samchain/econo-pairs-v1 huggingface dataset:
Their economic capital is procyclical today and Basel II does  6  BIS Review 34//2005  not alter the calculation of economic capital; if anything it can help to promote cycle awareness. In this regard I tend to think that the role of regulatory capital is overstated and the degree of risk sensitivity of banks’ behaviour today is underestimated. Furthermore, the most abrupt and procyclical behaviour will probably occur in a poorly provisioned and poorly capitalised bank with inadequate risk management. In a downturn this bank will most likely encounter unpleasant surprises stemming from mismanaged risks and, lacking appropriate shock absorbers (provisions and capital), it will have little room for manoeuvre. The most likely outcome is an abrupt cut-back on lending, therefore contributing to exacerbating the cycle. I mentioned before the importance of risk awareness and early detection and reaction by banks. I will just emphasise here that these are also important elements for restraining procyclicality. On the supply side, I have already commented on the beneficial effects of higher transparency in the information released by banks, especially after accounting for the fact that lender-investor informational asymmetries could result in a lower-than-optimal level of funds available for bank lending. Pillar 3 will thus grease the wheels of the market for bank capital, building up capital providers’ and depositors’ confidence about the efficient use of their resources and easing the conditions under which banks may gain additional funding if required.

We have refrained from changing the repo rate when energy prices have risen, although they have meant that inflation, and the forecast of inflation two years ahead, have periodically deviated from the 2 percent target. If energy prices remain at a high level over a longer period or continue to increase, the inflation rate could be higher than we have assumed. The conclusions for monetary policy would be different if this development begins to leave a mark on inflation expectations. All in all, the risks of lower inflation stemming from weaker economic activity are judged to be approximately balanced by the risks of higher inflation stemming from wage and energy price developments. The balance of risks therefore does not change the forecast I have reported earlier. It indicates that the underlying, cyclically-related inflation rate will be in line with the inflation target at the end of the forecast period. The Executive Board of the Riksbank therefore found it natural to leave the repo rate unchanged. The future stance of monetary policy will depend as usual on the new information received and on how this affects the overall assessment of inflation prospects in the coming years. BIS Review 44/2003  3  Long-term growth prospects Allow me at this point to shift focus and speak about long-term growth prospects. These are of course a decisive factor for welfare and deserve therefore to be given considerable attention in the economic policy debate. But they also have a huge impact on the Riksbank's operations, which I shall return to.
The scenario also poses a number of risks to banks’ market share, to the liquidity of retail deposits, to fees from payment services and to the ability to retain and access customers and to the use of their current data advantage to cross sell products. If firms are depending more on technology like the cloud and third party providers, this environment could also pose cyber and operational risks. The impacts are not of course all one-way. There is an upside for existing banks. New technology and customer relationships gives them the opportunity to provide customers with new and better products and services, to compete and, crucially, to become more efficient. 12  All speeches are available online at www.bankofengland.co.uk/speeches  12  In their responses, the banks in the test judged they could maintain existing business models without increasing overall risk taking, meeting the requirements of both regulators and investors, and using technology to increase efficiency to offset lower margins. Our assessment was that there were a number of risks to the banks’ projections in the exploratory scenario. In particular, Open Banking, PSD2 and other related changes might cause greater and faster disruption to business models and the forecast increases in efficiency may be more difficult to deliver than assumed. Investors might also demand a higher return than banks’ forecast in the exercise. The Bank of England’s 2017 Exploratory Scenario was not a pass or fail stress test.

So the technologies that support money in the UK are central to our purpose and we need to assess how changes in those technologies – physical, legal, institutional (public and private) will affect that purpose. Against that background, I want to pick up two changes in the technologies supporting our money. I am not referring here to Bitcoin or crypto-currencies, on which so much ink (physical and virtual) has been expended recently. I want rather to talk about two related developments that are actually happening or about to happen. The first is the growing use of non-cash technologies for small value payments. And the second is the change to the way we manage and use our payment accounts at banks, the form in which most of us hold our money. As I noted, some £ 20%, of the money in the UK is issued by the public sector. A very small amount of this, by value, comprises the coins issued by the Royal Mint. The rest is Bank of England money. Bank of England money is used at the extreme ends of the payments hierarchy – for the very largest and for the very smallest transactions. At the top end, the very large payments that private banks make to settle their claims on each other must be made in ‘Bank of England’ money by transfers between the banks’ reserve accounts at the Bank of England. This happens over an electronic payment system, the Real Time Gross Settlement (RTGS) system operated by the Bank of England.
That's not a massive rebound, but it is a positive picture - even allowing for downside risks. So we are, in fact, seeing - in terms of Turandot's first riddle - the renewal of the US economy. And of course it is  BIS Review 64/2002  1  immensely important for the global economy that we should, because the prospects in some of the other major industrial economies, notably Japan and Germany, are rather more uncertain. Surprisingly in the light of all this, Turandot's own answer to her first riddle was not "the US economy." Her answer was HOPE. I suppose I would settle for modest EXPECTATION. Her second riddle was "What flickers like a flame when man dreams of conquest?" And again, as I sat there, the answer seemed obvious - it had to be business and financial confidence - or perhaps the global equity market. Given the macro-economic prospect in the US - which is expected to contribute to a recovery to neartrend growth in the world economy as a whole in the course of the next year or two - the recent pessimism of business leaders and the renewed nervousness of global equity markets over the summer seemed somewhat puzzling. Fear seemed to have taken over from man's dream of conquest! There was a real puzzle before the equity markets started to decline.

The adverse global environment since the onset of the crisis in the AEs has reduced the contribution of the external sector to growth. Since 2007, the contribution of net exports to real GDP growth has been negative with the sole exception of 2014. This is in large part the outcome of the weak global growth which has reduced global demand for our exports, combined with strong domestic demand that has increased imports. Over the longer term, the contribution of the external sector will need to expand to support a healthy and sustainable economy. With respect to this, we need to continue focusing on strengthening our economic relationships with other countries. The ASEAN Economic Community is one opportunity for us to do so. The Trans-Pacific Partnership Agreement that is current being negotiated by 12 countries, including Malaysia, is another. 8  BIS central bankers’ speeches  Conclusion In conclusion, it seems to me that Malaysia will over time become even more integrated with the global economy and financial system. This is necessary if Malaysia is to grow and prosper. We need global markets and we need foreign investment. So far, we have done a credible job of ensuring that the Malaysian economy and financial system evolves in response to domestic, regional and global developments. But, as I have sought to highlight in my speech, globalisation, particularly financial globalisation, also brings difficult challenges and risks. And those challenges are not likely to go away.
Rise in the liquidity shortage causes the interest rates of repo auctions to become reference rates for the markets. The permanency of such conditions leads to an involuntary tightening of monetary policy because of the realization of the said interest rates above the Central Bank’s overnight borrowing rates. In order to avoid potential negative impacts of such a situation, interest rates of one-week repo auctions will be set as the reference rate for monetary policy operations, in the event of an increase in liquidity shortage and/or having high probability to become permanent. Furthermore, the Central Bank’s overnight borrowing and lending rates will be revised downward with a view to eliminating any probable impact of this change in the operational structure on the monetary policy stance. In other words, this interest rate cut should not be perceived as loosening monetary policy, but merely as a technical adjustment resulting from the permanent change in liquidity conditions. 12  BIS Review 3/2009  Operational framework for liquidity management If the technical interest cut mentioned above does not materialize, the 2009 liquidity management strategy will be as follows: (i)  The Central Bank will continue to announce overnight borrowing and lending rates between 10:00 a.m.– 12:00 p.m. and 1:00 p.m. – 4:00 p.m. in the Interbank Money Market within the Central Bank. In case of a liquidity shortage during the day, banks will be able to borrow at the Central Bank’s lending rate against collateral within their limits.

By end 2008, savings in the stabilization fund (FRR) , totaled DA 4113 billion ( equivalent to $ billion);  •  domestically financing the economy’s large investments, in the context of excess saving rates over investment rates;  •  developing the bond segment of the financial market, with access limited to domestic investors;  •  Advancing the restructuring of the banking sector following failure and bankruptcy of small private banks which resulted in withdrawing their licences over 2003-2006 while compensating depositors through the Deposits Guarantee Fund. The strengthened macroeconomic stability, as evidenced by subdued inflation (4.4 % in 2008 despite the surge in world commodity prices) and a real exchange rate of the Dinar near its equilibrium level, as well as important foreign exchange reserves $ billion, by end 2008) and low external debt, have constituted sound safeguards against the inherent shocks of the current international financial crisis. In addition, indirect monetary policy instruments (deposit auctions, marginal deposit facility, …) have been successfully used to limit the impact of structural excess liquidity on inflation. Although the direct contagion impact of the international financial crisis on the Algerian banking system is limited, in view of its small exposure to international financial markets, increased attention is directed to further strengthening and preserving its soundness. In this regard, the required minimum capital for banks and financial institutions have recently been substantially increased to strengthen their resilience and increase their lending capacity.
Norman T L Chan: Who would mortgage their children? Text of the DIGBY Memorial Lecture by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, Hong Kong, 10 April 2015. *  *  *  Dr David Li, Professor CH Leong, Professor Paul Tam, Professor Gabriel Leung, Professor CM Lo, Distinguished Guests, Ladies and Gentlemen, It gives me great pleasure to be invited to deliver this year’s Digby Memorial Lecture. When Professor Lo came to me with the invitation, I have thought long and hard on what this very distinguished audience from the medical community would want to hear from the Chief Executive of the Hong Kong Monetary Authority. I hope my remarks today would help stimulate and provoke a more informed discussion in our society on where we want our future generations to go. Instead of talking about monetary economics, which may not be of interest to most people, I have chosen a topic that is relevant to all of us, who have become accustomed to prosperity and good lives in a way that our parents and grandparents could never have dreamt of. “1942”: Children sold by parents 2. Last year I saw a movie called “1942”. The movie was based on what happened during the great famine that occurred in the Henan Province （河南省） and the surrounding areas in China around 1942. The famine was apparently so devastating that millions of people were facing starvation and many of them fled their homes as there was nothing to eat.

There is this question: why has the developed world ended up where it is now? We know how a household or company would suffer under the pressure of excessive debt. Households or companies troubled by significant debt overhang have to curtail their spending or investment, which has huge negative effects. In the end, they have to go into bankruptcy if they cannot repay their debts when due. But there is a lot of misconception when it comes to a country owing excessive debt. It is true that a country cannot technically go bankrupt in the same way as a person or company. However, it does not mean that a country cannot go into default if it borrows more than it can pay back. Even if a heavily indebted country manages to survive a debt crisis with debt restructuring, just like Mexico in the 1980s and more recently Greece, the debt overhang will still impede its economic growth and inflict huge costs and pain on its people in the form of rising unemployment and sharp drop in living standards. So how can one explain the common trend in the last 30 years of the developed world spending beyond their means and incurring debts to levels that clearly cannot be repaid by the current generation of people? One answer that I can think of is that, until quite recently, many people in the developed world had taken prosperity for granted and regarded good life as their right.
I have comments in three areas: the political economy genesis of the UK’s system; how it bears on the communication of monetary policy or what Blinder called the ‘cacophony problem’; and a plea for Blinder to widen his enquiries beyond interest-rate setting. Political economy and one-member/one-vote Modern Britain has no tradition of non-elected officials taking major executive decisions affecting the whole of the nation. This is in marked contrast to say the US where, at Federal level, the President is the only member of the executive to have reached office via the ballot box. Nor in the living memory of the UK people have we had any crises of democracy, so we have not developed national institutions, such as Germany’s Bundesbank, whose place in society was not mediated via our democratic processes. In consequence, when debates about the possibility of central bank independence got underway in earnest from the mid1980s, a widely perceived stumbling block was that central bank officials could not account personally for their decisions on the Floor of the House (of Commons). There was a democratic deficit. Resolution came via the political cost of the failure of other approaches to monetary policy, in which Ministers running for re-election decided rates; the happenstance of the development during the 1980s and 1990s of influential committees of Parliament, before which central  1  See http://econ2008.bankofcanada-conference.ca/wp-content/blinder.pdf  BIS Review 96/2008  1  bankers could (and frequently do) appear; and specific design features of the monetary regime itself.

At the other end of the spectrum, finding ‘the average’ for a collective Committee statement is tough in the short time available, except where a majority has decided to change Bank Rate, or where ‘no change’ is driven by some clear common factors that it would be unreasonable to withhold from the public sphere until publication of the minutes a fortnight later. ‘Individualism’ is also reflected in our public speeches and appearances before Parliament. Those individual exercises range widely – from assessments of the conjuncture, through examinations of particular parts of the transmission mechanism, to reflections on monetarypolicy making more generally. 3 But whatever the subject or scope, we are each speaking for ourselves, not for the Committee as a whole. Taken together, all this plainly sets up centrifugal forces, or Blinder’s ‘cacophony problem’. As put that matters, since it is of course the systematic component of monetary policy that is doing the work in stabilising nominal trends. Households, firms, the financial markets need to figure out what the Committee – or, somehow, its marginal member(s) – thinks is going on in the economy and how it will react in setting Bank Rate (‘our’ reaction function). But there are centripetal influences too. I shall highlight two. First, the aim of each member is not to be in a minority but for their preferred level of Bank Rate to be that chosen by a majority of the Committee.
In any event, uncertainties arise both about the degree of maturity of the different IT choices and the greater security risks they may entail. On top of this, we must also be aware that a CBDC may possibly bring with it some unwanted side effects, such as increased disintermediation of the financial sector by structurally eroding banks’ deposit base, lending capacity, and a greater risk of bank runs. It is, therefore, our responsibility, first to apprehend what is at stake with our decisions, and then to determine the conditions and the scenarios in which a public digital currency offers the most benefits while minimising the drawbacks. 1  Despite significant country-level differences, the Eurosystem payment study for 2019 (SPACE) revealed that electronic payments continued to increase their market share. In fact, for the euro area as a whole, cash was used in more than 70% of all payments at the point of sale. Moreover, the number and value of banknotes in circulation have also continued to rise uninterruptedly during the pandemic, for precautionary reasons (lower cash volumes were returned to the NCBs). The same holds true for other countries such as the United States (J. P. Konig, 2020) or Canada (Chen et al., 2020). Following the easing of lockdown measures, at end-May 2020 the annual rates of growth for the number and value of banknotes in circulation in the euro area were around 10%.

A key aspect to underline is that a potential CBDC could coexist perfectly well with physical cash, which serves an important role and for which -at least in the euro area- there is still strong demand.1 In other words, traditional cash and a CBDC might be natural partners, rather than potential substitutes for each other as they are often presented. However, before taking any major decision on the issue of a CBDC, several important questions need to be answered: What precise complementary roles would cash, bank accounts and digital coins play? Should central banks focus on securing a sound regulation that offers appropriate safeguards and leave the private sector to come up with viable alternatives? Or should we ensure the provision of a safe asset by issuing a CBDC? As you can see, when faced with a case of practical use, even one as apparently simple as this, embracing the opportunities that new technologies offer is not always crystal clear. What’s more, when approaching this topic in more detail, many questions and far-reaching implications arise, thus suggesting the need to tread cautiously in unknown territory. I refer to the myriads of design and operational aspects, such as whether this “new digital cash” should preserve all the features of traditional banknotes and coins (for instance, anonymity), or whether some of the key processes such as Know Your Customer or compliance with AML requirements should remain in the hands of the private sector for efficiency reasons.
These opposing wishes can be reconciled via banks, and also directly via the financial markets. The latter assumes that there are well-developed secondary markets with a large turnover in, for instance, equity. This enables companies to borrow long-term while savers can quickly sell their shares if they so desire. Risks are managed through the spread in borrowing, but also by transferring them, against payment, to others in the financial market. The spread and redistribution of financial risks enables investments to be made that would not otherwise have been possible. The third and final main task is the intermediation of payments, which enables payment to be smoothly made and received for goods and services sold either in the conventional manner or via, for instance, the Internet. 2  BIS Review 37/2003  In countries like Sweden we tend to take it for granted that these functions work. However, if we try to imagine that they did not exist, we will realise how extremely central they are to the functioning of the economy and to our welfare. If we imagine a country where savers and investors did not have access to functioning and reliable banks and financial markets, it is easy to see how this would hamper development. The effect would be a tendency for savings to move abroad, while profitable investment projects did not get off the ground in countries with an undeveloped financial sector. If we look back at the 1950s, we can see that the intermediation of payments functions much more smoothly today.

In this connection they will transfer in full the assets assigned to their banking activity to the central credit institution, in exchange for shares, and they will collaborate efficiently in the management and control of the activity pursued by this bank. BIS Review 173/2010  3  Making use of this possibility is a decision incumbent upon the managers of IPSs, and one which should be considered without delay, if funding markets so demand. Or if this should be so required by the even more demanding capital market, to which access will prove vital. In adopting investment decisions, this will call for a high level of certainty in projects and in business structures. To access bond markets and cover maturities, it may suffice, along with the full sharing of profits and losses and the cross solvency guarantee, to transfer to the central entity a portion of the group’s assets and liabilities (normally that associated with wholesale businesses and branches located in territories in which it does not operate exclusively). We shall find out if this is sufficient from January 2011, when significant volumes of external financing will have to be renewed. However, probably, when it is necessary to raise capital, by issuing shares of the bank located at the heart of the IPS, a larger contribution of strategic assets and liabilities to this bank will be needed, if it is desired to give expectant new members complete certainty regarding the specific assets and liabilities they are going to share and promote as a shareholder.