samchain/econo-pairs-v1 huggingface dataset:
1  BIS Review 7/2000  Chart 1: The payment pyramid  The payment pyramid  inte rba nk s y ste m  S e ttle m e n t b an k  C le arin g h o u s e  Ban k  B an k  P a y er  pa ym e nt se rv ice s sy st em (re tail)  P a y ee  This is where the large, time-critical payments occur and obviously where the system risk is greatest. Disruptions in this segment of the payment system can lead to severe consequences, partly through the banks’ exposure to each other and partly through the banks’ processing of payments to and from their customers – i.e. retail payments. At Norges Bank, we have come to focus more on risk in the retail payment system, not least because many small transactions can amount to a fairly large sum, but also because it typically takes some time before final settlement between banks occurs. Internationally, more attention has been paid to risk in retail systems. Moreover, if such systems combine pure retail payments and large payments - as is the case in Norway - it is recommended internationally that the risk-reduction measures be as strict for these systems as for systems for large-value transfers. We have also seen that part of the credit risk between banks arises in connection with (the legal basis related to) the various payment services.

For instance, in some net systems several settlements occur throughout the day, often in conjunction with various forms of exposure limits and collective guarantee arrangements. Certain gross systems have solved liquidity problems with new queuing solutions (algorithms), often in combination with new forms of central bank loans (primarily against security). We thus see some convergence towards a new type of clearing and settlement system: “secure” net systems or “optimised” gross systems. This does not mean a reduction in the risk-reduction measures placed on such systems; if anything, the minimum requirements have become stricter. And, fourth, there is a greater consensus on the (international) standards that must be met by the payment systems. The Lamfalussy minimum standards are well known. They were drafted by a G10 committee at the beginning of the 1990s, and are minimum requirements intended to reduce the risk in large, international clearing and settlement systems. Gradually, they have also become standards for corresponding national systems. According to the Lamfalussy standards, payment systems should have a well-founded legal foundation, the risk should be known and understood, the division of responsibility and risk limits should be clearly defined, settlement should be completed - even if the largest participant experiences payment problems, and there should be publicly-disclosed admission criteria and satisfactory back-up routines. 1 2  RTGS = real-time gross settlement. If the banks practise early crediting (based on queuing information) the credit risk will also arise in a gross system.
It is in this group that, for example, many of the decisions were taken so that monetary union could start on time. The budget policies of the Member States have also been monitored here and this will continue under the Stability Pact. Moreover, Ecofin draws up an annual “budget statement”, the Broad Economic Policy Guidelines, containing the principles for economic policy in the EU area. BIS Review 50/1998  -6-  •  Most of the matters on the Ecofin agenda have been prepared by the Monetary Committee, which besides representatives for each of the fifteen Member States (normally an under-secretary of state or a deputy central bank governor) includes representatives for the Commission and, more recently, for the EMI. When monetary union starts, the name of the Monetary Committee will be changed to Economic and Financial Committee but at present it seems that its composition will be unchanged apart from the EMI being replaced by the ECB. Work on monetary union has been a heavy burden for these bodies in recent years. Meetings have been protracted and business has ranged from major issues like the Stability and Growth Pact, the new European exchange rate system (ERM2) and legislation for monetary union to matters such as the design of the European coinage. Some of the structure is now changing with the advent of monetary union but not its basic features. The preparatory work is over, as is a good deal of the work connected with ERM.

So far, the processes of the EIA, HIA, and public hearing processes have been formalized and the government is now in the process of establishing independent agencies which will be responsible for evaluating all of the proposed investment projects. It will take some more time, but progresses are being steadily made. In my view, the “Map Ta Phut” problem is only a temporary hiccup in Thailand’s long record of investment-friendly climate and rapid industrial development. It can be seen as part of a growing pain that developing countries such as Thailand experienced as it becomes more developed. On the positive side, it should provide opportunity to forge a closer coordination among related parties and establish a clear process in achieving sustainability of industrial development. As for the second issue, I think, it is too early at this point to put out an exact estimate of its negative impact on the recovery process. Should the problem takes time to resolve itself, the negative impact on the economy will become more visible especially on the tourist industry and private consumption. These, together with the severe drought that we have been experiencing thus far, may somewhat dampen the robust economic momentum that we carry forward from the fourth quarter of last year. Ladies and Gentlemen, I would like to turn to my last topic: Thailand’s economic policies going forward, starting with our monetary policy strategies in 2010.
The first agreement on liquidity between the Bank of England and private banks occurred in 1947, and involved a requirement to hold a minimum liquid assets ratio of thirty-two percent (lowered to twenty-eight percent sixteen years later). The regime prevailed until 1971, when the Competition and Credit Controls Act (CCC) introduced a minimum reserve ratio of twelve and a half percent. The CCC had two objectives: first it was intended to strengthen control over monetary policy, by creating a solid money base to underpin it; second, it aimed to unify restrictions on banks to strengthen competition in the industry. The minimum reserve ratio was designed with this aim in mind, and this perhaps took priority over any desire to impose prudential liquidity reserves. While CCC undoubtedly liberalised the UK banking sector and thus supported improvements in competition and efficiency, it led to a fall in very high quality sterling liquid asset holdings of UK banks, as shown in Chart 4. After twice lowering the minimum requirement, the Bank of England finally replaced the reserve ratio regime with the cash ratio deposit regime in 1981, which did not directly require a minimum level of liquid assets. The Sterling Stock Liquidity Regime (SLR) in 1996 focused on holding sufficient liquidity to meet a particular severe cash flow funding stress.

I would like to highlight four emerging lessons from the current crisis that should help prevent future problems. First, we need to understand better the various sources of liquidity risk, particularly under stressed conditions. Second, banks need to develop more effective contingency funding plans. Third, banks should support improved market functioning and stricter market discipline through better disclosure. And finally, supervision should ensure that banks’ liquidity risk management is undertaken to a more robust standard, in order to internalise some of the costs of a bank failure on the wider financial system. I shall cover these briefly in turn. Banks and public authorities alike need to develop a more in-depth and more complete understanding of the various forms in which liquidity risk can arise. That requires both a careful analysis of the various potential sources of liquidity risk, and of how such risks may crystallise under stressed market conditions. As outlined earlier, in today’s financial environment, it is not just the simple maturity transformation between deposits and loans that generates liquidity risk for banks. To this must be added contingent risks, such as the potential activation of liquidity lines to off-balance sheet vehicles, or the drawing of committed facilities extended to corporate customers. Contingent risks may also arise, in a variety of forms, from complex trading instruments, as detailed well by the Institute for International Finance (IIF) last year.
By the end of the year we expect capital levels to be above 10% for the sector as a whole, both under the EBA definition and under the Basel III definition of common equity tier 1 to be used from January when the new European solvency regulations come into force. The improved situation of Spanish banks is also apparent in the liquidity indicators and in market valuations, both in absolute terms and in relation to net book value. That said, obviously the banking sector has to address the adverse impact on its balance sheets exerted by the still-weak macroeconomic environment, the necessary process of nonfinancial sector deleveraging and the persisting fragmentation of European markets despite recent improvements. In order to obtain a comprehensive assessment of the outlook for the sector, we have recently developed a supervisory tool to enable us to regularly conduct forward-looking analyses to evaluate the solvency of Spanish banks under different macroeconomic scenarios. This tool (FLESB) is not intended to estimate banks’ solvency ratios, but rather to evaluate the sensitivity of their solvency to a given set of shocks over a time horizon. The initial results, which were published some days ago in the Banco de España’s Financial Stability Report, offer some comfort as to the ability of Spanish banks to meet the minimum regulatory capital requirements with a sufficient margin, even under adverse scenarios. To conclude, monetary union is now unquestionably at a crossroads.

Moreover, profitability is boosted by a greater flow of lending and lower loan loss provisions than would have occurred in the absence of accommodative monetary policy. Analysis by the ECB suggests that these effects tend to outweigh the impact on net interest income over the short term, but the picture varies depending on banks’ business models.8 In the broader context of generalised overcapacity and technological innovation, some banks will need to review their business models to bolster profitability. Other financial institutions also face challenges to their business models in this environment.9 In particular, institutions providing longer-term return guarantees – notably guaranteed-return life insurers – face a future of weak profitability unless they adapt their business models to a changing world. Macroprudential policy can help to boost the collective resilience of these institutions and enhance recovery and resolution frameworks. Systemic risks beyond banking Let me now turn to the ESRB’s focus on systemic risks beyond banking. As financial intermediation continues to shift from banks to non-banks, we need to adapt our policy framework. We need to identify migrating risks and develop tools to mitigate them.10 With this in mind, the ESRB published its first annual EU Shadow Banking Monitor in July. 11 The report identifies a number of areas that require close monitoring, including rising liquidity mismatches, especially among some bond funds. One measure of liquidity mismatch for openended funds is the share of non-liquid assets in total assets, which was 38% for bond funds in the fourth quarter of 2015, compared with 26% six years earlier.
Consequently, the optimal path of  BIS Review 46/2006  3  monetary policy may differ. Monetary independence gives us the capacity to react to asymmetric shocks and to limit their negative impact on the domestic economy. To sum up my arguments thus far, monetary independence allows Switzerland, first, to live with a comparatively low rate of inflation and, second, to reduce the impact of Switzerlandspecific shocks, which limits the volatility of Swiss inflation and growth. The third reason for monetary independence, which I would now like to turn to, is the protection of the Swiss interest rate advantage. Continuity of the interest rate advantage One major attraction of adopting the euro for countries with a record of high inflation was that national interest rates would drop in the run-up to the monetary union and converge to the German level, which was the lowest among the euro's founding members. Swiss interest rates, by contrast, have historically been lower, even lower than those in Germany. The reason why Switzerland enjoys the lowest interest rate levels in Europe has nothing to do with the appeal of our bank secrecy, as many believe. Switzerland is not a net importer of capital, but rather a major capital exporter. Traditionally, the Swiss economy displays a large excess of savings over investments. In 2005, our current account surplus represented 14% of GDP and Switzerland exported more capital than the whole euro area.

For them, one of the major advantages of joining a monetary union is stronger economic growth thanks to lower transaction costs and reduced exchange rate risk. Moreover, for countries that have historically experienced high and volatile inflation and thus high interest rates, adopting the euro brings a fall in nominal and real interest rates, thereby reducing government and private debt burdens. Given these positive effects, why has Switzerland not embraced the euro or, at least, pegged the franc to the euro? To my mind, there are four main reasons for this. •  The first is that retaining our own currency, within the framework of flexible exchange rates, gives us the freedom to choose the level of domestic inflation. •  Secondly, monetary independence allows a better reaction to country-specific shocks. •  Thirdly, monetary integration would lead to higher interest rates in our capital market. •  And finally, any tentative move to peg the franc to the euro, as long as Switzerland is not at least in the process of becoming an EU member, would destabilise rather than stabilise our currency. Let me review these points in detail. 2  BIS Review 46/2006  Choice of monetary policy goal The European Central Bank's main task is to guarantee price stability in the euro area. The ECB achieves this by, in its own wording, "aim[ing] at maintaining [consumer price] inflation below, but close to, 2% over the medium term". The National Bank Act defines the SNB's main task, too, as the achievement of price stability.
Chile)  1.8 1.5 -0.8 9.2 6.5 4.2 4.4  2.1 -0.3 2.0 8.1 7.3 4.3 3.6  2.0 -0.6 2.7 7.9 6.5 3.9 3.3  2.2 -0.4 2.7 7.8 5.8 3.5 3.0  2.3 1.0 1.6 8.5 7.9 4.8 4.0  2.0 0.3 1.3 8.2 7.2 4.6 3.7  2.0 0.3 1.3 8.1 7.1 4.5 3.4  2.4 1.7 1.4 8.3 7.3 4.8 3.9  LME copper price $ Brent oil price $  400 111  370 121  355 107  355 113  (levels) 360 115  340 97  340 109  350 103  Terms of trade  0.5  -5.3  -6.9  -2.6  1.3  (annual change, percent) -7.4  -0.1  -1.5  (e) Estimate. (f) Forecast. Sources: Central Bank of Chile based on a sample of investment banks, Consensus Forecasts, International Monetary Fund and statistics bureau of respective country. 12  BIS central bankers’ speeches

THE CHALLENGE OF POPULATION AGEING  CHART 13  NON-FINANCIAL BALANCE OF THE SOCIAL SECURITY SYSTEM  DEPENDENCY RATIO % of over-65s relative to population aged 15-64  % of GDP  2.0  80  1.5  70  1.0  60  0.5  50  0.0  40  -0.5  30  -1.0  20  -1.5  10  -2.0  0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16  70 75 80 85 90 95 00 05 10 15 20 25 30 35 40 45 50 55 60 AIReF  pension spending GDP  n pensions population Dependency ratio  ∗  population n employees Inverse of employment rate  ∗  EUROSTAT  UN  INE  average pension total gross wages ∗ average wage GDP Replacement rate  α  SOURCES: Social Security and National Accounts, AIReF, Eurostat, United Nations and INE. sustainability of the system. I believe this is a structural issue that requires broader debate, not confined to the habitual annual budget discussions. Indeed, population ageing also has an adverse impact on the participation rate, productivity and potential economic growth, so a broad approach is needed to address this issue, both as to the time period considered and the set of economic policy instruments to be used.
Christian Noyer: The Euro area – challenges and responses Speech by Mr Christian Noyer, Governor of the Bank of France and Chairman of the Board of Directors of the Bank for International Settlements, at a breakfast for the Economic Club, New York, 18 April 2011. *  *  *  It is a great pleasure to be here today. It is also a privilege to address such a distinguished audience. I would like to take this opportunity to present my assessment of the situation in the euro area, particularly with respect to the difficulties we meet on sovereign debt. Three views on the sovereign crisis in Europe Broadly speaking, opinions and views expressed on the euro area by people outside the Eurozone, can be divided into three categories: hostility for, at least very few people, skepticism and support. First, outright hostility. It is unfortunately true that, in some circles, there is a spontaneous and deeply ingrained opposition to European integration. Since the euro is the most accomplished part of the integration project, it is only natural that it crystallizes those oppositions. Somber predictions about the imminent demise of the euro came predominantly from those deeply anti – European commentators. While those views, like all opinions, should be treated with respect, there is no point in trying to refute arguments which, in great part, are irrational and mainly reflect wishful thinking. Second, skepticism. It emanates mainly, but not only, from academic circles.

Philipp Hildebrand: The Swiss National Bank’s ability to act in the crisis Summary of a speech by Mr Philipp Hildebrand, Vice-Chairman of the Governing Board of the Swiss National Bank, at the Executive MBA HSG, Universität St Gallen, St Gallen, 21 January 2009. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The global financial system is in the midst of the biggest crisis of the postwar years. Above all, the crisis is the most complex of this period. Problems in the US sub-prime mortgage market led to the breakdown of both markets and general trust. In particular, the interbank market, the nerve centre of the financial markets, froze up for several months. Governments and central banks managed to prevent the financial system from collapsing. The interbank market has been revived and risk premia have come down from their former record levels. In the meantime, however, the financial crisis has worked its way through into the real economy, which is now moving into a sharp downturn. In order to fight the crisis, the central banks have lowered their key interest rates aggressively. The instrument of the Swiss National Bank (SNB), the repo rate, has practically reached zero. However, this certainly does not mean that the SNB is incapable of action. If needed, there are other options available. The National Bank can extend the terms of repo transactions or give consideration to the purchase of government and corporate bonds.
It is probably also easier if inflation is not too far from the target to start with, as inflation expectations are to some extent affected by the current rate of inflation. Also, a deviation from the inflation target is in itself more costly the larger the deviation is. Lack of practical experience So what is the current status of the debate? For natural reasons, an important dividing line here is the view of macroprudential policy and how well it can function as a first line of defence. Can it efficiently manage to counteract imbalances arising, or is it doubtful whether it can do so alone? This is essentially an empirical question, so the route taken by the international debate in the coming period will to a great extent be determined by the practical experiences from macroprudential policy and the tools at its disposal. So far, these experiences are relatively limited. Another important dividing line in the debate is the view of monetary policy as a tool to counteract financial imbalances. One argument that is often put forward against using monetary policy as such a tool is that it is far too blunt for this purpose and has limited effects  4  The arguments for and against that were put forward in the debate are summarised in Roubini (2006) and Posen (2006) respectively. 5  See, for example, Billi and Vredin (2014) and Woodford (2012). 6  See, for instance, Sveriges Riksbank (2013).

7  In terms of communication, however, there may be some differences that are significant in practice. BIS central bankers’ speeches  3  on the risks one wishes to counteract. A monetary policy that leans against the wind therefore gives little “benefit”, while the “cost” in the form of poorer price stability and macroeconomic stability is high. On the other side of the debate it has been pointed out that it is not necessarily a disadvantage that monetary policy is blunt, in the sense that it has a broad impact on the economy, as it then “gets in all of the cracks” and is difficult to circumvent. 8 What the benefits and costs of using monetary policy to counteract financial imbalances will be is also an empirical question. Here, as well, the problem is that the practical experiences of a monetary policy that leans against the wind are still limited. Should the level of the inflation target be changed? Another question being discussed is whether the level of the central banks’ inflation targets should be changed. The debate since the financial crisis has primarily concerned whether the target should be raised, but most recently there have also been arguments for lowering the target. Should central banks lower their inflation targets? It appears to be mainly in the debate in Sweden that arguments in favour of lowering the target have been put forward recently. 9 But they have also arisen in other countries to some extent.