samchain/econo-pairs-v1 huggingface dataset:
In terms of composition of banking retail credit, housing credit represents almost two-thirds, reflecting the household’s holding of assets mainly in the form of housing real estate - a common feature prevalent in Asia. Credit cards and commercial credits take up 7.2 and 6 percent of total retail credit, respectively, while the remaining 21 percent are credit for other consumption purposes such as electrical appliance, education and so on. Among all types of retail credit, there are three fast growing segments in the past few years that deserve our attention. First, housing credits with accelerating growth. Second, credit card advance with tapering growths close to 40 percent. And third, automobile hire purchase with record growths of well above 50 percent. The booms in these segments commonly rest on the strong economic recovery, coupled with solid performance of the stock exchange - after all the Stock Exchange of Thailand recorded one of the best performing bourse in 2003. The government spending programs such as the village fund has fuelled further consumption, especially at the grass-root level, to ensure firm recovery. Moreover, against the backdrop of persistently low interest rate environment, consumers find it easier to part with their money acquired from liability assumption. This is particularly relevant for the build-up of debt in housing and automobile segments by households that simply mirrors an accumulation of assets on the other side of their balance sheet.

In doing so, I would draw upon Thailand’s experience by touching on, first, a quick overview of the retail banking sector; second, I will draw the link to its social aspects - focusing on what’s moving and shaking in the Thai financial landscape; third, going through supervisory concerns and challenges - our policies to promote retail banking sector, while preserving financial stability, and concluding the session by attempting to answer “What do Regulators Really Want?” - from Thailand’s perspective, some elements of which I hope would be true or applicable to other countries’ experience as well. 1. Market developments of the retail banking sector in Thailand  The past few years have witnessed a steady increase in the share of retail credits to total credits of the Thai banking sector, climbing to 16.6 percent as of September 2003 from just slightly over 10 percent in 1998 - right after the Asian crisis. This remarkable trend can be explained by both push and pull factors. Laden with excessive liquidity and mired with sizeable unresolved NPL in the corporate sector within the banking system, commercial banks are under pressure to extend credit to the retail sector. In addition, lending to retail sector imposes lower possible loss in case of defaults given its much smaller average size of credits and greater diversity of portfolio than those of the corporate sector.
We have approached the market for consultation about this. As regards the instant settlement of payments in central bank money, this is a service which is now being demanded and the technology for which is available. For reasons of efficiency, the Riksbank should thus ensure that it is delivered. At the same time, settlement should be made in central bank money for security reasons. I am therefore of the opinion that we should decide, as soon as possible, to offer instant settlement of payments in central bank money. As I mentioned previously, we, at the Riksbank, are currently analysing whether the infrastructure for this needs to be located within Sweden’s borders. Economies of scale speak in favour of placing it with the ECB’s system TIPS. 32 Preliminary calculations indicate that this alternative would also be competitive from a cost perspective. It would also probably be advantageous to join the ECB's system from a security perspective as this has a high level of security. At the same time, emergency preparedness reasons suggest our own Swedish system or at least that a domestic backup alternative should be available. The drawback is that a completely domestic solution risks becoming very expensive. 33  Concluding comments Let me sum up and round off. Money has arisen in different ways in various cultures to make people's day-to-day lives easier.

However, at present, we have too few details around these plans to be able to express an opinion on it. What we see here is the ongoing centralisation of payment systems generated by globalisation. There has been a movement within the euro area from national systems and a fundamentally fragmented market to centralised, cross-border systems. Deregulation in the 1990s and 2000s contributed towards the integration of the banking market in the EU. And now the same thing is happening to the payments-infrastructure side. The European Commission intends to propose an amendment of the EC regulation on cross-border payments in euro to reduce fees for cross-border transactions in all member states and thereby facilitate trade and contribute towards increased competition. Other initiatives are also taking place on the EU level to develop the market for electronic payments and create better conditions for secure and efficient payments. The new regulations will entail a gradual adaptation of Swedish payment services to EU standards. Crypto-currencies are not money Another new trend is the new crypto-currencies such as Bitcoin, Ethereum and Ripple, to name a few. Bitcoin was launched in 2009 and is still the most commonly-used crypto-currency. Bitcoin was created by networks of users. Participants who pool their hardware resources to verify the payments made are rewarded with newly-created Bitcoins. The size of the rewards declines over time in a way that means there cannot be more than 21 million Bitcoins.
Consequently, during 2005–2008 the NBR did not refrain from making discreet forex market interventions by purchasing considerable amounts of foreign currency so as to preclude the fast overappreciation of the leu, which was likely to cause a dangerous erosion of the Romanian economy’s external competitiveness and to lead to a fall in inflation, yet in an unsustainable manner. At this juncture, I should bring to the fore other arguments in favour of a managed float policy for the Romanian currency. The major reason underlying the NBR’s purchases of foreign  10  BIS Review 5/2010  currency consisted in the fact that the leu strengthened in both nominal and real terms, concurrently with an extremely loose wage policy in 2006 and especially in 2007. During those years, pay rises overtook productivity gains, thus reducing the previously accumulated competitiveness gains and contributing definitely to the worsening of the balance of payments current account. Another argument I would like to point out is of a precautionary nature. As it has been noticed in practice, the end of cycles of synchronous large capital inflows coincide with somewhat abrupt depreciation episodes, which can be avoided provided sufficient reserves are available. The pro-cyclical conduct of fiscal policy that added to the vulnerabilities associated with the widening of the current account deficit during 2004–2008 also underpinned the NBR’s purchases of foreign currency. In principle, fiscal policy may either cushion or magnify the undesired effects of large capital inflows.

Loans expanded for several successive years at annual growth rates ranging from 60 percent to 80 percent in real terms. The share of foreign currency-denominated loans to households grew more than five times, from 2.2 percent of GDP in December 2004 to 11.6 percent of GDP in 2008. Moreover, the share of foreign currency-denominated loans to the corporate sector picked up substantially (Chart 3). Overall, financial intermediation (loans to the private sector/GDP) increased from 16.6 percent in 2004 to 39.3 percent in 2008 (Chart 4). BIS Review 5/2010  7  Chart 3 Breakdown of foreign currency-denominated loans granted by financial institutions percent of GDP  14 loans to households  11.6  12  10.6  loans to non-financial corporations  9.2  10 8  7.1  7.5  7.1  6  9.8  4.7 3.3  4 2.2 2 0 2004  2005  2006  2007  2008  Source: National Bank of Romania Chart 4 Breakdown of loans to the private sector 45  percent of GDP  loans to non-financial corporations a.o.
However, both processes call for mechanisms that facilitate the economy’s efficient adjustment so as to cope with the challenges of a constantly changing environment for firms, consumers and policy-makers. All of which reinforces the urgency to pursue the structural reform agenda in the euro area in a determined and systematic manner. With this wider-ranging reflection, I conclude. Once again, welcome to this ECB workshop. I can rationally predict that it will be a very productive and enriching one. 4  BIS Review 46/2005

I have already mentioned on another occasion that, with the prudence due, I consider that the set of measures to support lending, in the form of guarantees and moratoria, along with the regulatory and supervisory actions I have referred to, have achieved the objective of cushioning the enormous initial impact of the crisis, preventing the situation of business illiquidity from leading necessarily to a solvency crisis. In fact, according to preliminary data gathered by the SSM, following the expiry of moratoria in various euro area countries, most borrowers resume payments and only a small fraction were unable to do so. The situation is evolving and thus the response required of the sector is also evolving. Unfortunately, the disease remains with us, and this justifies maintaining many of the exceptional measures to support the economy, in particular for certain sectors. Accordingly, the Government’s decision to extend the grace period by a year and the maturity of financing with an ICO guarantee by up to three years seems appropriate to us. In any case, although the consequences of the pandemic have yet to appear on bank balance sheets, the crisis will inevitably lead to structural changes. Not all economic activity will return to its previous levels. Banks need to be preparing now for this impact. More resources need to be allocated to risk analysis and management, including the active management of rollovers and renegotiations with those customers that will almost certainly not be able to comply with their original contractual conditions.
1 But what are we to expect from the Riksbank’s balance sheet in the future? This is the question I would like to discuss today. My discussion will be based on a monetary policy perspective, which means that the focus is on the holdings of Swedish government bonds built up by the Riksbank in recent years and on the monetary base and the liquidity surplus that is now on the liability side of the balance sheet. There are other components that also have a major impact on the Riksbank’s balance sheet but I will not discuss these in any particular detail. Here, I am thinking mainly about the foreign exchange reserve. I will also refer to the international discussion, in which arguments have been put forward both for and against “large” central bank balance sheets. The arguments  I thank Henrik Erikson, Jesper Hansson, Björn Lagerwall, Marianne Sterner, and Anders Vredin for discussions and comments on previous versions of the text. *  1 [16]  concern two related questions: Should the purchase and sale of bonds be an active monetary policy tool even in the future? Do large bond holdings strengthen the transmission of central bank policy rates to market rates? Before I analyse these questions in more detail, I would like provide some background by describing both what central bank balance sheets looked like before the crisis and how they have developed since, and how the design of monetary policy interacts with the balance sheet.

On the other hand, it is hard to imagine that this scenario could have played out as it did without the worldwide glut of cheap credit in the years before the global financial crisis and Iceland’s position as a party to the EEA Agreement, which provides for a legal and regulatory framework based on European Union Directives, including free movement of capital and provision of financial services. The underlying principles are those of home licensing for operation throughout the EEA and a level playing field for competition, where size and location are not supposed to matter. This European “Passport” enabled the Icelandic banks to operate throughout the EEA, including through branches in other EEA countries. We know now that there were and are deep flaws in this framework: flaws that are important elements in the current eurozone crisis. A key issue here is the dichotomy between  BIS central bankers’ speeches  1  European passport rights, on the one hand, and national supervision, national deposit insurance, and national crisis management and resolution regimes, on the other. This is what recent proposals of a banking union are supposed to deal with. But then, for EEA countries outside the euro area, this framework entails potentially enormous foreign currency liquidity risk in the banking system that is not covered by a lender-of-last-resort (LOLR). This was a key element in the Icelandic banking crisis and must be addressed in future reforms of the system. Let me now say a few words about Iceland’s crisis and recovery.
To this purpose, alongside the banking system, we are considering the required measures that may lead to the growth of lending in line with the cyclical and structural needs of the economy. Economic and monetary developments elaborated above yielded an environment of contained inflationary pressures. Average annual inflation marked 3.4% in the third quarter. Against a background of below-potential economic growth, and given the absence of monetary-related inflationary pressures, inflation was largely affected by the rise in administered prices. The contribution of the latter’s rise to headline inflation is 1 p.p. In the absence of second-round effects, the effect of the rise in administered prices is expected to be transitory, while the inflationary pressures arising from domestic demand remain well contained. On the other hand, the depreciation of the national currency has been declining, hence offsetting the rise of primary commodity prices in the world markets and the increase of inflation in Albania’s main trading partners. The absence of inflationary pressures in the medium run and the contained fiscal policy provided room for pursuing a stimulating monetary policy that sustains economic activity. In July, the Supervisory Council of the Bank of Albania cut the key interest rate by 0.25 p.p. bringing it to the historical low of 5.00%. In addition, the Bank of Albania continued to supply the banking system with the required liquidity in order to ensure the smooth operation of the money markets and to enhance financial intermediation in economy.

The growth of exports in 2010 was fuelled by the recovery of global economy and the favourable conjuncture of prices in the global markets, the depreciation of the exchange rate, the Albanian entrepreneurship efforts to expand the market and by some other factors of transitory nature. Therefore, promoting exports in a stable and long-term fashion requires undertaking structural reforms, which will in turn enhance the competitiveness of the Albanian economy. This would ultimately serve to the transition to a more stable economic growth model and, at the same time, to curbing the reliance on foreign financial sources. Our analysis of monetary indicators concludes that the growth of money in economy is concurrent with the economic agents’ demand for monetary assets, hence creating no room for inflationary pressures in the future. BIS Review 170/2010  3  Aggregate M3’s average growth was 11.2% in July and August, being in line with the nominal economic growth and the enhanced confidence in the banking system. Its growth during this period was mainly determined by the increase of the banking system’s net foreign assets. Private sector credit grew by 9.8% y-o-y, close to the previous quarter’s rate. Although the better liquidity figures and the improved banks’ balance sheets led to higher banking supply and provided greater room for lending, the latter has progressed at moderate rates. Our analyses on lending in economy show that demand remains contracted and the number of worthy projects to lend is still low. The foregoing remains a constant concern for the Bank of Albania.
Collaboration between the two countries could be in many forms; for instance Turkish investors and financial institutions could use Malaysia as a gateway to the Asean region. Malaysian financial community could use Turkey as a base to Central Asian region and Europe. In the area of Islamic finance, Malaysia is committed to be a partner with Turkey to further promote the business prospect in this country. Malaysia being an Islamic financial hub in Asia is willing to share with Turkey our 30 years of experience in developing its Islamic  2  BIS central bankers’ speeches  financial industry and our knowledge and insights in operating an Islamic financial system that runs parallel with its conventional counterpart. Potential Turkey-Malaysia partnership in Islamic finance There are vast opportunities for Turkey-Malaysia bilateral cooperation, however let me mention five key areas of possible cooperation that could increase cross-border activities between our two countries. These are in the area of sukuk issuance, promoting cross-border activities, Islamic fund management, partnership in innovation and in education and research. Firstly, in the area of sukuk issuance, we welcome Turkish financial and business community to use Malaysia’s comprehensive and tested infrastructure with its extensive investors network as a platform to raise funds such as sukuk and Islamic syndication financing. The multi-currency sukuk market in Malaysia is well developed and active with over 60% of the outstanding sukuk in the world originating from Malaysia.

Among his many achievements was the time he steered the country during the 1997 – 98 Asian crisis. His unorthodox policies then have become mainstream now. Under his leadership, Malaysia experienced modernisation and economic prosperity, a development most profound for my generation. That modernisation included the early development of Islamic financial system. From the seeds planted during Tun Mahathir’s time, we are now seeing the maturing of the Islamic financial system in Malaysia that is innovative, competitive and increasingly internationalised. What was once a novelty has become an alternative means of conducting business. We owe this very much to Tun Dr. Mahathir’s foresight and wisdom. Not many people today realised that one of the first actions that Tun Dr. Mahathir took when he came to office in 1981 was to set up a National Steering Committee to implement Islamic banking in Malaysia. The report of this committee on the viability and strategy of the Islamic banking, was the impetus for the creation and robust development of the Islamic financial industry in Malaysia. The rest they say is history. Global economic challenges and Islamic finance The world is transforming and its transformation is way beyond what we had seen before. This is an era of radical change, new rules are being formulated, standards and best practices that were in vogue hardly 5 years are now considered insufficient.
Lastly, when participating in non-sovereign markets for the first time, a central bank might need to learn more about the asset class and build or refine the internal systems needed to operate in that market.11 In all these cases, a central bank might choose to diversify across different asset classes to achieve its policy objective. With these considerations in mind, I now want to turn to a discussion of the large-scale asset purchase programs pursued by the Federal Reserve. My focus will be on the Fed’s agency MBS purchases—which provide the central bank with an additional policy transmission tool and significant additional capacity to provide policy accommodation. Although the purchase of U.S. Treasuries is not central to my remarks, it is important to note that the Federal Reserve is fortunate in having a sovereign debt market that is the deepest and most liquid in the world and is sufficiently large that there are no close capacity limits. The experience with the three LSAP programs and the Maturity Extension Program showed that the Federal Reserve was able to purchase Treasuries at a fast pace without affecting market functioning. Before continuing to the main part of my discussion, I would also note that my intention is to consider the practical and operational issues surrounding the implementation of LSAPs, rather than to debate the merits of LSAPs relative to other potential monetary policy tools. There are a number of important issues linked to the potential costs of LSAPs but unrelated to these implementation issues.

Their firms are devoting more resources to marketing abroad – particularly in Asia – and expect their export sales to be higher in the next 12 months than in the past 12 months. BIS Review 100/2010  3  In sum, the region is showing signs of a moderate recovery, and the manufacturing sector is playing a key role in that recovery in parts of the region. Thank you for your kind attention. I will now ask Jaison Abel to provide more details on current regional economic conditions. 4  BIS Review 100/2010