samchain/econo-pairs-v1 huggingface dataset:
In the process, they are systematically capturing the type of knowledge I used to gain from my daily interactions with customers in the bank branch. Some providers are leveraging this data to sell their customers non-bank products and services. This – and the desire to avoid regulation – reduces their incentive to integrate upstream to conventional banking. Traditional universal banking begins with the customer relationship – or what I used to have as a teller. This historic preserve of established financial institutions is now being opened up. Aggregators, making use of banks’ Application Programme Interfaces (APIs), are providing customers with ready access to price comparison and switching services. New pro-competition policies are reinforcing this competition. 3  Meanwhile so-called “robo advisors” are deploying algorithms to deliver affordable investment advice to retail customers. 3  The second Payment Services Directive (PSD2) will allow, conditional on FCA authorisation and customer authority, non-banks to access customers’ bank account data. In the UK, the Competition and Markets Authority has required that the UK’s nine largest banks adopt an open banking standard for APIs by early 2018. 5  All speeches are available online at www.bankofengland.co.uk/speeches  5  As customers become more willing to delegate decision-making to machines, their funds and loans are being better matched with the best rates from around the system. These flows could become seamless if public policy initiatives and new technologies combine to create digital credentials that are universal, durable and reliable.

12 In recognition of the serious implications of a withdrawal in correspondent banking services for growth, financial inclusion, and the stability and integrity of the financial system, the FSB is working to advance a four-point Action Plan to address the recent decline. For an update on this work see: http://www.fsb.org/2016/12/fsb-publishes-progress-report-and-2017-workplan-to-assess-and-address-thedecline-in-correspondent-banking/ 7  All speeches are available online at www.bankofengland.co.uk/speeches  7  Seizing this opportunity means considering fundamental rights such as privacy, and practical constraints such as the costs of storage and handling. Ultimately it is for governments and citizens to decide whether – and how – to ensure the benefits outweigh the costs. Third, and relatedly, there are fundamental issues around data protection to consider. Traditionally, financial institutions have sought to protect and use their own customers’ data under well-established legal and regulatory frameworks. In contrast, social media firms regularly collect and sometimes share extensive data from their users (with their consent). 13  The FinTech future envisages the gathering of a broad range of  financial and non-financial data from, and sharing across, a wider set of parties. A more intense debate can be expected about whether there are appropriate frameworks for the gathering, storing and sharing data both domestically and cross-border. Now turning to the most important financial stability risks. 4.
I cannot see a robot replacing GSA lecturers in my lifetime. The BBC app tells me a teacher, childminder or artist has a probability of being automated of less than 10%. Even if you are an economist, it is only 15%.31 If anything, we might see the demand for these skills grow in the period ahead. It has been estimated that, between now and 2030, demand for jobs where creativity is a key skill could increase by 30-40%. Demand for jobs with high levels of social and emotional skills are forecast to increase by 25%.32 For all the jobs lost, new ones will be created in a different image, mirroring the pattern in previous Industrial Revolutions. We may also need to be more creative about how we define “creative”. TV programme-makers are creative, but so are computer program-makers. AI is about as creative an activity as you could imagine. NESTA have tried to classify the creativity of tasks. Their estimates put the number of people currently in creative professions at between a fifth and a quarter.33 Were jobs to evolve in line with expectations, that fraction could rise to more than a third in the next decade. For a great many tasks, it is probably wrong to even think of jobs being displacement. More likely, their nature and the skills required will evolve. Take medicine. Many aspects of clinical diagnosis and prescription are routine.

A public fire service was introduced in Scotland in 1824 and in England in 1833.13 The Bank’s fire engines and firemen were stood down. This particular public good also arose, with a lag, from the destruction of 1666. From the ashes of the Great Fire emerged a new public infrastructure of laws, regulations and institutions. That supported a new private infrastructure of contracts, companies and services. And this mass flourishing created one of the world’s leading financial centres, a position London retains. The regeneration spawned by the Great Fire set the economy and society – as well as the Bank - on an entirely different course. Enlightenment Now? That is the story of fire. But it is a story repeated for most transformative innovation over the course of human history: a spark of imagination; a flame of creativity as an imagined future is made real; periodic destructive burn-outs; and an eventual mass flourishing.14 History tells us it is through this evolutionary process of creative destruction that economies grow and societies improve. But is the creative flame still burning? Prominent economists, such as Robert Gordon in the United States, have recently argued that the world may be, in Haldane’s terms, at risk of perishing for lack of wonder.15 This hypothesis has support, with falling returns on research and development spending. The low-hanging fruit of creative innovation may already have been picked, leaving slimmer pickings for future generations. These fears do need, though, to be set in some context.
There has been a marked easing in global monetary and fiscal policies; authorities around the world have also enacted substantial initiatives to revitalise the global banking system; the sharp falls in commodity prices will boost households’ purchasing power; and the marked depreciation in sterling should support demand, both at home and abroad, for domestically produced output. The scale of this stimulus is significantly greater than that seen at comparable stages of the recessions in the 1970s, 80s or 90s. But to repeat, there is huge uncertainty about the precise form and timing of the recovery and so this central path should be treated with a healthy degree of scepticism. In particular, I think the risks around this central path are weighted to the downside, reflecting the possibility that the actions taken by the authorities around the world to improve the availability of credit and to restore business and consumer confidence are slow to take effect. So there may still be more to do. Learning from past recessions When considering the likely scale and duration of this recession, it is natural to examine the experience from past recessions. And simple comparisons with recent recessions are not encouraging. For example, taking account of developments in Q1, output appears likely to have fallen by more in the first few quarters of this recession than in any of the preceding ones. But when making these comparisons, it is important to recognise that the parallels are far from perfect.

Moreover, Switzerland would be alone in adopting such a solution: no other central bank has implemented such a solution to date. This brings me to the end of my speech. Please allow me to briefly sum up the key points. Conclusion I hope I have been able to demonstrate clearly why cryptocurrencies are not genuine rivals to conventional currencies. That said, the underlying distributed ledger technology does indeed have potential, especially in complex areas such as securities settlement and cross-border payment transactions. Nevertheless, the technology still has to prove itself in practice. As well as being efficient, DLT-based solutions must not give rise to any systemic risks in the financial market infrastructure. In the systemically important segment of cashless interbank payments, the SNB plays an active role by providing a reliable foundation. Any future DLTbased systems will have to be linked with the latter in some form or other. In turn, in the area of cashless retail payments, the private sector is better placed to address customers’ needs. The division of roles between the central bank (as the bankers’ bank) and commercial banks (as the interface to the end customers) has certainly proved its worth over the years. This brings me to an important conclusion: If cashless payment transactions are efficient and innovative, there is no need for digital central bank money. What is important is that we remain agile. Our existing set-up contributes to the stability of the financial system, while at the same time allowing sufficient leeway for innovation.
But if haircuts are lowered even modestly, resilience is eroded. In the example, lowering haircuts from 20% to 5% raises the crisis probability by an order of magnitude, from less than 0.1 to almost 1. In other words, a hands-off haircuts policy runs a significant risk of systemic collapse if haircuts are procyclically trimmed during the upswing. To prevent this, policy makers could seek to control haircuts directly. In the example, significantly greater resilience could be achieved by imposing a haircut limit of 20%. Alternatively, policy makers could seek to lean against the pro-cyclical tendencies of the financial system as systemic risk increases. The other two lines in Chart 1 show different sets of activist policy intervention. Both require banks to build up larger liquid asset buffer stocks in the event of haircuts being trimmed. This lessens the need for banks to hoard liquidity, so reducing system-wide liquidity stress. The two policies differ in how aggressively they respond to such excesses – “weak” and “tough”. Either way, the effects are striking. Even the weak policy shrinks the probability of collapse by more than half, whatever the initial level of haircuts. And under the tough policy, the financial system is effectively inoculated against haircut-induced pro-cyclicality. It may be over-optimistic to think policy could eliminate the adverse effects of haircut-induced pro-cyclicality. For example, we have little theoretical understanding of how haircut-based policies might affect banks’ behaviour. And we have little empirical case law on the implementation of these policies.

Even with these better shock absorbers in place, large and systemically important banks will again experience severe financial stress at some point in the future. Here we must accept that we still have not dealt with the fundamental reason why systemically important banks cannot be allowed to fail. The truth is that, if tomorrow morning a systemic institution were to be on the brink of failure, we would again face the terrible choice of coming to its rescue or risking the stability of the financial system. The fact that financial institutions which are too big or too interconnected to fail exist is a flagrant contradiction of one of the key principles and beliefs on which any market-based economy is built: Competition should ensure that the most efficient – and not the largest and most risk-loving – survive in the market place. It is evident that a change of rules is required. The financial system of the future should expose financial institutions of all sizes and structures to the test of the market place. In the event that some of them fail, we need a system that allows for the orderly resolution of large and complex financial institutions. In other words, we require a system that permits us to let systemically relevant institutions fail safely. One of the principal hurdles to achieving this objective is that it requires international coordination. Many of you will argue that the notion that we could agree on an international framework for the orderly resolution of cross-border financial institutions is utopian.
We want to continue to work together with all of you here on this agenda. We look forward to hearing your ideas, suggestions and questions through the panel discussion coming up shortly, and in our networking session with our market intelligence teams later on today. We want to use 2/3  BIS central bankers' speeches  that as a starting point to build stronger links with a wider, more diverse group of colleagues, and also deepen those over time, as they progress through their careers. There is a very important further issue in all of this, which is sadly highly topical, namely to ask what is the antidote to the problem of lobbying? The answer is not to speak to no-one. That is not likely to lead to good decision making. The answer is to be rigorous about speaking to a diverse range of people to get their views. We look forward to engaging with you in the future, working together to understand financial market developments from a diverse and varied range of perspectives to inform our policy committee decisions. Thank you I am grateful to Christine Boykiw, Sumita Ghosh, Sam Juthani, Ankita Mehta and Arjun Popat for their assistance in helping me prepare these remarks.​ 1 See Carney (2017) – link in References section. Gender, ethnicity, age, disability, sexual orientation and  education are types of ‘identity’ diversity. ‘Cognitive’ diversity is about our perspectives and how we think about and solve problems.

Monetary policy cannot alone prevent financial imbalances or secure the competitiveness of the Norwegian business sector. The objective of monetary policy is low and stable inflation and the Bank only has one instrument – the interest rate. Inflation expectations are now firmly anchored, which means that Norges Bank can give weight to stabilising economic developments in interest rate setting. But monetary policy cannot be overburdened. When assessing the various considerations, monetary policy must pursue its primary objective – low and stable inflation. Other economic objectives must be pursued using policy tools such as financial regulation, the tax system and fiscal policy. Thank you for your attention. 8  BIS central bankers’ speeches
Or, alternatively, it assumes that the cost of moving policy more vigorously to create greater headroom above the zero lower bound is justified in risk management terms – that the cost of a tighter policy setting than required is justified by benefits of avoiding the risk of having to use exceptional policy tools at the lower bound. I have however seen little evidence in the UK that monetary has a consistently asymmetric impact in normal 20  times. As to the risk management argument, I do think the experience of the last 10 years shows that there are policy tools which, while not the primary instrument, remain available close to or at the zero bound. It was partly for this reason that the MPC’s recent statement on the unwinding of QE made clear that QE remained a weapon in the Committee’s armoury. 21  20  Such evidence that exists for other economies suggest the opposite is true – that monetary policy has greater impact when it is raised than when it is lowered. Tenreyro and Thwaites (2016) 21 As it stated in the June 2018 MPC minutes: In the event that potential movements in Bank Rate are judged insufficient to achieve the inflation target, the reduction in the stock of assets could be amended or reversed. 11  All speeches are available online at www.bankofengland.co.uk/speeches  11  A sharper tightening of policy has also been suggested to avoid financial stability risks.

Technically speaking, this means we cannot determine an optimal commitment period for our investments. In point of fact, our investment horizon is usually relatively long-term, although it can be abruptly shortened in the event of a crisis. Finally, we also pay special attention to reputation risks when engaging in specific investments. One of  BIS Review 123/2006  1  the SNB's most important assets is its good reputation and its credibility. Damage to its reputation could also have a negative impact on monetary policy. Consequently, in cases of doubt, we avoid investment classes and instruments that may be expected to have a damaging impact on our reputation. We are also very risk-conscious when it comes to potential conflicts of interest. For instance, all staff engaged in practical investment activities are shielded from confidential monetary policy information. Effective risk management requires that all relevant risks be identified and assessed regularly, in a manner that is as unbiased as possible. Experience has shown that technical failure is seldom at the root of serious losses. The greatest losses result from a lack of risk consciousness, from a total failure even to recognise significant sources of risk. This danger exists when risk assessment is restricted exclusively to easily measurable quantitative risk variables, excluding areas such as processes or legal risks, which are referred to as 'operational risks'. For this reason, we also include operational risks in our assessment. However, while pursuing this broader route, we certainly do not neglect the regular quantitative measures for assessing financial investment risks.
And as usual, we will weigh up all the information and make a new overall assessment of inflation prospects, economic developments in general and the monetary policy that is needed. The recent concerns linked to the problems in international banks are putting us in a more uncertain position. The financial unease may dampen international economic activity, which would also affect economic activity here at home. The unease can also affect financial conditions, that is, the state of the financial markets and the interest rates, prices and conditions that households and companies face in those markets. So far, the signals regarding financial conditions are rather mixed. However, if interest rates directed to companies begin to rise, conditions for loans tighten, asset prices fall and credit volumes decline as a result of the bank unease and the risk of contagion effects, this in itself will have a cooling effect on the economy. At the same time, there is no doubt that monetary policy needs to be tight. In January and February inflation was still far too high and in February CPI inflation excluding energy was significantly above our most recent forecast. The inflation target is the Riksbank's overriding target and we will do what is necessary to bring inflation back to low and stable levels. In the short term, this means a more subdued development of production and employment. But in the longer term, there is no contradiction between low inflation and expansion of the real economy.

We are convinced that our banks are better able to withstand a crisis today than they were ten years ago. What is more, banks’ management bodies and the supervisory authorities alike now have a better understanding of how to assess risks. The comprehensive implementation of the agreed measures will further improve the stability of our financial system. We will still have systemically important banks in the future. However, these must no longer be too big to fail; that is to say, the state and taxpayers must no longer have to fear being held hostage. The new banking regulations therefore contribute to reducing risks, but they also take into account both the considerable economic importance of Switzerland’s banking sector and our interest in having a significant financial centre. I would like to cross over here, if I may, to the sovereign money initiative. The authors of this initiative hope that, if adopted, it would result in a more stable financial system. However, switching to an untested sovereign money regime would radically transform Switzerland’s tried-and-tested financial framework. Given the lack of empirical data and comparable systems worldwide, such a transformation risks plunging Switzerland into a period of great  11  From the end of 2019, both of Switzerland’s big banks must have a Leverage Ratio of at least 5.0% and an RWA Ratio of at least 14.3% on a going-concern basis, excluding the countercyclical capital buffer. Added to this are the gone-concern requirements in the same amounts (without taking any reductions into account).
12  All speeches are available online at www.bankofengland.co.uk/speeches  12  earlier and by a somewhat greater extent over the forecast period than anticipated at the time of the November Report”. Given that, why didn’t we vote in May to raise Bank Rate? The key thing to note here is the dependence on the data. Did the economy evolve broadly in line with our February projections? The simple answer to that question is no. Instead from early April we were faced with a string of much less encouraging data for the early part of the year. The March PMIs fell sharply and only partially reversed in April. Inflation surprised on the downside. GDP growth in Q1 was 0.1%. Consumer confidence fell. And consumer credit growth slowed sharply in March. Of course as always with data, there were more layers to the story. Most importantly, our staff analysis suggested the low GDP growth figure was likely to be heavily influenced by the bad weather we had in March. That was partly because the weather is likely to have had a dampening effect on activity – and the pattern of activity was consistent with this. And partly because GDP is typically revised up more than usual after periods of heavy snow: this chart (Chart 10) illustrates the size of revisions in previous periods of snow.

In advancing the Islamic financial inclusion agenda, crucial criteria such as injection of innovation and enhancement of products and services as well as distribution channels to reach targeted groups especially the rural areas are essential:  4  BIS central bankers’ speeches    One of such example in Malaysia is the introduction of profit and risk sharing investment accounts, where savings are matched with funding required by SMEs for financing specific projects.   Greater outreach to microenterprises and SMEs can also be achieved through the wider application of equity-based structures in financing for Islamic microfinance and SMEs. This contributes towards the overall objective of generating inclusive growth that enhances job creation.   Other financial products such as microtakaful and waqf can also provide a financial solution for lower income groups and small businesses.   Through Islamic finance, we can also further explore the concept of agent banking or branchless banking to leverage on the role of traditional community centres such as mosques. This would harness more efficient means of outreach amongst Muslims, which is of particular relevance in many OIC Members.   Another important sphere that has not been explored exhaustively, Islamic financial institutions may also leverage on its large distribution network to facilitate the collection and mobilisation of zakat and waqf. Fifth, proportionate regulation can achieve objectives of inclusion, stability and integrity Proportionate regulation ensures that the costs of regulation do not outweigh the benefits of regulation and that regulation is commensurate to risks.