samchain/econo-pairs-v1 huggingface dataset:
It encourages introduction of new types of payment services and sophistication of customer 1/2  BIS central bankers' speeches  protection and security. Also, much attention is paid on evaluation of SEPA-regulation and further integration via implementation of Pan-European instant payments solution. The innovations in the field of financial market infrastructures are expected to bring synergies between TARGET2 and T2S, which is in the scope of the Eurosystem’s Vision 2020. At the national level, we made significant progress towards fulfilling the European standards in the payment area. A new Law on payment services and systems implementing PSD and some articles of PSD2, E-money 2 and Settlement Finality Directive was drafted with the EU support via IPA project. In the field of payment systems oversight, the Principles for Financial Market Infrastructures were adopted. Furthermore, we aligned our methodology for collecting payment statistics data with the EU regulation on payment statistics. Last but not least is the recent project to enhance euro cross-border payment infrastructure by establishing an alternative payment channel via the Macedonian Interbank Payment System (MIPS) RTGS system, which was connected with the TARGET2, via Banca d’Italia. I am very glad that all these issues will be discussed by eminent experts from the Bank for International Settlements, European Commission, De Nederlandsche Bank, Banco de Portugal, Commerzbank, Euroclear, ProgressSoft as well as domestic financial institutions.

More widely, the future Prudential Regulation Authority will work to transform the climate of prudential regulation. The Bank’s prudential supervision will avoid ticking boxes, instead being centred on making judgments about big risks to safety and soundness. We want this to be as collaborative, open and honest as possible – a different relationship between banks and their supervisors. One that revolves around penetrating and forensic analysis of the business and, where necessary, frank discussions with senior management and the board. Not a negotiation. And a regime where the Bank’s Prudential Regulation Authority has the powers to underpin pursuit of material concerns about safety and soundness, based largely on whether firms meet the broad statutory criteria – the Threshold Conditions – for being authorised. Macroprudential policy: keeping the regime up to speed, and taking away the punchbowl No set of static rules, regulations and structures will keep the system safe for ever. As time passes, and the financial system evolves we cannot put an ever increasing burden on microsupervisors of individual firms to compensate for outdated regulatory regimes. The market will eventually take the system to the edges of the box the authorities have tried to put it in. Policymakers therefore need to be able to move the box when circumstances warrant. 6  BIS central bankers’ speeches  This is where macroprudential comes in – keeping the rules of the game up to date, and leaning against exuberance. In the UK, the Financial Policy Committee is charged precisely with those tasks.
Lars Heikensten: The Swedish krona and monetary policy Speech by Mr Lars Heikensten, First Deputy Governor of Sveriges Riksbank, at a seminar of Crédit Agricole Indosuez, held in Stockholm on 5 September 2001. *  *  *  Over the past year the Swedish krona has weakened markedly. Both we at the Riksbank and other players in the currency market have been surprised by this. In that the exchange rate is an important factor in our assessments of future inflation, it also plays a part in the direction of monetary policy. The fact that, for the first time in years, the Riksbank has intervened in the currency market has also contributed to the recent heightening of attention on the exchange rate. Today I shall first endeavour to clarify the krona’s role in the Riksbank’s intellectual framework for monetary policy. A policy that targets inflation requires us to forecast the exchange rate, which is my next theme and by no means an easy task. In that context I shall also say something about the Riksbank’s view of the krona’s long-term real equilibrium exchange rate and its course in the past year. Another question I shall be considering is how exchange rate movements affect inflation. Before concluding, I will also talk a bit about interventions and transparency - a topic that has featured in the debate since we took the decision in June.

At the same time, the monetary policy decision is reached in the light of other, alternative paths for the exchange rate. In the course of the last three decades the krona has depreciated. The main causes have been Sweden’s higher inflation and lower growth. Since the realignment of Sweden’s economic policy in the early 1990s, these factors no longer apply. BIS Review 75/2001  7  The fact that, on average, the krona has been under-valued in the 1990s has not posed such large problems for monetary policy as might have been expected. Various factors have helped to limit the pass-through to inflation. However, some of these factors cannot be seen as permanent. For instance, resource utilisation is likely to be higher than during the decade that followed the crisis of 1990-92. Interventions are an instrument the Riksbank has used very sparsely in recent years. Today I have only commented very briefly on our reasons for acting in the early summer. I have had more to say about my view of transparency in connection with interventions. Although, as usual in the context of monetary policy, there are grounds for striving for a high degree of openness and clarity, the comparison with repo rate decisions does not really hold. In the case of currency interventions the Riksbank is a minor player and it is difficult for our ambitions to have an impact. This must be borne in mind in the autumn when we establish a procedure for preparing for and informing about currency interventions.
It is fairly uncomplicated to observe business profitability and cost efficiency in a bank with the aid of measures such as return on equity and the C/I ratio. But a high return on equity and low C/I ratio is not necessarily a sign of an efficient banking sector, but can just as easily indicate weak competition and high margins. Similarly, from an economic point of view it is hazardous to place too much trust in the equity market’s valuation or a rating agency’s credit rating since these partly represent a different perspective. For example, for investors it is only positive if a bank – all other things being equal – operates in a market where competition is low and margins are high. Against this background, it is important to supplement the business analysis with an assessment of the quality and the price of the financial services provided by banks. I suppose the best indicator of the quality of a bank’s service range is how well the bank’s services fare in the competition from other banks and financial institutions. If the barriers to entry are high and there are few alternative suppliers, a high market share can hardly be taken as a sign that the bank’s service offering is particularly high quality or worth its price, even though that can of course be the case.

If, on the other hand, the banking sector consists of a number of strong players and there also are plenty of alternatives, it is much more conceivable that a large market share or high profitability is a result of a genuinely competitive product range. A European investor perspective So what do we know about Swedish banks' competitiveness – how do they fare in an international perspective? Looking at the European banking sector from an investor’s point of view, we can note that the profitability of Swedish banks is very average. In a selection of the 25-30 biggest listed banks, the Swedish banks come close to the median value for return on equity (see Figure 1).1 The Swedish banks’ net interest margin – net interest income in relation to interest-bearing assets – also appears mediocre at first glance. But if we take into account their very low loan losses, then for three of the four major Swedish banks the “loan-loss-adjusted” net interest margin is actually higher than for the European median bank. Also as regards cost efficiency, measured in terms of the C/I ratio, the Swedish banks are among the best. 1  This and the following comparisons are based on full-year results during the period 2002-2004. 1/4  But if Swedish banks are relatively good at earning money on lending without incurring excessive loan losses and moreover are cost-efficient, it seems a bit strange that this does not result in an even higher return on equity.
•  The published Allsopp analysis included a challenge from the major central banks to the major market participants to develop a new settlement mechanism. In short, find a solution or we will find one for you! I recount this history to highlight the magnitude of the achievement CLS represents. The establishment and growth of CLS is undoubtedly one of the most significant accomplishments in global financial markets in the post-war period and a major breakthrough in managing settlement risk in an over-the-counter market. BIS central bankers’ speeches  1  •  The largest part of the achievement, of course, is the difficult job of making it happen. CLS was actually the third major concept for FX settlement. It succeeded because the industry collectively got firmly behind CLS and because of the hard work of the many people in the CLS organization, whose commitment and efforts continue to this day. Let me highlight three dimensions of CLS’s success. First, its growth and its scope. When it went live in 2002, CLS began settling FX transactions in just seven currencies with 39 settlement members. Today it settles in 17 currencies with 63 settlement members and 16,000 third party users. Volumes and values of transactions settled via CLS have also expanded significantly. Today CLS is settling average daily values of nearly $ trillion and average daily volumes of 1 million transactions. On its peak settlement value day, March 19, 2008, CLS settled over 10 trillion U.S. dollars equivalent. Second, adaptation to a rapidly changing foreign exchange market.

Despite all that, foreign exchange market participants and central banks in 1974 found Herstatt risk to be an intractable problem. All that was left to banks was to manage it. And so it went for 20 years. Then, in the mid-1990s, Bill McDonough, president of the New York Fed, identified the continued existence of Herstatt risk as a challenge to be met. As chairman of the Committee on Payments and Settlement Systems of the G-10 Central Bank Governors, he spurred the central bank community to take a fresh look. This time, the combination of new financial analysis and the rapidly expanding availability of raw computing power made the difference. •  In what today still stands as a landmark in analysis of the connection between operational and financial risk, the 1996 Allsopp report demonstrated in a straightforward manner just how much financial risk existed in the bilateral settlement of gross principal amounts of foreign exchange – an analysis that provided the insight into how a settlement facility could reduce that risk, and into understanding how settlement management could improve in the interim. •  Raw computing power was essential for the design and risk management of any proposed new settlement facility. Through scenario analysis and stress testing, CLS’s founders could determine the necessary capital and liquidity needs, default handling procedures, and the general benefits of multilateral vs. bilateral netting. The inherently multicurrency nature of foreign exchange settlement of course enhanced the challenge.
Nevertheless, the gradual decline in its share of global foreign exchange reserves, which began in the mid-2010s, has gained momentum since 2020, and we are witnessing a renewal of the debate on the dollar's continued role as the anchor of the IMS. Let's not be naive: geopolitical forces are powerfully at work, all the more so since Russia’s invasion of Ukraine in early 2022. China, the world's secondlargest economy, has been expressing its wish to internationalise the renminbi for several years now; this has already materialised in its trade i and could accelerate over the next few years. In particular, the climate transition will lead us to reduce our consumption of fossil fuels and considerably increase our consumption of resources for generating cleaner energy. As a result, we are likely to witness a profound reconfiguration of international trade and financial balances and, potentially, of the balance of power between currencies. China, for example, has positioned itself at key points in supply chains, and has a very dominant, even hegemonic, share of certain finished products. ii The use of the Chinese currency is on the rise: in 2022, 7% of transactions on foreign exchange markets had a renminbi leg, iii a figure twice as high as in 2019, thanks in particular to the offshore centres created since 2010. China also plays a major role as a bilateral creditor - with outstanding loans estimated at more than USD 350 billion, iv i.e.

(http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm )  BIS central bankers’ speeches  Chart 3:  Chart 4:  Changes to US real GDP in crisis periods  Risk appetite(a)  1929 crash 1982 recession  cumulative % change since start of recession 40  Standard deviations from mean (b) 2.5  30  1.5  2008 financial crisis  2 1  20  0.5 10  0  0  -0.5  -30 1  2  3  4 5 6 7 years since crisis  8  9  10  Sources: Global Financial Data, Case-Shiller, Federal Reserve, US government bodies (Department of Commerce, Department of Labor, Council of Economic Advisers) and Bank calculations. -1.5  Credit Suisse  -20  0  -1  State Street  -10  -2 -2.5  04  05  06  07  Sources: Bloomberg, calculations. 08  Credit  09  10  Suisse  and  Bank  (a) Indices are adjusted so that positive numbers indicate increased risk-taking and negative numbers indicate reduced risk-taking. (b) 90-day moving average of standard deviations from mean. Mean and standard deviation calculated from 28 July 2004.
Accordingly, the Central Bank has established an index excluding all food items and started to monitor this index closely. From time to time, the Central Bank draws the attention to price movements in certain subgroups of the CPI in order to increase efficiency of the communication of the monetary policy and to take sound decisions. For instance, in order to highlight the effects of the monetary policy tightening being implemented since mid-2006, the Central Bank has frequently referred in 2007 to the developments observed in sub-groups, such as services or durable consumption goods, whose prices are sensitive to monetary policy actions. In summary, the Central Bank examines several variables including Special CPI Aggregates while assessing the main inflation trend, and can highlight different indicators at certain periods depending on the economic conjuncture. Understanding of the Central Bank’s approach to core inflation by the public will allow for a sound assessment of the monetary policy actions and hence an improved efficiency of communication policies. Uncertainty band and accountability It is stipulated in Article 42 of the CBRT Law that “The Bank shall submit information to the Government in writing and inform the public disclosing the reasons of the incapability of achieving the determined targets in due time announced or the occurrence of the possibility  2  BIS Review 4/2008  of not achieving the targets and the measures to be taken thereof”.

2  BIS central bankers’ speeches  Table 1  Before the crisis, both methods of conducting liquidity management transactions (via outright purchases or lending to the banks) previously mentioned, had the objective of steering a short-term interest rate close to the policy rate decided by the central bank. It would therefore be misleading to interpret the increase of banks’ balance sheets through LSAP or QE as just an increase in scale of the traditional outright purchases. There is a different objective of intervening directly in different asset markets and in higher maturities in order to influence the respective prices or yields. The intention and the composition of the assets purchased are thus relevant and different from what was previously done to manage short-term rates. QE has several transmission channels: besides the direct impact on prices/yields of the purchased assets (Treasuries or ABSs), it triggers portfolio adjustments on other assets, like equities or exchange rates, and is accompanied by wealth effects. While the theoretical debate on the exact channels of transmission remains active, many event and time-series studies have tried to measure the QE effects. John Williams (2013) presents a survey of several studies and reports that USD 600 billion of FED asset purchases achieves a result equivalent to a cut in the federal funds rate of 0.75 to 1 percentage point.1  1  For a survey of results, see John Williams (2013), President of the San Francisco FED, “Lessons from the financial crisis for unconventional monetary policy” NBER Conference, October.
To stay ahead of the game, corporate treasurers need to ensure that the treasury function can be transformed to better support international growth in order to capture the immense opportunities in Asia, and at the same time sharpen the management of capital, liquidity, funding and treasury related risks in order to navigate safely in the post crisis intricate market environment. 11. So, as the agenda of this Summit suggests, corporate treasury management can no longer afford to remain in a passive maintenance mode, but need to adopt a proactive and strategic mode. To use a soccer analogy, an effective corporate treasurer needs to be like a good mid-fielder who is able to make lethal passes to the strikers to score goals, and at the same time organise and support the defence to consolidate the victory for the team. 12. Like the mid-fielder in the soccer team, the corporate treasury function needs to be strategically located to support the front line business team in spots where they can strike business deals and where defence can be efficiently organise to handle the risks that may be encountered by the team. In the context of Asia, there is a compelling case for MNCs to set up corporate treasury centres in a financial centre where they can easily capture the China opportunities and where the key treasury functions can be organised efficiently. 13.

It is nevertheless conceivable that in a situation where a very high rate of inflation is accompanied by sluggish economic growth, Norges Bank may decide to apply a somewhat longer time horizon than two years to reach the inflation target of 2½ per cent. The choice of monetary policy time horizon reflects the fact that there are real economic costs associated with bringing inflation rapidly back to the target. This horizon is thus an indirect expression of the trade-off between the objectives of, on the one hand, stable output, and on the other hand, low and stable inflation. Historical data for Norway and other countries show that interest rate changes affect aggregate demand fairly quickly. Using the RIMINI model, we have estimated the effects of a 1 percentage point increase in interest rates over a period of two years. The chart shows that, in isolation, an interest rate increase of this magnitude may reduce mainland GDP by ¾ -1 per cent after two years. The effect will depend on a number of factors, such as household loan debt and corporate profitability. Household and business expectations may also play a part in determining the impact of interest rates. The band in the chart illustrates some of this uncertainty as shown by our models. In practice, it is often difficult to determine how long the interest rate will be kept at high or low level.
It is more extensive than the FOMC’s as it will cover, among many things, structural changes: climate change, financial stability; and the effects of digitalisation. The Eurosystem will take its time, as the Fed did, to consider the different alternatives. But we can already today shed some light on three key points, especially after the excellent “ECB Watchers” conference in Frankfurt on 30 September: 1. A dual mandate like the Fed’s and the ECB’s two-tiered mandate are actually more similar than they look. 2. There is some room for clarification in our inflation objective. 3. We should look again at the “second pillar” of the ECB and its possible link with the so-called “secondary” objectives. 1/5  BIS central bankers' speeches  1/ Our mandate puts a clear priority on price stability, and is not a dual mandate.

It can and should take on an international dimension. Through facilitating the inward investment of foreign savings, the source of funding for much needed domestic investments can be tremendously enlarged. This would also enhance the overall efficiency in the international allocation of funds, to economies that can provide a higher return commensurate with the risks involved. An economy with capital controls should therefore plan for the eventual internationalisation of the bond market, even though the associated financial liberalisation process can be quite a risky one. But risks are to be managed and not avoided, and the benefits of open markets far outweigh the costs in terms of financial instability. I can confirm this, even with the unpleasant experience of the financial turmoil of 1998. Free and open markets impose a valuable discipline on policy makers that is to be welcomed in the long-term interest of the people they serve. Fifth, and turning to the actual bond market development issues, there is a need to adopt a comprehensive approach. We should address the demand and supply sides, the environment in which they interact to discover the prices for the debt instruments, including market making arrangements and the determination of benchmarks, and the market infrastructure, including payment, clearing and settlement systems. Focusing on these issues individually, and this is the sixth point, there is usually strong latent demand for debt instruments, particularly in economies with a high savings rate.