samchain/econo-pairs-v1 huggingface dataset:
(b) Multi-Polar Regulation: The new regulatory framework is a different beast than its predecessors in terms of the number, complexity and discretionary nature of the constraints it imposes. There are good conceptual and empirical grounds for such a portfolio approach in insuring against future risks and, in particular, uncertainties. And from a risk- and uncertainty-averse social welfare perspective, even a marginally over-identified system might, in general, be preferable to a marginally under-identified one, if recent crisis experience is any guide. Indeed, that is the essence of robust control. Ultimately, however, the past is another country. There are legitimate questions to answer about whether multiple regulatory constraints could lead to excessive homogeneity and inefficiency in the financial system. And arbitrage is an ever-present threat, even with multiple regulatory metrics. This is an area where further research and practical experience with operating the new regime will be essential in gauging whether there is scope for streamlining, provided the resulting regulatory regime remains robust to the radical uncertainty that necessarily affects any complex, adaptive system such as finance.26  25 26  See also, Calomiris (2017), Duffie (2017), Greenwood et al (2017). FSB (2017e), for example, describes a Policy Evaluation Framework to achieve efficient resilience.

With this development comes the promise of greater consumer choice, improved access to credit for some borrowers, and greater efficiency and productivity in the traditional intermediary sector. There are also potential resilience benefits from increasing diversity in the provision of financial services (Carney (2017a)). While the sector is probably too small at present to pose a threat to financial stability, there is ample historical experience of risks emerging rapidly in fast-growing sectors if left unchecked. Such future risks might include: conventional vulnerabilities associated with excessive use of leverage and maturity, liquidity and credit transformation; the emergence of new highly-interconnected entities; and cyber and other operational risks. There is also the potential for these developments to make traditional universal banks less resilient, if they are forced to rely on less stable funding sources, for example. A challenge for policymakers is to ensure that the regulatory regime, and the wider policy framework – including the scope of central banks’ liquidity facilities – adapts to keep pace with these developments (Lagarde (2017)).
Working through local community groups to engage borrowers, or identifying with religious tenets to overcome weak willpower to repay, are some experiential learning that creates favorable conditions that can expand access to credit and encourage high repayment rates. These “small nudges”, a notion popularized by behavioral scientist David Halpern, allow us to revisualise how operating models and technology can be adapted more effectively and efficiently to deliver sustainable microfinance solutions. Malaysia’s microfinance journey has also reflected a wider focus on developing the broad range of financial services that are needed by the unfortunate to manage and improve their financial circumstances. Credit is important, but not all important. Savings, insurance, business training and financial education are other key components of our program approach which work together to amplify the economic and social impact of microfinance. The largest microfinance institutions in Malaysia are also among the largest mobilisers of micro savings. As a case in point, our National Savings Bank ranks among the top three financial institutions in the country with the largest number of micro-loan and savings accounts. Overall, 92% of the population have a deposit account, compared to 42% who have a loan account. We are also currently working to expand the offering and take-up of micro insurance solutions under a multi-pronged strategy that combines tailored products offered by insurance companies and development financial institutions, and a universal product option available through low-cost mobile and other channels.

He secured greater financial security and independence for his family and at the same time, created jobs for 10 persons within his community. As a contribution to his community, one of the three branches was dedicated for micro-entrepreneurs in the locality to showcase their products, free of rental. This simple and generous gesture to share resulted in positive spillovers, where some once wayward school-leavers and young adults received the opportunity to become owners of small businesses plying delicate handicraft and innovative accessories. There are many examples such as this, that if done right, can create a virtuous cycle of 3/4  BIS central bankers' speeches  expanded positive spillovers that uplift the community as a whole. Despite what seems to be an increasingly crowded space, microfinance often ends up being relegated to government-sponsored institutions, non-profit enterprises and donor organizations, because it is perceived to be financially unsustainable if a certain scale is not achieved (usually very large) or imposing high interest rates to hedge risks or cover high operational costs. A growing body of experience shows that the reverse is necessary to deliver a lasting positive impact on the lives of the poor. I have alluded earlier that aligning operational strategies with behaviors of micro borrowers can improve loan performance, thus reducing risks to lenders. In insurance, traditional agency-based distribution models are being disrupted to lower the costs of on-boarding and servicing micro policyholders.
The White House Framework suggests that Government action may be necessary to ensure the safety and soundness of electronic payments systems, to protect consumers or to respond to important law-enforcement objectives. Of course, the White House would work closely with the private sector to inform policy development and ensure that governmental activities flexibly accommodate the needs of the emerging market-place. From a central bank perspective, one of the most fundamental questions raised by electronic payments is its impact on monetary policy, especially if its development is as widespread as some have predicted. In the near term, it appears that Internet payments systems will not significantly impact monetary policy. For the most part, the Internet and other communication networks are currently being used to facilitate existing banking transactions using traditional banking settlement channels. Most payments over the Internet simply result in the movement of funds from a bank account in one institution to one in the same or another bank. This should have few, if any, implications on the conduct of United States monetary policy or the measurement of the United States money supply. “Money” as defined by M1, M2, or M3, would still be held in accounts at banks and would be reported to the Federal Reserve through existing reporting mechanisms. If, however, Internet payments evolve to the point where digital “coins” or other private electronic money begin to be widely used and circulated like Federal Reserve bank notes, the potential implications for monetary policy could be much greater.

With respect to electronic commerce, NCCUSL and the ALI have established a drafting committee that will recommend changes to the general definition provisions of the UCC located in Article 1. The drafting committee’s mandate is broad: consider and draft revisions and additions to Article 1 in light of developments since its adoption. One of the most significant developments that has occurred since the adoption of Article 1 is the shift from paper to electronic media. At a minimum, therefore, it is expected that Article 1 will be revised to recognize the validity of electronic signatures and electronic writings. Another effort rapidly proceeding under the auspices of NCCUSL and the ALI is a new UCC article on licenses which will govern not only traditional software contracts but any license of information (for example, books, movies, databases). In the process of addressing concerns unique to the information industry, the drafters have considered issues, such as electronic contracting, that every industry will likely need to consider. For example, the February 1998 draft of Article 2B provides that a “record” cannot be denied legal effect solely on the grounds that it is electronic. Article 2B also addresses the use of “attribution procedures” as a signature substitute in an electronic commerce environment. In this regard, Article 2B, as currently drafted, largely mirrors the concept of commercially reasonable security procedures found in Article 4A of the UCC governing funds transfers.
With respect to the Federal  Reserve’s current dollar swap lines, for example, when a foreign central bank draws on its swap line with the Federal Reserve, the foreign central bank sells a specified amount of its currency to the Federal Reserve in exchange for dollars at the prevailing market exchange rate. The Federal Reserve holds the foreign currency in an account at the foreign central bank. The dollars that the Federal Reserve provides are deposited in an account that the foreign central bank maintains at the New York Fed. When the foreign central bank lends to institutions in its jurisdiction the dollars it obtains by drawing on its swap line, the dollars are transferred from the foreign central bank’s account at the Federal Reserve to the account of the bank that the borrowing institution uses to clear its dollar transactions. By using its account on the books of the Fed to receive swap proceeds and distribute them, rather than accounts at private-sector bank, the central bank avoids much of the risk of public identification of its borrowers and itself avoids the credit risk, and other risks (operational, reputational, etc.) of a private sector bank account. Moreover, the overall size and ramping up of potential liquidity operations can be virtually unlimited, subject only to the policy limitations set by the central bank counterparties themselves.

16 For example, approximately two-thirds of the world’s FX reserves are in U.S. dollars (See International Monetary  Fund Currency Allocation of Foreign Exchange Reserves (COFER) database), and the dollar also plays a preponderant role in international debt issuance and FX turnover. The Federal Reserve’s provision of safe, confidential, and reliable services in dollars helps to support and promote the international role of the dollar and of foreign official holdings of U.S. Treasury securities. The provision of basic custodial services in U.S. government debt securities is consistent with broader U.S. official sector encouragement of foreign official investment in U.S. capital markets. Foreign official investments in U.S. capital markets and the broader 7/8  BIS central bankers' speeches  international roles of the dollar are generally believed to be a net positive for the U.S. economy through seignorage revenue and reduced funding costs for the U.S. government, households, and corporations. To the extent that these services help foreign official investors to access U.S. capital markets, they support the dollar’s continued international role and are beneficial for the U.S. economy. 17 See Gene Logsdon, “The Barn Raising”, in Amish Roots: A Treasury of History, Wisdom, and Lore , ed. John A.  Hostetler (Baltimore: Johns Hopkins University Press, 1989), 78. 8/8  BIS central bankers' speeches
It may well be the case that these rates decouple in future as liquidity improves and the outlook for each economy develops further. Chart 5 Indicators of when Bank Rate is expected to have risen August Inflation Report  Implied by OIS(a) Latest Reuters poll(b)  Date 2017  2016  2015 Mar 2013  Apr  May  Jun  Jul  Aug  Sep  Sources: Bloomberg, Reuters and Bank calculations (a)  Series is calculated as the first date at which instantaneous forward OIS rates equal or exceed 0.75%  (b)  Reuters poll shows the median of economists’ expectations of the first rise in Bank Rate. This is based on a survey of economists’ responses to the question: “When do you expect the Bank of England to change rates next?”  Whatever the explanation for the recent rise in interest rates, we do not intend to maintain a running commentary on whether the market has got it right or wrong in relation to when Bank Rate will rise. Monetary policy is a medium-term game, and its success or failure cannot be judged over a matter of weeks or by volatile price movements. If market expectations are in the wrong place then market participants will realise that in due course and rates will adjust. In any case, in my personal view, the biggest impact from forward guidance was never going to be from trying to shift the sterling market curve around – it is still pretty flat for 2 years ahead.

Tourists have a habit of taking back home unused currency – both notes and coins. This represents a leakage from circulation and needs to be replaced. We don’t have good data on this. But take for example, Singapore. Last year, we received almost 12 million visitors. If everyone took 8 coins back with them, close to 100 million coins would have leaked out of the country. And it will cost MAS about $ million to replace them. That’s why we have been working with the Singapore Mint, Changi Airport Group, and charity organisations to increase the availability of boxes in various parts of Changi Airport, for tourists to donate their excess notes and coins before they leave the country. Physical cash commands a premium during times of uncertainty. We saw this during the 2008 global financial crisis. Within the first month of the collapse of Lehman Brothers, there was an exceptionally large withdrawal of high denomination notes by banks in Singapore. Typically, 90 per cent or more of the high-denomination notes withdrawn from banks are redeposited within the month. During the initial months of the 2008 crisis, only 70 per cent of the $ $ and $ notes withdrawn were returned. This phenomenon is insightful. The safety and soundness of banks in Singapore was never in question, and the impact of the crisis on Singapore’s financial system was minimal. But there was a discernible effect on consumer behaviour – people preferred to keep more cash in a climate of heightened uncertainty. The bottom line?
A fairer description is that the Riksbank has tried to do its bit to slow down a trend where housing prices and indebtedness have been rising rapidly and simultaneously for quite a long time now – where there appears to be some slowdown in periods of weaker economic activity, but where the direction is upwards, no matter what the economic situation, and there are few signs that this trend will be dampened. The longer such a trend continues, the greater the risk that it will be broken in the same abrupt way as in many countries in connection with the financial crisis – that is, when housing prices and debt finally adjust downwards, it is in a dramatic manner, with substantial price falls and drops in consumption, with large and long-lasting negative effects on the economy.15 In general, there is solid empirical support for the idea that the more households  15  Mian and Sufi (2014) describe this sequence of events in the US economy in connection with the crisis. In a really bad scenario, problems may also arise with regard to financial stability, see for instance Financial Stability Report 2014:1, Sveriges Riksbank. 6  BIS central bankers’ speeches  and companies borrow during an economic upturn, the greater the risk that this upturn will be followed by a deep recession and a very slow recovery.16 One can make a few reflections here.

“The results of the policy have been devastating for the Swedish economy” The picture that critics like to paint is of a high repo rate pushing down demand and creating a more or less deflationist situation in the Swedish economy. This is something that some international analysts in particular seem to have latched onto, interpreting the situation in Sweden today to be similar to that in Japan in the 1990s.19  16  See, for instance, Schularick and Taylor (2012) and Jordà, Schularick and Taylor (2013). 17  See, for example, Jansson (2014). 18  In some cases, the critics have also had diametrically opposed views. Paul Krugman appears to think that Sweden has probably already had a housing bubble for some time, and that as it is too late to do anything about it, the Riksbank should not conduct a policy that leans against the wind (see Andrén Meiton, 2014). Lars Svensson, on the other hand, appears to think that there is no great risk of a housing bubble building up (see Svenska Dagbladet newspaper, 2014a) and that a policy that leans against the wind for this reason is not needed, but is harmful. 19  See, for instance, Krugman (2014a, 2014b) who as well as likening Sweden to Japan, has also characterised monetary policy in Sweden as an example of ”sadomonetarism”. Among Swedish critics it is less common to make comparisons with Japan.
While the years before the crisis were characterised by stability in the evolution of the market for goods and services, asset markets were anything but stable. In particular, there was a massive expansion in  4  BIS central bankers’ speeches  credit, particularly within the financial system in many of the advanced economies, accompanied by upward pressure on a range of asset prices, including real estate. There was a boom in asset markets, even if there was no corresponding boom in the real economy. To some people, the relatively low level of interest rates necessary to maintain price stability was instrumental in generating this boom in credit and asset prices by encouraging an aggressive search for yield. While there is some truth in this charge, I think it would be a mistake to conclude that monetary policy was the sole, or even the prime, cause of the crisis. Several factors coincided to form a potent cocktail. There were other factors that depressed the yield on safe assets, including high savings rates in China and a more general demand for US Treasuries as emerging economies accumulated larger stocks of foreign reserves in the wake of the Asia Crisis. Equally important, in my view, was the impact of the Great Moderation itself on risk-taking behaviour, as low volatility encouraged an underestimation of the likelihood and severity of adverse tail risks crystallising. Seen in this light, the Great Moderation sowed the seeds of its own destruction.

On top of this, of course, there was a litany of microeconomic features that aggravated the crisis, including: the development of complex securities that were impossible to value in stressed conditions and connected financial institutions in unexpected ways; disguised leverage through the use of securitisation vehicles, whose primary aim was regulatory arbitrage; remuneration packages encouraging positions that generated decent returns most of the time but high losses in some states of the world; excessive reliance on credit-rating agencies; defective risk management; weak funding structures; and insufficient high-quality bank capital to absorb losses. That said, the experience of the past few years does appear to suggest that monetary policy ought to take greater account of financial stability concerns. Ahead of the crisis, Bill White and colleagues at the Bank for International Settlements consistently argued that when leverage was becoming excessive and/or asset prices misaligned, central bankers ought to “lean against the wind” by keeping interest rates higher than necessary to meet the price stability objective in the short run. 3 Just as central banks are willing to accept temporary deviations from their inflation targets to limit output volatility, so they should also be willing to accept temporary deviations to attenuate the credit cycle. Essentially it is worth accepting a little more volatility in output and inflation in the short run if one can thereby reduce the size or frequency of asset-price busts and credit crunches.
A key question for the future is this: do notification and memo-posting suffice, so that funds actually move at discrete times in the day, as they do in the UK, or do funds need to move in near real time as well? 2  BIS central bankers’ speeches  In the near term, we in the Federal Reserve continue to work to reduce the time required to complete payments and deliver payments-related information in the channels in which the Fed operates. The debate to be had by the industry is whether our existing payments mechanisms can meet the needs of the future or we need to embark upon designing a next generation payment instrument. We welcome your voice in that debate. Let’s turn our focus to end-to-end efficiency in the payments system. Innovation is occurring in closer proximity to end-users, at points between payment providers and their customers, and between merchants and consumers. Enhancing efficiency will mean moving business-tobusiness (B2B) and person-to-person (P2P) payments from paper to electronics, and bringing down the end-to-end cost of initiating and receiving payments. Efforts will continue by Internet/Web vendors to create customer-facing technologies to help users initiate payments. Here’s where mobile and handheld innovations may play a large role. In what form, and when, growth occurs will depend on when alternatives offer the speed, convenience, simplicity and other advantages that drive broad adoption.

31.07.2017  The European economy and monetary policy Inauguration of La Granda courses Luis M. Linde Governor  Mr Chairman of the La Granda courses, Mr Rector of the University of Oviedo, Mr Mayor of Gozón, Mr Secretary of the La Granda Courses, Authorities, dear colleagues: Let me begin by thanking Professor Velarde for his invitation to me to participate in the inauguration of the thirty-ninth edition of the now-classic La Granda courses. But first I should like to congratulate Professor Velarde on the Menéndez Pelayo International Prize he has recently received and which is just one in a long list of accolades. Juan Velarde is much more than an eminent academic. He is a true humanist whose work, anchored in different areas of the economy, has always included historical and social concerns where his deep-seated and – I would say – benign liberalism prevails. Professor, my warmest congratulations on your Menéndez Pelayo prize. The European economic recovery Moving on to the subject of my address today, I should like to share with you some thoughts on the euro area economy and monetary policy. I shall begin by reviewing the key features of the current expansionary phase in the European economies and the fundamental role that monetary policy has played in providing for its take-off. I shall then refer to the main challenges over the course of these difficult years for the European economy and to the need to complete the institutional architecture of the monetary union.