samchain/econo-pairs-v1 huggingface dataset:
Subsidiaries are independent legal entities, while branches are not legally independent from their parent bank. However, host country authorities have little influence over foreign banks’ crisis management. One of the key issues is whether the home country authorities, in a crisis situation, should be obliged to take into account the effects of the crisis in other countries where a bank has branches with extensive activities. 5  Borchgrevink, Henrik and Thorvald Grung Moe (2004). ”Management of financial crises in cross-border banks” Norges Bank, Economic Bulletin, no. 3/04, pp. 157-164  BIS Review 34/2005  3  There are arguments to suggest that home-country authorities should have more responsibility for host banks also in a subsidiary bank structure. This would reduce the number of authorities that banks have to relate to. It is also in line with developments in banking where an increasing number of cross-border banks are organised as global firms with subsidiary structures under central management. The question of coordination is far from being solved. One possible way forward is to transfer some responsibility to supranational institutions. As transfers of responsibilities imply transfer of control, this solution is not a simple one in political terms. In the EU, the idea of a European supervisory authority has so far met resistance. A fundamental problem – especially in the case of a financial crisis – is the lack of a corresponding supranational fiscal institution. Today, any financial support must be granted by national authorities.

•  Can direct regulation over a limited set of institutions effectively protect the system from distress among the unregulated? •  How should responsibility for different dimensions of financial regulation be allocated, and how centralized or decentralized? •  What institutions should have access to central bank liquidity under what conditions? The role of the Federal Reserve The Congress gave the Federal Reserve broad authority to address risks to financial stability. Because the financial landscape has changed so substantially, many observers have pointed out the need to revisit the scope and nature of Federal Reserve’s authority. Secretary Paulson has outlined a number of important proposals for reform, many of which would broaden the responsibility and the authority of the Federal Reserve. I want to identify some issues that are critical to our current responsibilities and will be important in defining an appropriate role in the future, with the most effective mix of responsibility and authority. There is more continuity than change in these suggestions, and they assume, as is the case today, that we will have to work closely with other functional supervisors to make the system work. First, the Fed has a very important role today, working in cooperation with bank supervisors and the SEC, in establishing the capital and other prudential safeguards that are applied on a consolidated basis to the institutions that are critical to the proper functioning of financial markets.
The quantity and quality of capital ensure the competitiveness of the economy, which creates the conditions for reaching an optimal macroeconomic equilibrium.  The segregation between freedom and responsibility at the level of firms seriously undermines the foundation of the market economy and creates deep social disparities. 3/4   Besides a strong capital base, a fully functional market economy needs strong financial and payment discipline. Without these, financial instability would likely appear. * *  *   And, I would like to conclude by expressing, on behalf of the National Bank of Romania, our appreciation to all the participants for attending the seminar and to the IMF for their constant support in organizing such useful debates.  As the purpose of the seminar is to discuss current financial stability challenges and to exchange knowledge in dealing with such challenges, I believe that the objective has been achieved during these two days event.  Finally, taking into account: first, the issues I have mentioned above; second, the direct and strong correlation between the capital and the real economy and third, the fact that the distinguished participants who will take part in the next year seminar can offer the possibility to share experience among countries and institutions, I would like to suggest that the 2020 event topic to be “The capital in the real economy as a cornerstone of the financial stability”. 4/4

Mr. Bäckström discusses monetary policy and unemployment in Sweden Speech by the Governor of the Bank of Sweden, Mr. Urban Bäckström, before the Swedish Economics Association on 6/3/97. First a word of thanks for the invitation to this evening’s discussion. This is the third year in succession that your Association’s agenda has featured monetary policy. My first introductory talk, in 1995, was about the importance of low inflation and the background to and implications of focusing on price stability. Last year I took up matters to do with monetary policy’s construction and effects, as well as the considerations behind the monetary policy decisions in recent years. This evening I shall be elaborating on those discussions and then deal with monetary policy in the context of Sweden’s high unemployment. Economic developments in Sweden Following the deep recession in the Swedish economy in the early 1990s, we are now in the fourth year of economic expansion. Since 1994 production’s annual growth rate has averaged 2.8 per cent, which is considerably above the trend to which we have been accustomed in recent decades. In 1994 and 1995 the GDP growth rate averaged as much as 3.5 per cent. This increase was concentrated on the internationally oriented sector and industrial activity registered the fastest upswing in a long time. This led to capacity problems despite relatively high investment growth. The strong expansion was therefore not sustainable. Moreover, the credibility of economic policy was impaired by weak central government finance and an unfavourable history of inflation.
Mr. Bäckström speaks on the topic “EMU - a further step in financial integration” Address by the Governor of the Bank of Sweden, Mr. Urban Bäckström, at the Danish-Swedish Business Council in Copenhagen on 29/9/98. Stage Three of EMU will soon be here. Something that many people felt was impossible just a few years ago is now taking place. The EMU project is probably the greatest change that has even happened in the domain of exchange rate policy. The economies of eleven countries are being linked together by a single currency. Both the population and the economy of the euro area will be on a par with the United States. Today, the euro area’s share of the industrial countries’ output is about 30 per cent and the United States has 35 per cent. The introduction of the euro will affect conditions for the financial system throughout Europe. But the advent of a single currency should not be discussed as an isolated phenomenon in the financial sphere. The move to Stage Three is simply accentuating a process that is already in train. In the 1980s and ’90s we have seen the beginnings of a financial revolution on a global scale. This in turn has been a combined consequence of financial deregulation, a general globalisation of trade and production, major developments in technology and new demographic trends.

A competitive factor that has been important for national banks—familiarity with their domestic monetary policy—will disappear when the single currency is introduced. This could lead to a centralisation of trading in treasury bonds. It is quite conceivable that in time, treasury bond transactions are concentrated to one or two financial centres in Europe. The elimination of exchange risk means that risks of other types will attract more attention. I am thinking in particular of liquidity and credit risks. This could well result in the development of trans-national European markets for different categories of bonds, for example, corporate bonds, housing bonds and local authority bonds. A contributory factor here will probably be a propensity for investors to spread risks by diversifying portfolios so that potential losses are limited. Nor is it only trading in these instruments that will be affected. New knowledge will have to be acquired by the various players. Share trading is already showing clear effects of EMU. Stock exchange mergers are occurring here and there in Europe. Another expression of what is at least a related tendency is remote participation in the national stock exchange. At the same time, the two principal competitive factors in share dealing will continue to apply, namely local customer relationships and knowledge of national BIS Review 81/1998  -3accounting, taxes and laws in the company’s home country. But even these factors will be modified as investors learn more about conditions in other countries, harmonisation between countries continues and the production of goods and services is increasingly globalised.
Banks’ exposure to reputation risk also changes since problems in another, non-banking part of the conglomerate may influence and damage the bank’s reputation. In terms of financial stability, it may nonetheless be an advantage that bank conglomerates spread their revenue base. This is particularly true if earnings from new activities do not fluctuate in step with earnings from traditional banking activities. However, this is not entirely certain since most sources of bank revenues failed during the banking crisis at the beginning of the 1990s. Risk diversification through the securities market Credit that is channelled directly through the securities market diversifies risk and thereby eases the burden on the banking system. Developments in the securities market have made it easier for banks to vary their financing. In addition, the emergence of a number of new credit sources and new instruments has made it possible for banks to engage in risk trading. Therefore, it has also become easier for banks to diversify risk. The structure of the financial system varies considerably across countries. This is illustrated by the different ways enterprises finance their activities. Norwegian enterprises have a fairly low level of borrowing in the bond and short-term paper market, representing as little as 8 per cent of total financing. Different financing structures mean that the risk associated with extending credit and providing other financial services varies across countries. It is an advantage for enterprises and other operators in the financial market to have several financing sources to draw on.

Use of these instruments will probably strengthen the bond market and thereby improve the diversification and management of risk. In recent years, we have seen the development of new instruments that make it possible to sell the credit risk associated with a loan while the actual loan remains on the balance sheet. This makes it easier to diversify and manage risk. A credit default swap is a type of credit insurance contract linked to one or more loans. The purchaser of the contract is guaranteed payment if the loan defaults. The contract issuer must pay. Collateralised debt obligations, or CDOs, are another popular instrument. Simplified, this is often a corporate loan that has been transferred from a bank and split into tranches with varying risk profiles. Debt instruments are issued for the various tranches. If the loan defaults, the first losses will be incurred by the lowest tranche (which has the highest risk). The bank that has transferred the loan often holds this tranche. The tranche that incurs losses last will thus be very secure. The return in the  3/6  various tranches will naturally be related to risk. In this way, it is possible to create many different combinations of risk and return and tailor them to individual investors. Synthetic CDOs involve credit default swaps rather than loans. This makes it even easier to achieve the combination of risk and return the investor is seeking. In the global market, banks are net buyers of risk protection, whereas insurance companies are net sellers.
After an earthquake, demand for earthquake insurance at first increases and then declines, while the probability of the next large earthquake may grow over time. 7 So-called “Depression babies” seem to take less financial risk than other generations. 8 Such an effect may explain why the fear of financial crises declines over time as memories of the last crisis fade. (ii)  Decisions under uncertainty have been shown to be sensitive to the way questions are presented. People understand probabilities better if they are expressed in terms of natural frequencies (1 in 10,000) rather than percentages (0.01%). This is one symptom of a wider confusion over probabilistic concepts. Research by Gerd Gigerenzer and others shows that doctors, for example, are often misled by information presented in the form of probabilities rather than sample frequencies. The statement that a diagnostic test has a 5% probability of a false positive is misinterpreted more often than the statement that 5 patients out of every hundred taking the test will show a false positive. 9 And this is compounded by the fact that many forecasts are not of the kind where reference back to a sample frequency is informative. Forecasts made today of the weather or the inflation rate at some date in the future are unique; they are not the outcomes of a repeated experiment. Decisions about saving for future pension provision, for example, are difficult to make the subject of experimentation, although we can learn from the experience of others.

APIs offer a standardised way to communicate between different software services. 8. The BIS’s Committee on Payment and Settlement Systems has developed frameworks for interlinking payment systems as part of the G20 cross-border payments programme, covering links between wholesale payment systems, as well as links between fast retail payment systems. As regards the latter, within the Eurosystem the Banca d’Italia has experimented with cross-currency settlement by interlinking TIPS with systems that settle foreign currencies. 9. In permissionless DLTs, transactions between participants in the scheme are validated by solving cryptographic algorithms without the intervention of a central agent in charge of managing the scheme. 10. For instance if they cannot smoothly initiate the corresponding cash transfer in the TARGET Services and settle in delivery-versus-payment mode (a securities settlement mechanism which links a securities transfer and a funds transfer in such a way as to ensure that delivery occurs if – and only if – the corresponding payment occurs). 11. Panetta, F. (2020), “The two sides of the (stable)coin”, speech at Il Salone dei Pagamenti, 4 November. 12. Deutsche Bundesbank (Trigger Solution) and Banca d’Italia (TIPS Hash-Link) have experimented with this approach. 13. Banque de France has conducted a number of experiments based on this approach. 14. This platform could be linked to other market DLT platforms where securities or other assets are recorded and transferred, or it could be a platform for both cash and securities – in effect a DLT equivalent of T2S.
This is without doubt the most important lever for guaranteeing a strong and sustainable recovery in the euro area, and one that will create jobs. 2. The outlook for inflation in the Euro area  Of course, no summary of the euro area situation would be complete without talking about the current low level of inflation, which poses a major challenge for the Eurosystem, and for the euro area economy as a whole. The sources of and reasons for such a low level of inflation are complex and multiple. Temporary and global factors may be at play in the euro area, with import prices falling. I also think there are more permanent and deeper forces pushing inflation down both at the euro area and global level. Let me make a few points regarding this challenge to European monetary policy today. First, and you all know this perfectly well, low inflation is not deflation. Deflation is a permanent and cumulative process of decline in the overall price index, fuelled by negative expectations. Having this in mind, there is no deflation today in the euro area. Prices are still increasing and, most importantly, so are nominal wages. And, something even more crucial: inflation expectations remain firmly anchored in positive territory, even in the short run. 2  BIS central bankers’ speeches  Second, low inflation provides economic stimulus by boosting real income. In most parts of the euro area, nominal wages are downward rigid.

Should we note a deviation from this path, we will use every instrument within our mandate, including unconventional ones, in order to cope effectively with risks of a too prolonged period of low inflation. 3. Outlook for the French economy  I would like to end my speech by taking a closer look at the situation in France. Our growth is expected to be close to the euro area average in 2014, at around 1%. France has some major strengths for competing in a global economy: dynamic demographics, a well-trained labour force, expertise in strategic or high-tech sectors such as mathematics, aeronautics and nuclear engineering, and excellent infrastructure. We also have the advantage of an efficient financial system which has always managed to play its role in financing the economy. French banks have made the necessary efforts to meet the Basel 3 solvency requirements, and are also improving their liquidity levels in a highly favourable monetary policy environment. But our economy has two main handicaps: first, taxes and social security contributions are too much of a burden, particularly for companies, because of our excessively high level of public spending; and second, our labour market and goods and services markets are overregulated and excessively rigid. As far as I can see, France’s main priority today is to ensure that it can take full advantage of its strengths by implementing structural reforms that reduce the burden of taxation and simplify administrative formalities.
Big suppliers viewed them as unreliable given the costs and difficulty of small suppliers executing real-time inventory management. Only large firms with big IT budgets could afford the sunk costs of such systems. Today, a real-time inventory management system can be built using GS1 standards for a few thousand dollars. Small firms can connect to global product webs, through nodes such as Wal-Mart’s central inventory system, in the same way they might connect to a Facebook friend. A common language has levelled the playing field between the corner shop and the supermarket. The transformative powers of a common language have been even more striking in such well-established industries as publishing, music, advertising, news and retailing. For decades, large incumbent firms dominated these markets – EMI, Borders, Tower Records. Yet in less than a decade, new entrants with new business processes have completely reshaped the industrial landscape. Take publishing. Until 2007, publishing was an industry essentially unaltered since Gutenberg. The printing presses, while bigger and faster, would have been recognisable to a fifteenth century printer. 18  Vise and Malseed (2005). 19  McLaren and Shanbhogue (2011), Choi and Varian (2011). 20  Jorgenson et al (2010). BIS central bankers’ speeches  7  Copying and distributing a book to the public involved a complex chain of printers, wholesalers and retailers. This lengthy supply chain added both risk and cost. It also created a significant barrier to entry for new authors who were reliant on publishers to get their physical books onto physical shelves.

The architectural concept of Sasana Kijang is inspired from the shape of the Cowrie shell, a popular form of money in the Malay Peninsula during the 3rd century with its building facade derived from the geometric patterns of traditional Malaysian songket motifs, reflecting the hand woven fabric designs. Sasana Kijang hosts a learning centre with state-of-the-art training facilities for local and foreign participants and provides opportunities for the exchange of views and experience towards promoting capacity building in central banking. In addition to training facilities, offices and conference halls, Sasana Kijang also houses the Bank Negara Malaysia Knowledge Management Centre and the Bank Negara Malaysia’s Museum and Art Gallery which is open to the public. I hope all of you will take the opportunity to explore the Bank’s collection displayed at the Museum and Art Gallery and to enjoy the activities in the Knowledge Management Centre. As visitors to Malaysia, your stay here is not complete unless you have treated yourself to the variety of food, traditional and modern, that the country has to offer. On that note, I wish you all a productive engagement and a pleasant stay in Kuala Lumpur. BIS central bankers’ speeches  3
On the contrary, inflation has now been so low for so long that I am concerned that it risks becoming a problem in itself, as inflation expectations are adjusted to a lower level. For these reasons, I have considered a further cut in the repo rate to be justified. But a majority of Executive Board members have assessed that this is not justified, because an even lower repo rate is thought to increase household debt, which is in turn assumed to increase their vulnerability and thus the risk of shocks leading to a deep recession. It is, of course, important to consider how concerned one should be over household indebtedness, not just the Executive Board of the Riksbank, but the Government and the Riksdag (the Swedish parliament), as well as the banks that lend money to Swedish households and Finansinspektionen (the Swedish Financial Supervisory Authority), which supervises these banks. My own opinion is that the high housing prices probably mainly reflect a shortage of housing and are thus not to be regarded as a price bubble. However, if the supply and demand situation changes, this could very well lead to falls in house prices in some situations. And even if such price falls are justified, they can entail problems for macroeconomic developments.

To contribute to the reflection, we are about to publish a discussion paper on the possible regulatory options for DeFi. In order to build the most appropriate framework, taking notably into account the question of proportionality, we need to feed our thinking with input from all stakeholders: financial services or crypto-assets industry professionals, IT specialists, academics, other regulators and supervisors- That is why this document will be open to a wide consultation and I look forward to listening to your reactions on it. 2. The second axis is to use DeFi innovation to serve the possible development of tokenised finance and to improve cross-border payments Our monitoring of DeFi is not just motivated by financial stability risk but also by our intuition that its innovative potential could serve the development of an ongoing trend: the tokenisation of finance. To do so, central banks and the traditional financial players need to understand how DeFi operates and master its innovative aspects in order to use them in a secure way to do something else than speculate on crypto-assets. This is what we are trying do with the project Mariana, our ongoing experiment with the MAS, the Swiss National Bank and the Eurosystem, Singapore and Switzerland BIS Innovation Hub Centres. Basically, we are building an automated market for the exchange of CBDCs based on a concept imported from DeFi. This project is really at the crossroads of a number of topics: enhancing cross-border payments, CBDCs interoperability, understanding of DeFi and the development of tokenised finance.