samchain/econo-pairs-v1 huggingface dataset:
Cross-border Payments – Innovating in a Changing World Speech given by Victoria Cleland, Executive Director, Banking, Payments and Innovation  Central Bank Payments Conference 13 October 2020  I would like to thank Michael Pywell, Michaela Costello, Laurie Roberts and Cameron Brooks for their assistance in preparing this speech. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction  I was delighted to be invited to speak at this event, during such an exciting time in central banking and the payments industry. I am sorry that we are unable to all meet face to face, not least as it was originally hoped for this conference to take place in Athens. I cannot offer you the Greek sunshine, but I would like to introduce some Greek philosophy to get us started. Plato taught us that ‘Necessity is the Mother of Invention’ - this year’s virtual conference is a great example of that. So thank you to Jean-Michel and the team for their flexibility and ingenuity in holding this conference during such challenging times. And necessity and invention are at the heart of payments too. Every one of us needs to make payments. While the medium of exchange might have undergone considerable invention and innovation since Plato’s day, the importance of being able to exchange money safely and efficiently has not.

More than half of Turkey’s population is under the age of 30. However, unemployment rate for the young population stands at 21.2%. In order to unleash our potential, we need to keep investments at high levels and utilize human capital effectively. Since domestic savings rate in Turkey is not high enough to finance investments, we need to attract foreign savings, which implies having  BIS Review 79/2008  1  current account deficit. But the good news is that the quality of financing has improved significantly in recent years. The FDI inflows were more than USD 20 billion in each of the last two years. Nevertheless, I should say that ratio of greenfield FDI to the total FDI is relatively low yet. I believe that the greenfield FDI will also increase in the following years as we keep the macroeconomic and political stability in place and continue to improve the business environment. The second comparative advantage that I would like to underline is the convergence story of Turkey to European Union. Steps taken during the negotiation process will undoubtedly increase the momentum of Turkey and help unlock the growth potential of the country. European Union membership is our medium-term anchor and all parties in Turkey should adhere to this aim decisively. Dear Guests, The best way that a central bank could support sustainable growth is reaching and maintaining price stability, especially in a country that experienced high and chronic inflation for decades. As you may know, Turkey has adopted the full-fledged inflation-targeting regime in 2006.
In this respect, I can inform you that the government has made it very clear that they plan to consolidate the fiscal deficit to no more than 3.1% of GDP for fiscal year 2003. This is a good gradual reduction from 3.6% last year. The overall government debt is currently still at 54% of GDP, well under the cap of 60% announced in 2001. The rapid recovery of the general economy also helped boost tax revenue collection by as much as 10% in 2002, and looks set to repeat itself in 2003 as well, helping to narrow the budget deficit. Ladies and gentlemen, No one can plan for 2003 with absolute certainty. We are all following the news minute by minute, and even the best laid out plan for this year must contain several scenarios to cover for contingencies. But the one certainty I can assure you is that the macro economic policies in Thailand that aim for stability and sustainable growth will continue. BIS Review 8/2003  3

Last year industrial output declined markedly in all major regions of the world economy. In the US it appears that the decline may be coming to a halt. Developments in Japan are still highly uncertain. In the US, confidence indicators have recently shown some signs of improvement. The decline recorded following the terrorist acttacks on 11 September last year has been partly reversed. Nor does it appear that households in the euro area have become more pessimistic in the last few months. However, the indicators suggest that they still consider the economic situation to be fairly negative. Various institutions’ growth forecasts for 2002 were lowered substantially through 2001. Due to sluggish economic developments, many central banks reduced their key rates last year, in some cases quite appreciably. With the exception of Japan, no significant further downward adjustments of growth forecasts have been made in the last few months. Norges Bank expects international consumer price inflation to be low both this year and in 2003. This will contribute to a low, and in some cases negative, rise in prices for imported consumer goods. During the autumn of 2001, we saw signs that the international turnaround was also being felt in Norway. Some export industries, travel and tourism were most vulnerable. The oil price fell sharply. Since last autumn the oil price has hovered around USD 18-20 per barrel. The price of oil futures has remained stable at around USD 20 per barrel.
The recognition of these fault lines led to the creation of two institutional bodies that are or will be closely associated with the European Central Bank in Frankfurt: the European Systemic Risk Board (ESRB), and the Single Supervisory Mechanism (SSM). The ESRB addresses shortcomings in the macro-prudential policies, while the SSM will ensure a uniform and consistent supervision of all banks in the euro area. Better supervision will benefit the conduct of monetary policy, because a stable financial system is a prerequisite for the proper transmission of monetary policy signals across the euro area. Effective bank supervision is conducive to a stable macroeconomic environment with a stable price level. And strong supervision will minimise moral hazard concerns when it comes to crisis intervention. The SSM is an important first step towards a genuine banking union. But more must follow. Another indispensable element is a Single Resolution Mechanism (SRM) that will be able to ensure swift and orderly resolution – and, if need be, the closure – of non-viable banks with minimum recourse to taxpayers’ money. In addition to the SRM it would be highly desirable to establish a deposit insurance framework built on common EU standards. 6  BIS central bankers’ speeches  Conclusion  We have experienced challenging times but are laying a solid foundation to build on. Signs of stabilisation are becoming more and more frequent, and we continue to expect a gradual recovery in the course of 2013.

Second, the perception that the central bank will always “pick up the pieces” might give incentives to excessive risk-taking and high leverage. Even in good times that perception could discourage sound fiscal policies and prudent financial behaviour. In the design of non-standard measures and in its communication, the ECB has taken great care not to give such adverse incentives to either banks or governments. The following elements, among others, serve as proof:   The non-standard measures are temporary in nature. Some of them will expire automatically, if not renewed. On top of that, we have all the necessary instruments to reverse the current situation of abundant liquidity provision.   The mandate of the ECB as stipulated by the Treaty has an unambiguous focus on price stability. In combination with the ECB’s monetary policy strategy it provides a clear guidepost and has proved effective in anchoring inflation expectations over time.   The monetary policy strategy gives a prominent role to the monetary analysis which captures money and credit developments and ensures a symmetric reaction to financial forces.   The design of the tool called Outright Monetary Transactions creates the right incentives for governments to improve their performance with respect to fiscal prudence and structural reforms. I will expand a bit further on this fourth point. OMTs will only be activated in cases where the benefiting country has signed up to strict and effective conditionality attached to an appropriate European Financial Stability Facility/European Stability Mechanism (EFSF/ESM) programme.
The diverse professional training and experience of our staff are among the New York Fed’s strengths. Bank supervisors, risk managers, economists, traders and lawyers contribute insights from their respective professions that lead to better outcomes. In the spirit of learning from other disciplines, I am delighted to introduce today’s keynote speaker. Some of you may recall that, two years ago, Sir David Walker opened our first culture conference with the words, “I am grateful to the philosopher Onora O’Neill for reference to very relevant advice. "8Today we have gone to the source. Baroness O’Neill is professor emeritus of philosophy at the University of Cambridge, former president of the British Academy, and former chair of the United Kingdom’s Equality and Human Rights Commission. She was appointed a life peer and member of the House of Lords in 1999, and, in 2007, was elected an Honorary Fellow of the Royal Society. Today, Baroness O’Neill serves as a member of the Banking Standards Board. Her 2002 lectures on trustworthiness—reprinted in the book A Question of Trust —have been tremendously influential among New York Fed staff working on culture. Baroness O’Neill, the floor is yours. 1 Stephanie Chaly, James Hennessy, Jacqueline McCormack, Thomas Noone and Joseph Tracy assisted in  preparing these remarks. 2 William C. Dudley, Ending Too Big to Fail, Remarks at the Global Economic Policy Forum, November 7, 2013. 3 Thomas C. Baxter, Jr., The Rewards of an Ethical Culture, Remarks at the Bank of England, January 20, 2015.

Ravi Menon: Islamic finance – continued growth Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the 5th World Islamic Banking Conference Asia Summit, Singapore, 3 June 2014. *  *  *  Distinguished guests, ladies and gentlemen, good morning. And to all our foreign guests, a warm welcome to Singapore. The sun is shining on Islamic finance. Let me highlight three promising global developments. First, Islamic finance continues to grow rapidly. The industry grew at double digits last year, as it has for the previous five years, despite global economic uncertainties and market volatility. Global Islamic financial assets are estimated to have reached $ trillion by the end of 2013, from $ trillion in 2012. Second, global regulatory standards and best practices are being established for Islamic finance. The Islamic Financial Services Board (IFSB), the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), and the International Islamic Financial Markets (IIFM) have been at the forefront of this effort, helping to narrow differences in market practices and regulatory treatment. Common standards are good for facilitating cross border transactions. They help to address risks that are idiosyncratic to Islamic finance, such as Shariah non-compliance risk. In so doing, these standards serve to bolster confidence in the safety and soundness of the Islamic finance industry. Third, more countries are catering for Islamic finance. In Asia, Indonesia has set out to significantly grow its Islamic banking sector and develop its Islamic capital markets.
This has led to the built-up of imbalances which increase the risk of a substantial price corrections and of loan losses (charts 13 and 14).6 A second, related, danger is that low rates may induce excessive risk-taking in financial markets – as opposed to reviving productive risk-taking, which is one of the objectives of low policy rates. Here, the economic literature stresses two channels: investors who are unable or unwilling to accept low returns are liable to take higher risks and increase leverage to reach their return objective, a phenomenon known as “search for yield” (chart 15).7 In addition, by pushing up asset prices and dampening price volatility, low interest rates reduce  5  This view is also reflected in market expectations. For instance, 10 year inflation expectations for the US, derived from the yield differential of inflation-linked government bonds and nominal government bonds, stood slightly below 2.25% in August 2013. 6  Empirical evidence suggest that a simultaneous built-up of imbalances in real estate and credit markets is a key leading indicator of subsequent financial instability. Cf., for instance, Schularick and Taylor (2012) and Borio (2012). 7  Cf. Borio and Zhu (2008) and Gambacorta (2009). 4  BIS central bankers’ speeches  measured risk and may lead investors to misjudge the true risk of a given investment.8 A long period of low rates, for example, may lead borrowers and lenders to overestimate debt affordability and underestimate the risk of higher debt servicing costs in the future.

Christensen, J., Rudebusch, G. (2012). The Response of Interest Rates to US and UK Quantitative Easing. The Economic Journal, Royal Economic Society, vol. 122, pages 385–414. Gagnon, J., Raskin, M., Remache, J., Sack, B. (2011). The Financial Markets Effects of the Federal Reserve’s Large-Scale Asset Purchases. International Journal of Central Banking, vol. 7 (1), pages 3–43. Gambacorta, L. (2009). Monetary policy and the risk-taking channel. BIS Quarterly Review, December 2009, pages 43–53. Gordon, R. (2012). Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds. NBER Working Paper No. 18315. Miller, M., Weller, P., Zhang, L. (2002). Moral Hazard and the US Stock Market: Analysing the “Greenspan Put”. The Economic Journal, Royal Economic Society, vol. 112, pages 171–186. Schularick, M., Taylor, A. (2012). Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870–2008. American Economic Review, American Economic Association, vol. 102(2), pages 1029–61. Tinbergen, J. (1954). Economic Policy: Principles and Design. North Holland Publishing Company. BIS central bankers’ speeches  7  8  BIS central bankers’ speeches  BIS central bankers’ speeches  9  10  BIS central bankers’ speeches  BIS central bankers’ speeches  11  12  BIS central bankers’ speeches  BIS central bankers’ speeches  13  14  BIS central bankers’ speeches
Indeed, the very foundation of insurance is one that is based on a relationship of trust and integrity. Reputation and trust are indeed the valued assets of the insurance and takaful industries' business. Any lapses in market conduct will have widespread implications on the business and on the industry. Ensuring fair and equitable dealings with customers should also be a priority. In this environment where the industry originates more and more innovative and complex financial solutions, insurers and takaful operators therefore have a responsibility to ensure that: •  consumers receive sufficient information to be able to make informed decisions;  •  that they understand the key features of a policy, including any significant exclusions, before any purchase;  •  that the recommended policies are suitable for their demands and needs; and  •  that their claims are dealt with promptly and fairly. The new environment of increased market discipline now places even greater emphasis on stronger corporate governance, integrity and transparency. High standards of integrity should also define the management of the institution's human and physical resources. In this respect, there can be no substitute for the commitment of an institution's leadership to uphold the highest standards of integrity in dealing with its human capital and corporate resources that are managed on behalf of shareholders and policyholders. Achieving success in an environment of greater competition will hinge on the ability of the domestic industry to innovate and provide enhanced value propositions for consumers.

It is my pleasure to welcome you to this year's dialogue session between Bank Negara Malaysia and the insurance and takaful industries to discuss the challenges and opportunities the changing environment presents. A year ago, the focus of the discussions was on the strategic issues facing the industry as we transitioned towards a more competitive market environment. The emphasis was on the expectations on the industry to deliver a fair proposition to consumers, its relevance in the changing environment and its readiness in terms of capacity, and to support and sustain a successful strategy for growth. While the theme for this dialogue is to focus on how the industry should position itself to meet the new challenges, it will specifically address the transition towards a risk-based and a more self-regulated market conduct regime, and the development of a dual financial system for the insurance and takaful industry. This year, the dialogue has been jointly organised by the industry with the Bank. The industry's active involvement will be important in making this important event a success. This dialogue will provide an opportunity for deliberations on the strategic issues confronting the industry in the changing environment from the different perspectives between the industry and Bank Negara Malaysia . At this juncture, let me take this opportunity to share with you some of the recent economic and financial developments and the major policy initiatives by Bank Negara Malaysia .
Regarding price stability, monetary policy is fully responsible for prices in the long run. Or to put it more simply – a broad-based and sustained rise in prices is always attributable to monetary policy. As for economic  BIS Review 71/2008  1  fluctuations, monetary policy can affect them, but it cannot control them entirely. 1 Concerning the stability of the financial system, the role of monetary policy measures is mostly limited to crisis management, through reacting to increased liquidity demand and providing support to the banking system in times of crisis. In the longer term, central bank action does not determine financial stability directly, it is other factors, such as regulation, supervision, and incentive structures which determine the stability of the financial system. 2 I would also like to say a few words on the hierarchy of these objectives. It is sometimes argued that only one objective can be pursued – on the assumption that a central bank has only one instrument, usually a short-term interest rate. Some objectives must therefore be subordinate to other objectives. In theory, this view is certainly correct. However, practice is more complex than theory. In practice, the problem of having more objectives than instruments in monetary policy is less severe than theory might suggest. There are three reasons for this. First, the three objectives are not necessarily contradictory. On the contrary, they are mutually conditional: A policy that ensures price stability in the long run also contributes to stabilising the economy and the financial system.

Although they have helped to limit tensions in the money market, the situation is still far from normal. Despite all the liquidity measures that have been taken, term premiums in the money market remain elevated. This provides further evidence of the fact that the lack of confidence in the market cannot easily be removed by central bank action alone. Market participants have to undertake the necessary steps themselves to restore market confidence. 7  In October 2007 (unrelated to the financial market crisis), the SNB expanded the list of eligible collateral by around 50%, including in its list securities from issuers domiciled in the European Union and the European Economic Area denominated in Swiss francs and other major currencies. BIS Review 71/2008  5  5. Lessons and consequences for liquidity management operations  What lessons can we learn from the financial market crisis? There are, of course, many lessons to be learned. However, I would like to concentrate on those that are related to central bank liquidity management operations. 8 Liquidity management vs. changes in the stance of monetary policy The first lesson concerns the distinction between liquidity management and monetary policy. The crisis has made clear to financial markets, but also to central banks, that in order to safeguard financial stability during financial market turbulence, central banks do not depend solely on the monetary policy rate, but have a broad arsenal of liquidity management instruments at their disposal.
The primary purpose of near-term policy actions should be to set the economy on a long-term, permanent path to price stability and sound economic growth. This orientation puts the focus of policy on inflation expectations over the long term -- the time horizon that is appropriate for most saving and investment decisions. Businesses and households are understandably concerned about the long-term consequences of inflation and price level uncertainty. This is the frame of reference reflected in the conceptual definition of price stability offered by the chairman of the Federal Reserve, Alan Greenspan -- that price stability is achieved when people do not consider inflation a factor in their business and economic decisions. Long-term inflation expectations must be anchored to a transparent and rigorous commitment by the central bank to a well-defined standard of price stability, and unavoidable deviations from the goal of price stability must be explained with reference to that standard. In my view, price stability is a means to an end -- the promotion of sustainable economic growth. Only with long-term price stability can the economy expect to achieve the maximum levels of productivity and living standards. Price stability is both important and desirable because a rising price level, even at moderate rates, imposes substantial economic costs on society.

Let me end with a few reflections about European financial integration in my capacity as Governor of the Bank of Spain. European financial integration should also be further enhanced by taking further steps to cover the existing gaps in the Euro area financial architecture that still prevent the complete eradication of fragmentation risk among European countries. Completing these well-known gaps by finalizing the Banking Union should also come to the fore of EU financial policy priorities. While banking activity transcends national frontiers, and supervisory and resolution powers have been transferred to common institutions, the guarantee on deposits is still borne by Member States. Completing the third pillar of the Banking Union, namely a fully-fledged Deposit Guarantee Scheme, will not only provide a credible safety net for depositors in an integrated banking market, but also will provide the necessary legitimacy of any institutional arrangement. In sum, completing the Banking Union is a crucial ingredient in helping to create the appropriate institutional and regulatory conditions for banks, investors and other stakeholders to adapt to the profound challenges the financial sector is and will be facing in the future. Many thanks for your attention. 3/3