samchain/econo-pairs-v1 huggingface dataset:
As at end August 2013, more than 2,100 (2,121) kiosks have been deployed in 74% of the 2,341 bank branches and it is expected that almost all bank branches will be equipped with the Internet kiosk by end March 2014. In addition, the banking industry has developed a framework on payment reference standard that will enable payers to indicate payment transaction details to allow beneficiaries to easily identify the source and purpose of payment and this will facilitate more efficient reconciliation process through e-payments. Finally, I would once again like to emphasize that IBG via Internet banking and mobile banking provides significant benefits to the businesses by having the convenience of transacting anytime, anywhere. It also lowers the costs of doing business through reduction of cash and cheque handling costs and redeployment of resources for more productive activities. In closing, I wish you an insightful and productive engagement at this roadshow event and trust that the discussions today will be beneficial to you in your adoption of online banking and electronic payment solutions for your business operations. BIS central bankers’ speeches  3

The artificial intelligence and chatbots you are developing will help us respond more effectively to the public’s needs; big data, machine learning and biometrics will help us to better prevent fraud; blockchain technology and smart contracts will help to optimise transactions; and your APIs (Application Programming Interfaces) and open source technologies will help to make financial technologies more interoperable. When I think, in turn, of what the Banque de France and ACPR can contribute, I’d say this: stable, reliable and agile regulation. Stable because we have a strong anchoring in European regulation: this means that FinTechs established in France can offer their services in all countries in the European Union – it’s what we call “the European passport”. Reliable, because we strive to limit potential risks, so that innovation is always synonymous with customer protection, payment security, IT security and financial stability. But also agile, because innovation must not be stifled by administrative red tape; that’s why we are developing regulations that are based on objectives and principles rather than on rules, and that are proportionate to the scale of the risks. New FinTech players also help to stimulate competition with digital incumbents, and in particular with the initiatives launched by the US web giants. The industrial stakes are high: we need to foster this active competition, which is by far preferable to monopolies, even technological ones. Stable, reliable and agile regulation is a basis for confidence. And confidence is a basis for success in innovation. We want to build this regulation with your active participation.
We intend to strengthen our monitoring of funded reinsurance, for example analysing structures and the risks that they pose in detail. And we will think about whether protecting policyholders demands limits on acceptable structures or on volumes of transactions. The PRA also sees the continued and increasing levels of offshore longevity reinsurance as an important issue. Under both longevity and funded reinsurance arrangements, it is the insurers themselves who remain liable for their promises to millions of annuitants, and their ability to honour those promises depends on the effectiveness of these risk transfer strategies. Both types of reinsurance arrangements potentially expose insurers to complex and concentrated risk. And they will be supervisory priorities for us. Growth of private credit / illiquid assets The majority of credit risk, if not the insurance or longevity risk, is still retained by annuity firms. The second observed trend that carries potential concentration risk relates to investment in private credit or illiquid assets. The rapid growth of private credit has been striking, with global fund raising activities reaching $ in 2021 [see Chart 3][11]. The key reasons for this growth are widely understood: attractive returns tapping into the illiquidity premium, diversification benefits and more bespoke arrangements that match lenders’ appetites to borrowers’ needs. In addition, the long-term nature of many of these assets offers a good duration match for insurers with annuity liability portfolios. This is why UK life insurers have been an active participant of this trend, many with their own in-house origination functions[12] and engaging in direct lending activities.

The PPP is powerful as it puts the duty on insurers to really understand the risks they face and their resilience to them – it acts as a guardrail for how firms must invest their assets. For instance, the current Pillar 1 regime within the Solvency II[15] framework focuses heavily on reinsurers’ current credit ratings, solvency positions and probability of default. Whereas the PPP would also consider the reinsurer’s resilience over the whole duration of the exposures, as well as the potential impact from a mass recapture event where large concentrations to a small number of counterparties exist. And the PPP is flexible in that it can accommodate a range of investment strategies, risk management practices, business models and types of risk concentration. In 2019, when I last spoke at this conference, we had found that firms had not been implementing the PPP consistently, so we had just begun our consultation on Supervisory Statement (SS1/20)[16] aimed to address this deficiency. SS1/20 sets out PRA expectations of firms regarding their investment strategy and risk management framework, as well as their exposures to non-traded assets, intragroup loans and participations, and valuation uncertainty. It also reminds firms that the PPP applies to all assets including reinsurance arrangements. Since the publication of SS1/20 we have worked with firms to apply the PPP to address risk concentrations of concern to us.
Timing issues related to entry in ERM II In this process a first decision relates to the exchange rate strategy to be pursued in the interim period between now and entry into ERM II after EU accession. The EU Treaty is not restrictive in this regard. Any exchange rate strategy is acceptable as long as it contributes to real convergence and macroeconomic stability, and is compatible with ERM II by the time of entry in the mechanism. And since pegs to currencies other than the euro are incompatible with ERM II, our current exchange rate regime, which includes the euro, the US dollar and sterling, would need to change. In view of the positive experience with a fixed exchange rate regime and the absence so far of pressures on the lira during the on-going capital account liberalisation process, our strategy in this regard is to maintain this fixed regime but to gradually reduce the weight of the US dollar and sterling until the euro is the sole reference currency. This adjustment should not pose unsurmountable difficulties given that the euro already carries a weight of 70%. As for the timing and pace of the move to a full euro peg, these would depend, among other things, on the expected date of entry in EMU, which is conditioned by the two-year period embedded in ERM II, and also on the pace of the economy’s convergence to EU income levels and economic structures.

In the meantime, the Bank and the National Statistics Office are working to establish a common direct reporting database which will permit the dissemination of balance of payments related data to the ECB and EUROSTAT. The steady flow of information between the ECB and the national central banks is equally important from the point of view of transparency and effectiveness. The latter requires that ECB decisions be communicated in each Member State as early as possible. For this purpose, the Central Bank’s communications facilities will have to be upgraded. In particular, the Bank must have an archiving system capable of receiving, storing, retrieving and sending working documents to the ECB. Such a system is being developed. Conclusion Joining a common currency area clearly involves a complex and multifaceted process with implications of both a substantive and technical nature. This has become particularly evident as the emphasis of the Bank’s preparations has shifted away from legislative issues to the implementation phase. Much useful work has already been done, the Bank has been considerably strengthened as a result and we are fully in step with the central banks of other accession countries. Looking immediately ahead, the Bank’s integration within the ESCB now requires it to be represented on all the decision-making organs of the ECB. In fact, the Bank has already been invited to nominate a representative to sit on each of the twelve committees of the ECB in an observer capacity as from April.
The prospects for future stability will depend in part on how effective supervisors are in adapting policies in response to the ongoing evolution in markets. Financial institutions face strong incentives to monitor and limit their risk profile and the risk-taking of their leveraged counterparties to some efficient level where benefits balance costs at the margin. This is good for the firm and also good from society’s perspective. Private pools of capital have the capacity to use extensive leverage to amplify returns. This leverage can be acquired in a variety of ways: through repurchase agreements and reverse repos, through secured financing and securities lending and through derivatives and structured financial products. The ability of funds to take on risk and leverage is constrained by two external sources of discipline the returns required by their investors, and the terms on which their dealers/financers are willing to extend credit. In other words, the fund is constrained by the willingness of outsiders, collectively, to take exposure to the fund. The willingness of banks and investment banks to take on exposure to hedge funds is in turn influenced by the capital and supervisory framework that applies to those institutions and the discipline imposed on them by the market. The effectiveness of market discipline in constraining the risk-taking behavior of financial firms, however, may be compromised by the presence of market failures of the type mentioned above.

The recognition of a market failure does not mean, of course, that policymakers have the capacity to design solutions that can effectively mitigate those failures without raising others problems. The fundamental challenge for policy is how to achieve the appropriate balance between efficiency and financial resilience. With too much government intervention, innovation is constrained and the system is stifled. With too little, the probability of systemic crisis may rise to levels that are unacceptably high. We judge the appropriate balance not against the standard of whether it reduces to zero the probability of a major financial crisis, the failure of a large individual financial institution or a major reduction in asset prices. That is not an appropriate objective of policy. Some vulnerability to crisis is a necessary and unavoidable feature of a dynamic and efficient financial system where asset prices need to be able to adjust to changes in fundamentals. The consequences of trying to induce regulated financial institutions to self-insure against all conceivable potential risks would do substantial damage to the level and efficiency of economic activity and cause the same risks to migrate to other institutions. This leaves policymakers with a set of normative questions, the answers to which must be based on knowledge about how markets work, as well as a substantial degree of judgment about what policy actions are likely to be both appropriate and effective. What level of exposure to very low probability, extreme adverse events should we be comfortable living with?
8  The estimated simple gravity equation is lncij=4+0.9lnGDPi+0.8GDPj-1.4lndistij, where lncij is the log of consolidated claims of country i’s banks in country j, lnGDPi and lnGDPj are the logs of GDP in countries i and j, respectively, and lndistij is the log of the greater circle distance between the capital cities of country i and j. All estimated coefficients are statistically significant at the 1 per cent level. The country sample includes all EU countries for which data on foreign claims by nationality of reporting banks, immediate borrower basis, at the end of September 2009, is available from the Bank for International Settlements. Data on GDP in 2009 have been collected from the International Monetary Fund’s World Economic Outlook Database, April 2010. Data on greater circle distance have been collected from www.distancefromto.net. 16  BIS Review 82/2010  Bulgaria and Romania belongs to Greek banks, a large share of the foreign banking assets in the Czech Republic, Hungary and Slovakia belongs to Austrian banks, a large share of the foreign banking assets in Poland belongs to German banks, and a large share of the foreign banking assets in Estonia, Latvia and Lithuania belongs to Swedish banks. 9 One reason why cross-border banking is especially widespread in Europe is the efforts that have been made to achieve the long-term goal of creating a single market for financial services. In the early 1990s, a number of legislative reforms aiming to liberalise the financial sector were introduced.

8 The further countries are located from one another, the less likely it is that their banks will be active in one another’s markets. Many of the banks operating in Central and Eastern Europe originate in Western Europe. Right after the fall of the Soviet Union and the opening up of strictly regulated markets, the presence of foreign banks from Western Europe exploded. Today, many of the countries in the region report foreign ownership in excess of 80 per cent of total banking assets. Also here we see a strong geographical component. A large share of the foreign banking assets in  3  By the end of 2009 these countries accounted for nearly half of the global banking system measured in terms of gross global cross-border banking assets. 4  Other advanced economies include the US, Canada, Japan, Australia, New Zealand, and Switzerland. 5  See Table 1 in Barba Navaretti et al. 2010. 6  Inside the euro zone, cross-border loans have more than doubled from € 152 billion in 1999 to € 361 billion in 2006, while cross-border deposits have increased from € 221 billion to € 316 billion, respectively (see Heuchemer, Kleimeier and Sander (2008)). 7  The regional dimension of cross border banking activities was also emphasised in a speech given by José Manuel González-Páramo (24 February 2006).
18  J.-M. Grether, M. Olarreaga, “Preferential and non-preferential trade flows in World Trade”, WTO Staff Working Paper, September 1998. 19  M. Bacchetta and M. Jansen, “Adjusting to Trade Liberalization – the Role of Policy, Institutions” and WTO Disciplines, WTO Special studies No 7, April 2003. 20  Based on the data of the IMF, Word Economic Outlook Database 2005. 21  Based on the data from national accounts, source: ONZ. 22  E.g. B. O. Sascha et al., “Location choice and employment decisions: a comparison of German and Swedish multinationals”, CESifo Working Paper No. 1374. BIS Review 19/2006  5  indicates that differences in remuneration constitute a significant factor that leads to relocation of jobs in manufacturing to the countries in our region. Hence, the result of production fragmentation is the optimal use of the advantage of location of particular production stages and the reduction of the average cost. However, its side effect are additional costs related to linking of the particular stages into one via activities that have the nature of services (e.g. transportation, co-ordination and management). The phenomena inseparable from all those mentioned above are offshoring and outsourcing. Offshoring consists in relocation of jobs and production or orders from the country where the company is based abroad – usually to countries with lower employment costs 23 . Offshoring does not have to necessarily take place within a single enterprise. Outsourcing, on the other hand, consists in relocation of a part of services outside the company. OECD calculations have shown that ca.

Apart from preferential trade agreements, a factor of vital importance to the liberalisation of global flows of goods are multilateral agreements within the WTO/GATT forum. Thanks to GATT agreements, there has been a sharp reduction in customs tariff rates from ca. 40% after WWII to 6% in the early 1990s and to 4% at the turn of the century 19 . A gradual reduction of barriers to trade is a slow process; however, it brings permanent benefits to each of the interested parties, as it leads to specialisation in production, which brings notable benefits in the form of maintaining a competitive position on the global market. Proofs of growing links among economies can be found e.g. in the world trade statistics, according to which exports of goods and services have increased fivefold since 1980 20 . In 2005, the value of global exports corresponded to 29% of the global GDP, compared to 20% in 1980. This also indicates that trade develops at a much higher rate than the global domestic manufacturing. In the new EU Member States the export-to-GDP ratio has increased by 15 percentage points only over the past 10 years 21 . Changes in the growth rate have been accompanied by changes in the structure of exports, which have been significantly influenced by the foreign direct investment. Specialisation of production, as a prerequisite for competitiveness, leads companies to seek adequate locations allowing them to gain a competitive edge over rival companies.
One of the strengths of the UK monetary policy framework is that MPC members are individually accountable for their decisions and votes. The resulting expression of different views, and implied necessity for debate among them, guards against the emergence of ‘group think’ and thereby helps improve the robustness of final policy decisions. Given different appraisals of the economic situation and outlook, these different views reflect different assessments of how the MPC should act to achieve its common goal. Because, even if MPC members are individually accountable for their decisions, they don’t get to choose the MPC’s objectives. They are individually responsible for the means, but not the ends, of monetary policy. The ends of monetary policy are handed to the MPC in the form of its remit, which achieves democratic legitimacy through its roots in legislation approved by Parliament. [4] That remit has three main elements. First, it establishes the primacy of price stability in the mandate for UK monetary policy. Second, that primacy takes concrete form in the 2% inflation target, which holds at all times. And third, the remit requires the pursuit of the inflation target to be achieved sustainably in the medium term, while avoiding excessive and undesirable volatility in output and employment. Given the current situation, pursuit of this remit faces risks on both sides.

On the other hand, significant increases in international energy, food and goods prices over the past year imply a substantial squeeze in UK residents’ real incomes, which will weigh on future demand and employment. Looking beyond the shorter term, UK inflation is set to fall as global commodity prices stabilise, bottlenecks in global supply chains ease, and domestic inflationary pressure dissipates as the real income squeeze opens up a margin of economic slack. These two elements define the two sides of the narrow path along which the MPC has to navigate. The MPC sees an upside skew in the risks around the inflation baseline in the latter part of the forecast period. The balance of risk is tilted towards inflation proving stronger and more persistent than anticipated in that baseline. A number of underlying structural developments point in this direction. For example: (1) Brexit may  Page 14  have reduced the contestability of UK labour markets by EU immigrants and workers;[13] (2) the broader globalisation process – which helped contain external inflationary impulses to the UK around the turn of the century[14] – looks to have stalled and may be in retreat, reducing the competitive pressure on UK producers to contain costs; and (3) the impact of aging and longerterm health consequences of the pandemic may have led to a decline in UK labour force participation.
It is also precisely these questions that have been discussed in the general debate on the role of monetary policy in this context. I therefore intend to discuss these questions one by one and in relative detail. Can the repo rate affect housing prices and lending? It is probably true that the effect of a typical change in the policy rate on housing prices and lending to households is on average not very large. In addition, the policy rate is a blunt instrument when it comes to influencing housing prices and lending, as it is an interest rate that applies to the whole economy. This is why more specific tools, what are known as macroprudential tools, are generally perceived as more appropriate than the policy rate for counteracting this type of specific imbalances. But the effect of the policy rate most likely varies quite substantially depending on the circumstances prevailing at a specific time. In some situations it may be enough to make fairly limited increases to subdue an overly rapid upswing in the housing market, for instance, if the central bank combines these increases with communication emphasising that current developments are perceived as cause for concern.13 Small interest rate increases then function more as a concrete "reminder" that the central bank is concerned over  10  King (2012), p. 12. 11  IMF (2013), p. 3. 12  See, for example Svensson (2012).

We know there are effective fintech solutions to this which leverage off the credit of the payer. In such circumstances, and more broadly where fintech moves further into more traditional banking areas such as peer to peer and other lending, the Bank recognises that we need to think about and take forward a proportionate, activity-based regulatory response. Let me turn to the second gap in relation to a lack of client focus: an engagement gap, if I can put it that way. This manifests itself in a number of ways, as noted during the many insightful interventions during our panel sessions. Perhaps Julia Black put it best when she described the dangers of groups of professionals talking just amongst themselves. This has been part of the issue with financial reform – a sense that reform was a pre-packaged process built on discussions between regulators, banks, and investors, with sympathetic academics adding in their words of support. Part of the reason for our broader discussions today is to ensure we move out of this state of affairs. And of course, once we bring in other perspectives, it changes our own perspective and underscores just how hermetically sealed the industry in its broad sense can be. Let me say a couple of words on this. It should be recognized that the industry has made tremendous strides to address a number of issues.