samchain/econo-pairs-v1 huggingface dataset:
The decisions on this and certain other matters have been deferred, however, and will now be taken by those countries that join the euro area from the start. TARGET is to be tested this summer and is to be fully ready for use by 1st January 1999. Summary and conclusions Most of the evidence today suggests that the economic and monetary union will move to Stage Three on 1st January 1999. For Sweden the question is whether we should join the euro area from the start, wait a while or try to remain outside for good. I hope that we will soon be having a more lively debate on this very important issue. The question of EMU has now been largely examined and discussed by the financial sector, the authorities and big businesses. The time has come to spread the debate and information to other groups in society. In time the krona will lose ground Even if Sweden decides to stay outside, the single currency will affect us. Our analyses, together with other organisations, of what might happen in that event point to a relatively sizeable use of euro, particularly in the securities market. In time, the use of euro may spread like water rings to other parts of society. The extent to which the euro is used will among other things depend on its strength relative to the krona but also on market assessments of the probability of Sweden joining.

The nub of the matter is that euro services will be called for whether or not we join the area. The use of euro will be directed by the market. Naturally the euro would not replace the BIS Review 41/1997  -3-  krona as Sweden's currency if we remained outside but we could probably expect a demand for euro from some agents. According to the Stockholm Stock Exchange, trading in the shares of major companies will gradually switch to euro because handling two currencies would be too costly. In time the money and bond market may be affected in that renewals and new issues are denominated in euro and account for a growing proportion of bond trading. According to the Securities Dealers Association, for instance, large companies and financial markets will also become less interested in kronor. It is too early to say how this transition from kronor to euro will occur in detail. Neither can we foresee how quickly it will proceed or how far. Probably it will be gradual and ultimately also affect private individuals. If the euro turns out to be stable and strong, households will also prefer to have pension savings, for example, in euro securities. Thus, this scenario points to a development where financial markets, companies and even individuals are active in euro, while the public sector continues to use kronor as declared, for instance, in the report from the Ministry of Finance on practical preparations for the euro.
At the end of June, the Bank announced a set of macroprudential actions designed to mitigate the risks from the housing market (not to control house prices per se). The Bank was able to construct policies which would operate directly on the flow of debt arising as a result of the housing market. It was clear that the FPC should take the lead in using these tools, but drawing on a common macroeconomic assessment (provided by the MPC’s forecast, with policy analysis coming jointly from across the Bank) and a micro assessment provided by the PRA. The FPC could then set the overall macroprudential parameters by a Recommendation, with the particular policies being implemented by supervisory processes consistent with the PRA’s objectives, and by the rules of the FCA. Indeed it is worth noting at this point that the coordination circle does include the FCA – the CEO of which sits on both the FPC and the PRA Board. One could extend the three-committee analysis in this lecture to four. That brings us to the question of the policy levers themselves. Is it the case that each committee has instruments which are both sufficiently effective and independent? The MPC clearly has strong influence over the price and quantity of money. Bank Rate is a basic price of money: the rate paid to commercial banks on their reserve holdings at the Bank of England.

Another angle to cooperation arises from the “long and variable lags” in the economy – and not just in the monetary transmission process. Each committee can face very long and uncertain lags between deciding to take a policy action and the maximal impact on its objective. That makes it unlikely that any one objective can be achieved precisely at all points in time. As well as predictable lags, policy outcomes are subject to all sorts of random disturbances that constantly require changes to policy settings. Suppose, however, a committee actually tried to obtain its objectives at every moment in time regardless. That would likely necessitate wild swings in policy settings: imagine the MPC trying to set Bank Rate so that 2% inflation was achieved exactly every month! Not only would it quickly prove impossible, attempting the feat would drastically reduce the chances of the other committees achieving their objectives. So a degree of humility is required by each committee, for the sake of coordination as well as the credibility of each. In their commitments to hit their statutory primary objectives I would say that: •  The MPC should not be “inflation nutters”. •  The FPC should not seek the “stability of the graveyard”. •  The PRA Board should not seek to implement a “zero failure regime”. That is supported helpfully by the secondary objectives of each policy maker. One can interpret them in several ways, but to me they help put the primary objectives in an overall context.
In a very direct way, policies aimed at promoting the transition towards a carbon-neutral economy are likely to affect the volatility of headline inflation and, more indirectly, climate change and the remedial actions needed to tackle it could affect our ability to achieve price stability through their impact on the so called natural interest rate, which is an important benchmark for inflation-targeting central banks when setting our interest rates. 2/6  It is still not clear the way climate change affects monetary policy and thus more analysis is needed to address the implications of climate risks on the economy and on monetary policy. Therefore, we have to step up our efforts to develop the tools and models needed for such an analysis. And, finally, climate change will affect the risks of the assets held on our balance sheets. Monetary policy implementation exposes us to such risks directly through holdings of assets and indirectly through collateral pledged by counterparties. In this regard, and very much related to my previous comments on the implications of climate change for the financial sector, central banks also have to step up their efforts to incorporate climate change into their risk management models and frameworks. And this, together with climate-related disclosure requirements, can decisively contribute to the correct pricing of climate-related risks by financial markets.

Relative to money spending, central bank money supply is at its highest levels in the 15-year history of the European Central Bank, the 100-year history of the US Federal Reserve, the 131-year history of the Bank of Japan and the 319-year history of the Bank of England. Accompanying these monetary policy changes has been a marked shift in regulatory philosophy. Since the crisis, financial regulation has become explicitly macro-prudential [Morris and Shin, 2008; Bank of England, 2011; Hanson et al, 2011]. This is an expression much-used, but generally little-understood. In a nutshell, it means that policymakers have begun using prudential means to meet macro-economic ends. Those macro-economic ends include tempering swings in credit and leverage – the classic credit cycle. The credit cycle is a long-established feature of the financial landscape [Aikman et al, 2014]. Chart 1 shows its pattern in the UK over the past 130 years or so. The credit cycle is every bit as regular as the business cycle. But it differs from the business cycle in two critical respects: its amplitude is at least twice as large and its duration at least twice as long. Both are important for the design of macro-prudential policy regimes. The larger amplitude of the credit cycle is one reason why credit booms have, more often than not historically, resulted in banking crises (Table 1). Because financial crises cause large and long-lived disruption to the economy, this suggests a strong empirical link between credit cycles and macroeconomic destabilisation.
Additionally, in the second half of 2012 they were subject under the Assistance Programme for Spain’s financial system agreed with the European Union to an exhaustive accounting review and a stress test, the result of which led to the recapitalisation and restructuring of certain banks. Moreover, during 2013 several measures were taken to ensure that adequate provisioning levels were maintained, which included, most notably, the review of refinanced and restructured loans. –  As a result of the criteria issued by the Banco de España in 2013 for the proper classification of these operations, Spanish banks reclassified under an inferior category operations amounting to € billion, which required approximately € billion of additional provisions. BIS central bankers’ speeches  3  –  To sum up, between 1 January 2008 and 30 June 2014 the provisioning drive by Spanish banks amounted to € billion, that is to say, provisions amounting to the equivalent of 25% of Spain’s GDP in 2013. Given all these measures, the starting point for Spanish banks was expected to be generally better than that of those in the other European countries as a whole regarding the more demanding criteria for recording assets. And, the outcome of the Comprehensive Assessment which has just been published confirms these expectations. 9. Conclusions  The disclosure of the results today marks the end of a period of just under one year in which all the parties involved – the ECB, the national authorities, the auditors and the banks themselves – have made a sterling effort.

This is a familiar story where the seeds of future fiscal problems are sown during better economic times. In effect, a combination of a strong U.S. economy, a bull market on Wall Street and various forms of fiscal gimmickry masked the increasing underlying fiscal stresses that the city was experiencing. By 1970, when I arrived, some of this good fortune ended when the U.S economy was hit by recession and a bear market in equities began. What followed was a massive economic slump in New York City—what would generally be described as a depression. Some of the numbers are staggering: from 1970 to 1975, New York City saw a 6 percent decline in its population, a 15 percent drop in employment and a 50 percent surge in the murder rate. The combination of the need to roll over debt from the prior two decades, a shrinking tax base and increased costs of debt—which sometimes had been used to finance operating expenses—caused fiscal problems that forced the city to cut services and raise taxes. A continued bear market on Wall Street exacerbated the situation. In effect, New York City looked to be in a vicious cycle with companies shrinking, closing or moving out. The result was fewer jobs, an exodus of people, declining property values, rising crime rates and eroding tax revenues. This meant fewer firemen, police and teachers, which led, in turn, to more crime and poorer educational opportunities. Put simply, it was a horrible dynamic that looked difficult to reverse.
But in general one can say that it is not so much about inventing new tools, as it is about using traditional supervision tools in a new way – they will be more specifically aimed at signs of exaggerated credit expansion and indebtedness in the economy at large, at the systemic level. What are these tools in more concrete terms? What does a regulation lever consist of? I have already mentioned the possibility to vary amortisation requirements for mortgages. Another example is the countercyclical capital requirement for banks proposed in Basel III. The idea is that the capital requirement will increase if credit growth increases in relation to GDP. This entails a higher lending cost when credit growth is high, and also increases the banks’ resilience. A further example is a ceiling on loan-to-value ratios similar to the mortgage ceiling recently introduced by Finansinspektionen (the Swedish Financial Supervisory Authority). This kind of ceiling creates incentives for households to acquire a buffer that reduces the risk of their balance sheets being weakened if property prices fall. Regulation of the loan-to-value ratio could also contribute to slowing down lending and house price increases and thus counteracting a housing bubble. …but traditional supervision is still important But while the discussion now mainly concerns macroprudential tools, it is important that we remember to keep improving the more micro-oriented, traditional bank supervision. Just because it proved insufficient to prevent the financial crisis does not mean that it is unimportant.

But at the same time, this may be a strength compared with the regulations, simply because it is difficult to “circumvent” an interest rate increase. BIS Review 164/2010  7  Another reason why monetary policy may in some cases be needed as a complement is that there will probably be quite considerable resistance to using regulation to prevent a creditdriven bubble. Banks and other financial market participants may perceive regulation to be a larger intervention than an interest rate increase, and consider it to be aimed only at them. In addition, things often look very good just as a bubble is inflating, so resistance would probably be particularly strong when measures are needed the most. The political and psychological pressure on those pulling on the regulation lever could thus be substantial. Important with a good allocation of responsibility I thereby come to an issue that is just as important as how regulations should be designed; namely, who should pull on the regulation lever and when. Lessons can be learned from monetary policy when it comes to responsibility and mandate. If an authority has a sufficient degree of independence it can more easily withstand external pressure. And if it also has clear and specific objectives, it has greater opportunity to do a good job, while at the same time it is easier for society to evaluate it.
Thanks to the Chinese leadership, the spirit of connectivity and cooperation is further enhanced through the One Belt One Road initiative. The Asian Infrastructure Investment Bank (AIIB) is an added funding impetus to ensure that there will be physical infrastructure connectivity, laying the strong foundation for shared economic prosperity. China’s growing economic ties with Thailand and ASEAN have become stronger in many aspects. China has been the largest trading partner of Thailand since 2013. Thanks to the China-ASEAN FTA, China has been ASEAN’s largest trading partner since 20092, while ASEAN has been the third-largest trading partner of China since 20113. China has been one of Thailand’s top foreign investors for the past nine years4. And in terms of tourism, almost AFCA follows the philosophy of openness and inclusiveness as well as the mission of “connectivity, cooperation, joint governance, and shared benefits” 2 ASEAN Secretariat: ASEAN Trade Balance (in $ Million) by Country. 3 World Bank: China Trade at a glance. http://wits.worldbank.org/CountrySnapshot/en/CHN 4 Foreign Direct Investment Position Classified by Country $ Combining Hong Kong and China FDI values. BOT. 1  1  nine million Chinese tourists visited Thailand last year, the highest number from any country in the world. It is clear that trade and investment connectivity between China and ASEAN have been well established and have great potential to expand much further. However, financial connectivity in our region has yet to catch up with trade and investment connectivity.

If there are adverse side-effects, then an alternative drug can be called upon – macro-prudential policies. These are an important new addition to the central bank armoury. When risks are localised – say in the UK housing market – macro-prudential measures can act like a targeted lightning strike. The Bank’s Financial Policy Committee (FPC) is discussing these risks. I will not, tonight, steal their lightning. But if risk-taking becomes broadly-based, a broadly-based response may at some stage be appropriate – a rumble of thunder rather than a strike of lightning. The case for doing so is stronger, the greater the chances of an asymmetric asset price response – a sharp snapback in volatility and asset prices – which could imperil recovery.9 The MPC’s guidance gives monetary policy a role as a last line of defence if macro-prudential actions cannot contain these risks. As they evolve, the MPC and FPC will need to assess these risks carefully. The monetary policy stance Faced with these uncertainties, what would be a prudent course for monetary policy in the period ahead? The first thing to say is that there is consensus across the MPC on three key elements of our monetary strategy: that any rate rise need not be immediate, that when rate rises come they are intended to be gradual and that interest rates in the medium-term are likely to be somewhat lower than their historical average. This message appears to have largely been understood by financial markets.
10 Board of Governors of the Federal Reserve System, FOMC transcript and presentation materials, January 29-30,  2002. 11 Board of Governors of the Federal Reserve System, FOMC transcript and presentation materials, June 24-25,  2003. 12 See, for example, Lars E. O. Svensson, The Zero Bound in an Open Economy: A Foolproof Way of Escaping  from a Liquidity Trap, Monetary and Economic Studies, Volume 19, Issue S1, pp. 277-312, February 2001; Günter Coenen, Athanasios Orphanides, and Volker Wieland; , Price Stability and Monetary Policy Effectiveness When Nominal Interest Rates Are Bounded at Zero, Advances in Macroeconomics, Volume 4, Issue 1, 2004; Ben S. Bernanke and Vincent R. Reinhart. 2004. Conducting Monetary Policy at Very Low Short-Term Interest Rates, American Economic Review, Volume 94, No. 2, pp. 85-90, May 2004; Klaus Adam and Roberto M. Billi, Optimal Monetary Policy under Commitment with a Zero Bound on Nominal Interest Rates, Journal of Money, Credit and Banking, Volume 38, No. 7, pp. 1877-1905, October 2006. 13 Reifschneider and Williams 2000; Board of Governors 2002. 14 Gauti B. Eggertsson and Michael Woodford, The Zero Bound on Interest Rates and Optimal Monetary Policy,  Brookings Papers on Economic Activity, Volume 34, No. 1, pp. 139-211, 2003; Reifschneider and Williams 2000. 15 Ben S. Bernanke, Vincent R. Reinhart, and Brian P. Sack, Monetary Policy Alternatives at the Zero Bound: An  Empirical Assessment, Brookings Papers on Economic Activity, The Brookings Institution, Volume 35, No. 2, pp. 1–100, 2004.

•  Individuals purchasing property are constrained on their total debt service ratio. 36. MAS announced new unsecured credit rules two years ago. •  FIs will not be allowed to grant further unsecured credit to borrower whose aggregate unsecured debt exceeds borrowing limit for 3 consecutive months. •  This limit has been set at 24 times borrower’s monthly income, and will be lowered to 18 times from 1 Jun 2017 and 12 times from 1 Jun 2019. 37. Vast majority of Singaporeans manage their debt well. •  Less than 2% of unsecured credit users affected by industry-wide borrowing limit. •  Nonetheless, this is about 22,000 borrowers who need help to manage down their debt. There are measures to help unsecured borrowers pay down their debts 38. Banks have worked with Credit Counselling Singapore (CCS) to develop a new Repayment Assistance Scheme (RAS). •  Convenient one-stop solution for borrower to work out centralised repayment solution with creditors. •  Lower interest rate of 5% p.a. over repayment period of 8 years for debt in excess of 12 times a borrower’s monthly income. Second consumer initiative: facilitate retail access to simple, low cost investment products 39. Last year I spoke about how MAS was working to improve savings and investment options for retail consumers. Made progress on three fronts. •  introduced Savings Bonds for flexible risk-free returns  •  facilitated access to $ corporate bonds for stable, long-term returns  •  expanded ETF options for diversified equity returns  40.
With such caracteristics of climate-related risks, climate « stress test » as well as climate « scenario analysis », can prove to be very useful tools for financial institutions and their supervisors, to examine and understand the effects of different pathways for climate  change, as well as the effects of different pathways for climate policy, technology and consumer and investor preferences. It can prove also useful to reflect on and examine the impact of management decisions. It is with those mainly qualitative objectives in mind that, at the ACPR and the Banque de France, we have conducted with the French insurance and banking industry our first scenario analysis, which was completed and published a few weeks ago. I must say that those qualitative objectives have been well met, from our perspective. In particular, the exercise has clearly incentivised the participants to reflect on and develop appropriate tools and methodological frameworks to incorporate climate-related risks as a  mainstream risk to be governed and managed on a day to day basis accordingly, in line with our supervisory expectations. Given the difficulties to assess the exposure to and the impact of climate-related risk we have not assigned to this exercise quantitative objectives, beyond providing participants and us with a first bottom up assessment of their exposure, based on common assumptions, assessment which appears to be moderate by 2050.

 Inflation is high, but will fall towards the 2% target over the coming years. BIS Review 100/2008  7  Outline  International developments  Developments in Sweden  M onetary policy  What has happened during the summer  Basis spread Difference between interbank rates and expected policy rates Basis points 120  100  120 M PR 2008:2  Sweden USA Euro area  100  80  80  60  60  40  40  20  20  0 jan-07  0 apr-07  jul-07  okt-07  jan-08  apr-08  jul-08  Sources: Reuters EcoWin and the Riksbank  8  BIS Review 100/2008  GDP growth in the USA Quarterly changes in per cent calculated at an annual rate, seasonally-adjusted data 8  8  6  6  4  4  2  2  0  0  -2  -2 00  01  02  03  04  05  06  07  08  09  10  11  Note. Broken columns represent the Riksbank’s forecasts in M PR 2008:2. The dot is the outcome for Q2 2008.