samchain/econo-pairs-v1 huggingface dataset:
Thanks to this “coalition of the willing”, gathering today more than 90 central banks and supervisors across the world, high level scenarios were published in July last year, updated a couple of weeks ago by a set of 6 scenarios. This set of global reference scenarios  provide a good basis for financial authorities. Of course, the NGFS should continue to develop and refine those scenarios. However, there will remain the need to tailor those scenarios to the circumstances of each jurisdiction, for instance specifics of their climate policies, or more precise meteorological data at the national level. In addition, ST may legitimately differ along other methodological dimensions. A case in point is the use or not of a dynamic balance sheet assumption. Contrary to the BOE, the ACPR and the ECB have chosen to rely on such assumption, as it allows to take into account the concept of double materiality and to assess how financial institutions would implement their commitments or steer their alignment strategies. The second lesson we learned is that the implementation of scenario analysis can expose data gaps on firms’ exposures. Such data gaps are particularly acute in the case of scenarios, which go beyond the horizons typically considered by firms and their supervisors. This make disclosures of climate-related data and forward looking metrics all the more important to support effective scenario analysis. Progress in this area has already been made, following the COP21, with the creation of the Task Force on Climate-related Financial Disclosures (TCFD).

Pongpen Ruengvirayudh: Thailand in 2014 – recent developments and challenges ahead Keynote address by Ms Pongpen Ruengvirayudh, Deputy Governor for Monetary Stability of the Bank of Thailand, at the Thomson Reuters FX Community Forum 2014, Bangkok, 18 February 2014. *  *  *  Distinguished Guests, Ladies and Gentlemen, 1. It is a distinct pleasure to be back here again and I would like to thank Thomson Reuters for the invitation. To the winners of this year’s FX awards, I would like to congratulate you on your notable achievements. And to the rest of the market participants, I would like to express my thanks for your continuing contribution to the development of the Thai foreign exchange market. 2. Much has changed both at home and aboard since I gave an opening address at this event last year. On the external front, the US Federal Reserve’s planned scaling-down of its QE program has sparked turbulence in the emerging markets as investors continue to speculate on the Fed’s exact tapering timeline. On the domestic front, the absence of political solutions continues to subdue public and private spending, with unavoidable repercussions on overall growth outlook. Certainly, the interplay between these recent developments will have profound implications for the Thai economy to some extent going forward. For this reason, I would like to take this opportunity to share with you my views on these important developments and the potential challenges they pose to the Thai economy. 3. Let me start with the developments on the external front.
Rather we need effective supervision as well, something that is inevitably harder given the cross border nature of the activity and the potential both for gaps and for different priorities. That creates a need for close cooperation between both home and host supervisors to deliver effective global consolidated supervision of international banks. The changing approaches we’ve seen since the crisis There is a spectrum of approaches that supervisors can take to the supervision of international banks. In the absence of a single global consolidated supervisor, let me describe the two logical extremes. First one can have a model of pure home supervisor responsibility, based on branches of the parent group and where the host supervisor relies completely on the home supervisor. By allowing the most rapid allocation of capital around the globe, this model delivers the greatest benefits. But it simultaneously creates the greatest risks to financial stability in host countries because of the potential lack of clarity of remit, information, and responsibility and powers to deal with the risks international banking brings. Alternatively one can have a pure host-led approach. This would require operations overseas to be undertaken in subsidiaries, with those subsidiaries supervised in the same fashion as domestic banks, in effect treating the overseas entity as independent and standalone. This model reduces the risk of an abrupt cessation of financial services following events overseas and so, at first sight, does a better job of protecting financial stability. But it makes the cost of entry much higher.

So, if those are the benefits, what about the potential risks of international banking? The risks from banking are well known – that the failure of an institution can lead to contagion and spillovers that may have direct and indirect impacts on financial stability. These risks may be amplified, accelerated, and transmitted through the increased degree of interconnectedness that international banking brings. This could be through greater exposure to cyclical global macroeconomic trends, or through a greater appetite and capacity for risk without appropriate controls. Successive crises have clearly demonstrated the effects of international banks, and capital markets, “freezing”. Contraction in credit supply is a powerful channel through which financial crises hit global and domestic economies. And the balance between international and domestic services can shift rapidly in a recession as international banks serve the home market. In 2008–09 for example, UK resident banks cut cross-border lending by 30% 5, significantly more than lending in the UK. The same patterns were seen internationally. Lehman of course had global effects, but numerous other entities had substantial cross border effects too. The crisis showed us all too clearly that international banking, interconnectedness, and unrestricted capital flows carry risk as well as rewards. All this underlines the importance of delivering effective oversight of international banks. Prudent international regulatory standards are a necessary part of this, but are not on their own sufficient.
This may give rise to considerable challenges in terms of the Government’s and the Storting’s (Norwegian parliament) ability and will to maintain a firm fiscal stance. Under a system designed to maintain exchange rate stability, it is important that the authorities actually manage to implement fiscal policy in such a way that pronounced and undesirable cyclical fluctuations do not occur. During the last cyclical upturn, fiscal policy has been relatively tight, but the tightening element became weaker as growth gained momentum. Fiscal policy should have been tighter in 1996, 1997 and 1998. Another lesson from this period is that investment in the petroleum sector should be managed better in order to avoid fluctuations in the mainland economy. One cannot expect the central government budget to be able to counter the shocks to the mainland economy originating from the wide fluctuations in demand from oil companies. 2) Internal instability Fiscal policy has not had a sufficient stabilising effect on the economy in recent years. This has given rise to a dilemma for the social partners involved in the income settlements. Moderate wage settlements made a substantial contribution to achieving broad-based employment growth from 1992. In the period 1993-1998, employment rose by more than 250 000, while unemployment fell from about 6.5 per cent to below 3 per cent, the lowest rate BIS Review 10/1999  –3–  recorded for 10 years. Whereas 20 unemployed were competing for each vacancy at the employment offices in 1993, the ratio was reduced to a little more than 2 in 1998.

9) Formulation of monetary policy Norges Bank reduced its key rates by 0.5 percentage points effective from today. This decision came in response to developments in money and foreign exchange markets and the prospect of reduced pressures in the real economy. The outlook for the Norwegian economy has changed since Norges Bank raised its key rates in August. The forecasts for growth in the world economy have been revised downwards and persistently low oil prices have reduced demand in the oil sector. In addition, a tight government budget for 1999 and the high interest rate level are having a restraining effect on growth. At the same time, the krone has appreciated recently. This lays the foundation for slower price and wage inflation in the years ahead, as estimated by Norges Bank in its December Inflation Report. Developments in recent weeks have confirmed this picture, providing room for a slight reduction in interest rates. According to the Exchange Rate Regulation, “... in the event of significant changes in the exchange rate, monetary policy instruments shall be oriented with a view to returning the exchange rate over time to its initial range”. The guidelines provide considerable scope for discretion in the conduct of monetary policy. It is Norges Bank’s task to exercise this discretion. Interest rates are set with a view to returning the krone exchange rate over time to its initial range. Even with this interest rate reduction, the interest rate differential against European countries is substantial.
B.  Thailand’s outlook and BOT’s monetary and financial policies  Ladies and Gentlemen, Like the rest of emerging Asia, the Thai economy appears to soften in the near- term. On top of export recovery that could be more delayed, the vital contribution from domestic spending is also viewed to lessen. Part of this, of course, reflects a natural reversion to a more normal pace of growth following unusually strong growth last year. More specifically, the boost from the first-car scheme dissipated sooner than expected. Household debt, which has risen fast and is now in the ballpark of 80 percent of GDP, starts to weigh on durable and semi-durable purchases visibly. And businesses also seem to postpone investment awaiting better economic conditions at home and abroad. In light of these factors, the Bank of Thailand projected GDP growth to be around 4 percent this year, a downward revision from a more bullish view we had earlier. But I would like to note that this is still a reasonable growth amid weak external environments, coupled with the fact that consumption has become somewhat overstimulated already. Looking ahead, fundamentals of the economy remain sound overall. Monetary and fiscal conditions will continue to be supportive. And despite some delay, contribution from exports is also bound to improve as the global economy gains a firmer footing.

A combination of insights, leadership, technical capacity and adequate preparation needs to be channeled into a general enthusiasm for both our regions to rise to the potential challenges and in the process become greater partners for success. In summary, the future direction of the ASEAN-EU relations will be dependent on several multidimensional facets that would include: the changing strategic landscape amidst globalisation, ASEAN's and the EU's desire to play a greater role in the global economy and international affairs, the EU's ability in managing its enlargement process, and ASEAN's commitment to forge greater regional integration. I am certain that the passage of time and closer analyses of the issues discussed at this Conference will yield more lessons that we could take to heart in making progress on expanding ASEAN-EU economic and financial links. It is my hope that in the future we can continue to have such constructive exchanges of views and experiences that will further nourish the broader learning environment. In closing, allow me to thank the speakers for enriching the Conference with their presence and their cutting-edge perspectives. I also wish to again thank the European Commission for giving Bank  1/2  Negara the opportunity to co-host this Conference. To all our participants from abroad, we hope you stay in Kuala Lumpur has been pleasant, and we wish you a safe journey home. 2/2
14  In 2008, there were 100 branches per 100,000 inhabitants in Spain, compared with around 60 in France and Italy (data as at December 2020, which are the latest data available with comparable ECB information for the different European countries). 15  Second only to the Netherlands. 16  In Spain branch closures have affected municipalities of all sizes, albeit with slightly more cuts in larger ones (around 56% since 2008 for municipalities with more than 50,000 inhabitants) and fewer in smaller ones (around 40% for those with fewer than 5,000 inhabitants). The smaller municipalities are the only ones where the population declined in this period, in keeping with the demographic decline in Spain’s rural areas in recent decades. 9  Fifth, as regards the cost of bank funding, in the money markets secured interest rates stand at historically low levels. But wholesale market funding costs have risen, on expectations of a less accommodative monetary policy and the uncertainty prompted by the crisis in Ukraine. Indeed, expectations of interest rate rises have fed through to wholesale market interest rates on long-term bank debt (a measure of funding costs) more robustly than to the Overnight Index Swap (OIS) rate.17 Thus, banks’ credit risk spread has widened. There were mixed developments in the cost of new issuances in 2021 across instrument types and issuers. Banks stepped up their debt issuance to comply with prudential and resolution requirements, with issuances of Tier 2 instruments and contingent convertible bonds (CoCos).

Nevertheless, the impact is quite uneven across banks, owing to differences in factors such as the composition of loans to the private sector and of the sovereign loan portfolio, their international presence and the coverage of the ICO guarantee programme. In particular, in the portfolios of loans to NFCs and sole proprietors, the impact varies considerably according to firm size and economic sector.33 Loans to individuals are also important, as in business in Spain they account for more than half of the total loan portfolio.34  33  The larger differential impact on smaller firms reflects their lower capacity to absorb shocks, as their sources of revenue and financing are less diversified. The reasons for the cross-sector differences include the distinct impact the energy price increase has on each sector, and also the differences in the sectors’ sensitivity to the macroeconomic downturn and in their initial financial positions. 34  The expected loss rates in the mortgage portfolio remain limited, owing to the nature of the loans and their associated collateral, and the scenarios therefore envisage a smaller impact for this business.
This somewhat contradictory, in historical terms, price picture is probably partly due to developments in China, where on the one hand the vigorous industrial expansion has led to a marked increase in the demand for commodities, while on the other hand the plentiful supply of low-wage labour has meant  2  BIS Review 21/2004  that production of cheap goods for the world market is accelerating rapidly. This clearly illustrates one of the conditions of globalisation, namely the increasing specialisation and increased utilisation of comparative advantages. These factors, among others, provide better resource allocation, increased productivity and greater efficiency, which in turn have a subduing effect on prices. The increasing strong international economic activity and the upturn in commodity prices indicate that international price pressure will increase gradually in the future. However, the globalisation process may mean that price increases remain moderate over the coming years, despite the economic upturn. China and India together have more than 2 billion inhabitants, which corresponds to one third of the total world population. So far, only around 10 per cent of the Chinese population is estimated to be affected by the modern economy. This means that there is a very large unutilised labour reserve that could contribute to keeping down price increases for a long period of time.

A study by Catherine Mann at the Institute for International Economics shows that trade and global production accounted for 10-30 per cent of the price fall on hardware products in the United States during the 1990s. This led to growth being approximately 0.3 percentage points higher each year between 1995 and 2002 than it would otherwise have been. Today, expenditure on software is increasing at twice the rate as on hardware, and this process has scarcely begun in large areas of the economy. If prices for software also begin to fall, thanks to globalisation, the second wave of productivity gains can be even greater than the first, particularly within the services sector, which has the greatest potential. We have seen that globalisation of trade and production patterns has led to more operators, who also have lower costs, participating in the world economy. This has led to international competition becoming stiffer and prices being pushed down. Similarly, the increasing trend towards deregulation and privatisation over the past two decades has contributed to making production more efficient and raising productivity, which in turn has had a subduing effect on price trends. The question of how globalisation and structural changes may affect the future path of inflation will probably attract increasing attention in central bank circles. If, on the one hand globalisation and new  BIS Review 21/2004  3  technology have led to economies having a lower inflation propensity, it may be possible to achieve a higher level of resource utilisation without inflation accelerating.
Esteemed participants, In terms of the structural transformation programs, financial sector, owing to its significance, is the sector that is most and fastest affected from the process, as well as being the leading sector in terms of supporting the process. Accordingly, further steps need to be taken in this sector in the process of falling inflation. Dear audience, The third factor I will be conveying to you today within the context of the effects of falling inflation on the economy is that, together with falling and foreseeable inflation, prices resume their signaling task in the economy and thus their roles as indicators in the allocation of resources. Departing from the example of Turkey, as we all know from the past experience of chronic inflation, consumers used to be inclined to make less price and quality controls, and attach less significance to diversity in their choices of goods. Producers on the other hand, used to set their profit margins freely to a large extent, paying little attention to their pricing, the costs and productivity. They also showed little interest in making investments for increasing the diversity of their products by adding them new ones. As a result of this structure, the quality of production declined in time, global competitiveness of our country weakened and integration with the world economy was delayed. Nevertheless, with the absolute as well as the relative prices resuming their signaling task following the decline in inflation, the behavior patterns of producers and consumers in Turkey began to change.

As a matter of fact, the pass-through effect of exchange rate movements on prices has been weakening worldwide, in environments where price stability has been ensured thanks to highly reliable monetary policies, attributable to the facts that pricing in domestic currency is widespread, and owing to low and stable inflation, losses of value in the domestic currency are perceived as temporary and firms resort to price adjustments less frequently. At this point I would like to clarify one issue on the exchange rate policy of the Central Bank. The Central Bank has no policy towards keeping the Turkish lira overvalued. As always mentioned from the beginning of the implementation of the floating exchange rate regime, exchange rates are determined under the supply and demand conditions in the market. In case of excessive volatility in both directions, the Central Bank intervenes or if there is an excess foreign exchange supply Central Bank holds FX buying auctions to increase foreign exchange reserves. So we should keep in mind that in the current design of the monetary policy, with the floating exchange rate regime, level of foreign exchange rates is determined according to the developments in economy, exogenous shocks, expectations and volatility in risk premium as a result of all these. Dear participants, I would like to briefly mention what the economy of our country can gain if the main goal, which is price stability, is accomplished after the disinflation process.
Construction activities over the next few years In line with other economic activity, construction activity declined slightly last year, although this was estimated to be a temporary phenomenon. Large resources have been allocated for infrastructure measures and for the development of the third generation of mobile telephony, which is estimated to lead to increased activity in future. There are numerous indications that residential construction will continue to increase, albeit from a low starting level. The continuing positive development of households’ disposable incomes should lead to an increase in new building and renovation of housing. Subsidies for building rental apartment blocks, support for student accommodation and ecological construction are also expected to stimulate investment in housing. Seen in a slightly longer term perspective, the low rate of new building is insufficient to meet the demand. A shift in the age structure will probably lead to an increase in housing investment as a percentage of GDP. However, even here prices and wages comprise a problem for the industry. The preliminary results show that construction workers received wage increases in excess of 5 per cent last year, while productivity only amounted to 1.4 per cent and unemployment among construction workers was almost 10 per cent. Unemployment in the construction industry varies geographically, however, with a rate of under 3 per cent in Stockholm and over 19 per cent in, for instance, the Gävleborg and Norrbotten regions. Relative productivity in the construction sector appears to be declining. The gap between the percentage employed and the percentage of GDP is increasing.

Shortly after we joined the EU it was almost a shared view among the prevailing part of the elite in our country that the sooner we join the better and that the euro was the best club imaginable and a sure-fire recipe for success. The public never accepted this view. However, it was still very difficult to argue against it, like I and some others did ten years ago. The lesson learned is: no worries, the media and politicians can change their minds. If you believe in your case, do not change yours. They will change theirs. Ladies and gentlemen, I very much believe in reasonable European cooperation. But I also believe in reasonable competition among countries and their economic models. So I do not take it lightly when some integration projects divide us rather than unite us. I think that next time around we should be much more careful when some start selling us a project as indisputable and irrefutable. At that moment we should all be far more circumspect and far less credulous. Thank you for your attention. 3/3  BIS central bankers' speeches