samchain/econo-pairs-v1 huggingface dataset:
Building on strong foundations: Why central banks bank for each other Remarks given by Andrew Hauser, Executive Director, Banking, Payments and Financial Resilience At the Federal Reserve Bank of New York’s Commemoration of the 100th Anniversary of the Federal Reserve System’s U.S. Dollar Account Services to the Global Official Sector  20 December 2017  I am very grateful to Simon Heywood for his help in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/speeches  Introduction  1917 was not a quiet year. In April, the United States joined World War 1. In July, the British royal family changed its name from ‘Saxe-Coburg and Gotha’ to ‘Windsor’. And in Russia, the October Revolution ushered in the most momentous political change of the twentieth century. Against that backdrop, the agreement by the Bank of England and the New York Federal Reserve in Spring 1917 to provide banking services to one another was never going to leave the same historical footprint. But that superficially unremarkable act was actually part of a seminal moment in the development of the international financial system. Those correspondent relationships between central banks, forged at a time of war but replicated widely in the years ahead, would achieve three key things:  1. They gave central banks safe, confidential and reliable access to overseas reserve currencies, assets and payments, and intelligence on the operation of those markets – and in so doing:  2.

That is why it is so important to co-operate, as Strong and Norman clearly recognised at a previous critical switching-point in world affairs. Of course, the concept of co-operation can be pushed too far. During his time in London in 1916, Strong reported an ‘astonishing suggestion’ during a dinner with the British press ‘that the Reserve Bank System was really the Bank of England, and that if we would only promote the right kind of relationship, we ought to be able to consolidate the English and American system, and in some way or other work out a complete cord. This caused some amusement, but was roundly cheered. I did not find the gentlemen present at the dinner particularly well posted in regard to the American financial system.’  I am not so misguided as to repeat that suggestion here today! But I will end with Norman's comment to Strong as they were formulating their principles of central banking in 1921: ‘if ever you should feel downhearted just you remember that, economically speaking, there is only hope through a community of interest and co-operation between all central banks.’ Thank you – and I look forward to sharing the rest of this Commemoration with you. 7  All speeches are available online at www.bankofengland.co.uk/speeches  7
As the fundamental role of the financial system is financial intermediation, or the channelling of funds from those who have a surplus of it to those in need of it, the comparison should usefully be made in respect of the three channels of financial intermediation, namely, that of banking, equity and debt. The total assets of the banking system of Hong Kong are equivalent to 21% of those of the Mainland. You may think that this is not high; but if you put this along with similar comparisons for population, which is only 0.5%, or gross domestic product, which is 8%, you can appreciate the significance of the banking system of Hong Kong in the context of the country as a whole. What is more, the quality of assets in the banking system of Hong Kong is superior and the efficiency in financial intermediation, in mobilising savings in the form of deposits into the hands of borrowers who are credit-worthy, is also a lot higher. Capitalisation of the equity market of Hong Kong is 2.6 times that of the Mainland. The amount of funds raised in the past ten years in Hong Kong, through Initial Public Offerings (IPO) and other fundraising activities, is nine times that on the Mainland. The turnover value in 2005 was about 1.5 times that on the Mainland, and Hong Kong also has an active derivatives market, which traded 25 million contracts in stock futures and options last year.

On top of these, there are the restrictions in the mobility of factors of production, notably labour and capital, with the asymmetry in capital mobility between the Mainland and Hong Kong presenting the most obvious obstacle. These restrictions may well be there for good reasons, but they do not mean that the development of a working relationship that is beneficial to both financial systems and to the country as a whole can just be left to market forces. There is a clear case for the involvement of the authorities responsible for these policy areas. To be sure, there have been notable co-operative efforts between the two financial systems, both between the authorities and between the private sectors of the two financial systems, and these have been quite obvious since the resumption of the exercise of sovereignty. These efforts have arisen simply out of need, particularly where the free play of market forces has been possible, and through the initiatives of the authorities concerned, where a common understanding can be arrived at concerning the common benefits that could flow from the removal of restrictions. But I think it is fair to say that the process has not always been a smooth one. Neither has the outcome been as productive as it could be, at least when assessed, narrowly some say, against the fundamental objective of making the two financial systems work together for their mutual benefits and in the best interests of the one country.
It was assumed previously that as long as oil is overly volatile, the ruble remains equally as volatile. Yet the volatility of the ruble is lower than that of oil. It will take a further diversification of the economy to enable basic conditions for bringing down volatility. The current developments call for further promotion of forex hedging instruments. We see demand emerging for these instruments, which is why we welcome the initiative of the Government’s Ministry for the Economy for the establishment of a dedicated facility to support businesses in hedging forex risks. QUESTION from TASS Agency: Another question about the ruble and oil, if I may. The Brent crude price has dropped by almost 13% since the start of the year. The ruble has appreciated against the US dollar by roughly 7% in the same period of time. Does the Central Bank monitor the ruble’s dependence on oil? Can you estimate how long this weakening of the ruble’s dependence on oil will last? Thank you. ELVIRA NABIULLINA: Your question clearly demonstrates that the ruble is not only affected by oil. The oil elasticity of the exchange rate depends on seasonal factors, among others. On some occasions we have registered the elasticity ratio at 0.9, it has even reached 1 during short periods. According to our estimates, it now stands at 0.2-0.3. You will see that the movement may even be reversely directed if other, more serious, factors affecting the exchange rate are in place.

Our special focus is currently on information coming in from regions using our network. Leaders of the Bank of Russia’s regional branches are invited to each of our rate-setting meetings. They update us on the situation in their regions; ultimately, our estimates and outlooks are not solely based on the data provided by Rosstat. Rosstat data should indeed be treated as a reliable source of information, considering that alongside authorities virtually all market participants also use them. So, the more trust in Rosstat’s professionalism and independence the better. There are a variety of options on how we may address this. At the end of the day I believe this is up to the Government. I would rather reserve my judgement here. Thank you. QUESTION from Bloomberg: Two questions, again, please. One, following up on the question from my colleague, we heard both the economic development minister and the finance minister mention that the ruble is stronger than its fundamental values. In this connection, what does the Bank of Russia make of this; is the ruble close to its fundamental values, or is it actually stronger? And my second question, which is in some way related to the first. You mentioned that purchases of foreign currency are a possible means to replenish reserves, provided these purchases do not do damage to inflation targets. All indications are, we are on track to meet the 4% inflation target by mid-year. Can the Central Bank launch foreign currency purchases to replenish its reserves? Thank you. ELVIRA NABIULLINA: Thank you.
29.05.2018  Testimony of the Governor of the Banco de España before the Senate in relation to the draft State Budget for 2018 Luis M. Linde Governor  Ladies and gentlemen, I appear before you today as part of the Senate’s debate and approval process for the State Budget for 2018. Allow me to begin by reviewing the current international economic setting of the Spanish economy and its outlook. I shall then refer to the main aspects of this draft Budget. To conclude, I will mention what, in my opinion, are the main challenges for fiscal policy in Spain in the coming years. The external setting of the Spanish economy The external setting of the Spanish economy broadly remains favourable, although the global economy is subject to factors of risk that should not be ignored. Following several quarters of upward surprises, the opening months of this year have – more so in the euro area – seen some moderation in global economic activity whose scope is still uncertain. Notwithstanding, the information available continues to point to the maintenance of the current upturn over the next two or three years, underpinned by the correction of the previous imbalances, agents’ confidence, the favourable financing conditions and the boost from the expansionary fiscal policies in the United States. On the financial markets, despite the bout of marked volatility last February, asset values remain high by historical standards.

Our institutions – such as the Banque de France’s Lab, its Infrastructure, Innovation and Payments Directorate (DIIP), the ACPR’s Fintech-Innovation Unit, with its ACPR-AMF Fintech Forum – are fully mobilised to facilitate these initiatives and help them grow. Among these initiatives, three in particular are worth highlighting. First, those in the field of instant payments, which open a new chapter in the payments industry. Second, the continuing development of open banking, thanks to the European financial sector’s work on APIs. Last but not least, the European Payments Initiative (EPI) which will provide European citizens with a pan-European solution for everyday payments, via both a payment card and a smartphone, covering all retail use cases. With some major decisions scheduled to be taken this autumn for the actual launch of EPI, I would like to remind you here that the Banque de France fully supports this initiative, alongside the other Eurosystem national central banks and the European Commission. We are counting on you all, as participants in the financial ecosystem, to make this unique opportunity for European payments into a reality. C) We are also actively supporting financial innovation by conducting an ambitious experimentation programme for a central bank digital currency (CBDC) Several central banks have begun working seriously on the idea of issuing a CBDC, if it were to prove necessary, to preserve the anchoring role of central bank money in the digital era.
Ardian Fullani: Financial supervision and measures to strengthen financial stability Speech by Mr Ardian Fullani, Governor of the Bank of Albania, at the International Conference for the 10th Anniversary of the Central Bank of the Republic of Kosovo, Prishtina, 30 October 2009. *  *  *  Dear Governor Rexhepi, Distinguished ladies and gentlemen, It is a pleasure for me to participate in this Conference which is perfectly organized by the Central Bank of the Republic of Kosovo, and to witness the amazing progress this institution has achieved in such a short but intense period of time. The energy and desire of the local staff to contribute to the history of this institution, has been rightly channeled by the vision and experience of several managing professionals that have given a valuable contribution in chairing this institution in the last years. I am sure this story will continue to be a successful one, based on the commitment of the management of the Central Bank of Kosovo to achieve and comply with the best work organizational and efficiency standards, by pursuing a clear long-term policy of investing in the quality of its personnel, and by supporting actions that contribute to maintaining fruitful inter-institutional cooperation. In addition, I want to thank the organizers for giving me the honor to speak in front of you today, regarding a topic that has become so relevant in the last year, following this unprecedented international financial crisis.

Peter Pang: Islamic capital and money markets Welcoming remarks by Mr Peter Pang, Deputy Chief Executive, Hong Kong Monetary Authority, at the workshop on “Islamic capital and money markets”, Hong Kong, 19 March 2013. *  *  *  Distinguished guests, ladies and gentlemen, 1. It is my great pleasure to welcome you to this Islamic finance workshop. We are particularly grateful to Mr. Mohd. Radzuan, Mr. Azidy and Mr. Azahari, the experts from Malaysia, who have flown all the way to Hong Kong to share with us their knowledge on Islamic capital and money markets and their valuable experience in developing these critical components of Islamic finance. I would also like to thank Mr. Najmuddin of Bank Negara Malaysia for bringing the Malaysian delegation here. Two fast developing asset classes in the global markets 2. This workshop comes at a very opportune time as Hong Kong is looking to develop Islamic finance as a way to diversify our financial platform and further enhance our capability as an international financial centre. In my view, to be a truly international financial centre, one needs to develop a conducive platform for the two fast developing asset classes in the global markets – Islamic financial products and RMB-denominated investment assets. 3. The development of Islamic financial markets has been phenomenal in the past two decades.
Athanasios Orphanides: The role of central banks – lessons from the crisis Panel remarks by Mr Athanasios Orphanides, Governor of the Central Bank of Cyprus, at the VIth International Symposium of the Banque de France on “Which regulation for global imbalances?”, Paris, 4 March 2011. *  *  *  The topic of this session is lessons from the crisis, specifically regarding the role of central banks. Let me start with a question: How do we learn in our profession? The answer, I believe, is that our main guide is history. Indeed, one of the many differences between central banking and the natural sciences is that in central banking, unlike the natural sciences, we cannot run controlled experiments to improve our knowledge. As a result of the crisis, we are experiencing a unique natural experiment to draw lessons from. I fully expect this episode, which unfortunately is still mutating and evolving in some areas, to provide material for myriads of PhD theses and other studies for decades to come. What do we mean by “lessons” for the role of central banks? Lessons in the sense of learning things we did not know? Or in the sense of reaffirming things we knew? In my view, we have some of each but, in addition, we have seen an evolution in the consensus views on familiar questions. Let me focus on just a few1.

How activist central banks can be is an issue where there seems to be quite a bit of disagreement so let me be more explicit by using the euro area as an example. Let us take the first ten years of the euro area and look at real-time estimates of the output gap as published by the IMF and by the European Commission (EC). (The information can conveniently be found on their websites.) Both organisations have suggested, virtually every spring since 1999, that the output gap for the year reported would be negative. If we compare these to recent retrospective estimates we observe a significant bias. The bias is mainly due to the fact that the experts are now more pessimistic about what potential output was in the euro area than they were in the past. This is not the experts’ fault. We simply cannot know in real time. And this applies not only to the size of the output gap, but even to its sign. In comparing what the experts tell us now and what they were telling us then, in real time, the sign of the output gap is revealed to be incorrect in more than half of the years in the first decade of the euro area. Consider the year 2006, the year before the financial turmoil began. According to the IMF and the EC, the euro area operated below its potential that year with the gap being around minus 1 percent (see Figure 1).
In France, the ACPR is mobilised to support innovation, as demonstrated by the creation of the Fintech Innovation Unit and the Fintech Forum with the French financial markets authority. Within this Fintech Forum, we work closely with other public authorities to promote the development of Fintechs and Insurtechs in France. A year ago, the ACPR authorised the first fully digital insurance company in the health sector, the Insurtech “Alan”. In the case of insurers, the digital revolution starts with a complete overhaul of customer relationships and user habits. But it goes further than that. In the digital revolution, the insurance sector can bring stability and protection – it is this that has always been the raison d’être of insurance. I’d like to underline two topics that I think are essential: cyber-insurance and big data. Coverage against cyber-risk, first, is a very real concern that affects all companies – both small and large – as cyber-attacks are becoming increasingly frequent and costly: in 2016, cyber-attacks were estimated to cost businesses about USD 450 billion a year at the global level, 3/4  BIS central bankers' speeches  according to a report by Lloyd’s and Cyence. Despite these threats, the cyber-insurance market is still underdeveloped. Insurers can and should take inspiration from their own experiences in tackling cyber-risk, and use it to develop a more mature European cyber-insurance offering. The second subject I’d like to focus on is personal data and big data.

In line with this principle, the validation of internal models, for instance, should preferably remain the responsibility of the NCA in order to reflect the close link between this decision and the on-going dialogue that takes place between the insurer and its national supervisor; EIOPA for its part could concentrate more efficiently on the essential task of enhancing the harmonisation between national practices. In addition to these desirable adjustments of the European institutional framework, there is a need to make concrete progress towards a European resolution mechanism, which would provide more adequate tools to limit the impact of an insurer failure and increase trust and confidence. France has been working along these lines at national level and such a mechanism will be in place in our country before December. 1 The French resolution insurance regime requires insurers of a certain size to set up preventive recovery plans, which will form the basis for preventive resolution plans. Moreover, the ACPR is entrusted with several powers to be used in a resolution context, such as the possibility of appointing a resolution administrator in the insurance undertaking, limiting the distribution of dividends, or organising portfolio transfers to another insurer. 2. Economic innovation Let me now turn to my second point: economic innovation. As Europe’s economy is close to the “technological frontier”, businesses need to innovate more. As such, they need to be able to take more risks, which requires more equity financing, over the long term, rather than debt financing.
To put it in another way, the framework in question is intended to establish a balance between flexibility and safety, gradually easing the burden on employment, increasing the firms’ and workers’ capacity to adopt to changes, increasing the quality of workers that are transferred from the agricultural sector, and developing active labor policies to meet labor market’s needs. In the last part of my presentation, I would like to briefly mention the current account deficit problem. As it is known, in line with the high growth rate, an upward trend is observed in the current account deficit. Today, the primary reason of the current account deficit is that investments grow faster than savings. In 2005, the current account deficit was recorded as USD billion 23.1 billion and the ratio of current account deficit to national income was 6.4 percent. In this ratio, the impact of energy prices, which is composed of the prices of crude oil, natural gas and coal, was 1.4 points and the impact of the rise in crude oil prices alone was 1.1 points. By April 2006, the current account deficit increased to USD 26.8 billion. However, the question is not the level itself but its sustainability. When global trends are analyzed, it is observed that countries, which have succeeded in increasing financial and economic integration and reinforced macroeconomic stability, are able to sustain higher current account deficits compared to the past.

Turkey, being an energy importing country benefited from lower oil prices in many dimensions. The current account deficit fell from $ billion in June 2014 to below $ billion in November 2015 in 12 month rolling terms. This sharp improvement in the current account balances is also greatly helped by prudent macro-economic polices including monetary, macro-prudential and fiscal policies. Tight monetary policy, well-targeted macroprudential measures and strong fiscal balances have all contributed to lower levels of domestic demand by stabilizing loan growth and reducing risk taking behavior. Going forward, the current levels in oil prices and depressed producer prices in most part of the world due to weak economic activity are expected to lead to further improvements in external balances. Therefore, it is highly likely that Turkey will record a current account deficit of below 4 percent of its Gross Domestic Product in 2016, representing a major achievement in satisfying the norm of the European Union’s Macroeconomic Imbalances Procedure. Unlike these positive developments in the economy, inflation increased and its outlook worsened in 2015 reflecting the pass-through from the TL depreciation, elevated food inflation, and markedly increased minimum wages. These factors together with some deterioration in inflation expectations led the MPC to revise its inflation forecasts for 2016 and 2017 up to 7.5 percent and 6 percent respectively and postpone the projected realization year of the 5% target to 2018. Going ahead, we see there are three potential developments which would improve the inflation outlook a great deal.