samchain/econo-pairs-v1 huggingface dataset:
The better central bankers understand real and monetary macroeconomics, microeconomics, financial market economics, labour economics, industrial economics, international trade, public finance and public choice, the better equipped they are for their task. The favourite intermediary targets or policy instruments of central banks are short-term interest rates. When attempting to influence the rate of inflation by changing interest rates one needs reliable economic models. In the Swiss National Bank, we start with a definition of price stability. There is price stability as long as the annual increase in the consumer price index does not exceed 2%. We then use an inflation forecast over a period of three years. The three years correspond to the known range of  3  Casson, John J., “The Role of Business Economists in Business Planning”, http://www.findarticles.com/p/articles/ mi_m1094/is_n3_v31/ai_18481623. 4  Hirschman, Albert O., Exit, Voice and Loyalty, Cambridge Mass., 1970. 5  De Grauwe, Paul, “Central Banking as Art or Science? - Lessons from the Fed and the ECB”, in: International Finance, 5:1, 2002, p. 129. 6  Loc.cit., p. 130. BIS Review 62/2004  5  monetary policy lags. To forecast inflation, we have developed a number of state-of-the-art econometric models. The results of these models are translated in what we call ‘consensus forecast’. It shows different inflation paths as a function of alternative short-term target rates of interest. The Governing Board has to select the preferred target rate of interest (3M-CHF-LIBOR), which is implemented through daily money market operations.

However, monetary policy will do its part to ensure the macroeconomic and financial stability that can help in achieving progress in these areas. Moreover, even with respect to macroeconomic stability, monetary policy could use an assist from fiscal policy. It is important that monetary policy and fiscal policy work together and not at cross purposes to be able to bolster the economy when it needs support. Thank you for your kind attention. I would be happy to take a few questions. 1 See New York City’s Return from the Brink, Remarks at the Lotos Club, October 19, 2016. 2 Raj Chetty, Nathaniel Hendren, Patrick Kline and Emmanuel Saez. “Where is the Land of Opportunity? The  Geography of Intergenerational Mobility in the United States.” Quarterly Journal of Economics, Vol. 129, No. 4, 2014. 6/6  BIS central bankers' speeches
During the 1990s we have experienced an upward shift in the rate of productivity growth. However,  2  BIS Review 42/2001  productivity growth has not accelerated as in the United States. One explanation behind the shift in Sweden's productivity growth probably lies in the realignment of economic policy towards sound government finances and price stability. Today we can say that the credibility of the inflation target is high and it functions as a clear benchmark for price- and wage-setting decisions, thereby promoting a longer planning horizon in the business sector. Transformations have also been achieved by new companies, not least in the IT sector. Financial markets have been deregulated, the tax system has been reformed, the system of social transfers has been modified and competitive pressure has increased. All this has helped to improve the workings of our economy and thereby kept inflation in check, making a strong expansion of demand feasible. Sooner or later, however, an excessively rapid increase in demand that is allowed to continue will result in an unbalanced economy with tensions between supply and demand and an acceleration of wage and price inflation. Even in the best of worlds, an economy cannot disregard the fundamental laws by which it functions. What, then, is the level of this potential growth rate? According to a common, though not very precise estimate, the Swedish economy's sustainable annual growth rate has shifted upwards from 1.5-2.0 per cent in the 1980s to somewhere between 2 and 2.5 per cent.

Moreover, it intends to allow already established companies or start-ups that aim to provide payment services to be involved in other business activities allowing them to diversify the business risk and freedom to grow. Open Banking – Benefits, challenges and risks Digital disruption is the driver that enables banks to keep pace with customer demands. By adopting the right digital business model, banks can take advantage of open banking to unleash new business value. Being an open bank means operating like a platform company, with a business model that connects people and processes with assets and a technology infrastructure to manage internal and external users’ interactions. Open banking—a platform-based business approach— is a new way of how banks generate value, born out of the increasing pressures from regulations and competitors. Outside the banking domain, industry leaders like Google, Apple, Facebook, Amazon and Alibaba are unleashing technology’s power by developing platform-based business models and taking advantage of the strategies they enable. Since the beginning of 2018, sharing proprietary data with third parties is not an option for European banks, with PSD2 in the European Union. Investments are being made to make this a reality; almost $ billion was invested in PSD2 enabled services in 2016 (up to 200 percent from 2015)1. 2/5  BIS central bankers' speeches  In the core of Open banking are the application programming interfaces (APIs), which has also been used and facilitated by eBay starting in early 2000s, and also by technological giants like Google, Apple, Uber, and so on.
There are above all three specific points I want to make. The first is that the regulatory frameworks that are now being finalised and that will be introduced in Sweden and globally will benefit everyone. Once they are introduced they will increase the safety margins in the global financial system. This will strengthen financial stability in Sweden and abroad. My second point is that many of the international reforms, and particularly Basel III, are aimed at reducing just those risks and problems that Swedish authorities have identified in Sweden and in Swedish banks. They will thus directly contribute to increasing resilience in the Swedish banking system. The third point I would like to emphasise is that the Basel regulations are minimum requirements. They will not be able to manage all of the risks irrespective of the country concerned. In my opinion, there are specific circumstances in Sweden, special structural vulnerabilities, that more than justify continuing to set stricter requirements for the Swedish banks. New regulations will strengthen the banks and reduce the risk of crises The origins of Basel III lie in the latest financial crisis, which revealed several weaknesses in the global financial system. Above all, it became clear that the banks had too little capital in relation to their risks and that the liquidity risk at the banks was too high.

This assessment will eventually be extended to also cover other parts of the Basel III framework. However, it is already clear that this is an effective way to ensure that the frameworks agreed on are actually put into place and to ensure that the regulations are used as intended. The Basel Committee is also reviewing how the banks calculate their risk weights. Put simply, the risk weights determine how much capital the banks need to hold for a certain asset, for example a loan or a security. So far, the Committee’s work has resulted in three studies that have compared how international banks calculate their risk weights for different portfolios. The latest study examined, among other things, the banks’ risk weights for lending to companies, while the earlier studies focused on risk weights for the banks’ trading operations. However, all three studies have revealed that the risk weights the banks calculate themselves using their own models vary to a relatively great extent without this always being justified by differences in the risk associated with the assets. This means that it is not possible to effectively compare the banks’ risk weights. There is a risk that this could have a negative impact on confidence in the risk-based capital regulations. The banks’ risk weights must be credible I would like to focus on risk weights for a moment as we are currently discussing these here in Sweden too, although the discussion here differs somewhat from the discussion abroad, for example in that it primarily concerns mortgages.
In the baseline scenario of this Report, the sum of the effects of the catastrophe, the changes in conjunctural data and other specific elements shapes a scenario where inflation will converge to 3% sooner than was forecast in December. The change in the medium-term inflation scenario is determined by the effects of the earthquake and tsunami on productive capacity and by the persistence and magnitude of a potential contraction in private consumption. In the baseline scenario, annual CPI variation will exceed 3% in the second half of this year, standing around 4% for a few months. It will later fluctuate around 3% through 2011 until the end of the relevant projection horizon, which is currently the first quarter of 2012. Annual CPIX1 will show a more gradual convergence to 3% (table 2). All this within a substantially more uncertain setting than before. This scenario rests on other working assumptions. First, it is assumed that in the long term the real exchange rate (RER) will be similar to its current level. This assumption is made considering that, with the nominal exchange rate and parities prevailing at the statistical closure of this Report, the RER is consistent with its long-term fundamentals. Another working assumption is that inflationary pressures from the labour market will generally not experience any significant change with respect to current indicators. Finally, the external scenario will continue to add momentum to the economy and imported inflationary pressures will remain contained.

Finally, there will be an additional effect associated with the public and private reconstruction efforts. The ultimate impact on growth and inflation will  BIS Review 61/2010  3  depend, among other factors, on the magnitude, composition and timing of those efforts, on the sources of funding that are used and on the focus of the related expenditures. As for the size of the loss in productive capital stock, the Board’s working assumption for this Report’s baseline scenario is that the catastrophe destroyed 3 percent of the economy’s net capital stock. Such an estimate, which is detailed in a box inside the Report, is based on the damage survey published by the government on March 23 and on the historical ratio between the gross value and the net value of the capital stock. To clarify this calculation, it is important to explain how this capital stock is measured. First, the gross capital stock equals the value of assets used in the productive process, valued “as new”. In other words, the nominal gross value of the capital stock can be proxied by the replacement cost. Second, the net value of the capital stock is the gross value of the capital stock minus the assets’ depreciation. This distinction between gross and net value of capital is important, because the latter – the net value – is what matters when measuring the economy’s productive capacity and, therefore, trend GDP, the output gap and inflationary pressures.
Money is then unable to fulfil its three functions and we are, in a way, back in the barter economy. 2 [10]  Money assumes trust Until fairly recently, the trust problem was resolved in two ways. The oldest method is by minting coins in precious metals. The coins then have a value in themselves. In Sweden, the value of metal appears to have been on average 85% of the coin's nominal value until around the 17th century. Trust in coins was also increased when the king, not only in Sweden, but in most countries, promised to accept his own coins as payment for tax collection and so on. In this way, the holder of a coin knew that the money could be used in the future at a particular value and that in a worst case scenario, if the king broke his promise, the coins had a metal value. If we look at the 17th century, an important financial innovation took place here in Stockholm: the first modern banknote was produced. The banknote was made of paper and thus had not metal value. On the other hand, the issuing bank, in this case Stockholms Banco, guaranteed that the holder would always be able to redeem the paper for precious metals. The trust was thus shifted from the precious metals in the coin to the party storing the precious metals. Banknotes assume that there is a broad trust in the issuing bank. The same applies of course to the money we have in our bank accounts.

If the Riksbank launches an e-krona with a positive interest rate, it can in some situations be very attractive for both the general public and companies to convert their account balances in the banks to e-krona with the Riksbank. The banking system could then be drained of the funding for its lending, and become unstable, which could damage the supply of credit in the economy. In addition to the questions I have just mentioned, there are a number of other questions, such as technological solutions, consumer integrity and how a solution can be adapted to suite different groups in society. As you hear, I have only been able to take up a lot of questions here. I don't have all the answers. And I don’t think anyone else has at present. The only thing we can be fairly certain of is that whatever direction the Riksbank chooses to take - whether or not to issue e-krona - it can have a major impact on the payment market, the banks’ business models, the way interest rate setting functions, financial stability, and so on. The Riksbank will investigate e-krona Now I have given my view on the situation for Sweden as one of the countries where the use of cash is declining the most and the fastest and where the general public are finding it increasingly difficult to get access to central bank money.
Banks play a critical role in every economy. For ASEAN economies to continue to grow, they will need new investments. These investments will require financing, by sound banks able and willing to lend to sound borrowers. The immediate priority is to speed up the resolution of the non-performing loans (NPL) within the banking system. The process is underway, but is far from complete. Even today, NPLs in some ASEAN countries remain well above 20%. As in the case of corporate restructuring, effective bankruptcy laws are essential. Asset Management Companies (AMCs) need sufficient power to deal expeditiously with debts which are unrecoverable. Otherwise the banking problems will infect the whole economy, and drag countries into the same deep-seated malaise as Japan. Finding new money and writing off bad loans is the relatively easy part. It is more difficult, but equally important, for banks to put in place proper systems, structures, and prudential standards, to prevent the same problem from happening again. They need to establish rigorous credit cultures. They  BIS Review 111/2000  6  must lend based not on personal relationships, but on objective assessments of the borrowers’ creditworthiness. Many countries are encouraging bank mergers and consolidation as part of their plans to strengthen the financial sector. Mergers can help to strengthen the commercial banks, and give them the scale to compete in the globalised financial industry. However, mergers by themselves are insufficient.

ASEAN and its members have overcome many difficult challenges over the past three decades. Despite the crisis, we are much better off today than we were before the economic take off. The road ahead is indeed difficult. But the ingredients which fuelled our rapid growth in the past are all still there. Given the political will and the right policies, I am confident that in time ASEAN will recapture the lost ground, and thrive and prosper into the new century. BIS Review 111/2000  8
While I have presented to you some of the major risks as separate and discrete, we recently have discovered that they are, in fact, inter-related. For instance, we have seen that market risk frequently drives credit risk. In the second half of last year, we saw turbulence in fixedincome markets produce severe liquidity and solvency risks for hedge fund market participants. Also, we have learned that credit risk may derive from operational risks, embedded in complex systems for managing collateral or intra-day funding, both of which require rigorous internal control environments. Regardless of the nature or form of risk, the best way for all banks to protect themselves is to identify risk correctly, accurately measure and price it, appropriately control it and maintain high levels of reserves and capital, in both good times and bad. However, many banks are not finding it easy to develop a holistic approach to assessing and managing the many interrelated risks they face. A particular challenge is to relate such risk assessments to appropriate capital levels, especially given the dynamic nature of their businesses. BIS Review 32/1999  2  Before I discuss how some banks are tackling this issue, let me first consider the role of capital more generally and how it relates to risk and strategy. Fundamentally, the role of capital is to act as a buffer against unidentified, even relatively remote losses that a bank may incur in the future.

The greater use of RMB in international transactions will be closely related to China’s financial reforms and liberalisation, with new fund flow channels being opened up in RMB. For example, the RMB QFII scheme allows offshore institutions to use RMB funds to invest in Chinese capital markets, and it is a new channel in addition to the US dollar-based QFII scheme. And further to a recent relaxation, outflows under the QDII scheme can also be made in RMB. Such developments, in turn, will bolster the use of the RMB in trade, foreign direct investment and international transactions, thereby supporting the further development of the offshore RMB market. 13. While recent developments in RMB have been exciting, given the possible scope of future expansion, we are probably still only at the early stage of what could be more significant changes in the years to come. After all, RMB deposits and bonds outstanding in the offshore market only account for about one percent of onshore deposits and outstanding debt respectively. The possibility for expansion remains substantial. 14. One of the aims of the Hong Kong-London Forum is to assess what all this means to the financial institutions and to corporates — many of whose representatives are gathered here today. 15. For corporates, especially those already having business links with China, it is important to get prepared for the increasing use of RMB as a currency for transaction, financing and investments.
Rather than starting with a presumption that we will act in the United States and then hope to induce the world to follow, there are some areas where the more effective approach will be to start with the borderless solution by which I mean one designed to apply to a class of institutions and financial instruments, independent of geography and currency. Where this does not prove possible on terms or in a time frame we like, we of course preserve the option to move alone. Third, we live in a financial system in which nonbank financial institutions play a much larger role than they did in the past, a system in which the differences between the activities of the bank-centered financial institutions and nonbanks has diminished, and in which the largest commercial banks and investment banks compete with each other and with other nonbank institutions in both the United States and abroad. These changes in market structure have many positive implications for financial efficiency and stability, but they also mean that differences in the size and nature of the incentives faced by institutions with different supervisory and regulatory regimes can have larger competitive effects. The resulting opportunities for regulatory arbitrage have the potential to reduce the impact of provisions that apply only to regulated or supervised institutions. The risk that regulating the core of the system simply pushes financial activity to the periphery can raise the risk that distress among nonbanks can cause greater damage to the financial system.

Timothy F Geithner: Principles to guide the future evolution of financial supervision and regulation Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Bond Market Association's Annual Meeting 2006, New York, 19 May 2006. *  *  *  Thanks for inviting me to speak to you today. You are meeting at a time of significant confidence in the strength of the global economy and in the overall health of the financial system. On the available evidence, the core of the U.S. financial system is stronger than it has been in some time. Capital levels are higher and earnings stronger and more diversified. This strength is the result of many factors. It is the result of the length and strength of the economic expansion in the United States and the associated improvements in credit fundamentals. It reflects increases in the scale and scope of the operations of the largest institutions. It is the result of the dramatic innovations in the technology of finance and in the opportunities that has created for managing risk more effectively. And it reflects the increased integration of national financial institutions and the resulting competitive pressure and opportunities for diversification. We have seen substantial improvements in risk management practice and in internal controls over the past decade. These improvements are the product of large investments in people and technology, as well as changes to the internal architecture around control and compliance.