samchain/econo-pairs-v1 huggingface dataset:
Central banks need to define the conditions under which they provide these two types of liquidity. In particular, they need to decide on the fee/interest they wish to charge and on the level and type of collateral they consider appropriate. Allow me to discuss briefly both features. 2  2  For further details see Charles M. Kahn (2006): Why pay? An introduction to payment economics. BIS Review 130/2007  Central banks typically provide intraday liquidity on more generous terms than overnight credit. Why? To answer this question, consider the following alternatives: imagine that central banks would only ask for interest when credit spans a weekend, then we would have intra-week credit. Or, more extremely, imagine that interest would be charged only for credit spanning the year-end. Or why don’t central banks require banks to settle every hour, such that every end of hour would be what today is an end of day, with credit bridging every end of hour being charged at the monetary policy interest rate. I think that the reason why central banks choose a full day as the demarcation line reflects in particular three considerations. First, economic projects have rarely, if ever, a lifetime of less than a day, so there is no need to impose positive interest rates at the appropriate policy level intraday from a transmission mechanism perspective.

Bandid Nijathaworn: Economic volatility in the Year of the Rat Speech by Dr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at a seminar on “Economic Volatility in the Year of the Rat, Fight or Flight”, organised by the Foreign Correspondents’ Club of Thailand, Bangkok, 6 March 2008. *  *  *  Thank you and good evening, Let me begin first by thanking the FCCT for the invitation. It must have been a long while since I last visited or spoke at a FCCT event, so it is good to be back. Tonight’s topic is economic volatility in the year of the Rat. According to Chinese astrology, Rat is an auspicious animal, and the year of the rat is usually a year of plenty, bringing opportunity and good prospects. So, I think we have a good start. And judging from what has been happening, this year looks to be interesting and challenging both for the markets and policymakers. At this time, we are seeing widespread fears of recession in the US, a deepening of the credit problem, and stubbornly high oil prices. These developments are definitely a negative setting for the global economy and financial markets. Tonight, my talk will focus on global economic volatility and possible implications for Thailand. And I want to do this by offering a perspective on how we see things developing from a financial regulator’s point of view. First, the US economy. Latest economic data from the US are not positive.
In fact, one in three of the questions asked related to this issue.15 In my opinion central banks should contribute to this common purpose, insofar as this does not interfere with the Eurosystem’s primary objective, which is price stability. Indeed, in the Eurosystem we have embarked upon a strategic revision of our monetary policy. As part of this we intend to reflect on the way in which we can incorporate climate risks and promote the sustainability of the economy. For this purpose, we need, first, to improve our understanding of the implications of climate change and economic policies designed to mitigate this phenomenon for the economy as a whole and, in particular, for price stability. The overriding aim should be to incorporate these implications into the economic analysis and forecasting tools on which the decision-making process is based.16 In addition, climate risks (both physical and counterparty risks) may affect other elements of monetary policy instruments and operations. In these areas, the main objective of central banks should be to ensure, along with other public authorities, that markets correctly address climate risk. Once this objective has been achieved, our monetary policy collateral policies would immediately lead to an adjustment in the amounts that counterparties can obtain. These and other considerations must be analysed in the Eurosystem monetary policy strategy review. However, while this review is carried out, we in the Governing Council of the ECB are aware, to paraphrase President Lagarde that trickles become oceans if cared for.

In fact, if the – basically fiscal – measures implemented by governments are sufficiently successful the role of regulators and supervisors should largely be to ensure that financial institutions properly incorporate the impact of such measures into their risk analysis. That said, many of the models used by institutions to evaluate risks are based on historical data, which, by their very nature, will take a long time to incorporate the changes that occur. Stress tests may be very helpful here and supervisors could develop action guidelines as a reference for institutions. The role of central banks and monetary policy  14  For example, the evidence we have clearly shows that the worsening of the financial position of a solvent borrower may lead to insolvency, while its improvement, by definition, simply means that the borrower remains solvent. Thus, the solvency of the system as a whole may deteriorate even though the aggregate economic situation does not change, if the financial situation of some borrowers worsens and this is offset by an improvement in that of others. 6  The general public currently have rather high expectations regarding the role that central banks can play. An example of this is the press conference held following the meeting of the Governing Council of the European Central Bank in March. In her answers to journalists questions, President Lagarde mentioned “climate change” up to ten times.
Although the growth rate of credit began to fall as from 2006, growing debt and the loss of competitiveness over the 12 years to 2008 led the external imbalance to an unsustainable position, with a current-account deficit of 10% of GDP and a strong increase in Spain’s external debt. But what counts is that Spain has since adjusted its current-account deficit at a spectacular pace. From almost 10% in 2008, the deficit fell at the end of last year to 3.7% – an adjustment of more than 6 pp of GDP in three years – and at the end of 2012 we might already be in balance. The climate of pessimism accompanying the crises leads some to underestimate the effort made by Spanish private-sector firms, suggesting that the external adjustment has been due exclusively to the fall in domestic demand. This decline naturally plays a part, but the improvement is also attributable to the relative gains in our export shares compared with other developed countries. During the years of crisis, Spain has seen its exports outgrow those of France, Italy and even Germany, and this situation should not worsen in the coming years. And not only has there been an improvement in exports, but the decline in imports has been greater than the fall in domestic demand, which also shows gains in the share of sales of Spanish products at home. Behind these improvements in the current-account balance is the significant progress recorded in the trade and services balance.

While the merit of what has been achieved should be accorded to many, allow me briefly to acknowledge the work of the staff of the Banco de España, and most specifically the body of bank examiners, economists, lawyers and the senior managers of the supervisory, regulatory and legal arms of the Bank, on whom the greatest burden has fallen in terms of implementing the strategy approved in legislation. The fact is, the task discharged by them has perforce been complex and time-consuming. The decision by the authorities – previous and present alike – to use limited public funds in the reconstruction of the banking system was warranted because the big Spanish banks did not and do not need help and because, given the delicate situation of our country’s public finances then and now, the impact on the markets of a sharp and sudden increase in the budget deficit might have led to the collapse or intervention of the entire Spanish economy, as indeed occurred in some other countries. But with this strategy of minimising the use of public resources, the restructuring work increases exponentially and extends over time. The Spanish supervisor has had no “bad bank” with which to restructure the sector. Here we have not seen a State which, armed with taxpayers’ money, has bought bad assets from banks, thereby resolving all supervised banks’ problems at a stroke. Our Bank’s supervisory team has had to apply a strategy which has obliged it to seek predominantly private solutions.
There is still a considerable amount of Maltese currency which has not been presented for redemption. There is about Lm11 million € million) in coins and something like Lm28 million € million) in notes. Holders of coins have two years to present them at the  4  BIS Review 152/2008  Central Bank of Malta and in the case of notes it is 10 years. Money is still coming in, but at a very slow pace. Do you think this Lm39 million will ever be returned? The experience of other countries suggests there is always a considerable proportion of currency issued which is never returned. It depends on how long the currency has been in circulation. Many coins which were issued up to 30 years ago have probably left the country through tourism or have been lost. It is the same with notes, especially the small denomination notes – they might have been lost or deteriorated. Some of the higher denomination notes might still be hidden away, and maybe forgotten. Has the euro hoarding started? I do not suppose all those who had that habit have adopted a new way of doing things. In 2007 there was considerable activity with people exchanging Maltese lira notes for euro on the kerb market – and that probably represented mainly hoarded money. We had people who were hoarding money because of habit – these were persuaded to open bank accounts.

And, even for domestic imbalances, short-term interest rates would probably need to be held substantially higher for a persistent period in order to suppress rapid rises in asset prices or growing imbalances. Such policy actions could generate significant economic costs. The practical difficulty of implementing a policy of “leaning against the wind”, where the main policy instrument is short-term interest rates, should not be underestimated. If, as  BIS Review 86/2009  3  policymakers, we were successful in preventing a bubble from inflating, it might appear as if we were responding to phantom concerns. The bubble or imbalance would be nowhere to be seen, but interest rates would be higher, inflation would undershoot the inflation target and we would appear to have inflicted unnecessary economic hardship. That could undermine public faith and support in both the inflation target and the MPC. For me, the single most important lesson from the financial crisis is the need to expand the range of instruments available to policymakers. The inflation targeting framework provides the scope to respond to asset price bubbles and to imbalances that threaten future economic stability. But short-term interest rates are not well suited to managing such risks. The precise design of such new instruments is now the focus of much work and analysis. It is likely that a range of instruments and initiatives will be required. These may extend beyond new regulatory instruments and should embrace the need for greater international policy coordination.
It is usually considered desirable to have not only stable prices, but also as stable an economy as possible. One important question is therefore how monetary policy can contribute to this. The preliminary work to the new Sveriges Riksbank Act considered it natural that monetary policy could not be formulated merely in relation to price stability. The working group that produced the new act considered that the Riksbank should, without neglecting the long-term price stability objective, support the economic policy objectives of sustainable growth and high employment. However, the group also saw this as a natural consequence of the Riksbank being a public authority under the Riksdag. It was thus unnecessary to confirm by law any objectives other than price stability. The group also considered that it would be inappropriate to have several statutory objectives, as monetary policy is a blunt instrument and cannot affect, for instance, how growth and employment develop in the long term. In other words, the question has never been whether monetary policy should consider the real economy, but rather how this can best be done without neglecting the price stability objective. In practice, monetary policy takes the real economy into account in that we do not aim to bring inflation back on target as quickly as possible in every situation. When there is a deviation from target – which happens most of the time – our ambition is normally to return inflation to target within a time period of two years.

Ladies and gentlemen, you will agree with me that automation of processes brings in some efficiency which should translate into effective utilisation of resources. Instead of spending time processing bulk payments, employees will have time to concentrate on other more important assignments, such as deposit mobilisation, credit portfolio growth and administration, all of which are important for the wellbeing of an institution in terms of profits, enhanced shareholder value and growth of the economy at large. The world is changing in terms of technological advancement and new methods of doing business are being developed every day. As a country and through innovations like the product we are launching today, we need to constantly keep up with these developments. Ladies and gentlemen, as you are aware the government continues to give tax and other incentives for institutions and individuals importing computers and computer parts. This is deliberate. It is aimed at stimulating economic growth and as such we all have no excuse for not taking advantage of this development. We expect all commercial banks in Zambia to take full advantage of this for the benefit of the Zambian people through improved service delivery. In this connection, I would like to take this opportunity to call on Zambia National Commercial Bank Plc, as a national bank, to take the lead in responding to our call and indeed government’s call to reduce lending interest rates further.
There was a constant stream of worries, one thing after another, one disheartening report after another, and minor setbacks were followed by major setbacks. It was reminiscent of an operating theatre. The task was onerous not only because of its proportions, but also because of the oppressive weight of the anxiety that accompanied it.” 2 “The greatest risk lay in the fact that this anxiety had now become pervasive. The very foundations of confidence, the nation’s confidence in its own credit institutions had been shaken … The most important objective was therefore to prevent an avalanche, seek to contain the damage, hang on and hold back. That was the dominant thought, to prevent total collapse, for the danger of this was indeed present… and the general atmosphere of nervousness manifested itself in the most peculiar ways. In the blind panic that ensued, unreasonable attacks were made on institutions that were more than deserving of their depositors’ confidence.” 3 There may have been a similar feeling in many countries last autumn that the “oppressive weight of anxiety had become pervasive”. The recent financial crisis started with problems in the US subprime market. It was difficult to foresee that problems in a small segment of one market could have such dramatic consequences for financial markets the world over. But the financial system had changed. 1  See Knutsen, Sverre and Gunhild J. Ecklund (2000): ”Vern mot kriser? Norsk finanstilsyn gjennom 100 år (Defence against crisis? 100 years of Norwegian financial supervision)”, p.95.

Not that I want to defend the past economic regime in any way, of course, but let’s not forget that it had elements which can be traced back at least implicitly to the pre-war period. An explicit return to the three traditions I mentioned is the central feature of our post-1989 economic history. Many of us clearly remember that the liberalisation of prices and foreign trade in 1991 was accompanied by effective stabilisation measures. These included an appropriate devaluation of the koruna against a basket of currencies and the maintenance of balanced budgets or even slight surpluses. It is therefore no accident that in 1991 inflation was “only” 56% here, as compared to triple figures in Poland and often quadruple figures in other transforming 1/2  BIS central bankers' speeches  economies. The Czech National Bank embraced the legacy of price stability right from its establishment in 1993. The maintenance of a fixed exchange rate until 1997 was a condition for attaining singledigit inflation and provided a fixed point in the unstable transformation environment. The switch to inflation targeting in 1998 marked the start of a roughly ten-year transition to price stability according to the definition long applied in advanced market economies. Maintaining price stability is not just our constitutional duty, but a long-standing legacy that we proudly embrace. The second feature of our economic history that I mentioned at the start is an ability to cope with the consequences of the struggle for economic independence.
Jobs and skills have moved to front and centre of MAS’ financial sector development agenda. The sector will disrupt many existing jobs no doubt, but will also create many good ones. Working with the industry, we are resolved to help our workforce seize the opportunities that a thriving financial centre at the heart of a dynamic Asia presents. On that note, let me stop here and I look forward to your questions. 10 / 10  BIS central bankers' speeches

The U.S. was not alone in this shortcoming, but given our position in the global financial system, we especially should have done better. We’ve taken important steps reflecting both new legislative mandates and a broader effort to rethink our regulatory and supervisory framework. In particular, systemically important banking organizations must now hold amounts of capital and liquidity that are better aligned with their risk profiles, compensation schemes for these institutions will be more focused on rewarding long-term results and the official sector is making progress in solving the “too-big-to-fail” dilemma. All of this remains very much a work in progress. But, these efforts should help us to avoid repeating the mistakes of the recent past, and to take a more proactive stance toward mitigating potential future vulnerabilities. Of course, we at the Fed are not alone here. Since the recent financial crisis, central banks worldwide have been engaged in a broad rethinking of how to better fulfill their mandates. Let me close with a final thought. The largest problems that countries create for others often emanate from getting policy wrong domestically. Recession or instability at home is often quickly exported. Equally important, growth and stability abroad makes all our jobs easier. This means that there are externalities in the work we do, so that more effective fulfillment of our domestic mandates helps to bring us to a better place collectively. Ensuring global growth and stability is and will remain our joint and common endeavor. BIS central bankers’ speeches  3
There is a further argument for maintaining a degree of constructive ambiguity in order to avoid encouraging moral hazard by setting out too clearly the terms on which support might be forthcoming. This is a valid point. But it is also worth noting that the problem of moral hazard, while it can never be entirely eradicated, has been considerably reduced in Hong Kong in recent years. A sound and well established regulatory and supervisory framework has increasingly limited risk-taking activities, and the trend is towards riskbased rather than institution-based supervision. A high level of market transparency allows market discipline mechanisms to work effectively, and risk control systems at the institutional level are generally adequate. In fact, given the degree of sophistication and stability that Hong Kong’s banking environment has achieved, spelling out the rules clearly would, in my view, have positive advantages. Clear criteria on collateral requirements in the event of lender of last resort support, for example, may well provide incentives for institutions to hold better quality assets and thus further reduce moral hazard. The Scope of Lender of Last Resort Support But it is necessary to be clear about what is meant by lender of last resort support. So let me now deal with this important definitional point. Lender of last resort is a term which tends to be used rather loosely, and may mean different things to different people. There are in fact three activities of a central bank which might be referred to as lender of last resort.

We are encouraging and working with key FX players and platforms to anchor their e-trading facilities, matching and pricing engines in Singapore. As the e-trading ecosystem builds up, this will bring about better connectivity and latency; enhance pricing and trade execution; and improve clients’ trade fill-ratios and hence customer satisfaction, for market participants operating in Singapore and the Asia Pacific region. To date, MAS has received good interest from a strong pipeline of players – global tier 1 banks, non-banks and platforms – looking to set up their trading engines in Singapore. XTX Markets and our own home-grown Spark Systems are good examples of the first movers as a start. We will see more in time to come. 24 Next, skills. Complementing the business strategies and innovation agenda will be an active SkillsFuture programme to help the financial sector workforce build world-class skills. The financial industry is no stranger to transformation. It was not too long ago that exchanges were physical floor trading venues where buyers and sellers met and negotiated. But look at how that has changed today. The financial industry has been nimbler than other industries in the adoption of technology and data. As we enhance our market structure, analysis and business processes with the use of artificial intelligence (or AI), algorithmic trading, big data and coding skills, and new financial technology such as distributed ledger technology, the nature of job roles in the FX market will continue to evolve too.