samchain/econo-pairs-v1 huggingface dataset:
Building on our experiments with the private sector on a ‘wholesale’ CBDC to be ready for the future By comparison, the topic of a wholesale CBDC is less contentious and of less concerns to stakeholders; but it should not be perceived as less important. We central banks have been very proactive here, as demonstrated by the “wholesale CBDC focus” of the BIS Innovation Hubs. The Banque de France is at the forefront here, and we have especially identified two critical use cases for improving the payments ecosystem.  First, the tokenisation of securities. A wholesale CBDC could be used for the settlement of such securities issued on DLT, which is essential to prevent market and liquidity fragmentation. This technology also streamlines the information flows in financial markets, from trading to exchange procedures and settlement.  Second, a wholesale CBDC could enhance cross-border and crosscurrency settlements. Over the past year, we have successfully completed the first phase of our experimentation programme, comprising 9 experiments, hand in hand with the private sector and with other public actors. Thanks to these experiments, we have developed a direct technical expertise including two key innovative assets born in the Banque de France:  A proprietary DLT technology, called DL3S. This blockchain has been entirely designed by the Banque de France in order to meet the needs and expectations of market participants as a permissioned blockchain with efficient delivery and settlement services, using CBDC.

Change in consumer price inflation in percentage points 0 -0 .1 -0 .2 -0 .3 -0 .4 -0 .5 År  -0 .6 1  2  3  4  Source: Norges Bank JB 7. februar 2003  Effects on consumer price inflation of a persistent appreciation of 5 per cent of the import-weighted krone exchange rate.
35  Beyond age 18, there was in parallel a rise in both numbers and attendance at universities. For over six hundred years from 1209, England had only two universities – this one (Oxford) and the other one (Cambridge). It was not until the formation of University College London in 1829 that their duopoly was th  broken. And it was not until the 20 century that some of the other main cities – Manchester, Liverpool, Leeds, Bristol, Birmingham and Sheffield – established their own universities. 36  Today, there are around 130  universities in the UK as a whole. Participation rates in higher education have also undergone a secular rise and, latterly, a revolution. The share of young people attending university has increased from just over 3% in 1950 to over 8% in 1970, over 19% in 1990, 33% in 2000 and 49% by 2016. 37  Having been less than 5,000 in 1920, the number of first  degrees obtained at UK universities had increased to over 365,000 by 2016. 38  Through the rapid rise in school and university attendance, there was a revolution in cognitive skills in the workforce. That provided the human capital necessary to turn new technologies and machines into higher levels of productivity among companies, higher wages among workers and, ultimately, higher living standards among societies. Put differently, higher cognitive skills reduced the odds of a lengthy recessionary period of technological unemployment for many individuals and societies.

For me, the explanation lies in a second “i” – institutions. I will argue that it was the emergence of institutions that explains the rise in the other capitals that were essential pre-conditions for growth (human, social, infrastructural, intellectual etc.) It was the emergence of these same institutions which also cushioned the damaging effects of recessions. As with sight, to gain a true perspective on growth you need two “i"s.  This is, in one sense, not a new story. A number of distinguished economists have, over the years, placed institutions centre-stage in explaining secular trends in social and economic development. They include classical economists such as Adam Smith and John Stuart Mill and, more recently, Nobel Laureates such as Ronald Coase and Douglass North. 21  Broadberry and Wallis themselves conclude that the most likely cause  of fewer downside growth surprises since the Industrial Revolution has been the rise of institutions. 21  Smith (1776), Mill (1848), Coase (1960), North (1991). 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Empirical work supports the institutional hypothesis. Cross-country growth regressions suggest nations with high-quality institutions out-grow those without. 22  Detailed country case studies reach a similar conclusion. For example, institutional quality has been used to explain the very different economic fortunes of North and South Korea after separation. The absence of institutions is, for some, Why Nations Fail. 23  If institutions hold the key, what exactly do we mean by them and how exactly do they come about?
But where, in more extreme situations, an agreed solution in relation to external debt is not immediately achievable there may be a logical case for the orderly suspension of payments until a better alternative can be put in place. This could have advantages for committed private sector creditors as well as for the debtor country and the official international community if it prevented free riders running for the exit, or seeking to attach assets, and provided time for orderly negotiations on the provision of new finance or for equitable debt rescheduling. Similarly, in some situations, there may be an equivalent case for restraining domestic capital outflows. I am under no illusion that this area is an extremely sensitive and complex one. There are no simple solutions. But we do need to continue to explore the available options or we will remain in the position of making things up as we go along. The snail in this area certainly still has a long way to go! Conclusion Mr Chairman, I hope that I may have been able to persuade you this evening that the continuous round of meetings on international monetary and financial question do indeed serve a useful purpose, even though the outcome from one meeting to another may not be immediately apparent.

We need to develop a clearer presumptive framework of this kind – no doubt with provision for exceptions where they could be properly justified – before the next crisis hits us, because what debtor countries and their private sector creditors believe they can expect will influence their behaviour in the meantime. BIS Review 36/2001  5  What we all have to recognise is that the exceptional amounts of official funding committed during the Asian crisis are far less likely to be forthcoming in future. And to the extent that official funding is forthcoming, conditions may well be attached to ensure that it is not used simply to re-finance payments of short-term debt to private sector creditors or to fund a resident capital outlflow. Several of the tools which the G7 communiqué identified are designed to have precisely this effect. The last thing that the official international community wants is to get dragged into the micromanagement of relations between debtor countries and their creditors. We would all agree on the desirability of voluntary solutions, which might be easier to achieve if borrowing countries and their major creditors – above all the short-term lenders – were to establish, during the good times but on an on-going basis, arrangements for regular dialogue. Nor would anyone want to insist upon the imposition of constraints on capital outflows.
Andrew G Haldane: On being the right size Speech by Mr Andrew G Haldane, Executive Director, Financial Stability, Bank of England, at the Institute of Economic Affairs’ 22nd Annual Series, The 2012 Beesley Lectures, at the Institute of Directors, London, 25 October 2012. *  *  *  The views are not necessarily those of the Bank of England or the Financial Policy Committee. I would like to thank Andrew Gracie, Varun Paul, Kirsty Rodwell, Timothy Richards, Vicky Saporta, Rhiannon Sowerbutts and Belinda Tracey for their comments and contributions  1. Introduction  It is a pleasure to be delivering one of this year’s Beesley Lectures. I want to discuss financial regulation. But my title is drawn from neither finance nor regulation. Instead it is drawn from evolutionary biology. In 1928, evolutionary biologist J. B. S. Haldane wrote an important article whose title I have borrowed, On Being the Right Size.1 The essential point was simple. The sheer size of an object, institution or animal determined their structure. In particular, as their size rose, their structure needed to strengthen more than proportionately if they were to remain robust and resilient. This principle is sometimes enshrined in the so-called “square-cubed” law. A proportional rise in an object’s size causes its area to rise by the square, and its volume by the cube, of that rise. At one level, this is simple mathematical geometry. Yet in the real world, it carries fundamental implications for evolutionary structure. Take the animal kingdom.

One example is the recently implemented review of the monetary policy framework in the United Kingdom. There, for instance, the fact that some members sit on both the Bank of England’s monetary policy committee and its committee for financial stability, is regarded as a means of fostering coordination between monetary policy and macroprudential policy. 15 In Sweden, it will not be possible to coordinate macroprudential policy and monetary policy as closely as in the United Kingdom, for instance, as we have chosen a different framework for responsibility. It is at present difficult to foresee what the consequences of this will be – and even if there will be any significant consequences. After all, neither research nor the so far limited practical experiences give any particularly clear answer regarding exactly how important coordination is. It is once again quite possible that the solution we have chosen in Sweden will turn out to work very well in practice – only time will tell. ...or at least concordance But even if macroprudential policy and monetary policy may not necessarily need to be coordinated in a more formal sense, there may be reason to consider whether there should be a certain amount of concordance between them. My personal opinion is that there must  14  For an intuitive description of the problems concerning the coordination of macroprudential policy and monetary policy, see Bryant, Henderson and Becker (2012).
The fiscal authorities have no choice but to come to terms with the need to bring about a better balance between taxes and spending and to not only bend the curve, but reverse the inexorable growth in federal debt accumulation. This is the stuff of the great negotiations taking place among the executive branch and the two houses of Congress. This is no small chore. The parties involved must stop the hemorrhaging without inducing cardiac arrest; they must solve the long-run debt and deficit problem without, in the short run, pushing the economy back into recession, creating still more unemployment. And they must not only confront their addiction to debt and spending beyond their means, but they must reorganize the tax system, redirect the money they collect and rewrite the regulations they create so as to be competitive in a world that wants to beat us at our own game. This is an essential point. It will not be enough to reach a deal on the debt ceiling or on partially reining in deficits. In the post-Cold War, post-Bamboo Curtain world, there are many governments and great swathes of people outside the United States that want to attract investment and improve their lot. We are being challenged as the place to invest job-creating capital. Our fiscal and regulatory authorities do not operate in a vacuum; we live in a globalized, interconnected world where money is free to go to wherever it earns the best return.

In their solution to the debt crisis, our political leaders must develop an entirely new structure of incentives for private businesses and investors to put their money to work creating jobs here at home. Only fiscal authorities have the power to affect this outcome. Monetary authorities, like me and my colleagues on the Federal Open Market Committee of the Federal Reserve (FOMC), have limited influence. We can fill the gas tank with attractively priced fuel – abundant and cheap money – needed to propel the economy forward. But we cannot trigger the impulse to step on the pedal and engage the transmission mechanism of job-creating investment by the  2  2  See Collected Short Stories, by William Somerset Maugham, New York: Penguin Books, 1972. BIS central bankers’ speeches  private sector. This is the province of those who write our laws and regulations – the Congress of the United States. I firmly believe that the Federal Reserve has already pressed the limits of monetary policy. So-called QE2, to my way of thinking, was of doubtful efficacy, which is why I did not support it to begin with. But even if you believe the costs of QE2 were worth its purported benefits, you would be hard pressed to now say that still more liquidity, or more fuel, is called for given the more than $ trillion in excess bank reserves and the substantial liquid holdings above the normal working capital needs of corporate businesses.
Jean-Pierre Danthine: Situation at Swiss banks from a financial stability perspective Introductory remarks by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the media news conference of the Swiss National Bank, Berne, 19 June 2014. *  *  *  As my colleague Thomas Jordan has explained, economic and financial conditions continue to be challenging. Against this background, I would like to examine the situation at Swiss banks from a financial stability perspective, looking first at the big banks and then moving on to a discussion of domestically focused banks. Big banks: strengthening resilience Over the past year, the Swiss big banks have further improved their capital situation. In terms of loss-absorbing capital – defined as Common Equity Tier 1 capital plus high-trigger contingent capital instruments – their risk-weighted capital ratio either already exceeds or is close to the 13% requirement that will apply from 2019. They also meet or are very close to meeting the corresponding leverage ratio requirement of 3.1%. In terms of total capital, both big banks have also substantially improved their ratios. However, they have yet to meet the corresponding requirements applicable from 2019.1 The SNB welcomes the significant progress made by the big banks in improving their capital situation and their compliance with some of the requirements applicable from 2019. The SNB recommends that they continue to improve their resilience and, in particular, their leverage ratios. This is important for two reasons.

We continue to place an emphasis on promoting the global competitiveness of Thai businesses, while ensuring the integrity of the economic and financial system as a whole, the very foundation of consumer and business confidence. The key challenge this year for the BOT and other policymakers is to preserve the right balance of policy mix, which in turn demands both intra- and inter-agency cooperation. Our common goal is to promote a sustainable growth path and ensure a high standard of living for all Thais. Economic developments and policy implementation in 2012 Last year, the Thai economy had to grapple with the stagnating global economy, volatile capital flows, and challenges in recovering from the flood crisis. Notwithstanding these difficulties, the economy proved to be resilient and flexible enough to withstand various shocks and uncertainties. Indeed, robust domestic demand has become the main engine of growth amid the softening global economy, helped in part by government stimulus measures. Overall economic activities consequently improved, and I would like to thank all parties for their collective efforts. On the monetary policy front last year, a greater emphasis was placed on risks to growth, which justified the accommodative monetary policy stance throughout 2012. The Monetary Policy Committee (MPC) lowered the policy interest rate twice by a total of 0.50 percentage points. The first cut took place earlier in the year, and was designed to help speed up economic recovery after the severe flood.
The lower the expected path of national income, the less favorable the distribution of that income is expected to be, and the greater the uncertainty over the mix of tax rates and benefits a person or business expects to pay and receive, the less they will spend or invest today. Thus, policies that improve the long-run outlook make a cyclical recovery easier to achieve today. Conversely, a monetary policy that promotes a cyclical recovery supports the economy’s long-run prospects. Left for too long, long term unemployment will eventually lead to permanent atrophying of skills that will restrain the economy’s growth potential. This is also true for the cohort of young workers who are stuck in jobs for which they are overqualified and who are having trouble securing the professional experience that would make them increasingly productive over time. Although the outlook for the U.S. economy remains somewhat cloudy as we look into 2013, I remain a long-run optimist about where we are headed. The long term prospects of the US economy are excellent. The United States leads the world in higher education, technology and innovation and has recently acquired new comparative advantages in energy. We have an exceptionally dynamic labor market, high rates of entrepreneurialism, competitive product markets, and a well-capitalized financial system that relentlessly reallocates capital from one sector to the next in search of higher returns.

On the fiscal side, the authorities can cut taxes or increase spending to support income and demand during the deleveraging phase that follows the financial crisis. But the ability of such stimulus to continue to support economic activity ultimately encounters budgetary limits. For example, the need to keep the long-term fiscal trajectory on a sustainable path limits the size and duration of federal fiscal stimulus measures. For state and local governments, the statutory requirements for balanced budgets meant that fiscal policies turned restrictive relatively quickly once budget surpluses and rainy day funds were exhausted, and this was only temporarily mitigated by federal transfers to the states as part of the initial fiscal stimulus program. Fiscal policy is now a drag rather than a support to growth in the United States, and this will likely continue. BIS central bankers’ speeches  3  Monetary policy I would give each of these four explanations some weight for why the recovery has been consistently weaker than expected. But I would add a fifth, monetary policy, while highly accommodative by historic standards, may still not have been sufficiently accommodative given the economic circumstances. Now let me be clear. I believe the evidence overwhelmingly indicates that our monetary policy has been effective in easing financial conditions and supporting economic activity.
Better resolution tools, which would be needed if CoCos are not enough, can lessen the dilemma and are an essential part of the reform programme. They give the authorities extra options such as creditor bail-in through write-downs or debt-for-equity conversions. They provide a statutory backstop, enabling bail-in of private sector creditors. As such, they are a necessary ingredient for restoring market discipline. CoCos buttress market discipline and help lift the authorities from the horns of the timeconsistency dilemma. They augment regulatory discretion at the point of distress with contractual rules well ahead of distress. Capital replenishment is contractual and automatic; it is written and priced ex-ante and delivered without temptation ex-post. Because intervention would be prompt, transparent and rule-based, the scope for regulatory discretion would be constrained. For that reason, the time-consistency problem ought to be reduced, perhaps materially. A contractual belt is added to the resolution braces. To achieve these benefits, change would be needed to banks’ capital structure. But this reconfiguration would not be especially dramatic. Indeed, it would be as simple as CDE: C(oCos) + D(debt) + E(quity). The layer of bank equity would be augmented with a layer of CoCos, with slices defined by market-based triggers. Banks’ capital would comprise multisliced equity, some actual, some contingent. In some respects, this model is not greatly dissimilar to the one recently proposed by the Swiss banking commission.14 In achieving this capital structure, one option would be for regulators to require it, as in Switzerland.

Standard & Poor’s (2010), Potential $ Trillion Bank Contingent Capital-Style Issuance Faces Uncertain Investor Interest. BIS central bankers’ speeches  11  Annex Chart 1: Distribution of capital ratio for the retail mortgage book with model error 0.10 0.09 Model error  0.08  Original capital ratio  0.07 0.06 0.05 0.04 0.03 0.02 0.01 0.00 75  80  85  90  95  100  105  110  115  120  125  130  Sources: 2009 Pillar 3 disclosures of Lloyds Banking Group and Royal Bank of Scotland and Bank calculations (a) The model error takes the probability of default (PD) for each given risk bucket of mortgagees as the realisation of a uniformly-distributed random variable across the range of possible PDs within that risk bucket. This maps to a new risk-weighted assets number for the retail mortgage book, and a new capital ratio for this portion of the bank’s book (assuming the initial capital ratio is 100). This error is simulated 5,000 times for each of two banks and the chart shows the resulting distribution. Chart 2: Distribution of capital ratio for the retail mortgage book with model and mapping errors  Sources: 2009 Pillar 3 disclosures of Lloyds Banking Group and Royal Bank of Scotland and Bank calculations (a) The mapping error maps the PD for each mortgagee to the next higher risk bucket. It compounds with the model error described in Chart 1.