samchain/econo-pairs-v1 huggingface dataset:
Sethaput Suthiwartnarueput: Central banking amidst shifting ground Welcome remarks by Dr Sethaput Suthiwartnarueput, Governor of the Bank of Thailand, at the BIS-BOT conference on "Central banking amidst shifting ground", Bangkok, 2 December 2022. *** Governors, distinguished guests, ladies and gentlemen. It is a pleasure and great honor for me to be welcoming so many distinguished members of the central bank community to Thailand. Thank you for making the journey here from near and afar. Let me also extend a warm welcome to speakers and panelists joining us on-line today. We truly appreciate your participation in the conference. I would like to also express my sincere appreciation to the BIS for helping usorganize and host this event. During a period where the world is grappling with challenges that threaten to pull us apart, the BIS has continued to serve as a cornerstone of central bank and regulatory cooperation acting to pull us together. Indeed we are all here together in large part due to the convening powers of the BIS. This year marks the 80th anniversary of the Bank of Thailand. This conference is an opportune moment for us to take stock and reflect on how far we have come and chart the way forward. In light of the rapid and seismic changes we have experienced, such reflection is needed more so now than ever.

Macroprudential policy is still a work in development. Over the past few years much of the FPC’s work has been learning by doing. As we learn, we will have to set out clearly and publicly the development of our overall policy framework – how resilient we believe the system needs to be, how we think about macroprudential risk, what risks we believe fall into the domain of macroprudential and how we will use our policy instruments. As part of this, the Committee intends to set out by the end of the year our view on the adequacy of the overall capital framework for banks, now that the main post crisis reforms have been set. Have we gone too far? Financial crises are unruly affairs. The great crisis of 2008–9 was certainly no exception. Risks crystallised in unexpected ways and moved between parts of the financial system that we had not appreciated were connected. A large number of regulatory reforms were launched to address the many and dangerous fault-lines that the crisis exposed. It is only now, as we move through the implementation of these reforms, that we can start to see the whole picture of how they work together in practice. Inevitably, as the new framework starts to bite, the question is asked whether the reforms, as they interact in practice, produce “unintended consequences” that are worse than the risks they are trying to reduce.
However, that being said, the domestic policymaker understands best the context of the local situation that the country is facing. There should be no doubt in this. Third, policymakers must not be afraid of instituting bold policies if they are deemed necessary. This is especially important during times of stress or market failures that risk the orderly functioning of the economy and financial system. Intervention in markets should not be a knee jerk reaction. As a matter of principle, public policies should always first strive to facilitate a selfregulating free market to correct itself. However, when markets fail, it is incumbent upon the regulator to correct market failures. This ought to be the cardinal rule, especially for small and open economies with sizeable financial markets. More often than not, corrective public policy can be unpopular among the masses, but it is important to not lose sight of the bigger picture, for the greater good. Often times, short-term pain is necessary for longer-term gains. Fourth, clear and transparent communication is crucial. Policies will not be effective if the motivations and understanding between policymakers and the public are not aligned. At the end of 2016, the Bank actively sought out the feedback of industries and market participants that were affected by the financial market development measures we introduced in November 2016. This became an important source of information for us to continuously fine-tune the implementation of the measures to help those affected to better adapt to the new environment.

21.03.2019  Closing remarks Event on the “Impact of the new law on real estate credit”/PWC Margarita Delgado Deputy Governor  Good afternoon, I would like to thank PWC for kindly inviting me to speak at the close of today’s event on the new real estate credit law. I shall try to speak about the most innovative features of the new law from the supervisor’s standpoint, not dwelling too long on the details of the legal changes introduced, as I am sure that they have been widely discussed over the course of the morning. Specifically, I shall focus on the three features of the new law that strike me as particularly important from a supervisory viewpoint: (i) the emphasis given to customer protection, (ii) the need to ensure legal certainty for the mortgage market to function properly and (iii) the growing importance of credit conditions. I shall also refer to the potential short and mediumterm consequences of this law for access to owner-occupied housing, and shall conclude with some thoughts on how the new macroprudential tools may shape the way we supervise certain banking businesses, notably real estate lending. Introduction  As we know only too well, access to home ownership is an issue of great concern to Spanish society. Worldwide, Spain has traditionally been among the countries with the highest owner-occupancy rates. Although this rate has declined from the peak reached in 2002, it is still higher than in other European countries.
6  BIS Review 67/2009  Table 2: Monetary Policy Committee (MPC) Decisions in 2008 and 2009 MPC Meeting Dates  Decision on Interest Interest Rate Rates (Percentage points)  17 January 2008 14 February 2008 19 March 2008 17 April 2008 15 May 2008 16 June 2008 17 July 2008 14 August 2008 18 September 2008 22 October 2008 19 November 2008 18 December 2008 15 January 2009 19 February 2009 16 April 2009  -0.25 -0.25 No change No change +0.50 +0.50 +0.50 No change No change No change -0.50 -1.25 -2.00 -1.50 -0.75  15.50 15.25 15.25 15.25 15.75 16.25 16.75 16.75 16.75 16.75 16.25 15.00 13.00 11.50 9.75  Source: CBT. Benchmark bond rates came down significantly driven by the policy rate cuts and the partially easing tensions in global financial markets (Figure 10). Moreover, the signal given by the Central Bank for possible necessity of maintaining downward flexibility for a long period of time coupled with moderate recovery in risk perceptions contributed to the decline in market interest rates. Figure 10: Interest Rate Developments (Percent) 27  ISE Bills and Bonds Market Interest Rate (Benchmark, Compounded)  25 CBRT Overnight Interest Rate (Compounded) 23 21 19 17 15 13 11 9 05 07  07 07  09 07  11 07  01 08  03 08  05 08  07 08  09 08  11 08  01 09  03 09  Source: ISE, CBT.

And since its inception, the Bank has played a role in shaping the development of the financial sector in the UK and using its influence to promote financial stability. For much of its history, that role was not one of statutory regulation and supervision. The Bank exercised its influence behind the scenes on the small club of actors that dominated the financial system. Indeed, the UK came rather late to the idea that banks and financial firms needed to be regulated by law rather than steered by the eyebrows of the Governor of the Bank of England. The Macmillan Committee (1931), which inquired into financial policy in the wake of the Wall Street Crash, did not advocate statutory regulation. Rather it endorsed the informal role of the Bank in guiding the banking sector, commenting that “financial policy can only be carried into effect by those whose business it is”. 30 years, a Great Depression and a world war later, the 1959 Report of the Radcliffe inquiry into the monetary system concluded similarly that “it is on this relationship, and on the mutual trust and confidence that are the basis of the relationship, rather than on formal power…that the Bank has relied in seeking to inform itself about and influence the policies of the clearing banks”. In the immediate post war period it was not necessary to do a great deal to promote financial stability or the supervision of financial firms.
In oil exporting countries where growth has weakened and inflation has gone up by currency depreciation, banks with high foreign currency vulnerabilities or heavy reliance on short-term debt need close monitoring or tighter prudential requirements. Moreover, due to the different internal (growth and inflation) and external conditions (balance of payments strength), monetary policy positions have also diverged. Economies with current account deficits have been facing difficulties to balance internal pressures such as abovetarget inflation and slowdown in growth against reduced global capital inflows. These countries come to terms with limitations on countercyclical monetary policies to support the adversely affected domestic demand from tightened global financial conditions. On the other hand interest rates in other countries such as emerging Eastern European countries rates are at their historically low levels in order to avoid the disinflation imported from the Eurozone. EMEs with higher GDP growth, stronger external current account positions, lower inflation, and more liquid financial markets have managed to mitigate market volatility. Likewise, countries with more resilient financial sectors limited the adverse effects of volatility. As a result, out of 19 EMEs, 9 EM central banks have decreased the policy rate since the taper tantrum, 8 increased and 2 did not change. Overall, policy rate has increased 1070 bps. Along with the easing cycles of AEs central banks and ample global liquidity, the capital flows into EMEs have been increased which encouraged public and private leveraging and fueled credit growth in these countries. In response to the impact of the increased liquidity, EMEs implemented some macro-prudential policies.

The banking sector maintains its strong and sound position as banks in Turkey are wellcapitalized with high quality and highly liquid assets and continue to offer solid rates of return on capital. As a result the banking sector still provides a reasonable loan growth for the economy despite heightened uncertainty in global markets. To conclude given the ongoing challenging external conditions it will be essential to continue to implement a tight and flexible monetary policy in order to lower inflation in a volatile environment. Meanwhile, taking liquidity stabilizing measures for the foreign currency market and ensuring the stability of the financial system are key to alleviate policy tradeoffs. Last, but not the least, maintaining the fiscal discipline; and adhering strictly to the announced structural reform agenda in order to lift potential growth in accordance with the country’s needs remains the key to stability. Thank you.
Thus, I conclude that the risk that inflation could significantly exceed our 2 percent objective is quite low over the next few years, even if the economy were to strengthen considerably. 4  BIS central bankers’ speeches  With inflation well below its longer-run goal and high unemployment, the FOMC decided at its March meeting to maintain a “highly accommodative” policy stance: a federal funds rate in a range of 0 to 25 basis points with forward guidance based on economic thresholds. Moreover, to support a stronger economic recovery, the FOMC is purchasing long-term Treasury securities at a rate of $ billion per month and agency mortgage-backed securities (MBS) at a rate of $ billion per month, and will continue purchasing assets until it sees substantial improvement in the outlook for the labor market, conditional on ongoing assessment of benefits and costs. Combined, these actions are intended to ease financial conditions and thereby help to establish a self-sustaining economic expansion. As I stated in my recent Economic Club speech, the benefits of our asset purchases – as reflected in improving financial conditions and the quickening pace of interest-sensitive spending such as that on consumer durable goods, housing, and capital goods – exceeds the costs. Furthermore, the labor market outlook has yet to show substantial improvement. Consequently, I see the current pace of asset purchases as appropriate. At some point, I expect that I will see sufficient evidence of improved economic momentum to lead me to favor gradually dialing back the pace of asset purchases.

Against the backdrop of an apparently healthy financial system, market participants report a substantial rise in transactions leverage, erosion in the use of loan covenants, more favorable financing terms for hedge fund counterparties, and especially a pressure to reduce initial margin against OTC derivatives exposure to hedge funds. But the concern is that this sustained period of very low credit losses and low volatility works to hold down measures of the underlying economic risk in these exposures. This combined with the range of factors I just discussed, raises the odds that market participants will be faced with negative surprises in the event of a more adverse macroeconomic  2  BIS Review 55/2006  environment. And this could have more negative implications for market dynamics and liquidity as market participants react to those losses and attempt to reduce their exposure to future losses. These concerns are not particularly new, and my sense is that they are widely shared among the people and institutions that are closest to these markets. They do not, in my view, challenge the overall judgment that these changes in the credit markets on balance are likely to make the financial system more resilient rather than more fragile. But they do suggest the need for greater caution by financial institutions in several important areas. First, it is very important that the major dealers make the investments necessary to improve the operational infrastructure that underpins the credit derivatives and broader OTC derivatives market.
This is to be made up of myself, the two Deputy Governors, two Executive Directors of the Bank - responsible respectively for the Bank’s economic analysis and the Bank’s financial market operations, and four outside members nominated by the Chancellor and having professional knowledge and experience relevant to the Committee’s functions. It also includes a Treasury observer, who may participate in our discussions, and acts as a link between the fiscal and monetary authorities, but who may not vote on our monetary policy decisions. The overriding purpose of these new arrangements is to improve the credibility of monetary policy, and to demonstrate to the world at large the Government’s commitment to achieving and maintaining effective price stability. But it is important to understand that this objective is not simply an end in itself. The ultimate objective, of course, is growth of output and employment and rising living standards - there is no question about that. The argument is about means, not about ends. And effective price stability as the immediate objective of monetary policy is a necessary condition for growth to be sustained into the medium and longer term. The aim of achieving permanently low inflation is a deliberate attempt to break away from the boom-bust cycles of the post-war years, which led, as we can all remember, to a persistent ratcheting up of inflationary expectations and a steady erosion of long-term thinking and planning, saving and productive investment, on the part of consumers and businesses.

On the path to achieve stronger, more balanced and sustainable growth, the potential of responsible finance has therefore become greater than ever. Most important is for finance to be aligned towards its ultimate goal of serving humanity and of uplifting social wellbeing. Thus, more than merely performing its role as a passive intermediary of funds, finance today has the distinct potential of catalysing and shaping social outcomes. As mobilisers of funds towards socially empowering activities in the economy, the financial sector can act as a "social multiplier", significantly expanding the impact of positive finance. This is what responsible finance can achieve. Infrastructure financing, with its focus on longterm and socially impactful considerations, is an area of finance that can be instrumental in filling the vast development needs of many emerging economies, with an estimated global funding demand of about USD57 trillion by 2030, or about USD1 trillion a year. Recognising this, greater attention has been focussed on infrastructure finance, both at the national and international levels. The evolution of the sukuk market, in particular, has been an effective avenue in bridging this financing gap. Since 2003, an estimated USD115 billion of infrastructure sukuk has been issued by more than 10 different countries, which has been vital in contributing towards the long-term development of these economies. In Malaysia, the sukuk market has similarly been pivotal in supporting infrastructure financing, with Malaysiadomiciled infrastructure sukuk accounting for 79 percent of global infrastructure sukuk issuances in 2015.
Little to say because the government-approved Stability Programme, which envisages quickly attaining a significant deficit cut, has been favourably assessed by the EU and strictly met in its first year. The now-difficult task is for all levels of government to rigorously meet their adjustment commitments this year and to enable the 6% overall general government deficit target to be attained. Henceforth, we should expect local and regional authorities not to put off any longer the vigorous expenditure-cutting decisions that are needed to meet this overall target. BIS central bankers’ speeches  3  Finally, concerning the restructuring of savings banks, the final part of what was legislated by Parliament in the recapitalisation Decree-Law approved in February remains to be done, but so far the Decree-Law has been implemented under the conditions and within the timeframe set. On 11 March the Banco de España published the core capital requirements of all Spanish credit institutions. Among them, 12 (4 banks and 8 savings banks) were identified as having a core capital deficit for a maximum amount of € billion. Later, when one of the integration projects came unstuck, the number of institutions needing additional capital rose to 13. On 14 April, the Banco de España approved the strategies and timetables submitted by these 13 institutions or groups.

This include RMB outflows through official aid, international loans by banks in China, foreign issuance of debt in Chinese markets, direct investment abroad, inter-company loans, repatriation of corporate profits, resident spending abroad and so on. Some of these are already happening. Offshore RMB balances in Hong Kong, Chinese Taipei and Singapore for example rose almost 40% between late 2013 and early 2014 to RMB1.4 trillion. These numbers are indeed encouraging, except for one thing. When the RMB is abroad, it gets homesick, terribly homesick. It yearns to return home to the land of its birth. When the legal avenues for it to do so are limited, it desperately seeks other ways to do so. And as the size of overseas RMB pool increases, the pressure of the homeward bound flows will also increase. Will the Qualified Investor Schemes, RMB clearing banks and the eventual introduction of the China International Payment System alleviate this situation of the offshore RMB? Yes, it would, but not entirely. In the current situation, despite the sharp increase in RMB related trade and investment transactions, the data I have seen suggests that the use of RMB remains rather lopsided and favours the flow of RMB into China rather than out of China. A significantly greater proportion of China’s exports were paid for in RMB, then its imports. Similarly, while 63% of the FDI into China was in RMB, only 16% of the direct investment out of China was in RMB.
We are also seeing signs of spillovers to other parts of the economy, with recent survey data pointing to some moderation in the services sector. 1/5  BIS central bankers' speeches  Yet, consumption has held up fairly well: labour market conditions have continued to improve, encouraging consumers to remain confident and to continue to spend. The prolonged slowdown in economic activity has nevertheless been affecting price developments, which remain subdued. According to Eurostat’s flash estimate, inflation stood at 1.0% in November. Whether we look at surveys or market-based measures, inflation expectations are at or close to historical lows. What can the ECB do in a weaker economic environment to fulfil its price stability mandate? First of all, monetary policy can respond effectively even when growth is being dampened by external factors. And it can do so by ensuring favourable financing conditions for all sectors of the economy and providing visibility on those conditions into the future. Backed by a steady flow of credit on affordable terms, households and firms can consume and invest more. Such support for internal demand reinforces the services sector in particular, which is the most labour-intensive part of the economy. That helps to protect jobs and incomes and thereby sustains consumption – partly offsetting the external shock. We are seeing this mechanism in action today: the relative resilience of services so far is the key reason why employment has not been affected by the global manufacturing slowdown.

Clearly, if carbon emissions remain on their current trend, and if we want to keep the increase in temperature below 2°C, our global carbon budget6 will be consumed within 15 to 30 years.7 As central bankers and supervisors, our mission is both humble and considerable. Humble because the success of the Paris Agreement is the responsibility of the signatory states: the EU is committed to reducing carbon emissions by at least 40% by 2030, 8 and financial regulation cannot be a substitute for an ambitious climate agenda. Considerable because, we must do everything we can to support and complement the action undertaken by states. It is a great challenge for us, as supervisors in the 21th century. I would even say that it is our “ new frontier”, comparable to the financing of growth and major infrastructures in the 19th century or the management of great financial crises in the last 100 years. For this reason, I am very pleased to see that the Network for Greening the Financial System (NGFS), that the Banque de France launched last December, is gaining momentum. This pioneering initiative brings together, for the time being, 9 central banks and supervisors from all over the world, and is chaired by Frank Elderson (De Nederlandsche Bank). We plan to publish our first report by April 2019. In the meantime, let us take a closer look at the risks presented by climate change, but let us not overlook the opportunities.