samchain/econo-pairs-v1 huggingface dataset:
The sector contributes about 12 percent of GDP, but more importantly, it represents about a fifth of our total employment, so we got a very hard hit in terms of income and employment to our labor force. The slow recovery of the tourism sector explains why our recovery will be slow going forward and probably slower than other countries in the region. While things were difficult back then, we saw a GDP contraction of over 6 percent in the first year that Covid-19 hit Thailand, and we grew by only 1.6 percent last year, but things could have been much worse in terms of the Covid-19 impact on the economy. Without the large policy response by the government, both on the fiscal and monetary side, things could have been much worse. We estimated that the economy could easily contract up to 9 percent instead of 6 percent without the fiscal stimulus in 2020. Last year, instead of growing at 1.6 percent, we would have seen a contraction instead of growth. We got hit very hard, but it is helpful to keep in perspective that things could have been much worse, but they came out better than they otherwise would have. We are where we are today was due to the substantial, and for the most part, largely effective policy response. I spoke a bit about the response on the fiscal side at the Ministry of Finance in stimulating the economy.

One thing I would like to close on is to talk a bit more broadly about issues related to Thailand beyond the financial sector. Firstly, I would like to start by saying thank you. Thank you in the sense that policymakers in Thailand recognize that we are where we are today, largely thanks to our friends from Japan. Our success in building an export-driven economy is owing to the large inflow of Japanese foreign direct investment that came to us after the Plaza Accord. Over the years, such investment has contributed significantly and substantially to the improved living standards in Thailand today, and again, thank you for that. I think our partnership is something that we both benefited from as Thailand benefits from the partnership with Japan, and Japanese firms have also benefited from being here in Thailand. We recognize that things are different now, and the reasons that brought you here to Thailand back then are probably not the same reasons that will bring in new investment today. Therefore, we need to look a bit beyond and think about a new investment thesis for Thailand. Back then, we were a rapidly growing economy in the years before the Asian financial crisis, growing at a rate close to 10 percent a year. People were talking about Thailand becoming a newly industrialized economy at that time. That story is very different now, but I do think Thailand is still a good place to do business.
The decline in credit to the private sector was accompanied by an increasing reluctance on the part of the euro area private sector to invest in financial assets; it severely hampered banks’ access to financing via the secured money market, due to an increase in haircuts and a deterioration of the available collateral. While market-based funding was becoming ever scarcer for banks in the euro area (as investors were growing increasingly nervous about the escalation of the sovereign crisis), banks were also facing regulatory and market pressures to strengthen their capital position. In short, back in December 2011, even though there was significant cross-country heterogeneity, the overall picture was rather gloomy. There were clear signs that supply-side factors were making banks less willing to lend to the non-financial private sector, and that banks may have entered a vicious circle which could compromise their ability to supply credit to the economy, both in the short and the long run. The additional negative impact on banks’ balance sheets of rapidly declining sovereign bond prices made the situation even worse. Banks typically have three ways to adjust to pressures on their funding and capital positions: they can sell assets, raise capital or reduce lending. Let’s look at each of these options in turn. In an environment of extreme uncertainty and high risk aversion, risky assets can only be disposed of at very low prices, possibly considerably below their book value.

It can and should take on an international dimension. Through facilitating the inward investment of foreign savings, the source of funding for much needed domestic investments can be tremendously enlarged. This would also enhance the overall efficiency in the international allocation of funds, to economies that can provide a higher return commensurate with the risks involved. An economy with capital controls should therefore plan for the eventual internationalisation of the bond market, even though the associated financial liberalisation process can be quite a risky one. But risks are to be managed and not avoided, and the benefits of open markets far outweigh the costs in terms of financial instability. I can confirm this, even with the unpleasant experience of the financial turmoil of 1998. Free and open markets impose a valuable discipline on policy makers that is to be welcomed in the long-term interest of the people they serve. Fifth, and turning to the actual bond market development issues, there is a need to adopt a comprehensive approach. We should address the demand and supply sides, the environment in which they interact to discover the prices for the debt instruments, including market making arrangements and the determination of benchmarks, and the market infrastructure, including payment, clearing and settlement systems. Focusing on these issues individually, and this is the sixth point, there is usually strong latent demand for debt instruments, particularly in economies with a high savings rate.
Of course, the Board has to be duly informed, and some of their members should have the necessary expertise to assess these risks. Needless to say, it is not only banks that need to “catch up”; we are also working at the Banco de España to adapt to this reality. I believe it is fair to acknowledge that this is all very new for everyone in the banking sector, including certainly Central Banks and Supervisors. What are we doing? Firstly, we have created an internal function entrusted with assessing the impact we as an institution have on the environment. The aim is to identify and coordinate the necessary measures to reduce that impact. Secondly, as a macroprudential supervisor, we clearly need to be able to assess and quantify the risks that the transition towards a more sustainable economy poses, both for individual banks and the financial sector as a whole. We must be able to perform stress tests for the financial system overall and define scenarios to be applied by banks individually. 4/5  Accordingly, we are designing internal governance structures and methodologies, actively participating in the cultural shift in the SSM supervisory model. Naturally, we are also evaluating the information and data requirements needed to address this challenge. Thirdly, as investors in the debt markets, we are working to include environmental risk assessment in our credit analysis. A fourth key element is our responsibility as supervisors. We must foster the implementation of these changes in the financial sector. We cannot wait for change to occur.

It is duly assigning additional resources and focusing on the matter more closely. Far from being a passing fad, improving corporate governance should receive priority attention from banks. Not only because of the factors habitually cited, but also because the new environment of transparency associated with IAS and Basel II will simultaneously involve greater market scrutiny, a greater capacity for action by bank managers and, in sum, heightened responsibility for them. My final comments relate to the internal changes at the Banco de España. The year 2002 has also been important in this respect in view of the reforms initiated, which will continue in the coming years. Last year the Banco de España successfully met the logistical challenge of substituting euro for pesetas. While the intensity of this process has diminished, it has nevertheless continued this year. I should like to reiterate my gratitude to the staff at the Banco de España for their efforts and dedication, which have been on a par with the historic significance of this event. 8  BIS Review 31/2003  Likewise, last year saw the start of an ambitious plan to rationalise our network of branches, located in each and every Spanish provincial capital. The restructuring involves acknowledging what is a fact: namely, that many of the services provided by the branches do not -owing mainly to new technologiesrequire a physical presence. And those requiring physical presence can be more efficiently organised through a smaller group of better-equipped logistical centres.
Public sector net lending in Sweden, the euro area and the United States Per cent of GDP 4  4  2  2  0  0  -2  -2  -4  -4  -6  -6  -8  -8  -10  -10  UK Euro area  -12  -12  USA Sweden  -14  -14 99  00  01  02  03  04  05  06  07  08  09  10  11  Source: IMF WEO, October 2012. It is important in this context to remember that the primary aim of the fiscal-policy framework that we have in Sweden is to make public finances sustainable in the long term. Prior to the financial crisis, the greatest threat to the long-term sustainability of public finances appeared to be an ageing population.7 An ageing population increases the demands on the public sector at the same time as the extent to which the sector can be funded by taxes on employment income decreases. However, the experience gained in countries where the need to rescue systemicallyimportant banks has exerted great pressure on public finances has given us a somewhat different perspective. In a country like Sweden, which has a large banking system in relation to the size of the economy, a banking crisis could quickly have a devastating effect on public finances. Given this, the risk of a financial crisis is therefore perhaps the greatest potential risk to the long-term sustainability of public finances.

Employment developments were also influenced by substantial labour inflows from central Europe following EU enlargement in 2004. Strong growth in labour productivity is not due to any substantial increase in the real capital behind each hour worked, but is related to a considerably more efficient utilisation of labour and capital. In addition, growth in labour productivity reflected a marked fall in sickness absence in 2004. The national accounts show more moderate productivity growth in recent quarters. However, since the figures are provisional and can often be revised considerably, we should be cautious about reaching any conclusions. The strong rate of growth has only to a limited extent fed through to a higher rise in prices for consumer goods and services. The rise in prices has none the less accelerated in recent months. In August, the year-on-year rise in the CPI-ATE was 1.8 per cent. Underlying inflation has long been projected to be between 1½ and 2 per cent in the second half of this year. The year-on-year rise in the total consumer price index (CPI) has been just under ½ per cent in recent months. This is because electricity prices have been substantially lower this year than in 2006, when unusually high electricity prices due to low precipitation levels pushed up the year-on-year rise in the CPI close to the inflation target. In recent months, electricity prices have been at their lowest level since 2002.
Proportion of open unemployed members in different unemployment benefit funds Per cent of members  Hotel and restaurant workers  Building workers  Commercial employees  Industrial workers  Transport workers  SEKO  HTF  SIF  M unicipal workers  Local government officers  Graduates  Teachers  2002 2003  Government officers  10 9 8 7 6 5 4 3 2 1 0  10 9 8 7 6 5 4 3 2 1 0  Note. HTF = The Salaried Employees’ Union. SIF = The Swedish Union of Clerical and Technical Employees in Industry. SEKO = The Union of Service and Communication Employees. The building workers’ funds consist of The Building Union’s and the Swedish Painters’ Union’s unemployment benefit funds. The industrial workers’ funds consist of the unemployment benefit funds of the Swedish Metal Workers’ Union, the Swedish Forest and Wood Trade Union, the Swedish Food Workers’ Union, the Swedish Paper Workers’ Union, the Swedish Graphic Workers’ Union and the Industrial Workers’ Union. The number of members in the unemployment benefit funds included in the chart comprised in 2003 around 88 per cent of the total number of unemployment benefit fund members in Sweden. Source: National Labour Market Board. 8  BIS Review 59/2004  3.

the component that is not due to fluctuations in the demand for goods and services in the economy. And this requires completely different measures than those of monetary policy. In particular, it is a question of implementing measures that influence the functioning of the labour market. One indication that the employment problems we are seeing today are largely structural is the big differences in unemployment that exist between different regions and different occupational categories. (Chart 2.) Unemployment figures are twice as high in some regions as in others, and the percentage of people receiving benefit from their unemployment fund is twice as high in some occupational groups as in others. The fact that these differences remain over long periods, even when there is a shortage of skilled labour, suggests that the labour market doesn’t function as well as might be desired. The problems in the Swedish labour market are also underlined by the fact that open unemployment barely came down to 4 per cent when economic activity was at its strongest a couple of years ago. Target deviations and employment How the Riksbank works So, even though monetary policy cannot be expected to have any tangible impact on employment in the long term, short-term effects can arise. This is because a policy aimed at attaining the inflation target may entail changes in interest rates, which temporarily affect demand so that employment rises or falls.
For the moment, however, I shall simply reiterate that one of the aspects highlighted by the current financial crisis is how important it is for central banks to have the appropriate instruments with which to manage their liquidity provision policies with sufficient flexibility. 2  BIS Review 122/2008  And all the more so in the presence of turmoil which, as at present, is profoundly altering the operation of the channels through which liquid resources are normally re-distributed among the various banks that apply for them. In this respect, it is widely acknowledged that the Eurosystem’s monetary policy operational framework is allowing euro area banks' liquidity requirements to be met, thereby preventing the emergence of additional pressures that might exacerbate the situation on financial markets. In any event, returning to the most important macroeconomic developments that will influence the performance of the Spanish economy, it is clear that financial conditions in the euro area, as in the rest of the world, have tightened notably. Such tightening has compounded the adverse effects of the oil and commodities shocks on agents' real incomes and output capacity. The latest data, for the second quarter of the current year, show how the growth rate in the euro area has weakened to 1.4%, standing below potential. The latest ECB projections pointed to increases of between 1.1% and 1.7% this year, and between 0.6% and 1.8% in 2009, subject to considerable uncertainty and to downside risks that have increased in recent weeks.

Singapore will do well to prepare for a future where CBAMs cover a significant part of world trade. CBAMs are likely to be a reality, especially if several major economies agree on a global minimum carbon price. The EU has already proposed a CBAM. A well-designed CBAM that does not raise barriers to trade, is compliant with W TO rules, and gives some relief to the poorest countries who are also small emitters, is not a bad outcome. CLEANER ENERGY The second imperative for the net zero transition is a decisive shift towards cleaner energy. According to the IPCC, to have a good chance of limiting global warming to 1.5 degrees Celsius, global consumption of coal, oil, and gas must start declining immediately and steeply. This is unlikely to happen. The growth in renewable energy has been spectacular but not sufficient to meet growing energy demand. Despite a 50-fold increase in the supply of new renewable energy in the last two decades, fossil fuels continue to account for more than 80% of global primary energy consumption. One of the reasons is that about 750 million people in the world still lack access to electricity. For them, the priority is having the lights on at an affordable price, not how much carbon dioxide is emitted in its production. Most of the people living in sub-Saharan Africa in 2020 consume no more energy per capita than the people of France and Germany did in 1860.
Thanks to productive collective action by the private sector in dialogue with U.S. and international authorities, an initial set of 18 GSIBs and other large dealer banks have adhered to the 2014 International Swaps and Derivatives Association (ISDA) resolution stay protocol covering OTC bilateral derivatives in connection with last year’s G-20 summit. Under the protocol, counterparties agreed to the cross-border enforceability of existing statutory stays on resolution-related early termination and other default rights in OTC bilateral derivatives contracts. With support from the U.S. and other key jurisdictions, the FSB subsequently called on all GSIBs and other firms with significant derivatives exposures to adhere to the protocol by the end of 2015. In addition, the FSB requested that such contractual terms be incorporated into other financial contracts with resolution-related termination features−such as contracts relating to repo and securities lending arrangements. This goal has been accomplished this past week, and represents another positive milestone in improving cross-border resolvability. Importantly, both the proposed U.S. long-term debt requirement and provisions in the resolution stay protocol support resolution under both Title I and Title II of the Dodd-Frank Act. While we should recognize the extent of progress that has been made to set the basic foundations for the cross-border resolution of a GSIB, it is equally important in my view to recognize the significant challenges that still remain, and the important work that still needs to be carried out by both firms and authorities.

And from the end of March this year, the majority of new GBP Libor business should have ceased, further shifting demand to those increasingly deep and liquid risk-free rate markets. New sterling floating rate note issuance has almost exclusively referenced SONIA for some time. In the sterling swap market, the share of SONIA-referencing swaps has regularly dominated the Libor equivalent for 10 months now[1], with continued progress since the ‘SONIA-first’ interdealer quoting convention switch last year. [2] Indeed, the dealer to dealer market has completed a transformation in risk traded with SONIA in excess of 70% vs. Libor, with progress across all tenors. If we remove the direct market element and focus on pure inter dealer market, we estimate this is now in excess of 90% SONIA. [3] These positive developments in linear derivatives (e.g. interest rate swaps) have filtered through into more complex derivative markets, with SONIA swaptions, caps and floors widely available and infrastructure being put in place to support these products. Today is a further landmark, with another ‘SONIA first’ initiative as the interdealer market looks to shift liquidity in these more complex non-linear products from Libor to SONIA ahead of the upcoming end-Q2 milestone to cease new Libor linked issuance. [4] This is not to say there is an outright ban on trading Libor in nonlinear sterling markets after this milestone.
This is reflected in the fact that the Danish Central Bank invariably alters its interest rates in the wake of announcements of changes in the European Central Bank (ECB) policy rate. Sweden and the UK have opted for inflation targeting as their monetary policy framework, which therefore does not have the objective of keeping these countries’ currencies stable against the Euro. European Central Bank The Maastricht Treaty stipulates monetary arrangements in the EMU. The EU countries created a framework for the ECB’s activities which was to some extent modelled on the Central Bank of Germany but differed in many ways from the arrangements in others. Various conditions were set which EU members had to fulfil in order to be granted EMU membership. On the one hand these related to major components of economic developments, such as inflation, fiscal deficit, government debt and interest rates. On the other hand they addressed the framework that the Maastricht Treaty lays down for monetary policy implementation in the EMU. This policy was consistent with growing support for the view that it was natural to set a simple target for central banks – i.e. promoting price stability – and to increase their independence from the political leadership in pursuing their main objectives, and to strengthen their financial independence. Another emphasis was that, at the same time as the central banks’ independence was strengthened, stricter demands would need to be made of them regarding transparency in their activities and actions, and regarding accountability towards the government and general public.

Get creative It’s easy to say, in essence, “Don’t miss the forest for the trees.” Let’s acknowledge that the challenges you encounter in the first line of defense are a veritable thicket. To manage effectively the risks that your firms face requires intellectual agility and creativity. For now, I want to touch on a few considerations: diversity, choice architecture (especially incentives), and moral reasoning. These inputs can help you apply the three lines of defense model more effectively, especially in the face of rapid technological innovation. Diversity If you want to think nimbly, embrace diversity: the way we think, our backgrounds and areas of expertise, our experiences—including, but certainly not limited to, the ways that people treat us because of where we were born, our race, gender, pedigree, sexual orientation—and even our values. Diversity can help address the problem of silos that I described earlier. The problem with silos is not specialization, but blind spots. At the New York Fed, I don’t want economists making legal judgments, or lawyers performing economic analyses. But I very much want lawyers and economists to provide insights to each other based on their specialties. More generally, inviting outside views helps avoid common, human biases. 4 “Groupthink” is one well-documented bias. Another is the “endowment effect”—placing greater value on what one already has versus what one does not. What links these phenomena is an excessive preference for the status quo.