samchain/econo-pairs-v1 huggingface dataset:
Krzysztof Rybiński: Innovations in the financial markets – globalization of the infrastructure Panel presentation by Mr Krzysztof Rybiński, Deputy President of the National Bank of Poland, at the conference “Innovations in the financial markets 2007”, Warsaw, 16 October 2007. *  *  *  Ladies and Gentlemen, Since I have little time to deliver this presentation, I will skip the introduction and the anecdote and get straight to the point. The global financial markets have recently reported episodes of strong volatility; liquidity was suddenly lost, some markets failed to perform their functions in an adequate manner, others ceased to operate altogether. The liquidity and solvency of some financial institutions were put at risk, whereas some investors suffered loss. Disturbances originated from underestimation of risk by a number of agents on financial markets, ranging from subprime lenders to institutions which purchased structured credit facilities offered by banks and their vehicles. A thorough review must be performed with a view to examining the role of rating agencies and supervisory authorities, which appear to have underestimated the risk generated by the rapidly expanding market of asset-backed instruments and the market of credit derivatives. It is not yet certain whether the worst stage of disruptions is over. In the light of the above, strong asset appreciation, especially visible on the emerging markets, should be assessed with caution.

For instance, the Economist magazine estimated that about USD 500 billion to USD 1.5 trillion is laundered through banks each year. Further, the Financial Action Task Force (FATF) - an intergovernmental organization under the auspices of the Organisation for Economic Co-operation and Development (OECD) also estimates money laundering to be in the ranges of USD 590 billion to US1.5 trillion. As a percentage of world economic output, money laundering accounts for about 2% to 5%. Obviously, given the secrecy and the illegal nature of this business, it is difficult to tell exactly the extent of money laundering. Nevertheless, these figures give us an indication of the magnitude of the problem. In this regard, financial institutions, in particular, banks provide a conduit through which money (including laundered money) flows. Because of this, the financial system is the focal point of antimoney laundering initiatives because dirty money is most visible when it is first introduced into the financial system. Ladies and Gentlemen, before I proceed in discussing the various aspects of money laundering including stages in money laundering, its effects on the economy, the global and local initiatives to fight money laundering and the role that banks can play in combating money laundering, allow me to define what money laundering is. For the purposes of my presentation today, I shall define money laundering as the method of hiding, mixing and disguising the proceeds of criminal activities through legally operating institutions for the purpose of destroying the origins of the proceeds.
Caleb M Fundanga: Recent economic developments in Zambia Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, on the occasion of the monthly meeting with chief executive officers of commercial banks, Bank of Zambia, Lusaka, 2 April 2004. * 1. *  *  Recent economic developments  Introduction This brief reviews monetary, economic and financial sector developments during February 2004. Monetary developments •  During February 2004 monetary policy was focused on reducing monthly overall inflation rate to 1.6%. Net strong revenue inflows complemented with primary auctions of Government securities helped to maintain an appropriate level of liquidity. Inflation •  Monthly overall inflation slowed down by 1.5 percentage points to 1.1% in February 2004 from 2.6% in January. This was 0.5 percentage points lower than the projection of 1.6% for February 2004. The decrease in the monthly overall inflation rate was attributed to the slow down in food and non-food inflation rates to 0.9% and 1.4% in the month under review from 2.3% and 2.9% in January 2004, respectively. •  The slow down in food inflation was attributed to continued ample supply of food items in the market while the drop in non-food inflation was largely due to price declines in rental and fuel prices as well as in prices of transport and communications, recreational and educational services. •  The annual overall inflation rate fell to 16.8% in February 2004 from 17.4% in January 2004. This was 0.2 percentage points below the end-February 2004 inflation projection of 17.0%.

The issue of communication is particularly relevant in the current economic environment. For much of the past three years, financial markets have reflected a high degree of certainty about the near-term outlook for monetary policy in the United States. Market expectations in the weeks preceding each of the last 16 Federal Open Market Committee (FOMC) meetings attached a probability close to one that the FOMC would raise the target for the federal funds rate by 25 basis points. Also, there was very little probability attached to inter-meeting moves over this period, or to moves in increments larger than 25 basis points. And, although market expectations about how far the FOMC would ultimately move were revised significantly over the course of this period as the economic outlook was revised, these changes occurred without the Committee needing to deviate from the near-term path. This period of unusual certainty in the path of the fed funds rate was the result of a confluence of factors. When the Committee first moved to tighten policy in June 2004, the fed funds rate was at the historic low of 1 percent, and it was clear that policy would have to move a substantial distance to get back within the range of plausible estimates of the neutral rate. Over the course of the following months the incoming data tended to reinforce the case for a progressive move up in the target rate.
The ECB will consider the costs and benefits of any such measure very carefully, as we are well aware of its far-reaching impact on derivatives markets as well as the challenges this would pose for all involved. Requiring more critical services to be provided by EU CCPs would also make our domestic clearing landscape more systemically important, and would increase crossborder risks within the EU. In such a scenario, the current framework for supervising EU CCPs – which still largely relies on national authorities and gives ESMA and the Eurosystem a limited role – would not be fit for purpose. In this situation, it would be essential for EU authorities to have control over clearing activities that are systemic to the EU and critical to the transmission and conduct of monetary policy. This would require the EU dimension of CCP supervision to be scaled up. Investors are adapting to the post-Brexit landscape. For example, in January 2021 the trading of euro-denominated shares moved from London to venues in Amsterdam and Paris. This followed the Markets in Financial Instruments Regulation (MiFIR) requiring that shares listed in the EU only be traded by EU market participants on EU-regulated venues, or on third-country infrastructures considered “equivalent” by the Commission. The trading of EU carbon contracts is also expected to move from London to Amsterdam.

1 I would like to thank Paola Donati, Clément Rouveyrol, Fabio Tamburrini, Eszter Tanai, Simonetta Rosati and  Fiona van Echelpoel for their support in preparing this speech. 2 European Commission (2020), “Financial stability: Commission adopts time-limited decision giving market  participants the time needed to reduce exposure to UK central counterparties (CCPs)”, press release, 21 September. 3 ESMA (2020), “ESMA to recognise three UK CCPS from 1 January 2021”, press release, 28 September. 4 3/4  BIS central bankers' speeches  4 De Guindos, L., Panetta, F. and Schnabel, I. (2020), “Europe needs a fully fledged capital markets union – now  more than ever”, The ECB Blog, 2 September. 5 Eichengreen, B., Mehl, A. and Chiţu, L. (2017), How Global Currencies Work: Past, Present and Future, Princeton  University Press. 4/4  BIS central bankers' speeches
Now that sounds like rather a mouthful, but fortunately the Bank’s Independent Evaluation Office (IEO) has today published a thorough evaluation of the PRA’s approach to its Insurance Objective. The Bank set up the IEO in 2014 to help Court evaluate the Bank’s performance. Early last year, Court asked the IEO to consider whether we are doing enough of the right sorts of things to deliver the Insurance Objective. The IEO’s report includes a number of interesting findings, which I welcome and find consistent with my own observations from my time as Executive Director of Insurance Supervision. In particular, the IEO found that there is a lot of activity going on in pursuit of policyholder protection. This comes as no surprise to me. The PRA’s insurance supervisors, actuaries and other professionals have in my  9  http://www.bankofengland.co.uk/publications/Documents/speeches/2016/speech877.pdf Source: ABI factsheet https://www.abi.org.uk/~/media/Files/Documents/Publications/Public/2016/KeyFacts/ABIUKInsuranceAndLongTermSavings-KeyFacts.pdf 11 As at 2016Q2, based on insurers’ reporting to the PRA 10  7  All speeches are available online at www.bankofengland.co.uk/speeches  7  experience a strong public-service ethos. They are strongly motivated to protect insurance policyholders, which is for some a more human motivation than safety and soundness. However, the IEO found that we could do more to explain what we mean by “policyholder protection”. Some of this is straightforward, such as ensuring staff have clear legal analysis and understand where and when the PRA should and should not act, and we confirm in our response to the IEO’s report that we will improve that analysis and training where required.

But, as it showed just recently in making a modest reduction in interest rates, the ECB is sensitive to changes in the balance of risks around those judgements. So, too, are we in the United Kingdom. In our case we have been fortunate, since being driven out of the ERM in 1992 and moving to a symmetrical inflation target, in enjoying a sustained period of relatively stable economic growth. In fact we've experienced the longest period of continuous quarter by quarter growth since quarterly records began, with average annual growth at around 3% over the whole period compared with our long term trend rate of 2¼-2½%. Employment has steadily increased, and unemployment has fallen to its lowest level for 25 years. Meanwhile the rate of inflation has been consistently relatively close either side of the Government's 2½% target – the lowest and most stable rate of inflation that most of us in this country can remember. Domestic demand growth in the UK has remained relatively robust into this year, but we too are affected by the US slowdown and by the associated weakening of equity prices. And we have had a new problem of our own in the form of Foot and Mouth Disease, the effects of which have gone a good deal wider than just the agricultural sector. These new developments were likely to have a dampening effect on overall demand pressure within the economy, both through their direct impact and through possible damaging effects on confidence.
Some shops were reluctant to accept Hong Kong dollars. No one, I think, who lived through those times would wish to live through similar events again. Conclusion The creation of the Link eighteen years ago helped restore stability at an unstable time. History does not repeat itself. Times change. But let us at least remember the experience of those years when we talk about the usefulness or otherwise of the Link to Hong Kong during what are, arguably, even more unstable times. At this time of great global uncertainty and local distress, our efforts should be directed towards building stability, not destroying or undermining it. I have given some account in this talk of how, in its banking system and financial infrastructure, and in its currency, Hong Kong enjoys a position of great strength. It is from this position of strength, and not through any sudden and destabilising gimmickry, that we will best be able to weather the difficulties that now face us, and to embrace the opportunities to come. 6  BIS Review 88/2001

1/2  BIS - Central bankers' speeches  Two years later, we've seen great progress toward a recovery. The most recent data show that well over two-thirds of New York City's job losses have been reversed. Still, areas of the New York City economy, especially those dependent on visitors and office workers, continue to struggle and are lagging the nation in recovery. Despite the challenges, there is palpable energy and momentum propelling us into the future. Now that our focus is on the recovery, we must create an equitable future for all residents of this city. We must make sure that all of the people who live, work, or own a business here have a chance to succeed. It is essential that we build a stronger foundation so that everyone can fulfill their economic potential, both here in New York and around the nation. That's why it's critical that we prioritize tackling some of the city's biggest problems, including poverty and inequality, and issues in areas such as infrastructure and transportation. These issues are not new; they existed long before the pandemic. And there is no simple or single solution to solve them. But as we plan for a better future, we must understand how New York's challenges have evolved since March 2020 and how they are playing out in the current environment. With that knowledge and awareness in mind, we can chart the path forward. The New York Fed's Role This brings me to our conference today.
If, indeed, the bilateral exchange rate arrangement does not of itself matter much in the long-term determination of price competitiveness, why not anyway tie your currency in some way to that of your closest neighbour or major trading partner, as a matter of convenience, in the expectation of savings in transaction costs and of other synergies which would benefit both sides, independently of any arguments about price competitiveness? There are some fairly compelling arguments in favour of such an arrangement. The elimination of currency exposure and transaction costs would doubtless be welcomed. Prima facie one would expect resultant gains in the generation of mutually beneficial trade. One may recall that this was one of the principal factors justifying the introduction of the euro. For Hong Kong, however, both the United States and Mainland China are major trading partners, so there would, in this context, be offsetting effects from merely switching the peg from one currency to the other. On the other hand, there are some significant examples of economies which retain a currency independent of that of their main trading partner without obvious disadvantage. Take Canada and Mexico for example. The United States is a considerably more important trading partner to both Canada and Mexico than is China to Hong Kong, and the financial linkages are probably stronger too, but the Canadian dollar and Mexican peso remain separate from the US dollar, and the Canadian and Mexican economies do not appear to be disadvantaged.

I conclude that an exchange cross rate between Hong Kong and the Mainland which varies, or has the potential to vary, is not a problem for us, and this seems set to remain the case for the foreseeable future. The corollary to this is that there would be no advantage in attempting to hitch the HK dollar to the renminbi in some formal or permanent fashion. Other options? There are of course other alternatives which might be explored. For example, in a perfect world, if we were to set ourselves the narrow objective of sustaining our price competitiveness index at a particular level and we possessed a nicely calibrated model of the economy, and if we then applied suitable methodology, we could derive some formula for the optimal exchange rate, which would doubtless be different from that determined by the present regime, and we could then devise an operational strategy to deliver that exchange rate path. But this sort of desktop solution could be a nightmare in reality. Even if the empirical basis of the formula was entirely reliable (a wholly unrealistic assumption), imagine the possible consequences for interest rates or foreign reserves, and the practical problems in terms of operability, comprehensibility, transparency, credibility, financial market confidence, and so on. Such problems could be particularly acute, and the risks of such a strategy therefore correspondingly high, in such an open economy and open financial market-place as Hong Kong. I have deliberately exaggerated in order to make the point.
Vítor Constâncio: We need a coordinated European NPL strategy. How to deal with Europe’s market for lemons? Opinion piece by Mr Vítor Constâncio, Vice-President of the European Central Bank, 5 July 2017. * * * One of the most pressing issues for euro area banks is the nearly € trillion of non-performing loans (NPLs) on their balance sheets. While the average euro area NPL ratio has declined gradually from a peak of 8% in 2013, it still remains at 6% and differences across countries are marked: six countries still have NPL ratios of more than 10%, significantly more in some cases. This is not just a problem for banks. The flip side of NPLs is over-indebtedness among households and firms, and this poses a macroeconomic challenge – banks restrict credit supply and distressed firms curtail investment, which in turn hampers economic growth. Asset quality issues were exacerbated by the global financial crisis. When the crisis hit, the surge in NPLs blocked the ability of many banks to deal with distressed debt. NPL resolution, though not a panacea for all banking problems, could bring significant benefits. It is not easy to estimate the effects of resolving NPLs. However, scenario-based analysis indicates that replacing NPLs with performing assets could increase the aggregate return on equity of euro area banks by more than 1 percentage point, with some countries’ banking sectors gaining up to 5 percentage points.

The European Commission has recently announced that it will come forward with a proposal for a comprehensive and coordinated strategy to deal with NPLs, including a blueprint for national AMCs. It will be then imperative that all relevant authorities act rapidly and decisively to implement the necessary measures to overcome the NPL problem thereby strengthening the ongoing European recovery. Much hard work is needed, on many fronts, to deliver these benefits. But neither partial solutions, nor further delays, are viable options if we want to tackle the NPL burden and avoid a renewed build-up of NPLs in future cyclical downturns. 2/2  BIS central bankers' speeches
Only little more than 12% are in the form of government securities, whereas the rest, around 6.5%, are invested in investment or private pension funds, accounting for only 0.1% of total financial system assets. Statistics show that only a small number of companies operate in other segments of the financial sector, and their activity in terms of the Domestic Product or of the financial market remains insignificant. Regarding the above, we may logically conclude that the financial market architecture may not be considered complete yet. Financial instruments with long-term maturities are rare, whereas the short-term ones outside the banking system are apathetic and fragmented, in terms of both products and markets. An outcome of such a financial architecture is a kind of added pressure on the banking system, depriving the economy of other financing alternatives, beyond what the banks offer. This vacuum may not be filled with strained efforts by the banking system. It has been broadly accepted that each segment of the financial market plays a complementary rather than substituting role. I could mention a number of examples to illustrate my point, but for the moment I would rather not, as in the next panels these issues will be discussed in greater detail by other 2/4  BIS central bankers' speeches  colleagues and academics during the day. Overall, the above elaboration regards investment-related financial institutions and financial instruments.

Perhaps I should also add that the Hong Kong dollar’s stability after the depreciations of other regional currencies in 1997 probably helped to avert what might have been a spiral of further depreciations, which could have caused greater damage in the region and might even have had more painful eventual consequences for Hong Kong itself than we have in fact suffered. Slide 21 shows the path of the real effective exchange rate since mid-1997. This is the tradeweighted exchange rate adjusted for differences in movements of consumer price indices. It is one of several possible measures - none of them ideal - of external competitiveness. A movement up the page denotes a loss of competitiveness. The steep loss around the time of the Asian crisis in late-1997 has been partly recovered. The setback in the earlier part of this year arose mainly from the strength of the US dollar. But let’s look at this question in a longer-term perspective. Slide 3 shows that in the 13½ years from the introduction of the linked exchange rate up to mid-1997 the real rate appreciated on average by 4% a year; in the period since then the real appreciation has averaged 4½% a year. On this basis one might say that we are scarcely off track at all, from what appears to have been a secular trend of real appreciation of the currency.
In fact, as you might have guessed, these two worlds are not as unalike as might first appear. Chart 1 plots a map of the UK by region, shaded according to levels of nominal GDP per head prevailing in 2014, the latest date for which we have data. There are clearly significant differences across region. The GDP per head of the richest region (London) is around £ 2.4 times higher than the poorest parts of the UK (Wales and the North East) at around £ per head. These are, if you like, the Blue and Red 4  Car regions. Indeed, regional differences in UK living standards are among the highest in Europe. 5  3  I am simplifying here considerably. Lower interest rates will also boost asset prices, altering the distribution of wealth. And asset purchases will also influence borrowing costs, affecting savers and borrowers. This story also only considers the direct financial effects. Monetary policy can also have several wider indirect macroeconomic effects by boosting activity and employment which can also have distributional impacts. For further details see Draghi (2016). 4 See Haldane (2016), CBI (2016), Institute for Public Policy Research (2016). 5 According to data from Eurostat (2016), the gap in GDP per head between the richest and poorest regions in the UK ranked fourth in a sample of 20 EU countries on a comparable PPP adjusted basis in 2014.

This workshop is conceived as a platform for getting better insight in the fintech developments, exchanging opinions, sharing ideas with a view of drawing the outlines of our future FinTech Strategy. In this light, I am delighted to invite Mr. Tikam to share with us part of his rich experience and knowledge on this topic. Mr. Tikam is an experienced Executive Level Advisor with 26 years commercial experience, having played multifaceted roles, with the last 22 years in financial services. Having in mind Mr. Tikam’s proficiency, I have no doubts that today we will have fruitful discussions and valuable exchange of experiences to the benefit of all participants. Mr. Tikam, thank you for your efforts in making this workshop happen. The floor is yours. 1/1  BIS central bankers' speeches