samchain/econo-pairs-v1 huggingface dataset:
We must use regulatory power to guide innovations - the example of the General Regulation on Data Protection (GDPR) , have the courage to develop an industrial policy with public-private partnerships, as in the case of artificial intelligence and batteries, and make progress, for example, on Franco-German business law. Climate change and carbon tax Lastly, the ecological transition is clearly one of our common structural priorities and carbon tax is generally considered to be the most effective instrument to fight global warming. The European agreement of 21 July provides for the Commission proposing in the first half of 2021 a "carbon border adjustment mechanism", accompanied by a "revised emissions trading system, possibly extending it to the aviation and maritime sectors." The advantage of this solution is that it provides the European Union with a resource of its own and restores fair competition between European products and imported products that have a higher carbon footprint. The success of this instrument will depend on our negotiations at the WTO, and on its more extensive integration into European policies (transport, industrial policy, etc.). ** Earlier I mentioned the difference in terminology between French and German: the French use "couple", while the Germans speak of "engine".

A better allocation of European private savings, however, requires more effective cross-border financing channels. We therefore need to combine a more efficient Banking Union and an at last completed Capital Markets Union (CMU) to make a genuine “Financing Union for Investment and Innovation”. Jens Weidmann, the President of the Bundesbank, and I had made a strong case for it in a joint op-ed published in April 2019. Reviving the single market, our essential asset There is an essential asset that Europe does not talk about enough: it is its single market. Yet, 3/4  BIS central bankers' speeches  this is its great economic success, together with the euro. But it is vital to remain vigilant as to the dangers of fragmentation with the Covid crisis. National governments acted appropriately during the critical phase, adopting emergency measures in particular to provide liquidity support to their businesses. But the single market means common rules for businesses: if this were not the case, the divergence between our economies could regrettably increase further. It is therefore necessary to quickly restore the Commission's control over state aid and fair competition Furthermore, we must revive the single market, above all because we can optimise its power by combining its various components much better: free movement of goods, naturally; but also the cross-border financing capacity with the financing Union; and last but not least, regulatory power. There are still too many implicit borders and too much fragmentation.
Financial markets are very good at telescoping the future and reflecting it in today’s prices; hence the current volatility and the possibility of sharp adjustments should the telescope focus on a disappointing picture. Financial globalisation will readily transmit this to our markets. Monetary and financial developments on the mainland Let me turn to the SECOND issue with implications for monetary and financial stability in Hong Kong. This must of course be the monetary and financial developments on the Mainland. Here I also have ten observations to share with you. First is the increasing size of the current account surplus of the balance of payments. Not only has this become a pressing issue in international politics, it is presenting the Mainland with a most difficult task in effectively managing its monetary and financial affairs. Second is the appreciating exchange rate of the renminbi, under political as well as market pressure. The renminbi has appreciated against the US dollar by over 10% since the introduction of flexibility in the exchange rate in July 2005, but this has not produced any significant impact on the current account surplus. Third is the rapid accumulation of foreign reserves as the current account surplus and continuing net inflow in the capital account are absorbed by the authorities. With an appreciating domestic currency, this presents considerable challenges to the investment  BIS Review 139/2007  3  management of foreign reserves. More importantly, it also presents difficult challenges to the management of the monetary system.

I should of course start by re-iterating the firm HKSARG policy of keeping our exchange rate to the US dollar within the range of 7.75 to 7.85 through the linked exchange rate system, characterised by currency board arrangements that require our monetary base, and any changes in it, to be 100% backed by US dollars. With the weakening US dollar and the strengthening renminbi; with the local inflation rate, excluding the temporary effects of tax relief, edging higher; with an “asset bubble” on the lips of many commentators; with the exchange rate hitting the strong side Convertibility Undertaking late last month, requiring our passive and un-sterilised foreign exchange intervention, injecting quite a lot of Hong Kong dollar liquidity into the inter-bank market; and with current US monetary policy possibly becoming inappropriate for Hong Kong; questions have understandably been raised on the appropriateness of the system. Let me provide answers to these questions. First, the appropriateness of the linked exchange rate system should be judged by its ability to deliver monetary and financial stability in Hong Kong through economic cycles, and should not be judged by the short-term cyclical conditions of the economy relative to that of the US economy. The linked exchange rate system has served Hong Kong extremely well since its establishment.
Financing debt through the common budget would naturally lead to the creation of active mutualised insurance, helping to reduce the financing costs currently faced by individual Member States and to break the sovereign-bank doom loop in each country. This in turn would enhance monetary policy effectiveness, by making it easier to execute the Eurosystem's asset purchase programmes. 31  Further, if we are to increase the euro area's responsiveness to future shocks, the banking union must be completed through the creation of a common deposit insurance scheme. The lack of progress in this area and the incomplete harmonisation of national regulation go a long way to explaining the limited cross-border activity of European credit institutions and the low number of mergers between institutions of different member countries. Lastly, insufficient headway has been made in capital market integration in terms of harmonising market regulation and oversight, and insolvency proceedings. The degree of risk-sharing in these euro area markets is far less than that in other monetary unions, such as the United States. A single capital market would enable firms in the euro area to diversify and expand their sources of financing. In this respect, the progress in the capital markets union project in recent years can only be described as insufficient. That should spur the European political authorities to take more ambitious steps in this area without undue delay.

However, in the dogmatic pursuit of inter-country convergence, intra-country disparities have become increasingly apparent. As nations across the globe were brought closer together, citizens within each nation were pulled further apart, separated by the rising inequality, the declining share of labour income versus capital, and the displacement of workers. The unfettered market openness by advanced economies had caused unintended consequences that have ignited the rise to populism, inward-looking tendencies and potentially protectionist policies. If left to run its course, this will be a setback to global prosperity. In ASEAN, we are no stranger to this perspective. Our own experience is highly relevant. We learnt from the Asian Financial Crisis, that pushing countries to adopt policies when readiness is suspect is a design for failure. Without the necessary preconditions of sound institutional frameworks, adequate safeguards and capacity and robust domestic financial markets, premature financial liberalisation will expose the economy to waves of destabilising short-term speculative flows. When these flows leave, a trail of destruction is left behind. We also learnt that proper sequencing and readiness of financial liberalisation is key. The criticism that ASEAN’s ‘steam engine’ may not be ‘full speed ahead’ does not capture the full picture. This view fails to consider and understand that quality, not the speed and quantum of integration, is what really matters. The focus of integration should not be on speed, but on building the collective capacity, readiness and resilience of member countries.
: +49 69 1344 7455, E-mail: media@ecb.europa.eu Website: www.ecb.europa.eu Reproduction is permitted provided that the source is acknowledged. Media contacts  Related topics Monetary policy  Policies  Risks  Banking sector  Disclaimer Please note that related topic tags are currently available for speeches and introductory statements to the press conferences (with Q&A) from 2018-19 only. Copyright 2019, European Central Bank

I will return to these questions a little later when I put forward what I believe to be the main fiscal challenges facing our economy in the medium term. The last question I wish to address in this section relates to the risks underlying the revenue projection. In particular, the Draft Budget assumes that revenue from taxes and social security contributions will rise by 9% in 2021 in budgetary terms. This figure reflects the entry into force of the measures described above and also the projected behaviour of tax bases, which will essentially depend on the macroeconomic environment. In this respect, there are three main factors that condition the feasibility of this forecast, and all three are subject to significant uncertainty. First, the revenue-raising capacity of the new taxes, for which there are very few historical or international benchmarks. Second, the sensitivity of tax revenue to tax bases, which is an elasticity that is very difficult to assess accurately in circumstances such as the present ones for which there are no comparable historical benchmarks. And third, the macroeconomic situation in Spain and worldwide  22  which, as I have said, is subject to major uncertainty and risks which, overall, could result in lower economic growth for 2021. In accordance with the Banco de España’s preliminary analyses, the most significant risks of deviation from the revenue projection in the Draft Budget are concentrated on the last of the three factors mentioned, that is, on the level of momentum of activity in 2021.
And central banks do not regulate casino visits. As you can see, I could easily spend all of my time today talking about the problems of cryptocurrencies, and of bitcoin in particular. I could talk about how much energy it consumes – at some points last year, the bitcoin ecosystem consumed twice as much energy as Nigeria, an oil giant with 190 million people. By the way, the energy consumed on a single bitcoin transaction until 2017 could power a typical American household for more than three weeks. I could talk about how a seven-fold increase in the value of bitcoin some time ago was driven by the manipulation of a single trader. I could talk about the volatility of bitcoin, which surpasses that of any other commonly traded commodity and which renders bitcoin useless for the vast majority of people. I could talk about the funny thing that bitcoin as a quasi-currency was created to make payments cheap and fast, while in reality it is more often than not expensive and slow. 1/3  BIS central bankers' speeches  But instead, I will stress – and this is my point today – the positive philosophical influence of bitcoin on the conservative world of central banking.

One cannot use cryptocurrencies to measure value in economic transactions, because prices are mostly not displayed in cryptocurrencies and transaction costs are high and hidden for most people who would like to pay this way. One cannot, at least so far, use cryptocurrencies as a medium of exchange, because not many counterparties accept them. Therefore, cryptocurrencies are not currencies. To me, rather, they resemble commodities – pieces of code with some value for enthusiastic collectors. Which is fine. Its founders wanted to create something that – through the process of mining and the costs associated with it – would resemble a physical commodity or something physical. I would call it a commodity of the new digital era. But compared to vintage wine, art, or postage stamps, the amount of digital commodities is never really fixed, as proved, for instance, by last year’s split (or “fork” – I very much like this particular word) between bitcoin and bitcoin cash or the recent split between litecoin and litecoin cash. A piece of code is, in effect, easier to duplicate and improve upon. The fact that cryptocurrencies are rather commodities also shapes our light-touch, liberal approach to regulation at the CNB. We do not want to ban them and we are not hindering their development, but we are also not actively helping or promoting them and we are not protecting them or the customers that use them. Like in a casino, everyone investing in a cryptocurrency must be prepared to lose the entire bet.
I think at some point we will have to clarify, what happens after September 2016 and what happens with what comes to maturity. Quite a lot of securities come into maturity into the early years after September ‘16, this is something the Governing Council at some point will have to decide and communicate. Some people say the ECB is dominated by the financial sector. I strongly disagree with that, it’s more the opposite. Since we implemented our Forward Guidance we have been signalling more of our reaction function. When we talk about our ability and willingness to act under a number of conditions, of course markets incorporate that. What’s your view on the need for further monetary policy action now? There will be different views as usual in the Governing Council, there will be a very good dialogue on the economic assessment. You cannot prejudge at this time the decision on what combination of measures to take or not to take. The staff has also been tasked to look at the impact of all measures on financial conditions, on the economy and on inflation. The Governing Council will discuss whether there is a case for further action in the context of heightened uncertainty. This is a key issue. What would be the impact on the banking system of an even-more negative deposit rate?

BIS central bankers’ speeches  Charts and Tables Chart 1: Evolution of the global financial  Chart 2: Composition of IMF resources  safety net as a percentage of external liabilities (1980–2014) Per cent of global external Per cent of global external liabilities liabilities 14 3.5 Regional Financing Arrangments Swap Lines  12  3.0  IMF Temporary  10  2.5  IMF Permanent Self Insurance: FX Reserves (LHS)  8  2.0  6  1.5  4  1.0  2  0.5  0  1980 1984 1988 1992 1996 2000 2004 2008 2012  0.0  Sources: IMF, central bank websites, RFAs, Lane and MilessiFeretti (2012) and Bank calculations. GAB – General Arrangements to Borrow NAB – New Arrangements to Borrow Source: IMF and Bank calculations. Chart 3: Regional FX over- and underinsurance (2014)(a)  Sum overinsurance  Sub-saharan Africa  Middle East and North Africa  Latin America  Central and Eastern Europe  Sum underinsurance  Asia  $ billion 1000 900 800 700 600 500 400 300 200 100 0  Sources: IMF and Bank calculations. BIS central bankers’ speeches  9  (a) Degree of insurance is measured against the standard IMF metric. Chart 4: Access to regional financial arrangements bigger than 0.5% of regional GDP (2014)  Sources: National Sources, IMF and Bank calculations. 10  BIS central bankers’ speeches  References Brooke, M et al (2013) Sovereign default and state-contingent debt, Financial Stability Paper No. 27.
My dear friends, as we all know, the speedy resettlement of the internally displaced people has also been a top priority for the Government. Towards this goal, many extraordinary efforts have been taken. Out of the over 300,000 internally displaced persons who were rescued and had to be temporarily housed in welfare camps, over 217,000 or 72% have already been resettled. All those from Vavuniya, Mannar, Jaffna, a part of Mulativu and Killinochchi have now returned to their homes. The others mainly from Mulativu and Killinochchi are also to be resettled systematically without any undue delay, depending on the speed at which the de-mining processes take place. This is an outstanding achievement against all odds, and I believe the successful resettlement is a tribute to the deep commitment of the Government, the tremendous efforts of our public service and the dedicated contribution of several international organizations. I am also tempted to mention that this surprising outcome may have been a pleasant surprise to many who at certain times  BIS Review 16/2010  1  expressed the belief that the government may not have had the inclination nor the urgency to carry out this challenging task so expeditiously. My dear friends, the Central Bank has also contributed its mite to these normalization processes. We have, so far, over the past 8 months, granted approvals for the establishment of more than 90 banking outlets in the Northern Province.

17 However, in line with the previous discussion, instruments other than interest rates are likely to be much more effective in avoiding excessive credit growth and asset-price booms, and should thus be used as a first best alternative. Interest rates that are high enough to have a noticeable effect on credit growth and asset prices may have strong negative effects on inflation and resource utilization, and a central bank will probably rarely have sufficient information about the likely beneficial longer-horizon effects on inflation and resource utilization for the trade-off to be worthwhile and motivated. 18  16  Walsh (2009) points out that when financial factors cause distortions, these distortions will in general introduce corresponding terms in a loss function for monetary policy that is a second-order approximation to household welfare. Curdia and Woodford (2009) present a model where the second-order welfare approximation is a standard quadratic loss function of inflation and the output gap between output and potential output, but where potential output is affected by financial factors. Then inflation and the output gap remain the target variables, with and without financial factors. The neutral rate in the model, that is, the real rate consistent with output equal to potential output, is then also affected by financial factors. 17  Adrian and Shin (2007, 2009) argue, in a model with a risk-taking channel as in Borio and Zhu (2008), that short interest-rate movements may have considerable effects on the leverage of securities broker-dealers in the market-based financial sector outside the commercial-banking sector.
The aim is that the banks must reduce the differences in maturities between their assets and liabilities and their dependence on shortterm market funding. To achieve this, the banks must match their funding and lending to a greater extent than they do today. Assets with short maturities can have short-term funding while long-term illiquid assets, such as mortgages, will need more long-term and stable funding. All funding with a remaining maturity of more than one year will be counted as stable funding. This is a sound and important feature of the new Basel regulations. And it will probably affect the Swedish banks’ business models. Currently, none of the four major Swedish banks meet the structural liquidity measurement requirements (Net Stable Funding Ratio). This is mainly because they largely fund their lending through short-term market funding. The banks will need to think again here. In addition, a number of the Swedish banks do not meet the shortterm measurement (Liquidity Coverage Ratio) either. These banks must, before the LCR is introduced, either strengthen their liquidity buffers, for example by buying government bonds, or reduce their short-term net outflow. A weakness of the new standards is, however, that they do not contain any specific rules for matching maturities per currency. This is something Swedish authorities should look at more closely. Two thirds of Swedish banks’ market funding is in foreign currency. A certain proportion of this is converted via the swap markets to SEK and then lent.

When you look at the last thirty or forty years, you see repeating cycles of stop-go-policies. So, the trick is to attack the budget  deficit, which is crucial. If you are able to do that, then other  things will fall into place. The Government has taken several measures recently to boost exports. By recognizing the need for broad-based institutional  support, the Government has already taken steps to create an Page 12 of 17  Agency for International Trade. The AFIT is taking the lead in  negotiating a series of trade Agreements. An early harvest is being sought to increase the benefits from the existing FTA in goods with India. These include Mutual Recognition Agreements among  Standard Institutions and relaxing quotas on goods of interest to Sri Lanka. Negotiations are also underway to deepen and broaden the Agreement in goods through adjustments to the negative lists. The ETCA will also extend the application of negotiated rules to services, investment, training and technology. Similar agreements are being negotiated with China and Singapore. Now there is a natural concern, natural nervousness about a small country like Sri Lanka negotiating Partnership agreements with enormous countries like China and India. We are not the first  small country to negotiate trade agreements with a large country. Mexico is not a small country, but it is interesting that Mexico has benefited most from NAFTA, much more than the US or Canada.