samchain/econo-pairs-v1 huggingface dataset:
These intelligent and connected systems - some would say complex - are already present in the banking and financial sector. Digital transformation is both an opportunity for the financial sector and a risk. It is an opportunity if and only if it is framed by fair regulation and strong supervision, for the benefit of all. Central banks and supervisors have a major role to play, and new talents, and here I am thinking of you, will be welcome to contribute to meeting these expectations, both among the players of the digital transformation, and among central banks and supervisors such as the Banque de France and the ACPR. 2  Le mot du Directeur | ESIGELEC  8

Eddie Yue: How Hong Kong is prepared for macro-economic challenges on the horizon in 2019 Opening remarks by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong-Paris Financial Seminar, co-organised by the Hong Kong Monetary Authority and Paris Europlace, Hong Kong, 16 January 2019. * * * Denis (Beau), Arnaud (de Bresson), distinguished guests, ladies and gentlemen, 1. Good morning. Let me extend a very warm welcome to you all for attending today’s Hong Kong-Paris Financial Seminar, co-organised by the HKMA and Paris EUROPLACE. And a special welcome to our guests from France. 2. Hong Kong and France have always had strong ties. We are home to more than 20,000 French people and about 800 French companies. Apart from food and beverage and luxury goods that people are familiar with, French companies are also actively engaging in different industries in Hong Kong, ranging from finance, construction and infrastructure. About 170 of the French companies use Hong Kong as the regional headquarters. Given the existing strong ties, it is particularly good to have forums like today’s seminar to talk about how Hong Kong and France can further strengthen their relationship through financial collaboration. 3. Before I talk about the opportunities for further collaboration, let me spend a few minutes to talk about the risks and the rather challenging macro environment that we are facing.
Lars Nyberg: The mortgage market from a Riksbank perspective Speech by Mr Lars Nyberg, Deputy Governor of the Sveriges Riksbank, at The Swedish Bankers’ Association’s Annual Bank Meeting 2004, Stockholm, 11 November 2004. *  *  *  First and foremost, thank you for the invitation to speak at the bank meeting today. The mortgage market is the focus of today’s meeting and I will discuss this market from a Riksbank perspective. But what is that exactly? The Riksbank’s remit is to conduct monetary policy in such a way that leads to stable prices, but also to promote stability and efficiency in the payment system. For both of these tasks, the situation in the mortgage market since the mid-1990s, with increasing household debt and rising housing prices, has been of great interest. Is this development sustainable? And if not, what should be done? Incidentally, we share these issues with a number of other countries in the Western world. I intend to begin with a brief reminder of how we arrived at this situation. Then I will discuss the risks to financial stability. Finally I will give my views on the possible implications for the inflation target and monetary policy. Housing prices and debt Since 1996 house prices have risen by just over 80 per cent in current prices. Swedish household debt has increased by 85 per cent over the same period (Figure 1).

How the risk of rapid price falls in general and of speculative bubbles in particular should be dealt with in the context of monetary policy is not an altogether simple question, however. But, as I mentioned, there doesn’t seem to be any significant elements of speculation in housing prices. Consequently the bubble problem is somewhat hypothetical for us. I see no reason from a real economic perspective to depart from our normal rule of monetary policy on account of households’ debt levels. Furthermore it seems that the price situation has stabilised and in some locations prices are even easing. Concluding remarks The high debt levels of Swedish households and rising housing prices give cause for the Riksbank to be vigilant. There is no doubt about that. But there are no signs that the stability of the payment system is threatened or that price stability in any way is jeopardised by the rise that we have seen so far in households’ mortgage debt. Individual households should also be vigilant. For some time now nominal and real interest rates have been low owing to weaker economic activity and low inflation. However, as economic activity picks up, inflation should accelerate and interest rates rise. Interest costs will increase. Interest rate hikes should also mean that housing prices will not rise as rapidly as has been the case so far. I imagine that we all welcome the fact that inflation has come down to its currently low, stable level.
This shift in fiscal and monetary policy led to increased stability and predictability, which most likely enhanced the efficiency of the economy. Moreover, the tax and social security systems were reformed. Sweden’s entry into the EU’s single market together with the deregulation of several important markets also entailed stiffer competition. Furthermore, the faster growth in the private sector compared to the public sector, as well as the evolution of the ICT sector during the second half of the 1990s, most likely contributed to higher productivity growth. Against the background of the lower capital formation since the 1970s, however, it is worth asking what the prospects for Swedish growth are in the years ahead. Will we be able to regain any of our previously prominent position as a comparatively rich industrialised nation? What does the low level of capital formation imply for Sweden’s chances of recapturing the leading position it had among industrialised nations at the beginning of the 1970s? It is important here to note that the structure of the business sector has changed. The industrial sector as a whole, including the basic industries, such as mining, ironworks and steelworks, and paper and pulp, have decreased as a proportion of GDP in favour of the expanding services industries. Basic industries’ share has fallen from 6.5 per cent of GDP in 1970 to just over 4 per cent today, while service production in the business sector has increased from approximately 30 per cent of GDP to just over 40 per cent during the same period.

Indeed that is why we took it upon ourselves to reform SONIA. We started collecting daily data on money market transactions in February 2016 from over 50 banks, building societies and investment firms. These data give us a much clearer picture than we have previously had of what is going on in sterling money markets. A subset of the data will be used for reformed SONIA. The reformed rate will be much more robust, with daily transaction volumes three to four times greater than current SONIA. Any change in SONIA’s properties will be minimal – so far the reformed rate has been around one basis point lower than on the current methodology. Another key reform is that the Bank has consulted on and will implement a changed definition for SONIA. The new definition will allow the methodology and input data of SONIA to evolve if material changes to market structure or functioning threaten to undermine the integrity of the rate. This unique feature will ensure the robustness of SONIA over the long term, giving users confidence that their contracts will not be disrupted. Let me emphasise that, from the perspective of a user of SONIA, implementing these reforms should be seamless. However, one operational consequence that users should be aware of and prepare for is that the publication time for SONIA will move from the evening of the day in question to the morning of the following day. The Bank is working with ISDA, LCH and others to ensure this change is implemented smoothly.
Along with the Central Bank, the Committee is composed of the Banking Regulation and Supervision Agency, the Capital Markets Board of Turkey, the Savings Deposit Insurance Fund and the Undersecretariat of Treasury. In the international arena, Turkey became a member of the Financial Stability Board (FSB) in 2009. It will take part in G20 Troika in 2014 and assume the Annual Presidency of the G20 in 2015. Moreover, Turkey’s representative from the Undersecretariat of Treasury will join the FSB Steering Committee during the 2014–2016 period when Turkey will be in G20 Troika. Moreover, Turkey became a member of the Basel Committee on Banking Supervision (BCBS) and the Group of Governors and Heads of Supervision (GHOS) in 2009. The Central Bank of the Republic of Turkey will take part in the FSB Steering Committee during the period 2013–2015 when Turkey will be chairing the FSB Regional Consultative Group for the Middle East and North Africa (MENA). As part of the governance reform of the International Monetary Fund (IMF), a New Constituency was established with the countries Turkey, Austria, Hungary, Czech Republic, Slovak Republic, Slovenia, Belarus and Kosovo. According to this agreement, the Executive Director position will rotate among Austria, Hungary, Czech Republic and Turkey. This is perhaps a symbolic but, in my personal view, a very significant step in the right direction regarding the future of the Turkish-Austrian relations. Distinguished Guests, At this point, I would like to exemplify increasing commercial and economic relations between Austria and Turkey.

Data on activity in the repo market are limited. But we know the volumes are large. The business model of the hedge fund industry relies on financing their highly-leveraged activities via the repo market. Repo activity will therefore exceed their already substantial leverage positions. Moreover, as reflected in the recent analysis of Gorton and Metrick (2009), 1 information can also be gleaned from the balance sheets of broker dealers and investment banks. For example, approximately 80% of the balance sheet of investment banks such as Lehman Brothers and Bear Stearns in 2007 – that is, before the crisis – was funded by volatile, short-term instruments. It was this balance sheet structure that, in the end, made these two banks extraordinarily vulnerable to a sudden withdrawal of liquidity in the wholesale funding market and which ultimately led to their demise. Note that more than onethird of this short-term debt was collateralised, that is acquired in the repo market. To sum up, we have seen the relentless rise of collateralised finance. Any reflections on the future of the monetary policy transmission mechanism have to start from there. 2. Collateralisation and the money market  The crisis that started in August 2007 has highlighted the key role of collateralised finance in two ways: first, as a vehicle of distress; second, as a possible instrument of repair. 1  See: G.B. Gorton and A. Metrick (2009), “Securitized Banking and the Run on Repo,” Yale ICF Working Paper No. 09-14.
Table 1  The fiscal rule was drawn up in 2001. Today, the situation is different. In 2001, a real return on the Fund of 4 percent, or a little higher, based on the then prevailing distribution between equities and bonds, was a reasonable assumption. Today, calculations yield a lower figure for expected real return. 1 The real return on bonds in the Fund’s portfolio can now be estimated at 1 percent. With a normal risk premium on equities, the real return on the whole Fund can be quantified at 3 percent. There is a possibility that the real return will be higher, but it may also be lower. If we spend more than the annual return on the Fund, we will be eating into the savings portion. The conclusion is that a more robust approach would now be to base fiscal policy on an annual expected real return on the Fund of 3 percent. Such an adjustment would underpin the main principles that were behind the establishment of the fiscal rule – stability and sustainability. 1  8  See Norges Bank Staff Memo 6/2012. BIS central bankers’ speeches  Chart 8  In 2011 the structural non-oil budget deficit was about 3 percent, which is close to such a new path. Adapting petroleum revenue spending to a lower expected return should not therefore be particularly demanding. If we wait, a necessary policy adjustment later could be far more painful.

Moreover, there is no emergency handbook that comes with the rule that says what to do in this event. An apparently unstated branch of the Taylor 1993 rule includes setting the federal funds rate to zero during these circumstances and then simply wait and presumably smile confidently in public while holding to zero rates. As a rigid policy prescription, we are thus left with inaction. And inaction looks like policy abdication because we are left doing nothing to try to make timely progress in reducing policy misses. This rule cannot be the be-all and end-all for monetary policy; for a policy rule that some say should be enshrined in the Federal Reserve Act explicitly to govern the implementation of U.S. monetary policy, its prescriptions under the recent circumstances we’ve faced are an absolute failure. Furthermore, given that the Taylor rule has failed so badly and done so for so long, how can we be confident that its prescriptions will still be a good policy to follow once the rule says that the fed funds rate should rise above zero again? Indeed, that’s what many versions of the Taylor rule say today – that it’s time now to begin to increase the fed funds rate. How can we know if the policy prescriptions are from a reborn and healthy policy tool or perhaps instead from one still suffering from a zombie-like hangover in terms of its prescriptions?
Even if there are no unequivocal solutions, some measures are valid for several countries: raising the retirement age, eliminating early retirement incentives, reduction in replacement rates, integrating public pensions within a system which allows future payments to be financed so that the ageing of the population does not create imbalances between generations. Should men and women retire at the same age? This is a sensitive and important issue triggering a whole host of reactions and different points of view. Apparently, in accordance with current jurisprudence, I would say they should retire at the same age, as the European Court of Justice maintains that there should be no discrimination or distinction between men and women in any area. How urgent is pension reform? Extremely urgent, in all euro area countries. When we look at demographic trends, we tend to put it off as we are talking about long-term developments. It seems that the movement is slow and long, and that there is time. However, it is a complete illusion because it is an issue that has to be tackled as early as possible. The more radical left-wing and the unions are opposed to it and say that you are technocrats who only pay attention to numbers. As an important international leader, do you not believe that there are also social costs which need to be taken into consideration? We are, after all, talking about millions of people and all the weakest categories of the population. It is a crucial factor.

One explanation for the increase may be that Icelandic companies have been undervalued by the markets, for example relative to comparable businesses in other countries, and another that bold and determined investment ventures have driven up their value. But risk and gain often go hand in hand. Sometimes the stakes may be raised too high. It has long been customary to pay a premium for attractive investment options. Such goodwill used to be depreciated in companies’ accounts over a long period and rarely affected their operations. The situation has changed whereby companies now need to make impairment tests of the goodwill they enter on the asset side of their balance sheets. If their original ventures fall flat, the goodwill must be depreciated accordingly. Thus there is a risk, if conditions deteriorate, that this rule could amplify a company’s negative results at the worst possible time. Goodwill totalling more than 500 b.kr. was entered in the financial statements for 2006 of companies listed on Iceland Stock Exchange, and at certain companies, goodwill and other intangibles account for more than half of the total assets on their books. This is a cause for some deliberation. Although the Central Bank’s main function on occasions such as this is to draw particular attention to causes for concern, it should of course take note, like everyone else, of the factors conducive to strengthening the long-term economic outlook. Iceland’s economy is advanced, transparent and vibrant.
Note, however, that inflation measured with UND1X is not affected; the rate remains stable around 2 per cent throughout the period. Neither are any monetary policy measures taken in this example, as long as inflation expectations do not change. The reason is that by the time a repo rate cut would elicit effects, the tax changes would no longer be affecting the inflation rate. This is evident from the absence of any effect on underlying inflation. Initially, moreover, the interest expenditure item in the CPI would move in the ‘wrong’ direction and lower CPI inflation even more. If medium-term inflation expectations were to be influenced, on the other hand, monetary policy action might be called for. An adjustment of expectations in the light of the tax change has consequences for underlying inflation, so that inflation may be below the target somewhat further ahead. 7  BIS Review 61/1999  9. Permanent and transitory inflation A schematic account Initial position Economic development stable, underlying inflation UNDINHX - in line with the target. 4  3 UNDINHX  Good coffee harvest and increased supply of oil. These commodities’ prices fall sharply in July year 0 and are then stable at the new, lower level. •CPI-inflation is lowered for a period of twelve months and so is UND1X. •But underlying inflation measured with UNDINHX remains stable.

Briefly, the problem with adhering to the 2 per cent inflation target, measured with the CPI, from 1996 to 1998 is as follows: In the short run, the downward and direct impact on CPI inflation from lower interest rates – the interest expenditure effect – is appreciably larger than the upward tendency associated with stronger economic activity: the macroeconomic effect. BIS Review 61/1999  8  A situation in which forecast inflation one to two years ahead points to the rate being below the target poses evident difficulties for monetary policy. In order to bring inflation back into line with the target further ahead, the Riksbank responds by reducing the repo rate, which has the effect of lowering inflation still more in the shorter run. The interest expenditure effect disappears after a couple of years and the macroeconomic effect gains the upper hand. The opposite applies if the repo rate is raised. This accordingly indicates that an appraisal of monetary policy must be based on a thorough analysis of the factors behind the path of inflation, for example by comparing CPI inflation with other inflation indicators that exclude transitory price effects. There was, in fact, a theoretical possibility of preventing CPI inflation from being so low in 1996, 1997 and 1998. The Riksbank never even considered it, for obvious reasons. Still, I can illustrate how the inflation target could have been fulfilled mechanically by avoiding the direct interest expenditure effect.
This study being presented today is, therefore, a welcome opportunity to reflect on the progress since 2009. Financial institutions have a role to play in ensuring financial services and products are available at reasonable terms, including fair and practical know your customer (KYC) assessments, the use of alternative collateral and flexible lines of credit to mention, but a few. To enhance income-generating activities from survival level to strong and viable businesses, in particular for women led enterprises, access to credit, banking and financial services and facilities is essential to fully develop small scale to businesses. The firm, robust and sustainable growth can only be founded on strong and viable Small and Medium Enterprises hence the need to financially empower enterprises is cardinal through financial inclusion. This lack of access to finance by our entrepreneurs is a major concern for both, the Bank of Zambia and Government. Ladies and Gentlemen, Allow me to outline some of the measures the Bank has been putting in place to accelerate access to finance for all citizens generally, and in particular for women The Bank of Zambia is the lead implementer of the Financial Sector Development Plan on behalf of the Government of the Republic of Zambia. As you may be aware, the Zambian government formulated the FSDP as a comprehensive strategy for addressing challenges in the Zambian financial sector. Under the second phase of the FSDP, access to finance by the various strata of society, including access based on gender is identified as a key challenge to be addressed.

Repo rate  0,5  1-quarter inflation  0,5  0,5  0,0  0,0  0,0  0,0  -0,5  -0,5  -0,5  -0,5  0  4  8  12  16  0  20  Real repo rate  4  8  12  0,5  16  20  Real exchange rate  0,5  0,5  1,5  0,0  0,0  1,0  1,0  -0,5  -0,5  0,5  0,5  -1,0  -1,0  0,0  0,0  0  4  8  12  16  20  0  4  8  4-quarter inflation  12  1,5  16  20  GDP  0.5  0.5  0.4  0.0  0.0  0.2  0.2  -0.5  -0.5  0.0  0.0  0  4  8  12  16  20  Hours worked  0.4  0  4  8  12  0.4  16  20  0.4  Anticipated 0.2  Unanticipated  0.2  Note. All x-axes refer to quarters. 0.0  0.0 0  4  8  12  16  20  0.35 per cent of an estimated potential employment rate of, conservatively, 93 per cent of a labour force of approximately five million is equivalent to over 16 000 jobs. Calculating on the basis of 93 per cent thus entails assuming a rather high figure for long-term unemployment of 7 percent.