established about 60 years ago. The world economy has witnessed dramatic changes since that time. For instance, our membership has grown four-fold, from around 40 to 184. The world’s financial landscape has also been dramatically altered by the rise of private international capital flows. Throughout the changes of the last six decades, the IMF has continually evolved to meet the needs of its members and the international economic system. It is in that spirit of evolution and renewal that we meet today to discuss issues related to the international monetary system, financial stability and, more broadly, the IMF’s role in the world economy. My remarks this morning may be conveniently divided into three sections: •  The origins of the IMF, addressing its purposes, objectives, and mandates. •  Main changes to the IMF since its establishment, and the reasons for those changes.

Any structure needs to be funded. The use of emergency support should be reduced over time. Maximise Value – The Bank of Cyprus has received substantial capital. It needs to manage its loan book, restructure loans and maximise value. This will not be best achieved through a fire sale. Support the Economy – As the largest and most important bank in the country the recovery of the Bank of Cyprus is vital to the recovery of Cyprus. The bank must continue to prudently lend to business and consumers. BIS central bankers’ speeches  1  The Cypriot economy and the Bank of Cyprus have undergone a severe shock. However, both Cyprus and the bank are resilient and can emerge strongly. It is important to recognise that substantial progress has been made. The Bank of Cyprus is now adequately capitalised and has exited resolution. New management is in place and they are working on preparing the strategy and restructuring plan. The ECB’s Governing Council has recognised the steps taken to restore confidence. Continuing the efforts to create a stronger and safer Bank of Cyprus is in all of our interests. I look forward to hearing the panellists’ views on how this can best be achieved. 2  BIS central bankers’ speeches
The gist of the response is that, on the basis of economic fundamentals, there is no reason why the Hong Kong dollar should be impacted by changes in the renminbi exchange rate. But things get a little more complicated when market sentiment enters the picture. During the Asian crisis, the market perceived a strong correlation between the Hong Kong dollar and the renminbi. This was partly attributable to misconceptions about the economic - and perhaps the political - relationship between Hong Kong and the mainland, and partly due to the market’s practice of regarding the Hong Kong dollar as a proxy hedge for the renminbi. Over the past year or so, however, the renminbi and the Hong Kong dollar have become substantially decoupled in the eyes of the market. This decoupling can be most easily read by comparing the Hong Kong dollar forward spread and the renminbi’s non-deliverable forward exchange rate, which tracked each other very closely until the end of 1998, when they began to diverge. The decoupling suggests that the market has drawn the obvious conclusion from the fact that, since the linked exchange rate was introduced in 1983, the renminbi has depreciated by more than 70%, while, during the same period, the Hong Kong dollar has remained rock solid. And this was confirmed by the calmness with which the market took the raising of the possibility of greater flexibility for the renminbi exchange rate by Premier Zhu.

Joseph Yam: The WTO - China’s future and Hong Kong’s opportunity  Speech by Mr Joseph Yam, JP, Chief Executive of the Hong Kong Monetary Authority, at a conference co-sponsored by the Cato Institute and the Hong Kong Centre for Economic Research on “Globalisation, the WTO, and Capital Flows - Hong Kong’s legacy, China’s future”, held in Hong Kong, on 4 September 2000. *  *  *  I feel honoured to be invited to deliver the keynote address at today’s conference on the implications of China’s prospective entry into the World Trade Organisation (WTO). This is a timely conference for, although the arrangements for China’s entry into the WTO are not yet signed and sealed, it looks very likely that they will be agreed soon. The Cato Institute takes a special interest in the relationship between economic change and government policy throughout the world, and it is appropriate that it should be following this historic event closely. The Hong Kong Centre for Economic Research - now, I note, more than 20 years old - has established a solid reputation for independent research into public policy and economic affairs: it is therefore well positioned to provide the Hong Kong and regional perspective. It also seems right to me - despite the heavy rainfall we’ve been having this summer - that Hong Kong should be the venue for this conference. The reasons, I hope, will become clear in this address.
However, improvements in many leading indicators are still tentative, problems across credit markets linger, and employment remains in a precarious state, all suggesting that recovery is likely to be anemic and protracted. Figure 1: Revisions to GDP Forecasts in Advanced Economies in the Last Three Months (Seasonally Adjusted, 2008Q2=100) 104 102 100 98 96 94 92  USA (Sep09)  USA (June09)  Euro Zone (June09)  Euro Zone (Sep09)  90 2  3  4  1  2008  2  3  4  1  2009  2  3 2010  4  1  2 2011  Source: Consensus Forecasts, June and September. 1. Inflation developments  Distinguished Members of the Press, Inflation developments observed in the first three quarters of 2009 were shaped around the framework that I have already mentioned. The crisis was characterized by a steep drop in economic activity, which was mainly driven by shrinking external demand, tighter financial conditions, and rising precautionary saving. The sharp contraction in economic activity and the collapse of commodity prices have brought down inflation rates across the world,  BIS Review 143/2009  1  including Turkey. In this respect, after displaying a sharp decline in the first half of 2009, annual inflation maintained a downward trend in the third quarter to become 5.27 percent breaching the lower limit of the uncertainty band set (Figure 2).

BIS Review 143/2009  5  Figure 13: Policy Rates in Emerging Figure 14: Change in Policy Rates Markets * between September 2008 and October 2009 in Emerging Markets* September 2008-October 2009 (Basis Points) 20  0  Emerging Markets Turkey  -200  17  -400  14  -600  11  -800  8  -1000  * As of 19 October 2009. Source: Bloomberg, CBRT calculations. Source: Bloomberg, CBRT. Rus sia  Hung ary  Romania  Indon esi a  Mexico Thailand Poland  India  * As of 19 October 2009. Brazil  Turkey Chi le Columbia  Peru South Africa  -1200  0709  0109  0708  0108  0707  0107  0706  0106  5  Data releases on inflation and economic activity since the inception of the rate cutting cycle have vindicated these preemptive monetary policy decisions, and thereby strengthened the impact of policy decisions on expectations, gradually bringing government bond yields to historically low levels on the back of improvement in risk premiums (Figure 15). CBRT’s effective communication policy and management of expectations, along with market perceptions indicating that the Medium Term Program (MTP) released in September is consistent and realistic, played a key role in bringing down government bond yields. This downward trend particularly accelerated after providing a medium-term policy perspective in the July Inflation Report.
The scale, pace and timing of any further increases in Bank Rate will reflect the Committee’s assessment of the economic outlook and inflationary pressures. The Committee will be particularly alert to indications of more persistent inflationary pressures, and will if necessary act forcefully in response. I’ll conclude by offering a few observations on this language from my perspective. First, by focusing on the ‘scale, pace and timing’ of further changes in Bank Rate, the statement clearly widens the discussion beyond the interest rate decision at the next meeting. In my view, this represents the desirable introduction of greater flexibility in our communication of the policy outlook relative to the previous language. It thus reflects the uncertainties we face, and the likelihood that we will have to take finely-balanced decisions over rates not just in August but also beyond that, in the face of two-sided risks to the economic outlook into next year. Second, by referring to ‘any further increases in Bank Rate’, the introduction of greater flexibility does not obscure that the next change in Bank Rate is more likely to be in one direction rather than another. We are talking about rate increases, not rate decreases. At the same time, the reference to ‘any’ increases allows for the possibility of remaining on hold, which helps to capture the potential breadth of opinions on the Committee: after all, we have seen votes to keep Bank Rate unchanged in recent meetings.

As a result, the case for maintaining forward guidance to smooth the transition is, at least in my view, much diminished. On this basis, the ‘further tightening’ forward guidance that had been in place in MPC statements since November – despite its evolution over the intervening period – had come to outlive its usefulness. Speaking from the collective perspective of the MPC, using forward guidance of that form requires near-unanimity across members of the Committee if it is to be meaningful. But, as the patterns of individual votes on Bank Rate in recent months reveals, unanimity about the short-term interest rate outlook no longer exists. We should not be defensive about that. One of the strengths of the MPC set-up is individual accountability and the diversity of view that it encourages. At a time when inflation is elevated, monetary policy faces substantial challenges, and uncertainty is heightened by geopolitical and epidemiological concerns, it would be not only surprising but also worrying if all MPC members moved in lockstep. For all the commentary about ‘group think’ on the Committee, I see little evidence of that in our discussions or published votes. But trying to shoehorn that necessary and constructive diversity of opinion into a common statement[15] is understandably – and probably inevitably – confusing. It certainly is hard to encompass the prevailing diversity of opinion into a short and clear statement of forward guidance. And if, in that context, attempts at guidance create confusion rather than clarity, then surely the time has come to retire them.
Another point that I usually make is that it can be difficult to draw monetary policy conclusions from our forecasts as they only cover a limited forecast horizon of three years. A certain repo-rate path may appear to provide better target attainment than other paths over this limited forecast horizon but could well lead to poorer target attainment beyond it. It is therefore desirable when making monetary policy decisions to take into account the possible state of the economy beyond the forecast horizon, even though it is difficult to do this in terms of quantified forecasts. One way to do this is to choose a repo-rate path that provides good target attainment at the end of the forecasting period but does not entail serious tendencies towards poorer target attainment beyond the forecast horizon. Even though we have a limited forecast horizon, the monetary policy decisions must also to some extent look ahead to what can happen afterwards. The development of house prices and household indebtedness could, for example, entail risks that materialise beyond the current forecast horizon, especially if monetary policy remains far too expansionary for far too long. The question of whether risks of this type should be considered in the monetary policy decisions has been widely debated. One view is that such risks should already be taken into account in our standard quantified forecasts.

The radically-changed economic conditions of course had a major impact on the repo-rate forecast. It was revised so much that the repo-rate path also ended up far outside the uncertainty bands that surrounded the forecast produced in September 2008. It could also be said that the monetary policy actually conducted was closer to crisis management than to forecasting. Let me illustrate this with an analogy. Figure 2 The repo rate and forecasts for the repo rate at different times, per cent 7  7 90% 75%  6  6  50% Outcome September 2008  5  5  September 2009 September 2010 April 2011  4  4  3  3  2  2  1  1  0  0 06  07  08  09  10  11  12  13  Note: All forecasts entail a degree of uncertainty but to preserve the graphic profile only uncertainty bands for the September 2008 forecast are shown. Source: The Riksbank. 6  BIS central bankers’ speeches  Monetary policy is sometimes compared to driving a car, in that it is a case of moving forward safely along a road at a good speed. The forecast can be compared to looking ahead along the road and then adjusting the speed of the car and the movements of the steering wheel to keep the car on the road. The financial crisis can be compared to a collision that threatens to throw the car off the road.
Were these proposals to become mired in detail, they risk sinking, like the Tower of Basel, into the swamp. This is not because these proposals go too far but because they may not go far enough. These reform efforts have too many commas, semi-colons and sub-clauses. They would benefit from a few more full stops. That logic suggests cleaner solutions than are currently being implemented, if not than are currently being contemplated. Strict size limits and forced separation of commercial and investment banking are two frequently cited such radical options (Haldane (2010), Fisher (2011), Johnson and Kwak (2010)). The debate on them has waxed and waned on both sides of the Atlantic. A stalemate has been reached. Having risen to a peak of almost three in 1928, the largest US banks’ price-to-book ratios had by 1931 plummeted to below one. They remained close to these levels for several years afterwards (Chart 20). This discount implied that investors in the bank could improve their wealth by selling-off the banks’ assets separately. Investor pressures to separate began to mount. In response, a number of banks began selling off their equity brokerage affiliates, including the two largest banks, Chase National Bank and National City Bank in 1933. A number of banks delisted their shares. This response, led by the market, paved the way for the passage of Glass-Steagall in 1933. As Fuller (2009) puts it: “Divorce made a virtue of necessity and cursed and condemned bankers jumped at the opportunity to demonstrate their virtue”.

(b)  In-sample performance is measured by deviance and out-of-sample performance by the mean squared prediction error. For both statistics, a lower number implies better performance. (c)  The data set excludes outlier banks with very large risk-based capital and leverage ratios. Excluded observations account for approximately 0.5% of the entire sample. 30  BIS central bankers’ speeches  Chart 9: In- and out-of-sample performance of different models of bank risk (1000 (a)(b)(c) observations)  Source: FDIC and Bank calculations. (a)  Different models estimated using 10,000 random samples of 1,000 observations each. Samples are rejected if there are no observations of bank failure. The different models are used to predict bank failure for approximately 4,300 banks out-of-sample. (b)  In-sample performance is measured by deviance and out-of-sample performance by the mean squared prediction error. For both statistics, a lower number implies better performance. (c)  The data set excludes outlier banks with very large risk-based capital and leverage ratios. Excluded observations account for approximately 0.5% of the entire sample. BIS central bankers’ speeches  31  Chart 10: Summary of out-of-sample model (a)(b) performance  Chart 11: Distribution of daily stock price (a) returns, 1928–2012  Source: FDIC and Bank calculations. Source: Bloomberg and Bank calculations. (a)  Different models estimated using 10,000 random samples of different size. Samples are rejected if there are no observations of bank failure. The different models are used to predict bank failure for approximately 4,500 banks out-of-sample.
The high road to a responsible, open financial system Speech given by Mark Carney, Governor of the Bank of England  Thomson Reuters, Canary Wharf Friday 7 April 2017  I am grateful to Lauren Anderson, Phil Evans, Michael Goldby, Clare Macallan and Iain de Weymarn, for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/speeches  I. Introduction  The United Kingdom has been at the heart of the global economy for centuries. Throughout that period, the City has channelled the life blood of the world economy, finance. th  London emerged as the world’s leading financial centre at the end of the 18 century, overtaking 1  Amsterdam, as Britain became the dominant economy. Whereas other major financial centres lost their importance as economic power shifted elsewhere, London has retained its pre-eminence even as the UK’s relative economic weight has declined. 2  This staying power reflects London’s inherent strengths: its people, law, language and time zone. And it testifies to the City’s enduring commitments to markets, openness and innovation. Long experience teaches that an open global economy is not predestined. A responsible international financial system requires:  -  a shared commitment to markets;  -  common minimum standards;  -  high degrees of cooperation amongst regulators; and  -  resilient institutions and markets at the core. Authorities who oversee the largest global financial hubs, like the Bank of England, bear special responsibilities.

We start from a position where the high road is both readily attainable and highly desirable for all involved. The UK and the rest of the EU have exactly the same rules governing our systems. And we have the most highly developed frameworks for intensive supervisory cooperation. Capital flows seamlessly across our borders. The current EU legal regime allows firms to passport throughout the Union, supervised by the home supervisor. The EU and UK are therefore ideally positioned to create an effective system of deference to each other’s comparable regulatory outcomes, supported by commitments to common minimum standards and open supervisory co-operation. These commitments could be reinforced by reliance on independent peer reviews and a new, independent dispute resolution mechanism. Such an outcome would be entirely consistent with the UK Government’s stated aim of a new, comprehensive, bold and ambitious free trade relationship with the EU that embraces goods, services and network industries. And such an approach could be applied more broadly to the immense benefit of the global economy. The UK and EU have the potential to create the template for trade in financial services – one that leverages the tremendous progress that has been made in recent years building resilience and cooperation. But financial services are only part of a much broader negotiation. Given our responsibilities to promote financial stability, the Bank – like its counterparts on the continent – must plan, purely as a precaution, for all eventualities.
Nina Stoyanova: Innovations Statement by Ms Nina Stoyanova, Deputy Governor and Head of the Banking Department of the Bulgarian National Bank, at the opening of the Financial Forum “Innovations”, organized by Association “Bank of the year”, Sofia, 9 June 2021. * * * Market developments today are driven by the new technologies. They provide a basis for increasingly diverse and innovative payment products. Digitalization of processes and services has led to development in the financial sector in Europe further stimulated by the policies of the European and national regulators. Payment services are getting more convenient, secure and accessible. Today, when consumers make on-line purchases, they expect the payments to be executed swiftly and smoothly, requiring no additional time or effort. The global pandemic increased the interest of different businesses to the payment sector. We witness a quick acceleration of digitalization in most of the spheres of life, such as work, shopping and administrative services. This has also generated a demand for alternative methods of payment. According to the latest public data, three out of four users worldwide have changed their method of payment owing to the Covid-19 crisis. Half of the consumers would opt to shop online, where possible. During the pandemic large part of consumers have tried for the first time a new shopping or payment method. Currently, we observe an enhanced activity of the innovative payment market players. These are FinTech companies that have proven themselves in other sectors but also the so-called “challenger banks”.

In case of remote payments, such as Internet payments, an additional requirement has been introduced for the so-called dynamic linking. It requires linking each transaction to a specific amount and a particular payee by sending one-time code messages by the payment service providers. The forthcoming review of the PSD 2 will provide a comprehensive assessment of the strong customer authentication impact on the level of payment fraud. New requirements are considered in order to reduce ‘social engineering’ and ‘phishing’ types of fraud, including a requirement to 1/2  BIS central bankers' speeches  match the payee’s name in the payment order with that of the account holder. Special emphasis will be placed on the prevention of instant payment fraud. Electronic identification and certificatebased solutions are explored as means of strong customer authentication. Recently, a special focus has been placed on re-defining and strengthening the oversight of the wider payment ecosystem. Specific steps in this aspect have been taken by the ECB with the draft of a single Eurosystem oversight framework for electronic payment instruments, schemes and arrangements (PISA framework), published last year. PISA framework aims to cover not only the traditional payment schemes and instruments (e.g. payment cards), but also innovative instruments, such as digital payment tokens backed by assets (e.g. stablecoins). Last September the European Commission published a Proposal for a Regulation on Markets in Crypto-assets (MiCA), which is currently under discussion.