samchain/econo-pairs-v1 huggingface dataset:
However, pre-existing sources of risk and vulnerability remain and some have grown: •  The recent market jitters have confirmed concerns regarding previously identified risks and vulnerabilities and have revealed the relevance of some new risk exposures;  •  Vulnerabilities could be quickly unearthed if market liquidity were to abruptly and sharply decline, possibly triggered by a wane in risk appetite caused by a change in risk perceptions;  •  Re-leveraging in the corporate sector and the process of credit risk transfer from the banking system to other financial institutions and market participants which is associated with a greater emphasis on the “originate and distribute” business model by banks, could constitute vulnerabilities in a less benign market environment. •  In addition, global imbalances remain a medium-term, low-probability but potentially high impact risk for financial stability. Therefore, despite the strong performance of the financial sector and the benign macroeconomic outlook, there is no room for complacency, given the potential risks and the identified vulnerabilities. This conclusion also reflects the fact that the materialisation of risks and the triggers that could expose vulnerabilities can not be predicted with any degree of certainty. The main message for the financial institutions is to prepare to mitigate potential disturbances through appropriate risk management arrangements including through stress-testing and vigilant monitoring of the financial soundness of their counterparties.

Lucas Papademos: ECB Financial Stability Review June 2007 Opening remarks by Mr Lucas Papademos, Vice President of the European Central Bank, at the press briefing on the occasion of the publication of the June 2007 ECB Financial Stability Review, Frankfurt am Main, 15 June 2007. * I. *  *  Introduction  My colleagues and I welcome you to today’s press conference on the occasion of the publication of the June 2007 edition of the ECB’s Financial Stability Review. The financial stability assessment contained in the Review has been prepared with the close involvement of the ESCB Banking Supervision Committee. It is based on information that was available up until 11 May 2007, the “cutoff” date for this Review. The primary objective of the semi-annual ECB Financial Stability Review is to review the main sources of risk and vulnerability for euro area financial system stability and to provide a comprehensive assessment of the capacity of the euro area financial system to absorb adverse disturbances. In addition to the financial stability assessment, the June 2007 edition of the Review addresses several topical issues in 17 boxes and it also includes five Special Feature articles. In my introduction, I will first focus on risks and vulnerabilities we have identified in: (i) the external environment; (ii) global financial markets; (iii) the euro area corporate and household sectors; and (iv) the euro area financial institutions. I will then discuss some potential risk triggering factors and will conclude with an overall assessment of the outlook for financial stability. 2.
Their participation confers a degree of legitimacy on the decisions of supra-national bodies such as the Governing Council, and can improve the quality of the policy debate as well as communications with the public in the various member states. From our perspective, the adoption of the euro should not involve any major regime shift. In fact, since the collapse of the Bretton Woods system three decades ago, the Maltese lira has been pegged to a basket of major currencies. Although the composition of the basket has been changed on a number of occasions, mainly in response to shifting trade patterns, the exchange rate was only devalued once, in the wake of the ERM crisis in the autumn of 1992. The fact that Malta has successfully maintained a peg for so long suggests that this is a viable exchange rate arrangement. The choice of a fixed exchange rate as the intermediate target of monetary policy was dictated by key characteristics of the economy. First, Malta’s size implies that it is a price taker on international markets and cannot hope to influence its terms of trade through nominal exchange rate movements. In addition, because of the economy’s openness, the conduct of monetary policy has to take the exchange rate into account, whatever the overall policy strategy adopted. In fact, our experience after the 1992 devaluation showed the ineffectiveness of the exchange rate as a policy instrument, given the rapid pass-through from import prices to the general price level, and the consequent loss of competitiveness in export markets.

Prasarn Trairatvorakul: Journey towards a more competitive, inclusive, connected and sustainable Thai banking system Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Association of International Banks (AIB) Dinner Talk, Bangkok, 21 May 2015. *  *  *  Ladies and gentlemen, It is a great pleasure for me to be here on this special occasion. The topics I addressed in previous occasions focused on economic situations and developments. So much has been said and discussed on those issues, so today I would like to talk about the future development of the banking system in Thailand which is equally important. As many of you here are already aware, we are drafting the third Financial Sector Master Plan which will cover the next five years time span. The process is quite challenging because it involves many stakeholders, both in the public and private sectors, including foreign banks like yourselves. We thank you for your suggestions and feedback provided individually and also as a group through the AIB. Today I will share with you briefly the concept and aspiration behind the development plan for the banking system in Thailand. Thailand is currently at a crossroad in need of structural reforms to cross over the middle income trap. This requires commitment from all stakeholders. The public sector is already taking the lead on infrastructure development to promote urbanization and more equitable income distribution. For the private sector, they will need to make a transition toward production with innovation and higher value-added.
Yet the concept of debt sustainability is not easy to operationalise. Debt sustainability analysis tools provide a way to organise our thinking on these issues and we have some experience using them - for example, within the International Monetary Fund programmes framework. But their practical application for informing policy decisions remains rather complex. In this sense, it is worth remembering that any framework aimed at providing the necessary adjustment to cyclical developments must rely on the use of unobservable variables. In the case of the debt sustainability analysis, it will be necessary to forecast medium-term nominal GDP growth, which will face problems similar to the measurement of the structural deficit. 8  Beetsma, R., X. Debrun, X. Fang, Y. Kim, V. Lledó, S. Mbaye, and X. Zhang. (2019). Independent fiscal councils: Recent trends and performance. European Journal of Political Economy, 57, 53-69. 7  Therefore, it seems that we may be shifting complexity away from the rule framework and moving it towards the analysis of debt sustainability. The reform proposal also addresses the possibility of redirecting additional public funds towards the climate and digital targets through the use of an extended period of adjustment. I believe this approach is better than the use of the so-called “golden rules” to finance green investment, which allow governments to exclude some types of expenditure from the calculation of the fiscal targets for several reasons.

Fahad Almubarak: Brief review of financial developments in Saudi Arabia Speech by His Excellency Dr Fahad Almubarak, Governor of the Saudi Arabian Monetary Agency (SAMA), marking the Seventh Anniversary of Blessed Allegiance Pledge to the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, Riyadh, 17 May 2012. *  *  *  Saudis celebrate on the 26th of Jumada II 1433H (May 17, 2012) the Seventh Anniversary of the blessed allegiance pledge to the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz. The celebration is a true image of loyalty to the Custodian of the Two Holy Mosques, who is faithful to his nation’s interests. It is based on well-established bases, in the forefront of which are the tributes of our wise leadership such as the great keenness on the welfare of citizens and the enhancement of the development process. It is difficult to enumerate the achievements of the Custodian of the Two Holy Mosques in a few words, but, however, I will touch upon some of them.
Credit growth in the UK economy continues to be weak. The latest Bank of England credit conditions survey indicates early signs of an increase in the amount of mortgage lending  BIS central bankers’ speeches  3  available to households, though much less evidence of a change in credit conditions for businesses. But it is very early days for the recently announced policy measures – in particular the Funding for Lending Scheme – which are intended to have a positive impact on domestic credit conditions. So, we can see a picture of gradually improving resilience in the banking system but with further to go, but also credit growth which remains weak. In that context, and recognising the balance of objectives within macro-prudential policy, the FSA has taken a number of steps. We have allowed banks to reduce the capital buffers they hold over the minimum requirements in line with new lending to the UK economy. Our view here is that a reduction in the risk arising from this new lending caused by an improvement in credit conditions should offset the risk from lowering capital buffers. If such extra lending boosts economic growth, it will enhance resilience in the financial system. Likewise, we have altered our guidance to banks on the liquid asset buffers that they need to maintain. This reflects the Bank of England’s stance on the potential access of banks to liquidity from the Bank, and a wider desire to reduce the incentives for banks to hold excessive liquid asset buffers for precautionary reasons.

These are examples of leading practice, and they are not at this point standard operating procedure across the range of institutions where they should be. Systematically assessing the evolving frontier of leading risk management practice is a useful way to ensure that we continue to build on the significant improvements in the overall stability and resilience of the U.S. financial system that have been achieved over the past two decades. This is important to do on a continuing basis to strengthen the shock absorbers in the financial system. It is important to do even when, or perhaps particularly when the overall economic environment looks quite favorable, as it does today. We look forward to working with the foreign banking community to continue to identify ways in which risk management practices can be strengthened. It is in our mutual interest to insure that the practices employed broadly by the industry continue to move towards the frontier of risk management practices. Thank you. BIS Review 36/2004  3
The differences compared with developments during the inflationist and unstable 1970s, often entitled ”The Great Inflation”, have been so notable that this development has been awarded its own title in academic research – ”The Great Moderation”. 6 Although the reasons for the greater real economic stability are not entirely clear; there are hypotheses that economies have undergone various types of structural changes which have subdued the fluctuations – such as improved stock management among companies and financial innovations – or that the shocks to the economies have quite simply been smaller than during the 1970s. However, it is most likely that a better monetary policy has played some role in the increased real economic stability. We have thus established what a central bank’s primary tasks should be: to maintain price stability, to promote stability in the financial system and – as long as the nominal anchor formed by the price stability target is not threatened – to try to stabilise the real economy. There may nevertheless be reason to provide an example of what is not an appropriate objective for a central bank. As I have tried to emphasise, the real economic objectives that central banks have entail stabilising real quantities such as production and employment. By stabilising I mean that one tries to reduce the fluctuations around the long-term trend. However, it is important to realise that this long-term trend development is not something that monetary policy can directly influence.

However, on receiving your much appreciated invitation, I thought I’d take advantage of the sense of calm reflection which university fora instil to pause and ponder on what may happen to the Spanish economy after the crisis, when the global economy recovers. It is worth reflecting on the aftermath because the global nature of the crisis is "homogenising" the different economies. And by blurring the differences from one economy to another, it is hard to discern the different tasks awaiting them. As the crisis left nobody unscathed, not even those countries which acted prudently, i.e. those that did not incur excessive debt or whose competitiveness did not worsen, are faring better than those which were not so virtuous. But when the crisis ends, differences will re-emerge. When a plane taking off from New York almost crashed last month, the health and well-being of all the passengers hinged on how the crisis was resolved, without this depending on their youth, cholesterol levels, excess weight or the state of their lungs. The drama was the same for everybody. Luckily, they all emerged safe and sound from the landing on the Hudson. But after that, with the crisis behind, their health and well-being depends once again on the state of their organs, diet and exercise, and on taking the right medicine. Countries worldwide have entered into a similar negative spiral (a deep slowdown in – and in some cases the collapse of – consumption, employment, output, credit, investment...).
Cooperation within the EU offers a unique opportunity to discuss and agree on how to handle these problems. 6  BIS Review 125/2008  However, dealing with all of these problems is not just a matter of changes in regulation and supervision. If I may once again take the US as an example, the problems there show that the incidence of financial crises can also have a clear political dimension. One important reason for the lending boom was that the country's political leaders had long pressured the mortgage lending institutions to increase lending to low income groups. Institutions such as Fannie Mae and Freddie Mac were quite simply forced to base their operations on political objectives rather than on sound credit risk policies. The fact that unfortunate political decisions such as these, as well as inadequate regulation, can help to create a crisis is an important lesson to keep in mind when we eventually close the books on this crisis. I am aware that my wish list is long and requires extensive reform work. However, the course of events over the past year has clearly underscored the need to quickly deal with these issues. Meanwhile, it is important to make clear that we must not become overly zealous about regulation. In times such as these it is easy for opportunism to gain the upper hand, resulting in measures that do more harm than good.

Attempts to attenuate the financial stability risks from this broad property price boom with targeted macroprudential measures resulted in a large number of measures being applied, even including LTV restrictions on stand-alone car parking spaces, to which the boom had spread. •  If loose monetary policy can lead to a build up of financial stability risks, then the converse must also be true – tighter monetary policy can be used as a means of reducing financial stability risks. Most empirical estimates show that a temporary tightening of monetary policy can be expected to reduce real debt levels – and  BIS central bankers’ speeches  1  hence the probability of crisis – by discouraging households and firms from increasing leverage in the medium term, even if the transmission (through reduced aggregate demand and a higher interest burden) involves a short-run move in the opposite direction (for example, Goodhart and Hofman (2008)). •  This was recognised in the design of the UK Monetary Policy Committee’s 2013 guidance that it intended to maintain a highly accommodative stance of monetary policy until economic slack had been substantially reduced. Recognising the financial stability risks that could emanate from a commitment to maintain low interest rates, the MPC set a “knockout” whereby their guidance would cease to hold if the Financial Policy Committee judged that the stance of monetary policy poses a significant threat to financial stability that could not be contained by the combination of macro and micro prudential policy tools available.
Next to the broadening and deepening of the statistical framework the Bank of Albania will improve upon its communication with the public. We discussed during this Round Table the transparency of the Bank of Albania. We concluded that significant progress has been achieved. But next to transparency, the Bank of Albania wants to improve upon the information that it provides to the public. The Bank of Albania aims at making monetary policy understandable to everybody. We know already that money matters. The more money we possess, the more we can buy, and the more our economy will grow. The more our economy grows, the more people can share. Poverty will be reduced. But what about monetary policy? We all know that higher wages or lower prices are beneficial for our personal pockets. The higher the wages, or the lower the prices, the more we can buy. But for the Albanian economy as a whole, there is a flipside. This flipside is inflation. More spending will lead to higher prices in the medium to long term. And these higher prices, I can also say “higher inflation”, is damaging for the Albanian economic growth. For this reason the Bank of Albania safeguards price stability. Our main task is to keep prices stable. In order to do so, we set the main interest rate. The Bank of Albania wants to communicate better on all these monetary policy issues. It wants to explain the monetary and financial benefits at the micro and at the macro level.

Its demand, trade and cross-border investment activities will reinforce this potential. The recent trend for the use of the renminbi for settlement of trade and cross-border investment activities will facilitate this potential. It is my pleasure to welcome you to this Seminar on “Renminbi Trade Settlement and Investment”. I would like to take this opportunity to extend a warm welcome to our guest speakers from the People’s Bank of China and the Ministry of Commerce (Mofcom) of the People’s Republic of China. I also wish to welcome our panellists from the financial industry and the corporate sector that are here today to share their experiences in operating in the current challenging economic and financial environment. The economic relationship between Malaysia and China is longstanding and grounded on strong foundations. Today, China is Malaysia’s largest trading partner accounting for 14% of our country’s total trade. Malaysia also ranks as China’s most significant trading partner in the Asean region. Our trade with China has continued to expand, increasing by 20% annually, in this recent two decades. Our bilateral trade with China is now seven times higher than the level in the early 1990’s. Our economic relations have also evolved and expanded beyond the area of trade – into the services sector, particularly the financial sector, tourism and education. China is among the top five tourism markets for Malaysia and Chinese nationals represent the largest foreign student population in Malaysia’s private universities and colleges.
The longer these gaps continue to build, the greater the ultimate adjustment required, and the greater the risks that accompany that process. What does this mean for economic policy in the United States and the rest of the world? The conventional policy prescription includes the encouragement of higher public savings in the United States, the implementation of structural reforms designed to increase flexibility and raise potential growth rates in economies outside the United States, and movement toward increased exchange rate flexibility. The principal rationale for each of these policies is independent of the external imperative. But the fact that these policies would contribute to a benign external adjustment process strengthens the case for action on these fronts. Improving the U.S. fiscal position is the most effective means we have available to reduce our vulnerability during this prolonged period of adjustment. The United States needs to produce a substantial reduction in its structural deficit over the medium term and begin to reduce the more dramatic longer term gap between resources and commitments. And the United States needs to restore a reasonable cushion in its structural budget balance to help deal with future shocks. If we are unable to begin to generate more confidence in the capacity of the U.S. political system to produce these improvements, we would face a greater risk of future increases in risk premia.

The challenge, now, is to calibrate and phase in the new framework in a way that does not impede the recovery. The macroeconomic assessment of the reforms underway will help us strike the optimal balance. 25. Beyond capital and liquidity, other important initiatives are aiming at addressing systemically important financial institutions and cross-border resolutions. To better deal with the problem associated with systemic firms, progress is being made to improve the capacity to resolve them orderly, and to strengthen ex ante preparedness, contingency planning, cooperation and information exchange among the relevant authorities. 4  BIS Review 113/2010  26. There is a broad agreement for an approach that may have two pillars. One is about tools and measures to limit the risk of their failure; the other is about tools and measures to limit the consequences of their failures. Discretion is required to allow national authorities to strike the balance between the two pillars and tailor regulatory and supervisory actions to domestic conditions. The challenge is to ensure that national policies to address the risks associated with these firms are consistent, mutually supportive and thus avoiding regulatory arbitrage. But beyond international initiatives, enhancing supervision at the domestic level remains very critical. 27. Higher and better capital and liquidity standards are not sufficient conditions to secure the stability of the financial sector. Changes in the practice of micro-prudential oversight are also needed. Indeed, a lesson from the crisis is that the way supervision was performed prior to the crisis has likely contributed to it.