samchain/econo-pairs-v1 huggingface dataset:
Turning now to market transparency, what is the situation in Sweden? MiFID entails the introduction of rules for transparency before and after share trading. The requirement applies to all trading facilities and involves the publication of prices and volumes. So for shares there are no deficiencies concerning transparency in these respects. There may, however, be shortcomings in over-the-counter trading in interest-bearing securities and derivatives. A large proportion of fixed-income trading in Sweden is done by telephone rather than on a market. Derivative instruments can also be traded off-market. 8 If trading is arranged instead with an electronic facility, each order is matched against the best price and market access can be improved for new players. Still, there may be financial markets whose functioning is not improved by increased transparency. It should therefore be up to each market, including the Swedish fixed-income market, to decide which approach is most effective. What are the lessons from this argument? Well, in times like these, coloured by financial market uncertainty, there is much less propensity to take risks. Financial market participants are more interested in low-risk assets, low-risk markets and counterparties that they know and are safe. In a severe situation, this can mean that in certain cases trading ceases altogether because even small risks are perceived as too large. This is because the problems associated with counterparty risks and a lack of transparency become more tangible when markets are turbulent. Every measure by which the financial markets can be made to function even in turbulent times is welcome.

A key part of this is to make certain that banks and financial markets perform their functions efficiently, and that their business poses no systemic threat to the financial sector and the economy. Hence, for a long time now, the main focus of bank regulation and supervision have been to ensure that banks manage their exposure to risk effectively. These include exposure to credit risk, market risk, liquidity risk, and operational risk. Much progress has been made in honing the approach for a more accurate assessment and a more effective management of risk, culminating in the Basle II, which is a global standard for bank’s risk management. BIS Review 18/2008  1  But, in spite of what has been achieved, mishaps can and do happen. From time to time, we still read about banks suffering large losses that originate from the under-management of these risks. More often than not, the losses are linked to a breach of internal controls or systems that have been put in place to rein in excessive risk-taking in the first place. Ladies and gentlemen. On the security risk aspect, the growth of electronic banking and real-time funds transfer have made the challenge of risk management even greater, as the nature of security risk to banks has shifted considerably. Clearly, the main concern now is not so much about ensuring property security or preventing theft of physical assets, but about ensuring information security and preventing identity theft.
This partnership is taking various forms, among which, for instance, the organization of several joint conferences on liquidity or on the future of regulation or on public debt and which materialized as special issues of our Financial Stability Review. Jean has also developed his thinking about macroprudential policy and strategic interactions. This is at the heart of today’s conference. Non-banks actors are frequently referred to in the media as “shadow banks”. However, this does not mean that they are unregulated. Insurance companies, sometimes included in the definition of “shadow banking”, are tightly regulated in France and supervised by the ACPR while the AMF supervises asset managers. Regulating the shadow banking system has been and still is, as you know, a major objective for the G20 and the FSB since the 2008 financial crisis. The underlying objective was to prevent regulatory arbitrage and risk transfers outside the banking sector at a time where banking supervision has been considerably strengthened. Even though this objective is a very legitimate one as far financial stability is concerned, I would like to emphasize two ideas: (1) The first idea is that a number of pitfalls have emerged along the way. Indeed, consistency should not be mistaken with uniformity of the rules. (2) And the second idea is that a “one size fits all” approach of shadow banking regulation could lead to unintended adverse consequences. 1.

Beyond the yearly shadow banking monitoring exercises, policy makers intended to make sure that no part of the financial system would be left unregulated and that a similar set of rules should apply to a similar set of risks. For the sake of a better regulation of globally systemically important institutions, some progress remains possible in the monitoring, and the need for relevant data in particular as regards the better understanding of inter-linkages among G-SII. Cross-sectorial consistency was seen as a key factor to prevent any opportunity for regulatory arbitrage and preserve appropriate level playing field. The Financial Stability Board following the G20 recommendation has launched an ambitious regulatory program which aims at better controlling risks which are related the shadow banking sector. Indeed, the US have recently adopted a regulatory framework for Money Market Funds (July 2014). Other reviews are still ongoing, I am thinking of the assessment of risks and systemicity of asset managers whose assets under management have experienced a major growth these last few years, or the rapid development of ETFs providing real time liquidity on their liability while their matching assets have a lower liquidity. In Europe, this global initiative translated into a number of regulatory initiatives such as the Securities Financing Transactions Regulation (repos and SFTRs) or the Regulation of Money Market Funds. The final objective was to turn the shadow banking sector into a safer and regulated “market-based financing”. 2.
Climate change affects economic development via physical risks, transition risks and the risk of irreversible threshold effects. All this is negative risk. It is therefore important to point out that the effects of a transition to more sustainable development do not need to be negative – an effective climate policy that contributes to more rapid technological development in green energy and sustainable infrastructure could, on the contrary, lead to productivity growth, new jobs and higher living standards. So far I have focused on how the Swedish and global economy are affected by climate change. The next step is to consider how the Riksbank can act when price stability and financial stability are threatened by global warming. Here, I would like to start with current monetary policy and highlight a few scenarios that reflect how climate change may affect monetary policy going forward. Climate-related risks can affect monetary policy At the most recent monetary policy meeting in February, the Riksbank left the policy rate unchanged at zero per cent. The policy-rate path was also left unchanged and indicates that the rate will remain at zero per cent for the whole of 2020 and 2021. Bond purchases also continue as planned without any changes during the year. However, I mentioned at the meeting that we risk underestimating the possibility whereby so much happens over the next two to three years that monetary policy needs to change direction. As monetary policy-makers, my colleagues and I must weigh together the effects from short-term cyclical developments with long-term structural phenomena.

Weitzman, M, (2009b), “Some Basic Economics of Extreme Climate Change”, Discussion Paper 09-10, Harvard Environmental Economics Program. World Economic Forum (2019), “The Global Risks Report 2019”, 14th Edition. 18 [18]
It is only now, ten years later, that they are taking steps to move away from these measures. What is everyone afraid of? That growth will remain rather low and unstable. Indeed, after a long period of crises and stagnation, the global economy is entering a new cycle. But what is the aftermath? First. A higher debt load than in 2007. In developed economies, the primary problem is government debt, whereas many countries with emerging markets struggle with corporate debt. Second. Developed economies are contending with exceedingly low inflation and even deflation. Moreover, there are bubbles in individual markets that threaten to grow owing, among other things, to the effects of long-term soft monetary policy. Fourth. Low growth rates in productivity and investment. This not only limits opportunities for development but also hampers growth due to increased debt burden. Fifth. Developed countries are seeing increased inequality in the face of stagnating middle-class incomes, a trend observed over the past 30–40 years and often labelled the result of globalisation. It is clear, however, that unequal access to the opportunities afforded by new technologies also played a role. In this regard, the digital revolution and the new wave of job automation, which changes the traditional profile of the labour market in a number of professions and sectors, bring about significant social risks. As a result, we are observing an upswing of populism in politics, which in itself generates new economic risks and harbours continued financial market volatility. Sixth. An important point for us.

Greater transparency in the financial sphere. This means transparency of sources of capital and combatting instances of financial institution owners financing their businesses. Rejecting dogmas. For example, the dogma that banking regulation is neutral and is aimed at mere risk management. We are starting to gradually transition towards incentive-based regulation. Supporting new technology: focusing on that with greater protection from cyber risks. I will now discuss the Bank of Russia’s main areas of activity in more detail. The first area is monetary policy. Its role is sustaining low macroeconomic risks, thus creating a framework where banks, business, and the public can enjoy an increased planning horizon, create long-term money and realise long-term projects. Over the next five years, the focus of our policy will gradually shift from achieving the inflation target and lowering inflation expectations to keeping inflation close to the target level and maintaining inflation expectations at a low and, importantly, anchored level. However, while transitioning to a policy of fine tuning, there are a number of challenges we must face. Ultimately, inflation is clearly a monetary phenomenon and, if we look to the medium term, the average inflation rate depends first and foremost on monetary policy. Average inflation will near 4%. However, it will naturally fluctuate. Meanwhile, inflation fluctuations around the average level can vary in nature, affect inflation expectations in different ways and therefore have an impact on monetary inflation.
The settlement of currency transactions is associated with a similar type of risk because settlement often occurs in different countries at different times. The latter risk is referred to as Herstatt risk, named after the German Bankhaus Hertsatt that closed in 1974. This occurred after the closing of the German settlement system, but before the matching settlement was finalised in the US. Other banks that had settled the German mark portion of the transaction with Bankhaus Hertsatt were running a loss because Bankhaus had not settled the dollar portion of the transaction in the US before it closed. The payment and settlement system must thus be designed to reduce settlement risk. It is out of concern for financial stability that financial markets in general and banks in particular are regulated and monitored to a further extent than other industries. A bank failure will as a rule have more far-reaching consequences than a business failure in other industries. Both the contagion effects and the consequences for the real economy are greater. In most countries, the authorities have introduced measures to restrain banks from taking excessive risks in their quest for profit. Another important consideration reflected in regulations is the need for consumer protection. Regulations can distort competition and weaken market discipline. For instance a bank’s creditor may choose not to assess the risk assumed by the bank because of the safety net established for banks.

For better or for worse, we are increasingly exposed to developments in other countries. The banking crisis taught us how costly financial crises can be. We brought the crisis on ourselves. Many other countries have experienced similar problems. The root of the crises can be traced back to overly zealous financial market participants with reduced risk awareness. The authorities’ role is to prevent crises in the financial system and - if they still occur - handle them with a view to reducing the adverse effects and the likelihood of their recurring. In view of the globalisation of financial markets, international cooperation in this area is crucial. The financial system is also important with regard to Norges Bank’s conduct of monetary policy. By setting the terms for banks’ deposits/loans in the central bank, Norges Bank influences the level of interest rates. Monetary policy is also dependent on financial stability. However, monetary policy is not the topic today. I will focus on the issue of financial stability. 2. What is financial stability? Financial stability is the absence of financial crises. The root of a crisis is that exuberance, optimism and greed take precedence over risk and return considerations when investment decisions are taken. The price of financial assets and property rises. Bank loans and household and corporate debt increase. As a result, all agents become more vulnerable if the situation is perceived as taking a turn for the worse. This may in turn trigger a plunge in property and equity prices.
We have stressed, also, how Chile’s interest rates have adjusted significantly downward in this scenario. This contrasts sharply with what would occur in other times or today in other emerging economies, where exchange rate pressures would rapidly translate into higher interest rates. External credit conditions, aside from temporary ups and downs, have remained favorable from a historic perspective, although the risk of a reversal is still present. Lately, Chile’s sovereign and corporate risk premiums have increased somewhat, but are still below their year-ago levels. The situation is similar in other emerging economies. Long-term interest rates have receded in the developed world since June, with unprecedented performance in the case of the U.S. given its stronger economy and expectations that the benchmark rate will begin to rise by the middle of next year. The terms of trade have also been favorable since June, and they even increased marginally with respect to June’s forecasts, mainly owing to a higher copper price because of tighter supply. The baseline scenario works with a copper price forecast of 315 dollar cents per pound in 2014 and 305 in 2015. The growth outlook of our trading partners lost some strength since June, and we continue to expect higher growth in 2015 than in 2014. In the developed economies, growth has been slightly revised downward for this year. The worsened figures in Japan combined with a slower recovery in the Eurozone, Germany included, where consumer and business confidence has declined, partly because of the geopolitical conflicts in the region.

Rodrigo Vergara: Chile’s September 2014 Monetary Policy Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Honorable Senate of the Republic, Santiago de Chile, 3 September 2014. *  *  *  The Monetary Policy Report of September 2014 can be found at http://www.bcentral.cl. Introduction Mr. Vice-president of the Senate, Senator Eugenio Tuma, honorable senators, ladies, gentlemen, Thank you for your invitation to the Board of the Central Bank of Chile to present our Monetary Policy Report. As is the norm each September, this Report coincides with the annual report from the Central Bank Board to the Senate, where we share our vision on the recent macroeconomic and financial developments in Chile and abroad, as well as their prospects and implications for monetary policy conduct. Chile’s economic outlook has seen important changes over the past few months. In particular, the slowdown in output has been more pronounced than anticipated and is expected to be also more persistent. A year ago, when we came to the Senate to present our vision of what would be the economy in 2014, we projected that it would expand in the 4 to 5 percent range. Today, as I will detail in a moment, we estimate that growth will be between 1.75 and 2.25 percent this year and between 3 and 4 percent in 2015, that is, less than our estimate for medium-term growth in our economy.
Explanation (2): Lack of relevance – “I’ve read the Code but most of it seems to be for the sell-side: parts of it aren’t relevant to my business, others are disproportionate. In areas of sell-side behaviour I do care about – like last look and disclosures – the original Code didn’t go far enough” It would be quite wrong to think that the Code is irrelevant to buy-side firms. The principles on Ethics, Governance, Information Sharing, and many parts of those on Risk Management and Compliance and Confirmation and Settlement apply directly.

Over the coming year, the Global FX Committee and the broader international community will be working towards bringing the level of signup to the Code on the buy-side up towards that seen on the sell-side. Please join us in that campaign. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9
The real interest rate is the nominal interest rate minus expected inflation. When the Riksbank cuts the repo rate the real repo rate also normally falls as inflation expectations are normally sluggish. In a situation with very weak aggregate demand, a low level of resource utilisation and low inflation a low and perhaps even a negative real interest rate is required to stimulate the real economy and thus, as far as possible, stabilise inflation around the inflation target and resource utilisation around a normal level. The Riksbank cannot, however, cut the repo rate more than to zero. But even if the repo rate is set at zero, the real interest rate may be too high to have the desired stimulation effect on the real economy. In such a situation monetary policy faces a binding zero lower bound for the interest rate. The major question is then how monetary policy should be conducted, to avoid a binding zero lower bound and to escape from such a situation by using means other than lowering the interest rate. Why is it not possible to reduce the nominal interest rate below zero? The reason is that money in the form of banknotes and coins yields a zero interest rate. If the interest rates for various accounts and securities such as Treasury bills and bonds were to become negative, households, firms and authorities would prefer to retain cash in the form of banknotes instead of lending it or depositing it.

Although it is not particularly likely that we in Sweden will be subjected to a strongly binding zero lower bound for the interest rate, it is wise to be prepared for this eventuality and to have carefully considered the monetary policy alternatives that would then be available, and which of these would be appropriate, depending on how serious the zero lower bound was. A zero lower bound on the interest rate means that the real interest rate is still too high to sufficiently stimulate the real economy, despite the policy rate being cut to zero. It is the real market rate that is important in the real economy, and this corresponds to the policy rate plus a spread arising due to various risk and liquidity premia, minus expected inflation. Although the policy rate is zero, nominal market rates are positive as a result of the spread. The various measures taken by central banks and other public authorities during the financial crisis to ensure that the financial markets function more efficiently and that the spreads decline thus fulfil a function that is at least as important, even if the repo rate is at zero. It is reasonable to suppose, however, that their stimulating effect is much smaller than the effect a central bank can achieve with measures that focus on inflation expectations. The major danger with a zero lower bound for the interest rate is that inflation expectations will be too low and even negative, and that the real interest rate will thus become too high.
On the other hand, there are some constraining factors that hamper digitalization in South East Europe, including Macedonia, such as: the negative effects that the financial crisis had on the ability of banks to innovate, and the local mentality of the population which still does not show a sufficient level of confidence in online activities. Financial services industry in Macedonia is in essence still traditional, conservative industry, but is evolving. Banks strive to keep pace and fit in the new digital era by investing more and more funds in new products and financial innovations, as well as sponsoring software development conferences and new technologies. This is supported by relatively solid infrastructure for digitization in Macedonia which is readily available at satisfactory level. For example, 76% of households in Macedonia had access to internet in 2017 vis-à-vis 85% in the EU. On average, bank deponents have two payment accounts in Macedonia. However, only 7% of payment accounts held by the households can be used for electronic payments, while this share is relatively higher in case of legal entities (29%). The latter initiated 51% of the credit transfer in an electronic way, while the households initiated electronically only 20% of their credit transfers in 2017. The companies usually initiate their payments by using computers, while households rely mainly on computers (92% of electronic credit transfers), mobile phones (7% of electronic credit transfers) and ATM (1% of electronic credit transfers).

In 2016, the National Bank conducted thematic control through the development of a tool whereby banks made their own assessments of the inherent risk and appropriately determined the activities that they needed to fulfill on different levels of readiness from attacks from the digital space (primary, secondary and advanced level of readiness). Blockchain technology and impact on central banks’ activity The potential of blockchain is immense and is an issue for the central banks as well. At retail level blockchain from Central bank perspective in regards to cryptocurrencies or Central bank cryptocurrencies (CBCCs) does not exist. However, the concept of a retail CBCC has been widely discussed by bloggers, central bankers and academics. While CBCCs for retail payments remain at the conceptual stage, some central banks have completed proofs of concept for DLT-based applications. One of the reasons for the interest in DLT is that many central bank-operated wholesale payment systems are at the end of their technological life cycles. The systems are programmed in obsolete languages or use database designs that are no longer fit for purpose and are costly to maintain. Project Jasper at the Bank of Canada (Chapman et al (2017)) and Project Ubin at the Monetary Authority of Singapore (MAS (2017)) and STELLA – a joint research project of the European Central Bank and the Bank of Japan simulate real-time gross settlement systems (RTGS) on a DLT platform. The two projects Jasper and Ubin show that central bank money can be transferred on a distributed ledger in real time, in realistic volumes.