samchain/econo-pairs-v1 huggingface dataset:
A BIS survey in January 2020 found that more than 80% of central banks, compared to only 70% in a survey the year before, are looking into CBDC, suggesting that there is greater openness to issuing a CBDC than a year ago. The survey also shows that emerging market economies report stronger motivations and a higher likelihood that they will issue CBDCs. Although many central banks are considering CBDCs, they appear to be proceeding cautiously, with only about 10% of central banks say they are likely to issue a general purpose CBDC in the short term and 20% in the medium term. Whether it is for DLT, CBDC or other innovations in financial technology, it is important for central banks to continue cross-border cooperation in order to realise successful digital transition. Harmonisation of standards and data privacy across jurisdictions; information-sharing; and support for cross-border integration through the various international platforms, are some of 2/3  BIS central bankers' speeches  the ways for central banks to contribute to this transition. Preserving safety and soundness As we embrace financial innovation, we need to be mindful of the risks of unintended consequences such as cyber threats and spread of illicit finance. These areas, which were already the focus of central banks, have become increasingly important with the advent of the Covid-19 pandemic. An increasing number of cyber criminals are exploiting the current pandemic for their own objectives.

Abdul Rasheed Ghaffour: Opening remarks – Forum on Central Bank Foreign Currency Operations Opening remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the OSSP-BNM-SEACEN Forum on Central Bank Foreign Currency Operations, Kuala Lumpur, 6 August 2020. * * * It is my great pleasure to welcome all participants to the OSSP-BNM-SEACEN Forum on Central Bank Foreign Currency Operations. My appreciation also goes out to OSSP and SEACEN Centre for organising this forum. Although we have been looking forward to hosting all delegates and speakers in Kuala Lumpur, I am glad that technology has enabled us to come together regardless of this challenging time. I believe this forum is timely, given the myriad of issues associated with the current global landscape and the evolving environment for cross-border payment operations. The COVID-19 pandemic has caused widespread disruption within an inconceivably short period. We see disruptions in the lives and livelihoods of families and individuals; in the way work is done and trade conducted; and in our perspective of the world and our solutions to its problems. In at least one area we see the pandemic accelerate a growing trend both domestically and internationally – in digital trade and e-commerce. Retail purchases have more than halved year-on-year, and this gap is quickly filled by the rapid growth of e-commerce. This digitalisation trend is likely to continue post-pandemic with new norms in day-to-day domestic as well as cross-border economic activities.
financing mature economies’ expenditure with world savings. Does this situation correspond to the efficient allocation of capital and if not how do we explain it? More generally, is there any likelihood that a chain that hinders balancing mechanisms has been established? The foreign exchange intervention operations carried out by several central banks help to finance the US budget and external deficits. In the United States, the corresponding maintenance of long-term interest rates at a low level fosters the US domestic savings-investment imbalance. In the Asian countries, and particularly China, the increase in trade surpluses and its corollary, the worsening of the US imbalance, exerts upward pressure on the currencies while swelling foreign exchange reserves increase the costs of an appreciation vis-à-vis the US dollar. Does this configuration correspond to a mutually advantageous and sustainable situation? In this second session, Bill White, Economic Adviser at the Bank for International Settlements, will clarify these paradoxes in the light of the work carried out by the latter organisation, which makes a vital contribution to the analysis and promotion of macro-financial stability. In the third session, which will tackle economic policy adjustment and responses to the increase in global imbalances, we will examine private and public players’ ability to adapt to the current situation. Can the behaviour of private agents, through a change in their savings or the redirection of capital flows, lead to a spontaneous decrease in global imbalances without engendering destabilising adjustments on the financial markets?

Between the low risk-return bank deposits and the high risk-return equity market, there should be a risk-return profile that fits that of debt instruments. The trick is how this latent demand, involuntarily trapped at the two ends of the spectrum, can be brought out and satisfied. Investor education and the creation of a retail network to market debt will help. But the costs of the latter can be quite substantial and possibly prohibitive, particularly in a low interest environment, if the retail banking system cannot be relied upon to support this wholeheartedly (which I am glad to add is not the case in Hong Kong). Furthermore, when government debt is used by the banking system as assets for acquiring liquidity support, the demand from the banks may easily crowd out the retail demand. Nevertheless, the institutionalisation of savings, if this could be organised, through for example the introduction of professionally managed provident fund schemes, should be quite effective in harnessing this demand. This would, at the same time, enable the retail demand to be transformed into a level of sophistication that, with the appropriate supply response, will greatly enhance the efficiency and robustness of the debt market as a channel of financial intermediation. The seventh point I wish to make concerns the supply side. For an economy with a continuing need to finance budget deficits there is of course a natural supply of debt instruments, unless, like Hong Kong, it has surpluses to spend. But the story does not end there.
Globalization, moreover, was producing an environment in which success would only be achieved by countries that had the ability to anticipate change and the capacity to adapt their productive structures fast enough to seize the new market opportunities ahead of their competitors. Finally, the increasingly free movement of the factors of production entailed a relative loss of policy autonomy, even for large and relatively self-reliant economies. I suggested that these trends were especially relevant for a small, open economy like Malta’s, and one that was clearly living beyond its means at the time. As you might recall, less than two years later the vulnerability of our economy was clearly exposed by two external events: the collapse of the technology stocks bubble and the ensuing sharp decline in demand for electronic components; and the increased aversion to flying following the 9/11 terrorist attack in New York. The impact of these shocks on the electronics and tourism sectors combined with some long-standing domestic factors to produce a stagnation in economic activity in the period 2002–2004. This was a stark reminder that there is no escape from the realities of a globalized world, and that the only valid response to international competition is to make the economy more efficient and flexible. From stagnation to sustainable convergence Today, some six years after those destabilizing events, the Maltese economy has come a long way.

In the absence of a consensus, however, strong leadership would be required in order to explain the need for hard measures to the population and to isolate vested interests standing in the way of the needed reforms. Whatever the approach adopted, maximizing the benefits of Malta’s participation in monetary union will require the removal of the remaining impediments to growth. In the public sector, fiscal consolidation must henceforth involve a greater emphasis on expenditure reduction, particularly in view of rising pressures caused by aging-related factors such as pension and health care costs, and on securing more “value for money” and greater accountability in the use of public funds. The provision of free public goods and services regardless of the beneficiary’s ability to pay needs to be reassessed as it leads to waste and to a higher tax burden, besides being inequitable. The same applies to subsidies, whether implicit or explicit. The resulting distortion of incentives and inefficiencies is both unsustainable and incompatible with the fiscal discipline required in a monetary union. An important contribution to enhancing the economy’s competitiveness can also be made by new forms of employment security and by further improvements in labour market flexibility. With regard to the former, there remains scope for more innovation in terms of employmentfriendly labour laws, labour market practices and social protection systems.
For instance, the proportion of borrowers with a debt burden indicator above 80% (suggesting that people had to spend more than 80% of their monthly income on loan servicing — a heavy debt burden) went up from 23% at the beginning of the pandemic to 30% in the second quarter of this year. That is certainly an area of concern. We are in dialogue with banks, explaining why that situation is dangerous. A bank portfolio might look OK (banks might tell us: see for yourself, our portfolio is being serviced, it is all right). However, when many consumers in the wider system, some of them debt-laden, take out many loans that are unsupported by income growth, risks are bound to increase. In a negative scenario, many borrowers would be unable to service their loans, which would trigger the emergence of social and financial stability risks. With the tools available to us, we are working to cool the market. We have increased add-ons to high-risk consumer loans, with a further increase to take effect from 1 October. We might have to raise those buffers still further. However, they are not an ideal tool. This is how they work: high-risk loans lock more bank capital compared with low-risk loans (and therefore high-risk loans lose economic advantage). However, there is capital stock in the banking system, but it is distributed unevenly. Ultimately, regulatory add-ons propel banks with modest capital reserves to change their strategies, while those with abundant capital may simply lure their customers away.

This is not the case for our economy. People remember the huge inflation of the 1990s and the high inflation of the 2000s. Therefore, when prices, especially for food and everyday goods, are up, they expect inflation to continue to rise. What does this mean when inflation expectations rise, that is, when people expect inflation to rise? People start to spend more, if they can, and save less, afraid of money devaluation. They tend to make large purchases faster, which translates into demand for durable goods. People even take out large loans on the expectation that the goods they need might go up in price, thus pushing inflation upwards, while production cannot adjust quickly enough to rising demand. This feeds though to prices. Therefore, we must definitely reduce inflation and household inflation expectations as soon as possible. Our immediate task is to prevent the economy slipping into 1/5  BIS central bankers' speeches  an inflationary spiral. We can see the positive impact of confidence in steadily low inflation on financial markets. For example, investors’ inflation expectations are anchored as they expect inflation to return to target, which makes it possible to maintain quite steady long-term rates on OFZs. Although we have started to raise the key rate since March, the cost of ten-year OFZs is still roughly level with March. Indeed, market participants believe that we will bring inflation back to target. Why am I talking about long OFZs?
As you know, the project has suffered significant delays, and only a few months ago the chances of it going ahead seemed to be only 50-50. However, a number of the logjams have now been cleared and a revised timetable has been announced. The intention is now to release a revised set of consultation papers in May of next year. This would take account of a further quantitative impact study which will be held later this year to test the calibration of the revised proposals. If all goes well, the final Accord would be released before the end of 2003 with implementation targeted for 2006. I know that there have been a number of false alarms on the New Accord, and that some of the banks here today may be inclined to take a wait-and-see attitude. To such banks, I would say that the pendulum has swung in favour of implementation. It would therefore be sensible to plan on the basis that the New Accord will now go ahead on the revised schedule, and that it will include an explicit capital charge for operational risk. This does not leave all that much time for those banks which might want to use the advanced approaches in the New Accord to measure credit or operational risk to get themselves ready. I would advise such banks to start their preparations now if they have not already done so. I would particularly recommend that banks begin to collect default data for credit risk and loss data for operational risk.

Public finances were deteriorating. Banks and governments were being forced to pay even higher interest rates. And credit and economic growth were falling further, leading to rising unemployment and reduced consumption and investment. A number of economies could have seen risks of deflation. All of this meant that the outlook for the euro area economy as a whole was increasingly fragile. There were potentially negative consequences for Europe’s single market, as access to finance was increasingly influenced by location rather than creditworthiness and the quality of the project. The disruption of the monetary policy transmission is something deeply profound. It threatens the single monetary policy and the ECB’s ability to ensure price stability. This was why the ECB decided that action was essential. Restoring the proper transmission of monetary policy So let me now turn directly to our recent policy announcements. To decide what type of action was appropriate, we had to make two key assessments. First, we had to diagnose precisely why the transmission was disrupted. And second, we had to identify the most effective policy tool to repair those disruptions, while remaining within our mandate to preserve price stability. In our analysis, a main cause of disruptions in the transmission was unfounded fears about the future of the euro area. Some investors had become excessively influenced by imagined scenarios of disaster. They were therefore charging interest rates to countries they perceived to be most vulnerable that went beyond levels warranted by economic fundamentals and justifiable risk premia.
A peaceful country without a single terrorist incident; significant country-wide economic growth; and sharp reduction in poverty levels. These incredible outcomes vividly reflected the extraordinary benefits that had been reaped via practical wisdom! Around 2008, the country was trapped in a “vicious cycle” that had hampered growth since independence: high fiscal deficits leading to high inflation; high inflation leading to high interest rates; high interest rates leading to low investor confidence; low investor confidence leading to sluggish investment; sluggish investment leading to lower growth than potential; lower growth and high fiscal deficits leading to unfavorable debt dynamics which in turn, impacted fiscal deficits adversely. This vicious cycle was deep rooted, and many Sri Lanka’s economists who subscribed to conventional wisdom used to lament that this cycle was the country’s “karma” (fate), and that it would be impossible to break free from that grip! To escape, a radical change in policies and perspectives was needed, and Sri Lanka responded by introducing several bold policy initiatives across several fronts: excessive monetary expansion was contained through unconventional monetary policies such as tight quantitative tightening; recurrent fiscal expenditure was curtailed while preserving public investment for infrastructure development; monetary and fiscal policies were-coordinated to bring about overall macroeconomic stability; new foreign investment was targeted through a steady pipeline of major projects and investments in government bonds.

These new measures led to an average annual growth of 7.5% over the four years, 2010 to 2013 and thus, the vicious cycle was converted into a new virtuous cycle, with inflation in single digits, shrinking debt to GDP ratios, and low interest rates. In 2009, Sri Lanka also faced another major challenge: the threat to its external account. The effect of Global Financial Crisis had impacted Sri Lanka, and large scale overseas bond redemptions had resulted. It was soon clear that some external support was required to stave off this challenge, and Sri Lanka decided to avail itself of the IMF facilities via a stand-by arrangement (SBA). The key  BIS central bankers’ speeches  1  objective of the SBA was for Sri Lanka to build up its foreign reserves to more comfortable levels to meet the uncertain global environment. The issue however was that the IMF, in its conventional wisdom, was insisting that Sri Lanka sharply depreciates its currency in order to curb its trade and current account deficits which, in their view, would help the country to build up reserves. The IMF also held the view that Sri Lanka must significantly increase government revenue by raising taxes. In theory and normal circumstances, IMF’s suggestions may have had merit. However, the Sri Lankan authorities who had a deep practical understanding of the socio-economic challenges facing Sri Lanka, held a different view.
Pakorn Malakul na Ayudhya: Central bank independence - what does it mean? The Bank of Thailand’s experience Remarks by Mr Pakorn Malakul na Ayudhya, Deputy Governor of the Bank of Thailand, on the occasion of The Inauguration of the Monetary Policy Committee, Bank of Ghana, Accra, 10 September 2002. *  *  *  Mr. Chairman, Governors, Members of the MPC, Distinguished guests, Ladies and Gentlemen, I consider it a great honour to be invited by the Bank of Ghana to take part in this very important event, the inauguration of the MPC. I would also like to thank Governor Paul Acquah and the Bank of Ghana for the warm hospitality extended to me and my staffs. It has certainly made our first visit to Ghana a very memorable one. Before I begin my talk on the assigned topic of Central Bank Independence: What Does It Mean? The Bank of Thailand's Experience, I would like to offer my congratulations. The first one is for Governor Paul Acquah and the Bank of Ghana for the successful launching of the MPC. The ceremony which took place yesterday was very impressive. The message came across very clearly that the Government places great importance upon the Bank of Ghana's independence and that much reliance is placed on the MPC for its successful conduct of monetary policy so that price stability and consequently sustainable growth can be achieved. The exact words used by your Finance Minister were essential pillar for macroeconomic stability.

My central scenario for the short term is a scenario where after a couple of months inflation will recede in the euro area and come back “below but close to 2%” in accordance with our definition of price stability. It is not unusual to witness commodity and consumer prices acceleration in the initial phase of an economic slowdown, as there is some inertia in employment and commodity prices dynamics with respect to activity. This has happened previously at the end of the 1990s, with a subsequent moderation in inflation. In the short run, recent inflationary shocks are likely to maintain inflation at a high level for most of 2008 as we may expect a significant degree of persistence in energy, industrial commodity or some food price increases (such as meat). In the euro area, HICP inflation has reached 3.3% in February. It might remain well above 2% in the coming months but ebbs later this year according to ECB staff forecasts. These projections rely on a scenario of global economic slowdown and moderation in commodity prices, which would contain pressures on capacity utilisation in the labour and product markets. They are all the more credible than we do not see at this juncture a major diffusion of price increases: less than 30% of the consumption basket (energy and food) are responsible for more than 60% of the overall increase. There are nevertheless some upside risks to these projections. First, further shocks on food and commodity prices cannot be ruled out.
That goal is central to the PRA’s general objective to promote the safety and soundness of the firms we supervise, as well as to the Bank’s financial stability objective of ensuring that the UK financial system can serve UK households and businesses in bad times as well as good. I want to use my speech today to set out my thinking on where our resolution framework has got to as we move closer to our 2022 commitment, and convey three key messages relating to that commitment. First, that progress towards the commitment reflects a regime which is built on robust and coherent principles: credibility, transparency, flexibility and proportionality. Second, how we apply these principles to the operationalisation of our regime – specifically, through the Resolvability Assessment Framework which is key to ensuring our resolvability regime is ‘fit and ready’ – fit for purpose and ready for use: and where there have been some important developments this week which I want to update you on. And third, that resolvability is not a binary concept; even once the 2022 commitment is fulfilled the work doesn’t stop. 2022 will see us pass the important milestone for the resolvability of major banks – but the work to maintain and improve the resolvability of firms within the UK resolution regime will continue. Credibility and transparency in the making There are many previous milestones in the history of UK banks’ resolvability, or lack of it, very few of them positive.

In one policy, it demonstrates our transparent, flexible, proportionate, and credible approach to resolvability. Making the UK resolution regime more transparent and better understood is at the heart of the aims of the RAF. Disclosures made by firms and the public statements with views on individual firms made by the Bank are a major component of the RAF – and my Dear CEO letter reinforces our existing expectations. Each of the major UK banks will assess their preparations for resolution, submit a report of their assessment and publish a summary of their report every two years. The Bank will also make its own public statement on the resolvability of these banks. Combined with our policy statements and our annual publication of loss absorbency requirements, this aims to help investors better understand the progress firms are making to become more resolvable, and what would happen in a resolution. This will ultimately help the UK banking system function more efficiently by allowing the public and investors to hold banks more effectively to account, with the confidence that any failure, should it occur, be more orderly. The RAF is an inherently flexible framework. The focus is on banks and building societies to do what may not come naturally – confront the difficult and complex judgements required in a resolution in advance and plan for them. Identifying and having flexible capabilities that give the authorities options to respond to a range of failure scenarios, rather than asking them to address a specific one, is important.