samchain/econo-pairs-v1 huggingface dataset:
It is particularly difficult in instances where fluctuations in the exchange rate are amplified as a result of speculation, hedging and portfolio shifts in financial markets. 7) The Exchange Rate Regulation Norges Bank’s use of instruments in 1998 was in keeping with the Exchange Rate Regulation of 6 May 1994: “Section 1 The international value of the Norwegian krone is determined on the basis of exchange rates in the foreign exchange market. Section 2 The monetary policy to be conducted by Norges Bank shall be aimed at maintaining a stable krone exchange rate against European currencies, based on the range of the exchange rate BIS Review 10/1999  –7–  maintained since the krone was floated on 10 December 1992. In the event of significant changes in the exchange rate, monetary policy instruments will be oriented with a view to returning the exchange rate over time to its initial range. No fluctuation margins are established, nor is there an appurtenant obligation on Norges Bank to intervene in the foreign exchange market.” (My underlining) Pursuant to these guidelines, Norges Bank raised the deposit and overnight lending rate by 1 percentage point on 25 August. In connection with the increase in interest rates the Bank stated that instruments were subsequently to be oriented “with a view to returning the exchange rate over time to its initial range”. In the opinion of Norges Bank, the situation in the financial market was such that it would not be appropriate to make further use of its instruments.

A precondition for maintaining a stable exchange rate against the euro is that price and wage inflation is on a par with that of euro countries over time. When the krone exchange rate is weak, Norges Bank therefore sets the interest rate with a view to low price inflation. At the same time, we must avoid a situation whereby interest rates are so high that monetary policy contributes to a downturn that undermines confidence in the krone. Interest rates are set based on these considerations. This is not a new policy. In an address to the annual general meeting of Forex Norge in August last year, Kjell Storvik stated: BIS Review 10/1999  –9–  “I would point to the well-known fact that a lower krone exchange rate may contribute to fuelling inflation expectations and that such expectations may in turn generate expectations of a weakening of the krone exchange rate, thereby reinforcing depreciation pressures. Price expectations may thus prove to be a self-fulfilling prophecy. The interest rate level which has now been established should, in addition to directly contributing to stabilising the krone exchange rate, also limit price expectations...” I should also like to quote the following from the Revised National Budget for 1994: “A stable exchange rate can generate expectations of continued low inflation, which in turn influence both price and wage determination.
Of course, real situations are always more complex than the simplified representation that a single model or a single system of equations can offer. That is the reason why our monetary policy concept is as comprehensive as possible, relying both on an economic analysis and a monetary analysis, and it reserves a central role for judgement, for the collegial wisdom of the Governing Council. Explaining thoroughly and convincingly our assessment of complex situations is therefore of the essence. It is this combination of full knowledge of the monetary policy concept and strategy, of precise arithmetic definition of price stability and of detailed explanations on the assessment of the ECB every month which permits market participants to have an intimate understanding of our policy and of the way it is implemented. In doing so a central bank avoids two opposed inappropriate behaviours. The first would be to give no guidance on its monetary policy and to communicate an unstructured, very complex and partially self-contradictory representation of the economic situation; such behaviour would not permit market participants and public opinion to be able to form pertinent expectations on future monetary policy decisions. On the other hand, a central bank cannot in normal times preannounce with an arithmetic precision its future monetary policy decisions. These must be derived from the full consistency between strategy and monetary policy concept, the medium-term price stability goal and the economic situation which is itself moving and always incorporates elements of uncertainty, chances and risks that can materialize.

But even if we could, I don’t see how in practice we could use our single instrument (the overnight interest rate) to target both consumer price inflation and asset prices – especially when one remembers that there are lots of different asset prices and that questions of disequilibria about them may run in different directions. Having said that, there is no denying that asset prices can be a serious complication for monetary policy. And I think I would want to register just a slight qualification to a strong version of the proposition that the central bank should simply – as if it could be simple – ‘mop up’ after a bubble has burst. Policymakers need to take care that the measures they take to offset the impact on aggregate demand of one type of imbalance unravelling do not themselves create or exacerbate imbalances elsewhere in the economy, including in other asset markets. In other words, policymakers need to guard against one imbalance leading to another. That view is, I believe, quite consistent with inflation targeting. The simple set up I described in my introductory remarks had two relevant features. First, the policymaker’s objective (or loss) function was set as a quadratic in inflation and output. And as I described, that can be unpacked as caring about both systematic biases from the target and the volatility of inflation. Second, the policymaker cares not just about today (or tomorrow) but about the future.
BIS central bankers’ speeches  3  Monetary policy is oriented towards maintaining low and stable inflation over time, while seeking to smooth fluctuations in output and employment at the same time. Labour cost growth in the business sector influences the inflation outlook. An increase in wage growth will, all else equal, normally result in prospects for higher inflation and higher interest rates. Normally, the krone will then also appreciate somewhat. Conversely, a decline in wage growth will generate prospects for lower inflation, lower interest rates and a weaker krone. Over time, real wages must move in line with productivity. The social partners determine wage growth. We have seen that they pull in the right direction when the need arises. The alternative could be a more painful adjustment with higher unemployment. As long as inflation is low and stable, the krone can act as a buffer during periods of adjustment. We cannot, however, rely on a depreciation of the krone to ensure Norway’s competitiveness in the longer run. Monetary policy cannot influence the long-term growth capacity of the economy. The challenges associated with low growth and changes in business structure must be addressed using other measures. Chart 6: Long-term real interest rates and potential growth in advanced economies Monetary policy easing and low interest rates do not lead to a sustainable level of higher growth. The inverse is true: prospects for persistently weak growth result in low interest rates over a long period.

Some of the most important recent changes in the payment landscape have been catalysed by regulatory intervention, for example the development of the Faster Payments Scheme (FPS). 5 In the past, regulatory intervention in retail payments has been targeted, addressing specific problems as and when they have emerged. Going forward however, the Payments Systems Regulator (PSR) which launched in 2015 is likely to create a new dynamic by stimulating a greater focus on competition and innovation in payment systems. Alongside this new regulatory focus, the pace of technological change in payments has picked up sharply. Recent years have seen huge growth in demand for payments services that can be accessed in real time, at any time (“24x7x365”), in a wide variety of locations through mobile phones and tablets. The software on these devices also makes growing use of so-called Application Programming Interfaces or “APIs” which allow the seamless integration of payment into websites, and offer new ways to utilise payments data to improve services to customers. The “electronification” of payments and rise of mobile banking has enabled non-banks to deliver services using existing payments infrastructure and made it possible for challenger banks to grow without having to build an extensive branch network. The emergence of various forms of Distributed Ledger Technology (DLT) poses much more profound challenges because it enables verification of payments to be decentralised, removing the need for a trusted third party.
30 See a speech by Stefan Ingves, ‘Basel III: Are we done now?’, https://www.bis.org/speeches/sp180129.pdf. 29  12  All speeches are available online at www.bankofengland.co.uk/speeches  12  work in more detail and sets out some thoughts on how one might approach the financial stability case of making an adjustment in this area, in line with the principles I outlined earlier. This evaluation exercise highlights that interactions between different types of policy are likely to be a fertile area for research going forward. Summary  The finalisation of Basel III late last year represented a final step towards completing the reforms to banking regulation that followed the crisis. I hope I have been able to convey today the reasons for those reforms and the financial stability benefits both here in the UK and internationally. The focus of regulators has now shifted towards completing the implementation of the post-crisis reforms, but also towards monitoring for any unintended effects the reforms are having, as well as being alert to new risks that emerge. We will consider making adjustments to regulations in response to unintended consequences and new risks to ensure that the resilience we injected into the banking system post-crisis stands the test of time. Or put in the words of the young Tancredi in the novel The Leopard by Giuseppe di Lampedusa, “if we want things to stay as they are, things will have to change”. 31  Thank you. 31  https://en.wikipedia.org/wiki/The_Leopard.

(b) Sample includes Bank of America, BNP Paribas, Bank of New York Mellon, Citigroup, Commerzbank, Deutsche Bank, HSBC, ING, JPMorgan, Lloyds Banking Group, Royal Bank of Scotland, Santander, State Street, UBS, UniCredit, and Wells Fargo. Chart 6: Overnight sterling repo rate (RONIA) and the introduction of leverage ratio requirements  (a)(b)(c)  Source: Bloomberg Finance L.P., EVIA (formerly WMBA), and Bank calculations (a) The Repurchase Overnight Index Average rate (RONIA) is the weighted average rate of all secured sterling overnight cash transactions. Boxes indicate quarter-end dates. (b) The monthly average is the arithmetic mean of a firm’s total exposure measure on the last day of each month in the quarter. (c) The daily average is the sum of: (i) the arithmetic mean of a firm’s total exposure measure in relation to on-balance sheet assets on each day in the quarter; and (ii) the arithmetic mean of the firm’s total exposure measure excluding on-balance sheet assets on the last day of each month in the quarter. 19  All speeches are available online at www.bankofengland.co.uk/speeches  19  Chart 7: Risk weights on UK mortgages under the Standardised Approach (SA) and Internal Ratings-Based Approach (IRB)  (a)  Source: Benetton, Eckley, Garbarino, Kirwin, and Latsi, ‘Specialisation in mortgage risk under Basel II’, Bank of England Staff Working Paper No.639.
Only if investors outside the euro area are confident that their purchasing power will be preserved over time, will they engage in euro-denominated financial activities. Therefore the commitment of the ECB to pursue price stability in the medium term remains a key factor behind market confidence in the euro as a stable currency. Besides price stability, the current and expected growth performance of the euro area economy is an additional factor behind the attractiveness of the euro. Sustained non-inflationary growth in the euro area economy would have beneficial effects on market expectations and foster the international use of the euro. As regards the private use of the euro, recent trends show that it has mainly been used as a financing currency. With regard to international debt securities, the euro is more widely used than the former national currencies of the euro area countries. The issuance of euro-denominated assets by residents outside the euro area accounted in 1999 for almost 30% of total issues denominated in a currency different from that of the borrowers’ respective geographical residences. By comparison, the combined share of all former national currencies of the euro area countries and the ECU amounted to only 18% of total gross international issuance in 1998. The growing use of the euro was mainly mirrored in a decline in the share of US dollar-denominated issues from 58% to 48% between 1998 and 1999. These trends are even more striking if one focuses on the bonds and notes segment of the market.

However, by maintaining price stability, the ECB almost automatically fosters the attractiveness of the euro as an international currency. Third, the international use of a currency is a complex phenomenon that does not lend itself to ad hoc promotion measures. A currency can be used not only for different functions, but also by different groups of economic agents. In this context, the use of the euro by private agents as an investment and financing currency, as well as a payment and vehicle currency, plays a prominent role. Although the euro is also used by the public sector as a nominal peg and reserve currency, the behaviour of the private sector dominates the internationalisation of the euro. The amount of financial assets managed by the private sector is many times larger than official reserve holdings. In addition, private agents usually adjust their asset management strategies more rapidly than most public sector institutions. But what are the factors behind the internationalisation of a currency? In principle, two basic factors might eventually determine the international role of the euro - size and risk. With regard to the size factor, a broad, deep and liquid euro area capital market may lead to a greater use of the euro through lower transaction costs. This may, in turn, facilitate the development of the euro as a vehicle currency for trade and commodity pricing. Already at this early stage, the introduction of the euro has brought about fundamental structural changes in euro area capital markets.
According to preliminary data from INSTAT, the Albanian economy grew 0.44% in 2013, from 1.2% in 2012. The economic activity dynamics reflected the contraction in the services sector, especially tourism, whereas the production sector contributed positively, driven by investments in infrastructure, further growth of exports and rise in agricultural produce. Aggregate demand was weak, reflecting the weak private sector demand for consumption and investments. This component continued to be negatively affected by the low economic agents’ confidence, slower income and relatively tight financing conditions. The general elections held last year elevated the uncertainties in economic agents and financial markets, hence decelerating their consumption and investments in the post-election period. Foreign demand and public expenditure contributed positively to economic growth, but they did not manage to fully offset the sluggish private demand. The external sector was characterised by relative stability of the current account deficit and increase in the country’s foreign currency reserve. Exports of goods surged 13.5%, reflecting the improved economic situation in Albania’s neighbouring countries and the structural improvements in certain sectors of the economy. Furthermore, imports of goods were 1.8% lower from a year earlier, as a result of the weak domestic demand. These developments materialised in the correction of the trade deficit by 13.5% in annual terms. Moreover, the balance of services deteriorated significantly, due to the fall of net exports in tourism. Main foreign currency inflows during 2013 were in the form of net foreign investments.

The normal functioning of the banking system relies on a safe and effective payment infrastructure, which, in Albania, is operated by the central bank. Over 2013, the Bank of Albania focused its efforts on improving AIPS and AECH systems. Moreover, in order to render the financial markets infrastructure complete, we are working to establish the Central System for the Settlement and Registration of Securities. This system will provide possibilities for the further development of the secondary market and will guarantee the settlement of transactions in this market, conform to international standards. In 2013, the approval of the law “On Payment System” was finalised. This law provides a special legal framework for regulating, licencing and overseeing payment systems by the Bank of Albania. It aims at minimising the systemic risk, which is related to the participation in payment and security settlement systems, and risks related to the insolvency of participants in the system. The passing of this Law implies the liberalisation of the payment systems market through the establishment of private payment systems. Furthermore, to encourage the use of electronic payment instruments and reduce the use of cash in the economy, the Bank of Albania has adopted the regulatory framework for using these instruments, by reflecting the principles of the relevant EU directive.
Complementing the MII's efforts for the insurance industry, the International Centre for Education on Islamic Finance, or INCEIF which was launched in March this year seeks to produce high-caliber practitioners, professionals, specialists and researchers in Islamic finance. It offers the world's first certification on Islamic finance, the Certified Islamic Finance Professional (CIFP) programme as well as post-graduate programmes in Islamic finance. This initiative is aimed at supporting the global development of the Islamic financial services industry. Ladies and Gentlemen,  2  BIS Review 76/2006  The further development and growth of the insurance industry brings with it new potential and opportunities for professionals like yourselves. The challenge is to embrace the opportunities as they present themselves and to continuously develop new skills and competencies that will be needed in this changing environment. In relation to this, I would like to urge you to rise to the challenge by building on your achievements today to continually improve your skills and knowledge. The inculcation of a culture of lifelong learning is essential to enable you to adapt to the constantly changing environment and to contribute to the growth and development of the insurance industry, and to the overall financial services industry. In closing, let me congratulate once again all the graduands of MII. I wish each of you every success in your career and future endeavours. Thank you. BIS Review 76/2006  3

One solution is to make the data reporting process better tailored to the needs of supervisors. Digital regulatory reporting (DRR) is the automation of regulatory data collection, and could potentially lead to significant improvements in both the cost and timeliness of data. The idea is based on machine readable reporting requirements that firms’ systems could automatically interpret and satisfy via a secure regulator-firm digital link. This would allow regulators to collect data on an ad hoc basis from firms as required, in close to real time without any manual intervention at either end. That would enable 6  Amadxarif, Z, Brookes, J., Garbarino, N., Patel, R., and Walczak, E (n.d) [forthcoming] 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  supervisors to specify the data they needed to solve a particular puzzle – exposures to a particular country, for example – and transmit that data request to firms in a machine readable form. The data would then be ‘grabbed’ directly from firms’ systems and sent back to supervisors automatically. The FCA and Bank of England are currently undertaking a DRR pilot with participants from a number of regulated firms. It is too early to say what the outcome of this early pilot will be, but initial findings suggest it is feasible. There remain significant technical challenges to be overcome. And regulators would need to guard against the moral hazard that could arise if firms perceived that responsibility for the accuracy and congruence of data had transferred from regulated entities to regulators.
They gain and lose symmetrically as returns rise and fall. Many shorter-term investors face no such restrictions. If their timing is right, they can win on both the upswings (when long) and the downswings (when short). For them, the road to riches is a bumpy one – and the bigger the bumps the better. As in Merton’s model, all volatility is good volatility. Perhaps reflecting that, there is evidence of the balance of shareholding having become increasingly short-term over recent years. Chart 8 shows the average duration of holdings of US, UK and European bank shares. Average holding periods for US and UK banks fell from around 3 years in 1998 to around 3 months by 2008. Banking became, quite literally, quarterly capitalism. Today, the average bank is owned by an investor with a time-horizon considerably less than a year. A second piece of evidence on equity short-termism, which is specific to banks, comes from trends in banks’ capital planning. Since the late 1990s, there has been increasing focus on return on equity (ROE) as a performance target. Indeed, major banks have recently set explicit numerical targets for ROE as a guidepost for shareholders and managers. These targets are revealing about investor and managerial incentives. ROE is an entirely equity-focussed concept. As such, ROE targets provide strong incentives for banks to increase equity returns, either by boosting asset volatility or gearing up their balance sheet. ROE targets hard-wire in the North-Easterly drift evident in Chart 5. Instead of adjusting for risk, ROE is flattered by it.

Caleb M Fundanga: The Financial Sector Development Plan Welcome remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Financial Sector Development Plan (FSDP) National Financial Education Strategy Consultative Workshop, Lusaka, 20 October 2010. *  *  *  The Guest of Honour, Honourable Situmbeko Musokotwane, Minister of Finance and National Planning M.P. ; The FSDP Steering Committee Chairman & Secretary to the Treasury, Mr. Likolo Ndalamei; Distinguished Excellencies; Co-operating partners; Chief Executive Officers and Representatives from Banks and Non-bank Financial Institutions; FSDP Working Group Chairpersons and Vice Chairpersons; Distinguished Invited Guests; Members of the Press; Ladies and Gentlemen. It gives me great pleasure, on behalf of the Bank of Zambia, to welcome you all to the Financial Sector Development Plan (FSDP) National Financial Education Stakeholders’ Consultative Workshop. Honourable Minister, this very important workshop comes at the time when the FSDP is gearing up to implement many of its activities under phase II which the Government approved earlier this year. As you are aware, one of the activities identified under the FSDP II is the development of a national financial education strategy for Zambia. Let me hasten to say, financial education needs in Zambia are many and varied. They stem from inadequate understanding, by a good proportion of the population, of basic financial terms and concepts on the one hand, and a lack of knowledge of financial products and services that are increasingly available, on the other.