samchain/econo-pairs-v1 huggingface dataset:
The baht has been depreciating since late April, reducing the year-to-date appreciation against the dollar to about 3 percent. The correction is also evidence that under flexible exchange rate regime, unwarranted overshooting inevitably will be corrected by market forces. The fact is that although the exchange rate is not the BOT’s main policy tool, or an intermediate policy target, it is an integral part of our macroeconomic analysis and policy deliberation. Beyond aggregate statistics, it is also recognized that sharp exchange rate volatility can have significant impact on small businesses with less capacity to adjust. Thus, while exchange rate is allowed to play an active automatic stabilizing role under current framework, the MPC constantly monitors the impact of baht movements on the overall economy. To supplement this baseline analysis, the BOT staff also conducts projections under different degrees of baht appreciation. In a recent joint forecast exercise with the Ministry of Finance and the Office of the National Economic and Social Development Board (NESDB), the BOT’s estimate of growth impact of baht appreciation in fact proved to be the largest among the three, testifying to our conservatism. In broad terms, however, the three agencies’ analyses agree that baht appreciation alone should not derail the underlying momentum of the economy. 2  BIS central bankers’ speeches  The MPC continues to be prudent, and vigilant about the potential adverse impact of extreme exchange rate volatility.

The committee recognizes that, in the current environment where growth prospects differ wildly across regions and monetary policy in advanced economies remains ultra-loose, pressure from capital inflows may persist in the medium term. All available policy options are therefore open to considerations. Substantial preparation work has been ongoing to ensure that the right measures can be readily implemented should the situation warrant. Investors seeking long-term presence in Thailand should be reassured that productive capital inflows are still highly valued, and any introduction of measures will be carefully designed to minimize unintended consequences. After all, the goals of these measures are to preserve the financial and economic integrity, the very reason that attracts investors to Thailand in the first place. Structural Impediments Ladies and gentlemen, Macroeconomic stabilization and demand management policy can only get us so far. The ultimate determinants of long-term growth are tied to the supply side of the economy, namely the deployment of effective capital and labour inputs. It is a pity that the supply-side issues are often overlooked in policy discussion, and action is often limited to structural ‘reform’ that comes too late. By addressing the structural issues early and preemptively, the long-run growth benefits are likely to be more substantial. So let me venture out of my familiar territory, and devote the rest of my talk to discuss one key structural issue facing the Thai economy – the labour shortage. Unemployment is persistently low in Thailand, and is not very sensitive to the business cycles.
In autumn 1997 the Riksbank accordingly presented its first more cohesive public analysis of financial stability. The new report was intended to signal the importance the Riksbank attached to work on stability and it also helped to focus and develop the internal efforts. The experience of work on the Inflation Report had been encouraging, so it seemed natural to build up the work on and communication about issues to do with stability in the same way. By launching the Financial Stability Report or, as it was called initially, the Financial Market Report, the Riksbank was the first central bank to issue a public account of its appraisal of financial system stability. Its example has been followed to date by about thirty other countries. Recurrent financial crises have made it clear that there will always be problems which the authorities are obliged to address in some way and it may therefore be of some assistance to have a clear, structured presentation of the approach to financial stability. This has led the International Monetary Fund, for example, to pay growing attention to these issues. Since 1999 the IMF and the World Bank are engaged in joint evaluations of national financial systems in what is called a Financial Sector Assessment Program. Matters to do with stability are also on the agenda almost every time I meet my colleagues from other countries. BIS Review 53/2003  1  Principles for financial system oversight First I should perhaps reiterate what we mean by the financial system.

A clear-cut arrangement for the management of crises can be difficult to construct in advance. It is hard to tell at present how these problems should be resolved. In principle there are two conceivable approaches. One involves continued cooperation on agreements, joint principles and regulatory frameworks. The other is to have more supranational management. It is probably a combination of the two that will be needed. The important thing today, however, is that a debate on these complex issues gets under way before we find ourselves in a situation where it is necessary instead to deal with them in an emergency. More advanced risk management Another factor that will probably affect future work on the supervision and oversight of stability is the banks’ increased possibilities of managing risks. The assessment of risks is one of banking’s traditional functions. Things have changed markedly in this respect since the mid 1990s. Technical progress and new financial theories have led to a refinement of the methods for and possibilities of measuring credit risks. This has been accompanied by facilities for trading risks with additional financial instruments in increasingly international markets. All this has enhanced the ability of the banks to manage risks. Banks in general - not just the largest international groups - have invested in new systems for risk management. The trend, which began earlier, has been accelerated by the new capital adequacy rules, Basel II, that have just been produced.
The economy needed a new nominal anchor in order to return to a disinflation path. Inflation targeting was chosen as “the best of all bad” alternatives at the time. Such a sudden switch from a fixed exchange rate system to inflation targeting required a radical and fast change in the central bank’s mentality. This was perhaps the biggest challenge that the CNB had to face. Over the past five years it has involved much work on improving our forecasting tools, leading to substantial development in our internal analytical processes. At the beginning of 2002, the CNB settled on a new forecasting process. This integrates expert judgment and short-term analyses – which were the key pillars of the CNB’s forecasting tool-kit in the first years of inflation targeting – with a macroeconomic model that provides a consistent framework for the policy analysis. An important element of this step was a switch from a forecast with a fixed-interest-rate assumption to an unconditional forecast that includes a reaction function of the central bank. The initially established quarterly projection model was a small-scale model belonging to the second generation of such models. It was thus relatively simple and arguably missed many important links in the economy. Nevertheless, it was already quite close to the state-of-theart among the inflation-targeting central banks around the world, and intense work has been in progress to build a higher-generation model. As a result from July 2008 the CNB’s forecast is based on latest generation general equilibrium model, which is fully based on micro specifications.

Zdeněk Tůma: Forecasting at the Czech National Bank Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Bank’s Forecasting Dinner, Prague, 18 February 2010. *  *  *  Ladies and gentlemen, dear colleagues, Over the last seven years I have had the privilege to welcome you here at the premises of the CNB and open the Forecasting Dinner with my thoughts on forecasting and related issues. Unsurprisingly tonight it won’t be any different. However, as it is almost certain that this is my last chance to speak to such distinguished audience still as the governor of the Czech National Bank, I would like to use this opportunity and discuss the forecasting process in the Czech National Bank from a little bit broader perspective. Those of you who were expecting exact inflation and GDP growth numbers I will kindly ask to refer to our latest Inflation Report that was published last Friday. As many of you well know it is generally recognised that central bank policies must be forward-looking. As emphasised by Milton Friedman, for example, there are long lags between monetary policy actions and their impact on the economy.
This is something that I and my colleagues will continue to work on explaining over the coming year. At the same time, it should be emphasised that this is a complex task and that it is therefore quite natural that there is a debate on monetary policy. Nor are we Executive Board members always unanimous on which interest rate decision will be the best one in a given situation, despite the fact that we are agreed on the objective of our monetary policy. Credibility demands openness and clarity In order to combine confidence in price stability in the longer term with flexible inflation targeting, it is important that we are open and clear when conducting our monetary policy. This is also a necessary condition for the legitimacy of the Riksbank’s objective, independence and actions. Important elements of this endeavour include publishing the analyses on which interest rate decisions are based in the form of Inflation Reports. In addition, after every monetary policy meeting a press release is published, which gives an account of the reasons behind the decision made. Moreover, when an Inflation Report is published or the repo rate is adjusted, the Riksbank holds a press conference. The Executive Board’s monetary policy discussions are reported in separate minutes of the monetary policy meetings, which are published around two weeks after each meeting. In this way, all those who wish can closely follow our reasoning and a basis for evaluating our assessments and decisions is created.

It is surprising that this issue is still outstanding, despite the fact that it is more than ten years since the bank crisis occurred and despite a draft bill being taken up for consultation five years ago. We play a central role in the monitoring work and concentrate our task to assessing how the financial system functions and what risks might arise. Our Financial Stability Report is very important here. The aim of this report is to identify potential risks and to influence market operators with good analyses. The third part of the stability work – crisis management – arises because the central government might need to take action to avoid a crisis that threatened the stability of the system. In order to manage a crisis, the central government must be able to assess what consequences will arise if an institution suffering problems should become bankrupt. If these consequences are judged to be serious, the central government must also be able to take measures to alleviate the effects. In extreme cases the central bank can act as “lender of last resort” (provide emergency liquidity assistance, ELA) if this is necessary to prevent the bank system from collapsing. A lot has happened with regard to stability work since 1997 and the work changes continuously as the world around us changes. For instance, the increase in the banks’ operations abroad means that foreign borrowers also need to be analysed to a greater extent. In addition, the stability work must follow the increasing integration of the financial markets.
The ESRB recommends that macroprudential responsibility should lie with one institution or one council and that this body should have control over suitable tools to attain its objectives. This is to establish a clear responsibility. Moreover, they recommend that the central banks should play a leading role in macroprudential policy and that the macroprudential supervisory body should have operational independence. It is now time for me to return to the Financial Crisis Committee’s proposal, and how this relates to the demands I consider should be made regarding a framework for macroprudential policy – demands that are also expressed in the ESRB’s recommendation. …but the Financial Crisis Committee’s proposal does not go very far… Two days ago, 23 January, the Financial Crisis Committee published its proposal as to how we should organise macroprudential policy in Sweden.13 In principle, the proposal is that the current council for cooperation on macroprudential policy between the Riksbank and Finansinspektionen is confirmed by law and supplemented with independent experts and an observer from the Ministry of Finance. The council shall work to promote greater knowledge of systemic risks and to develop macroprudential tools. Moreover, it shall analyse risks and discuss suitable measures. A secretariat for the council will be established at the Riksbank. However, the council will not have any powers of authority; its work will consist of exchanging information and discussion. Decisions on the application of macroprudential tools will lie with Finansinspektionen or the Riksbank, with both being given responsibility for macroprudential policy.

Unemployment in the EU and the euro area has reached historic levels, especially amongst the youth. Economic growth is weak and is mainly concentrated in central countries of the euro area. Our countries have been affected by this situation for objective reasons. Trade relations, movement of capital and workers, and the financial system are channels that pass these problems on to our economies. The form, size and extent of this impact have evolved over the past four years. At present, the situation is reflected in the decrease of domestic demand, decline of economic growth, reduction of available income, loss of confidence and deterioration of optimism; this is, in turn, reflected in higher savings. Consequently, these developments have placed the focus of economic policies towards economic activity and revitalisation of optimism in order to boost investments and consumption. On the other hand, maintaining financial stability becomes a necessity, creating thus a binomial of priorities that condition each other and require a simultaneous solution. The Albanian economy is increasingly facing the challenge of economic growth. Although the Albanian economy enjoys consolidated macroeconomic stability and sound financial foundations, aggregate demand has been weak during the first nine months of 2012. Both domestic and foreign demand suffer from high uncertainty, relatively tight lending standards, and limited space for discretionary and stimulating policies.
And we should expect that trend to continue for a number of reasons. First, and most obviously, what I have called the digitalisation of everyday life will continue. The growth of internet commerce or use of banking and payments apps, for example is forecast to grow/unlikely to stop. Second, there are further developments in train within existing payment systems, infrastructure and regulatory frameworks. These include Pay.UK’s development of the New Payments Architecture[5]. The Bank of England is well advanced in the build and implementation of a new central bank real time payment system (RTGS), the central rail of the current UK payments infrastructure. This renewal programme will increase resilience and access, and offer wider interoperability, improved user functionality and strengthened end-toend risk management of the UK’s High Value Payment System. As announced this morning, the government and regulators[6] will expand the Open Banking framework through making improvements on API performance, improving the provision of information sharing to third party providers and working towards additional functionalities, such as variable recurring payments. Third, and looking a little further into the future, over the last decade a set of newer technologies have emerged which may have the potential for a further transformation in payments. I am referring here to technologies that have been pioneered and refined in the crypto world, such as tokenisation, encryption, distribution, atomic settlement and smart contracts. These developments have been much hyped of course, and one could not say it was a certain bet that they will be as transformative as some have claimed.

The role of the Riksbank in this situation is, when necessary, to be able to provide liquidity assistance at short notice. With today’s Swedish banking system, it may also be necessary to provide such assistance in foreign currencies. We therefore asked the National Debt Office on two occasions to borrow foreign currency on our behalf to strengthen the currency reserve. All in all, we borrowed foreign currency to a value equivalent to SEK 200 billion. However, the foreign currency reserve has grown by SEK 325 billion, while the strengthening by means of the National Debt Office loans amounted to SEK 200 billion. The difference is partly due to the krona being weak during 2014 and the value of the foreign currency reserve, measured in krona, therefore having increased. The krona depreciation is also visible in the fact that the value of the foreign currency loans, which a year ago was SEK 193 billion, now amounts to SEK 228 billion. But the foreign currency reserve has also grown as a result of the return on the bonds in the foreign currency reserve being reinvested in new bonds instead of used to pay dividends to the government. As a result of this, the Riksbank has instead had to borrow from the banks that are its monetary policy counterparties to pay the dividends.
Our prudential work has also broadened to consider the impact of climate-related risks to the UK banking sector. We have now completed our initial engagement with the industry and are synthesising our findings. We expect to publish these later this year. From our prudential work, it is clear that consideration of the financial risks from climate change has significantly evolved over the last few years. There is a transition in thinking underway as climate is increasingly seen as a core strategic risk issue, rather than a matter solely for those managing firms’ ‘corporate responsibility’ strategies. As I will come to later, while this transition in thinking is encouraging, and the direction is correct, we need to make sure the speed of progress is sufficient. 2  Carney (2015), “Breaking the Tragedy of the Horizon – climate change and financial stability”, speech given at Lloyd’s of London, September 2015. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  3  The second element relates to the Bank’s financial stability objective. As discussed elsewhere , financial stability risks could arise from a late and sudden transition to a lower carbon economy. An abrupt transition could particularly impact carbon-intensive sectors. And as I said earlier, by the time climate change becomes a clear risk to financial stability, it may already be too late.

4  All speeches are available online at www.bankofengland.co.uk/speeches  4  And the TCFD is here to stay through the power of market uptake - with 250 major companies representing $ trillion of market capitalisation and financial institutions (banks, insurers and asset managers) responsible for $ of assets already having committed to make these disclosures and to talk to the users of information about how to sharpen and refine what disclosures are provided. Green Finance It’s perhaps less obvious that I, as a regulator and central banker, but wholly understandable that many of you here in the room, might be focused on the opportunities as well as the risks from climate change – and specifically the opportunity to ‘mainstream’ Green Finance. Unfortunately, measuring and tracking green financing comprehensively is difficult, partly due to the lack of criteria, indicators and a clear taxonomy, and so an absence of proper green labelling. But we can accurately measure the labelled green bond market. This has continued to develop rapidly: issuance reached over $ in 2017, and is forecast by some to pass $ this year overall. There have also been significant innovations in recent years. For example, the Agricultural Bank of China issued a green RMB bond and Bank of China issued the first ever green covered bond in 2016. We have also seen an increase in sovereign green bond issuance including from Poland, France and Nigeria. 4  But whilst welcome, this is not enough.
But then one must also take into account the fact that we have already counted on a significant slowdown in GDP growth, from around 4.4 per cent in 2011 to around 2.2 per cent in 2012, which is a much lower growth rate than the 3.8 per cent the government was anticipating for 2012 in its Spring Budget Bill. Economic developments in Sweden can also be affected by developments in the Swedish krona. History shows that the Swedish krona usually weakens in times of turbulence, which was clearly demonstrated during the financial crisis. One effect of the severe krona weakening in 2008–2009 was that the price of imported goods rose. In this way, inflation in Sweden was stabilised; otherwise there was a risk that it would have been too low. Even during the most acute phase of the crisis, CPIF inflation remained close to the target of 2 per cent. The krona has also weakened during the financial turbulence this summer, but so far the depreciation has been modest (see Figure 14). We will also take into account the consequences of this in our inflation forecasts. At the same time, the recent financial market turbulence, with falling share prices and interest rates, may suddenly be reversed. My experience is that one should be cautious in interpreting fresh events when one is shaping economic policy. Our repo rate decisions are aimed at the future.

The outlook for price stability is also favourable, although inflation is expected to rise somewhat in the near future. This is mainly a result of the recent strong increase in energy prices. The fact that regional discrepancies in price increases amounted to up to 2 percentage points does not, by any means, conflict with this assessment. This phenomenon, which is almost typical for large-sized monetary areas and is also to be found in the United States, can reasonably be explained. *** So far, I have limited myself to considering the internal aspects of EMU, but the introduction of the euro also has implications that extend far beyond the boundaries of the European Union. As the currency of an economic area with a population of nearly 300 million people and one sixth of the world’s gross domestic product (GDP), the euro is already the second most widely used currency in the world after the US dollar. Moreover, as investor confidence grows and as more EU Member States join the euro area, in particular following EU enlargement, the euro’s role as an international currency is destined to gain in importance. This is not to say that the Eurosystem will actively promote an international role for the euro, or that there is a policy of trying to supplant the US dollar as the world’s leading currency.