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Press briefing on new monetary and financial statistics




Introductory remarks by Jürgen Stark, Member of the Executive Board of the ECB, for the presentation of four new/enhanced datasets on monetary and financial statistics

Ladies and Gentlemen,
I would like to welcome you to this press briefing on monetary and financial statistics, which is dedicated to the presentation of two new and two extended sets of statistics. We are in an environment of continuous financial innovations and changes in the financial landscape. The ECB is determined to keep the monetary and financial statistics fit for use in that changing environment.Press briefing on new monetary and financial statistics 3
The extended sets of statistics improve the existing balance sheet and interest rate reporting by “monetary financial institutions”, which means primarily banks representing the money-issuing sector. These datasets are at the centre of our monetary analysis.
The new statistics refer to detailed quarterly balance sheet information from financial vehicle corporations engaged in securitisation, often called securitisation vehicles, and from insurance corporations and pension funds. The new datasets close some gaps in the harmonised balance sheet reporting of the growing sector of euro area financial intermediaries outside the money issuing sector.
These improvements and new developments are the result of very significant efforts undertaken by statisticians at the ECB and in the national central banks of the Eurosystem. The work was carried out in close collaboration with policy-makers, analysts and the financial industry. In my view, this process brought about a proper balance between the benefits of the data for monetary policy and the burden of collecting it from respondents. As policy-makers, we need timely data, and the data must be harmonised across country borders, so that it can be readily aggregated at the euro area level.
The new statistics fit in well with the much used term “lessons learned from the financial crisis”. At the same time, the new developments are the outcome of a process that has been pursued pro-actively and with a longer-term view, rather than re-actively and with a focus on the recent crisis. Indeed, the development process started before the financial turmoil that escalated into a genuine crisis. The process involved the euro area as well as other EU countries. It was motivated by the need to fill gaps caused by the ongoing financial innovation and by structural changes within financial products and the financial sector.
The analysis forming the basis for monetary policy decisions depends crucially on the quality and breadth of coverage of the available statistics. Not least the frequently cited deficiencies of the Greek statistical system (with respect to both methodological and institutional aspects) have reminded us of the importance of reliable, accurate and timely statistics for the functioning and credibility of our whole system.
I am pleased that the new developments in monetary and financial statistics will contribute, in particular, to the research agenda of the ECB’s Governing Council for enhancing monetary analysis. As you know, the ECB attaches a high importance to this. Last year, we published a comprehensive scientific compendium on the enhancement of monetary analysis, and I presented these results at a press briefing.[1]
Allow me to mention three key examples to illustrate the improvements the new data bring.
First, the new data will shed more light into the relatively opaque shadow banking. A major aspect of financial innovation is linked to the securitisation of financial assets by, in particular, the banking sector, and to the financial vehicles created outside the banking sector for this purpose. The lack of good statistical information on securitisation gained increasing relevance over the last decade and became particularly obvious in the financial crisis.
In order to provide for a consistent monitoring of securitisation, the ECB has now introduced new quarterly balance sheet statistics that cover “financial vehicle corporations engaged in securitisation”. The aggregated total assets of such special-purpose vehicles in the euro area stood at €2.3 trillion in the first quarter of 2011. This represents about one tenth of the total assets of all non-bank financial intermediaries. And together with the reporting of investment funds established in 2009, which also includes hedge funds, the ECB statistics now cover a large part of the shadow banking system within the euro area.
In addition to balance sheet reporting for securitisation vehicles, a consistent monthly reporting by Monetary and Financial Institutions (MFIs) has also been developed. This makes it possible to assess how the securitisation of loans granted by MFIs can actually have an impact on the growth rates of MFI lending to households and non-financial corporations. That is a step forward for our monetary analysis. To give you a concrete example: taking into account the impact of securitisation, the annual growth of MFI loans to non-financial corporations turned positive already in October 2010, some months ahead of what had been shown by the figures available in the previous version of the statistics.
Second, we now have detailed quarterly data on the balance sheet of insurance corporations and pension funds. Currently, their assets account for about one third of all assets of non-bank financial intermediaries within the euro area. That is of course already a sizeable figure, but in view of our ageing societies, those institutions can be expected to be of further increasing significance for the economy and the entire financial system. Already today, insurance and pension fund technical reserves, which represent the claims that households have vis-à-vis life insurance companies and pension plans (other than social insurance schemes), account for around 30% of households’ total financial wealth. These new data therefore are important not only for the ECB, but will be highly relevant for many other uses.
Furthermore, as institutional investors with a significant portfolio in securities, insurance corporations and pension funds will be monitored for monetary policy and financial stability purposes. In view of the desirable further development of these statistics, we have started a close cooperation with the European Insurance and Occupational Pensions Authority (EIOPA). This should help to further improve the statistics, while minimising the costs for the industry through the compilation of aggregated data based on supervisory returns.
Third, the improved interest rate statistics allow a deeper analysis of the transmission channels of monetary policy. One specific improvement sheds more light on how the external financing conditions of small and medium-sized non-financial enterprises compare with those of large corporations. This is particularly relevant for the euro area, given its rather more bank-based funding system as compared with the more market-based funding system in the United States.
For example, figures on interest rates for new loans to non-financial corporations show that interest rates on new loans of up to €250,000 have indeed been far higher than interest rates on loans of over €1 million. On average, they were more than 140 basis points higher for small and medium-sized enterprises and 90 basis points higher for sole proprietors. This is important information which enhances our analysis of the financing conditions as these rates serve as a proxy for loans to small and medium-sized enterprises, as well as to “sole proprietors” (e.g. doctors or architects).
Overall, I am pleased to see that these new developments and the new datasets in the euro area monetary and financial statistics keep them fit for policy and analysis purposes. Actually, we are coping well with the current challenges. In particular, not least due to the specific role we assign to money in our monetary policy strategy, I see a self-reinforcing virtuous circle in action. Enhancements in monetary and financial statistics make it possible to keep track of financial innovation, thereby facilitating an enhanced monetary analysis and thus ensuring an effective policy decision-making process. The enhanced monetary analysis and its use in the policy-making process, in turn, identify necessary improvements to the statistics, thereby closing the circle.
Nevertheless, there is no reason to be complacent. Important innovations in the financial sector will continue to occur. We thus need to invest in flexible tools and methods so as to further adapt our statistics and analysis to changes both in the financial sector and in its interaction with the real economy. In this respect, a better international standardisation in the reporting and registration of individual financial products, transactions and financial institutions will be crucial. The ECB is closely involved in discussions at the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
Worldwide convergence and standardisation will allow a swift and flexible adaptation of monetary and financial statistics to financial innovation without creating an unnecessary reporting burden. We need to express data requirements in a more business-friendly way and we should be open to automation (e.g. based on International Financial Reporting Standards (IFRS) or supervisory reports). Another potential for improvement lies in the re-use of micro-data, such as credit registers, for statistical purposes. The processes initiated within the framework of the G20 initiatives on data gaps might also provide an adequate forum for the very important and complex work ahead of us.
Thank you very much for your attention.
Now, Aurel Schubert, the ECB’s Director General Statistics, will present more details on the four datasets and stand ready to answer your questions.
[1] See Papademos, L.D. and Stark, J. (eds.), Enhancing Monetary Analysis, ECB, Frankfurt am Main, 2010.

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U.S. inauguration turns poet Amanda Gorman into best seller



U.S. inauguration turns poet Amanda Gorman into best seller 4

WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.

Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped’s sales list.

“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.

Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.

While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.

“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”

Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.

“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.

“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”

The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.

“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.

A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.

She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.

Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.

“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.

Gorman’s books are both due out in September.

Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.

(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit

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Why brands harnessing the power of digital are winning in this evolving business landscape



Why brands harnessing the power of digital are winning in this evolving business landscape 5

By Justin Pike, Founder and Chairman, MYPINPAD

Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.

As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.

As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?

Digital is an essential survival tool, and even more so in a COVID world

No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.

In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.

Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.

The challenges that rapid digital transformation brings to businesses

Justin Pike

Justin Pike

Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.

Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.

The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.

As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.

But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.

A digital world post-COVID

Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.

There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.

Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.

Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.

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Brexit responsible for food supply problems in Northern Ireland, Ireland says



Brexit responsible for food supply problems in Northern Ireland, Ireland says 6

LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.

British ministers have sought to play down the disruption of Brexit in recent days.

“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.

The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.

(Reporting by Guy Faulconbridge; Editing by Tom Hogue)

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