samchain/econo-pairs-v1 huggingface dataset:
However, a part of the information systems examination reviews the bank’s electronic and Internet activities and plans, and all examiners ask general questions that we feel that any bank offering on-line banking services should be able to answer responsively. In addition, we have convened a special task force at the Federal Reserve Bank of New York to review security issues involving on-line and Internet banking. The goal of this task force is two-fold: (1) to gather, review, and benchmark current and future on-line security procedures and policies of State member banks in our district; and (2) to then somehow disseminate, without unduly disadvantaging any specific depository institution that provided us with its information, the best of these policies and procedures into a kind of “sound practices” security guide for banks to use for their electronic and Internet banking services. The task force should issue its first report in the summer of 1997. In a similar vein, I believe that the United States Federal bank supervisors, while mindful of the risks, have tried to be as supportive of electronic and Internet banking as possible. Each of the various bank supervisory agencies, i.e., the Board of Governors, the Office of Thrift Supervision (“OTS”), the Federal Deposit Insurance Corporation (“FDIC”), and the Office of the Comptroller of the Currency (“OCC”), has dealt in some immediate way with the issues posed by electronic and Internet banking. Both the OTS and the Board of Governors have dealt directly with Internet banking through the bank applications approval process.

It is thus not unusual that the studies available should question the fact that banks with the same risk profile are actually subject in practice to comparable capital requirements when they operate in different jurisdictions. The dissatisfaction arising from the difficulties in achieving an appropriate estimation of asset risk weightings should not lead to conventional solvency ratios being discarded or to their BIS central bankers’ speeches  1  role as essential indicators of the financial strength of banks being questioned. Nor is it easy to justify renouncing the use of the specific information at hand at banks – through the advanced approach – to improve the measurement of the risk of exposures. Indeed, I believe any effective regulatory reform should continue to aspire to have capital requirements discriminate between different types of exposures on the basis of their risk and to avoid excessively simplistic approaches that prevent capital requirements being adapted to each bank’s business model. What’s more, the calculation of the solvency ratios and, in particular, the use of advanced models should be subject to more demanding tests. In this respect, various options – which are not mutually exclusive – have emerged in the ongoing debate to refine the calculation of regulatory capital, and these merit in-depth study. The first approach involves developing more accurate guidelines for the design and parameterisation of acceptable models.
Giro transfers and direct debit are used for recurring and, in this context, relatively large payments such as, for instance, monthly bills, and often with someone with whom one has a contractual relationship, for example, the electricity company and the telephone company. In terms of value, giro transfers, other credit transfers and direct debit account for a very large proportion of the payment flow between private individuals, companies and the public sector. Previously, they also accounted for a large proportion of the number of non-cash transactions, but over the past few years more card payments have been made than giro transfers, other credit transfers and direct debit. In Sweden today, approximately 80 per cent of households have Internet access. This has meant that an increasing number of people use the banks’ Internet banks. The traditional account-based payment instruments have been adapted to this new payment channel. In some banks, more than half of the credit transfers are now Internet-based and this percentage is increasing rapidly. Increasingly, customers can also receive their bills directly via the Internet service, the so-called e-invoicing. Do you remember how one used to queue at the bank or in the post office in order to pay one’s bills once a month? Some still pay this way, but they are an ever-declining number. BIS Review 16/2008  3  Most people who are able prefer to sit in front of their computers to hanging around in a queue. But it has not just become more convenient to pay, it has also become cheaper.

Central banks are meant to provide liquidity support only to solvent firms so that the central banks avoid taking on credit risk. An overreliance by firms on access to central bank liquidity can expose the central bank to the risk of loss. Finally, in some cases, central bank liquidity provision can become stigmatized. In this case, financial firms are prone to underutilize this source of liquidity – a decision that can have adverse consequences for markets and the availability of credit. Liquidity buffers reduce the likelihood that this stigma constraint will become binding. The on-going Basel discussions have focused on a short-term liquidity requirement – the Liquidity Coverage Ratio (LCR); and a longer-term liquidity requirement, the Net Stable Funding Ratio (NSFR). The intention of the LCR is for banks to hold sufficient high-quality, liquid assets that can be easily and quickly converted to cash to cover expected liquidity outflows in a stress scenario over a 30-day period. Unlike illiquid assets, the conversion of these high quality liquid assets into cash should not create any fire sale dynamics. However, it is important that banks actually use this liquidity buffer when there are liquidity outflows, rather than attempting to maintain their LCR at 100 percent by selling other assets. The OTC derivatives markets remain another important source of potential instability.
The main conclusion is that neither a pegged exchange rate nor independent monetary policy with a flexible exchange rate will generate the intended results unless several other things are in place: policy instruments designed to achieve those results must be applied as needed, other economic policies should be aligned with monetary policy objectives, and prudential policy regarding the financial sector must support rather than undermining economic stability. 11

Using digital technologies, they try to redefine the provision of financial services to improve customer experience and to find their place on this highly competitive market. These new players position themselves mostly in market niches with a potential for further development. Such niches are, for example, the digital wallets, person-to-person (P2P) and business-to-business (B2B) payments, as well as value added services offered on the basis of existing traditional payment services. With the Second Payment Services Directive (PSD 2), two new types of electronic payment services were regulated in the European Union – payment initiation services and account information services. These new services are already offered in Bulgaria and provide technological basis for the implementation of the so-called ‘open banking’. It enables FinTech companies to enter the payment market more easily by introducing new business models, services and solutions. Examples for such services are aggregation of payment account data from different payment service providers, carrying out financial analysis, initiating payments from accounts held with other payment service providers, etc. Security of electronic payments remains in the focus of the European and Bulgarian regulators. Increased use of electronic payments and the recent boom in e-commerce pose new challenges with respect to protecting security of payments and electronic identity of customers. The most significant progress here was made in 2019 when the Europe-wide obligation for strong customer authentication was introduced. For this purpose, at least two independent elements of different categories must be used (knowledge, possession and inherence) when processing electronically initiated payments.
Particularly relevant will be the occurrence and sign of new inflation surprises, the evolution of consumption and the unfolding of external conditions. The upper boundary of the corridor reflects situations where inflation remains high for longer, consumption maintains a low pace of adjustment and the external scenario is more favorable than expected. In such an eventuality, the MPR would be maintained at its current level for a longer time than described in the central scenario. 7  The lower bound of the corridor represents a scenario in which the international context worsens more than expected, leading to higher global risk and affecting financial conditions, global activity and commodity prices more strongly. In such a context, a faster adjustment of the local economy could lead to a somewhat earlier reduction in inflation and the MPR (figure 15). The risks facing the Chilean economy continue to be very significant. Due to their characteristics, should any of them materialize, they would entail major changes. These changes would probably drive economic growth outside the ranges considered in the central scenario. For this reason, they do not form part of the MPR corridor that I have just presented to you. Today we envision two major risks. First, the evolution of the external scenario requires constant monitoring.

But the present magnitude of the U.S. external imbalance seems difficult to reconcile with plausible estimates of future productivity and potential output growth. The demographic shifts underway in the major economies seem to have contributed to an increase in demand for longer-dated fixed income assets to fund growing pension liabilities, and these shifts have been reinforced by actual and anticipated changes in the regulations that affect pension fund managers. These changes may have operated to push up the price and lower the yield on longer maturity bonds, but the effect of these changes seems likely to be small in comparison to the changes in the behavior of forward interest rates. The rise in the current account surplus that is the counterpart to the U.S. deficit has focused much attention on the rise in measured savings relative to investment that has emerged in many economies. But the implications of this are ambiguous. If the rise in so-called excess savings principally reflected  2  BIS Review 18/2006  concern about future economic opportunities and weak investment demand, then this might imply a decline in future real interest rates. But the pessimism implied by this view is hard to reconcile with the relatively robust pattern of investment growth, particularly in those countries with some of the larger external surpluses. It is hard to reconcile with the fact that growth in aggregate demand globally has been reasonably strong through this recent period of relatively low forward interest rates.
Jarle Bergo: Business cycles and monetary policy Address by Mr Jarle Bergo, Deputy Governor of Norges Bank (Central Bank of Norway), at a meeting hosted by Handelsbanken and the Centre for Economic Research at NTNU, Trondheim, 21 April 2005. Please note that the text below may differ slightly from the actual presentation. The address is based on the assessments presented at Norges Bank’s press conference following the Executive Board’s monetary policy meeting on 20 April, Inflation Report 1/05 and on previous speeches. The references and the  Charts in pdf-format can also be found on the website of the Norges Bank. *  *  *  The Norwegian economy is growing at a solid pace and there are prospects that growth will remain high. The recession was mild after the previous expansion culminated two and a half years ago. The period of relatively high cost inflation in Norway came to an end without production being impacted to the same extent as during the recessions in the early 1980s and around 1990. One of the main reasons for this is probably that low inflation in the 1990s and current monetary policy have anchored expectations of low and stable inflation among economic agents. The need to bring down inflation was the main reason why New Zealand introduced an inflation target for monetary policy, as the first country to do so, at the end of the 1980s. Canada, the UK, Sweden and Australia followed suit later in the 1990s.

The decline in prices for clothing and footwear will probably continue in the coming years. Prices for audiovisual equipment are still falling as a result of strong international competition and high productivity growth. We assume that the effects of structural changes in these markets will gradually be exhausted towards the end of the projection period. External price impulses via consumer goods are expected to increase in pace with unit labour costs among our trading partners. The projections in Inflation Report 1/05, published on 16 March, are based on a gradual increase in the interest rate. This is in line with financial and foreign exchange market expectations. It is assumed that the exchange rate will shadow movements in the forward exchange rate. This implies that the krone will remain fairly stable around the current level in the years ahead. Growth in private consumption is expected to remain high this year and next. Low real interest rates, solid growth in real disposable income and a continued rise in house prices will contribute. Goods consumption picked up sharply, as expected, from January to February. The upturn was broad-based, with strong growth in car sales, other goods and electricity consumption. In the period ahead, higher employment and wage growth will continue to fuel household demand. On the other hand, household debt has risen sharply. This implies that a normalisation of interest rates will increase household net interest expenses. After a period, growth in consumption may be fairly low.
3/5  Second, a potential increase in economic and geopolitical uncertainty stemming from escalating trade tensions could adversely impact global growth. In this regard, the latest forecasts by international organisations already reflect some impact and, indeed, global growth and global trade has already begun to lose momentum. In addition to protectionist escalation, sources of geopolitical risk have also grown in Europe as a result of Brexit negotiations and the fiscal situation in Italy. But how have financial conditions actually evolved in this new scenario? Until very recently, financial conditions in advanced economies remained loose, while conditions in emerging markets had tightened. Interestingly, US interest rates have increased at the longer maturities, but still modestly. Nevertheless, a materialisation of current risks might lead to a “snap-back” scenario of sharply rising long-run yields, driven by a sudden decompression of term premia, that might amplify market stress and harm the economy. In this context of growing near-term risks, a better understanding of volatility, the second topic of the conference, is also crucial for central banks, given the implications for monetary policies and financial stability. The period of ultra-loose monetary policy has driven a prolonged period of low volatilities. Nevertheless, global markets could be entering a new phase of higher volatility or more frequent short-lived bouts of instability as interest rates increase. Moreover, volatility markets – in particular, volatility-linked derivatives – have become more popular in this low-uncertainty environment.

Zeti Akhtar Aziz: Enhancing interlinkages and opportunities – the role of Islamic finance Speech by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Islamic Finance Conference "Islamic Finance in Southeast Asia: Local Practices, Global Impact"; Georgetown University, Washington DC, 18 October 2007. *  *  *  It is my great pleasure to be here in Washington D.C. to speak at this important conference which has brought together policymakers, market practitioners, members of the academia and the business community to discuss the new opportunities in Islamic finance and its role in enhancing international financial linkages. It is exactly five years ago, when I spoke on this very subject of Islamic Finance at the First International Islamic Finance Conference that was held in Washington D.C. in 2002. The issues discussed at that time were on the challenges faced in developing an efficient and robust Islamic financial system. Five years hence, the Islamic financial system has evolved significantly to become a dynamic and competitive form of financial intermediation in the global financial system. This transformation has been achieved in an increasingly challenging environment. My remarks today will focus on this transformation that has taken place in these five years in both the national and international Islamic financial system.
Generally speaking, the greater the depth of financial mediation, the larger the relative size of the banking sector in the economy and the higher the level of private sector debt, the more vulnerable the economy, the greater costs of any financial crisis and thus the higher the ensuing requirements as regards quality of banking regulation and strictness of supervision. Therefore, effective prevention of financial crises is an increasing priority for economic policy makers of countries with greater depth of financial mediation. Still, the depth of financial mediation differs systematically, for example, between the founders of the EU and recent entrants. For example, in the case of the Czech Republic, if the worst comes to the worst we can revoke the licence of a major bank, take its liabilities onto the government balance sheet and sell its viable business, as we have done in the past, without increasing our government debt-to-GDP ratio above two or three hundred per cent, provoking a sovereign debt crisis and starting the vicious circle known to many European economies. Most developed European countries do not enjoy such freedom. On the other hand, many segments of our financial industries are still underdeveloped and their space for growth is rather high. I do not believe we have reached the point at which one should question the benefits to the economy of increasing the depth of financial mediation.

In our day-to-day work, be it the preparation and implementation of European regulations or the actual performance of supervision, we run into the problem of overcomplicated and unclear regulations. The modern theory of law accepts that laws conflict. I believe we reached this point in regulation long before the Great Depression. We have made no secret of the fact that we believe the weaknesses in the European banking sector laid bare by the financial crisis should be dealt with by enhancing supervision, i.e. its processes, institutions and culture, rather than by adding more regulations or hastily changing the existing ones. Yet the regulatory whirlwind we are currently experiencing is far from over. This naturally gives rise to a number of questions. Can we be sure that such regulations will not generate even more problems? How will institutions cover all the costs of implementing the changes to all the regulatory requirements, costs which, even worse, are often hard to predict? Might a situation arise where all financial institutions have implemented CRD, CRR, BRRD, MREL, LCR, NSFR, leverage and so on, but still have little prospect of making the profits demanded by investors? Might the incentive to do business in the banking sector be weakened? Are we contributing to a shift of business not only outside our countries, but, more dangerously, outside the regulated market? These fundamental questions are not prompted solely by the recently adopted or planned regulatory changes.
BIS central bankers’ speeches  11  Figure 8 Sweden’s net external position and accumulated current accounts Percentage of GDP  80  80 Accumulated current accounts Net external position  60  60 Nominal net external position  40  40  20  20  0  0  -20  -20  -40  -40  -60  -60 75  77  79  81  83  85  87  89  91  93  95  97  99  01  03  05  07  09  Sources: Statistics Sweden and the Riksbank  If it is the case that Sweden has no particularly large net claim internationally then this will have some significance for the prospects for the real exchange rate. In theory, countries with a strong external position should in the long term experience appreciating real exchange rates, and vice versa. There is also empirical support for the link between the net position and real exchange rates when studying different countries. 24 With a net claim close to zero one would not necessarily expect any strengthening of the real exchange rate despite a large current account surplus. The fact that Sweden’s external position appears to be close to zero suggests that there is no need for the real exchange rate for the krona to move in any particular direction for this reason. Other factors also affect the real exchange rate, for example relative GDP growth, relative inflation and the terms of trade.

*** As part of this report, I would like to highlight an important aspect for guaranteeing good governance at the institution: the internal audit systems. The internal audit is independent from the management, guaranteed through the Inspector General, appointed by the Parliament. 7/8  BIS central bankers' speeches  Fostering internal control and monitoring systems and procedures In 2018, the operational risk management function – a new function at the Bank of Albania – consolidated and matured. It is based on the international risk management standards as well as on the best practices of central banks. In the last assessment, the level of Operational Risk Management has shifted from ‘ad-hoc’ to ‘managed’, thus overcoming the ‘basic’ level. This assessment exceeds the Bank of Albania’s objective. This year, the project for “Drafting and Implementing the Bank of Albania’s Business Continuity Management Program” continued and is currently in the final phase of its completion. The purpose of this project is to ensure the continuity of critical processes and to restore normal business as soon as possible in the event of a crisis or emergency situation. Audit engagements in 2018 focused on: (i) giving an opinion on the adequacy of internal audits set by the Management for the audited functions / processes, including supporting applications for the activities; and (ii) other not planned audit and non-audit engagements upon special request by Administrators or other external institutions.
Do they need to adapt to the new situation and, if so, how? One important question is, as I see it: “How can we ensure that monetary policy continues to have scope to counteract recessions and increased unemployment?” Keeping inflation low and stable certainly has a value in itself. But I have also argued here that maintaining the inflation target is very important for being able to use the interest rate as a monetary policy tool in the future. Thus, the fact that the Riksbank’s forecasts do not quite attain 2 per cent should not be regarded as an indication that we have abandoned the target and intend to focus on something else in future. It merely shows that it will take longer time to attain the target than we usually assume. The policy will in accordance with this remain expansionary, with the tools at our disposal today. But in the situation that has arisen, it is also fairly obvious that fiscal policy needs to play a larger stabilising role than has been the case in recent decades. One idea that I would like to at least air here is that fiscal policy may not merely provide support for monetary policy with regard to counteracting recessions, but also explicitly contribute to maintaining confidence in the inflation target. The inflation target is, after all, not merely the Riksbank’s target but a societal target with a political majority behind it.

I want to conclude by repeating my warm welcome to you all. I hope that you enjoy both the conference and your stay in Istanbul. Thank you very much. BIS Review 19/2006  5