samchain/econo-pairs-v1 huggingface dataset:
Or it may require a longer breathing space or a larger amount of support than that prescribed in the limits I have set out. Or it may propose other forms of security than the three that have been specified. Support in such cases would be considered in the light of the implications of failure on systemic stability and would not be granted without the specific prior approval of the Financial Secretary. In addition, the Monetary Authority would consider whether to appoint a Manager under Section 52 of the Banking Ordinance to safeguard the interests of depositors and other creditors. The aim in providing for cases that fall outside the conditions set out in the policy statement is to allow sufficient flexibility for the HKMA to deal with unpredictable situations, a point that has been well made by the HKAB, but also to ensure that this flexibility is matched by adequate checks and balances. Conclusion Before offering my concluding remarks on the policy of lender of last resort, I should like to make some observations on the institutional position of the HKMA as lender of last resort.

The interlinkages between financial institutions amplify risk in the financial system. In our assessments, it is important to be aware of any build-up of systemic risk. Residential mortgages provide a good illustration of the difference between the individual risk for a bank and systemic risk. Even during the 1990s banking crisis, Norwegian banks’ losses on residential mortgages were low. Today’s low risk weights for residential mortgages provide strong incentives for banks to extend these mortgage loans. However, housing market fluctuations, which go hand in hand with shifts in saving behaviour, are nonetheless a source of business cycle fluctuations and substantial losses when banks have to write off loans to firms selling goods and services to households. 8  BIS Review 131/2009  The Norwegian housing market is vulnerable. Both a high level of tax incentives for house ownership and a large volume of adjustable-rate mortgages contribute to wide fluctuations in activity and prices. 8 The rise in house prices in the past two decades has also been very strong compared with countries where housing bubbles have burst. To finance strong growth in residential mortgages, banks have to rely to a great extent on borrowing, thereby increasing their vulnerability to a liquidity squeeze. Thus, low risk weights for residential mortgages also lead to higher liquidity risk in the banking system as a whole. It is important to be aware of the similarities between developments in the Norwegian housing market and bank lending and developments in the countries most severely affected by the crisis.
With stronger banks, credit is flowing again, helping businesses with new ideas and families looking for a home. In the past 2 years, lending by banks has grown in line with the economy: credit supply looks neither too cold - as it was after the crisis - nor too hot - as it was in the build-up to the crisis (Chart 1). 2  Carney (2017) ‘FSB Chair letter to G20 Leaders – building a safer, simpler and fairer financial system’, 3 July. http://www.fsb.org/wpcontent/uploads/P030717-1.pdf  3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Sadly we can never declare ‘mission accomplished’. Vigilance is needed because too much credit – the flipside of which is of course too much debt – poses economic dangers. The financial system has a habit of creating too much of it. And even when the overall temperature is just right, there can be pockets of debt that are too hot. The economic dangers of debt Household debt – like most things that are good in moderation – can be dangerous in excess. Dangerous to borrowers, lenders and, most importantly from our perspective, everyone else in the economy. Let’s begin with mortgage debt. It doesn’t take a genius to know that households with big mortgages are more vulnerable to the unexpected. In Britain, they do everything they can to pay their mortgage debts through thick and thin. That is why banks did not take large losses on mortgages in the crisis.

Aggregate cumulative UK impairment charges over the five years of the (a) stress Impairments in the stress (left-hand scale) Impairment rates in the stress (right-hand scale) Per cent 25  £ billions 20  20  15  15 10 10 5  5  0  0 UK mortgages  Sources: PRA regulatory returns, published accounts and Bank calculations. (a) Major UK banks’ core Tier 1 capital as a percentage of their risk-weighted assets. Major UK banks are Banco Santander, Bank of Ireland, Barclays, Co-operative Banking Group, HSBC, Lloyds Banking Group, National Australia Bank, Nationwide, RBS and Virgin Money. Data exclude Northern Rock/Virgin Money from 2008. (b) Between 2008 and 2011, the chart shows core Tier 1 ratios as published by banks, excluding hybrid capital instruments and making deductions from capital based on FSA definitions. Prior to 2008 that measure was not typically disclosed; the chart shows Bank calculations approximating it as previously published in the Report. (c) Weighted by risk-weighted assets. (d) From 2012, the ‘Basel III common equity Tier 1 capital ratio’ is calculated as common equity Tier 1 capital over riskweighted assets, according to the CRD IV definition as implemented in the United Kingdom. The Basel III peer group includes Barclays, Co-operative Banking Group, HSBC, Lloyds Banking Group, Nationwide, RBS and Santander UK. (e) CET1 ratio less the aggregate percentage point fall projected under the Bank of England’s 2016 annual cyclical stress scenario for the six largest UK banks.
Prasarn Trairatvorakul: Thailand – assessment of recent economic performance and challenges for the period ahead Keynote address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Institute of International Finance Asia CEO Summit, Bangkok, 14 March 2012. *  *  *  Distinguished speakers, Ladies and gentlemen. Let me begin by thanking our hosts – the IIF and Bangkok Bank, for inviting me to speak before you at this occasion. It is a pleasure to participate in this unique forum that brings together so many experts from both the private and public sides of the international financial community. I would also like to congratulate the IIF for your proud 30th Anniversary. My designated topic for today is on Thailand’s recent economic performance and challenges for the period ahead. In this audience, I think it is safe to presume that most of you are familiar with recent economic developments so I will be brief in this respect and focus most of my remarks on challenges going forward. So let me start by offering a recap on the events of 2011 up to now. The main theme during most of last year was maintaining growth momentum while keeping stability in check. As the economy gained traction, the balance of risks began to shift away from growth and towards inflation. As a result, monetary policy was dedicated to normalizing interest rates. Then the table was turned.

It could be for France even slightly higher than forecasted (1.6%), if we look at our Banque de France forecast for Q4 published this morning – at 0.5%. It will be sustained in the next two years thanks to strong investment and increased convergence among countries. These forecasts, including a positive but still subdued inflation, confirm the adequacy of the gradual normalisation of our monetary policy we are engaged in. There is a risk, however, that the debate will continue to revolve around two long-standing divisions: “German rules” vs “French expenditure” and “community methods” vs “intergovernmental methods". Too many fears and suspicions have been inherited from the past, but we are living in a new era – which is also thanks to the acceleration of reforms in France – and in a time of unique historic opportunity. In Rome, on 25 March of this year, the Member States all expressed their clear will for “the completion of the Economic and Monetary Union". We are in agreement on the “why": greater stability, to counter the risk of a new crisis befalling an unprotected euro area; and greater growth, to catch up our past lag on the United States and finally treat the fatal disease of mass unemployment in Europe. But how can we achieve this shared objective?
On one side, economists at the Bank for International Settlements (e.g. White, 2006), argued that monetary policy was too loose and should instead “lean against the wind” of a credit/asset-price boom in order to reduce risks further down the road. On the other side, people such as the Chairman of the Federal Reserve, Alan Greenspan (2002), doubted the feasibility of such an approach and advocated a policy of benign neglect during the boom phase, along with aggressive relaxation should there be a collapse of asset prices. As I noted some years ago (Bean, 2003), such “leaning against the wind” is in principle compatible with flexible inflation targeting: a central bank ought to be willing to undershoot its inflation target temporarily, if it believes that it will thereby improve its chances of meeting the target later on by avoiding a disruptive bust. The crisis and subsequent Great Recession seem to make this logic even more compelling. But unfortunately, by the time an unsustainable credit boom has been diagnosed, a small increase in policy rates is unlikely to do much to cool it. And a large increase is likely to generate unacceptable collateral damage to the real economy. In a paper for the Federal Reserve’s annual conference at Jackson Hole a couple of years ago (Bean et al., 2011), I reported the results of some simulations of what might have happened if Bank Rate had been 200 basis points higher during the four years before the crisis began.

2  Estimation of an error-correction model in which the projection of the NFC lending rate depends on the lagged OIS3M and OIS2Y 3 April 2023 euro area bank lending survey (europa.eu), released on May 2, 2023  Page 7 sur 14  By the way, the growth of loans in France remains significantly higher than in the euro area average. Overall, evidence shows a quick and smooth pass-through of ECB decisions to broad financing conditions. But this is only the first part of the transmission to tame inflation. II. Transmission to the real economy and the decline in inflation In the textbook theory, tighter financial conditions moderate aggregate demand. Monetary policy also affect inflation through the exchange rate channel, but this is beyond the scope of my speech today. According to recent ECB work based on a set of models that complement each other,4 our policy tightening is estimated to lower inflation by around 2  4  Darracq-Paries, Motto, Montes-Galdón, Ristiniemi, Saint Guilhem and Zimic, A model-based assessment of the macroeconomic impact of the ECB’s monetary policy tightening since December 2021, ECB Economic Bulletin, issue 3/2023. Page 8 sur 14 percentage points as a mean over the period 2023-2025. But these estimates call for two caveats: - they vary substantially across models, and are lower in semi-structural models, which unlike structural or DSGE models, incorporate more inertia in consumption and less influence of forward-looking inflation expectations.
For the region as a whole, the population in this age group will increase by 314 % from 207 million in 2000 to 857 million in 2050. Many nations are finding it increasingly difficult to provide adequately for the needs of their aged through state-provided social security. Faced with such prospects, planning for retirement has become more important, both for individuals as well as public policy to ensure sustainable financing and management of retirement and healthcare needs in the long term. In this context, the development of deep financial markets among ASEAN countries is critical. One of the significant challenges currently facing the insurance industry in this region has been the shortage of long term assets that match the duration of insurance liabilities. While the bond markets in several ASEAN economies have been extensively developed over the last decade, longer-dated papers remain scarce in most countries. This has been a key impediment to the development of private pension products needed to meet the increasing demand for channels through which the population can save for retirement. While there are significant efforts being made to further develop the longer end of the bond market, the engagement between the industry, regulators and Government needs to be maintained and intensified further to take this agenda forward. This is critical both for the management of risks in the industry, and to support sustainable growth in the longer term.

Another untapped segment of the market is the takaful sector in view of the fact that Muslims constitute more than 40% of the population in ASEAN, mainly in Malaysia , Indonesia and Brunei . Globally, the Muslim population accounts for about 24% of the total population. This has supported the growth of the takaful market in recent years as an alternative to  2  BIS Review 134/2007  conventional insurance. The global takaful market is expected to grow between 15 and 20 per cent per annum. Based on the market penetration level which is at 6.8% in Malaysia and less than 5% in many Muslim countries, this represents significant market potential for the future growth of takaful business. The expansion of insurance markets in ASEAN will need to be reinforced by further consumer education to increase awareness among the public on the importance of longterm financial planning as well as to equip them to evaluate product features and make informed decisions. The insurers must recognise that it is an important responsibility on their part not just to ensure that adequate information is provided to the consumers, but that consumers are suitably advised in the sales process. This includes ensuring that information about insurance products is presented in a manner that is meaningful and easily understood by consumers. This distinction between quantity and quality is important.
Without going into the details of the Regulations, let me only mention that their effect is to strengthen the Stability and Growth Pact and to make sanctions a more credible threat. 6  See M. Salines, G. Glöckler, Z. Truchlewski and P. Del Favero (2011): “Beyond the economics of the euro. Analysing the institutional evolution of EMU 1999–2010”, ECB Occasional Paper No. 127. 6  BIS central bankers’ speeches  Another important innovation has been the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, known as “fiscal compact”, which entered into force in January 2013. This is an intergovernmental treaty which establishes, among other things, that Member States must enact laws (preferably at Constitutional level) requiring their national budgets to be in balance or in surplus within the treaty’s definition. The laws must also contain a self-correcting mechanism to prevent any breach. The treaty defines a balanced budget as a general budget deficit less than 3.0% of the gross domestic product (GDP), and a structural deficit of less than 1.0% of GDP if the debt level is below 60% – otherwise it shall be below 0.5% of GDP. Finally, the so-called “two-pack” Regulations entered only very recently into force, subject euro area countries to the obligation of ex ante notification of budgetary plans to the European Commission.

That will call for a detailed review of the risk models used by banks and the adoption of corrective measures should unjustifiable deviations be detected. Macroprudential policy Macroprudential policy, insofar as it seeks to identify systemic risks, prevent them and increase the industry’s resilience, has an important role to play. The very nature of these risks is global in dimension, meaning that coordination between the various authorities with responsibilities in this field is needed. At the same time, it should be borne in mind that while the risks may be considered common to the euro area as a whole, their impact and intensity vary from country to country. This heterogeneity not only depends on the characteristics of each country, but also on the particular juncture of the financial cycle. For example, at present certain euro area countries evidence risks associated with excessive real estate market prices, while in others this risk is not discernible. Macroprudential policy thus requires a coordinated approach by the various institutions, and at the same time attention must be paid to considerations of a national nature. In a monetary  BIS central bankers’ speeches  3  union like the euro area, the heterogeneity of the member countries’ financial cycles may be an important issue when it comes to designing these policies. The European Systemic Risk Board was set up in late 2010 as the authority responsible for macroprudential oversight in the European Union, empowered to issue warnings and recommendations in this connection under the “act or explain” principle.
Minimum conditions would be first that Member States actually abide by common rules – the Stability and Growth Pact and the Macroeconomic Imbalances Procedure – and second that they actually conduct policies consistent with the euro area collective economic strategy. However, contrary to the ESM instruments that have been used so far, access to the SLI should not be conditional on the implementation of an adjustment program. Its design would be such that it does not involve a stigma for Member States. The issue of governance brings me to a broader reflection on the idea of a European Monetary Fund (EMF). An EMF would only make sense if its scope of action and its governance went beyond those of the current ESM. Otherwise, why would we give it a different name? The scope of action of a potential EMF should not be limited to crisis management. We should entrust it with the role of crisis prevention in a broad sense, including contingent lending through the SLI. This would require decision-making processes that would not be tied up by veto-based governance. 2/4  BIS central bankers' speeches  As President of the Eurogroup and Member of the European Commission, the Finance Minister of the euro area would logically chair the Board of Governors of an EMF and play a stronger role in situations that require Board level judgement.

The challenge, now, is to calibrate and phase in the new framework in a way that does not impede the recovery and does not contradict our macroeconomic objectives. In the long run, we want stronger balance sheets in the banking system but too high capital requirements could have negative effects, reducing loan supply and, paradoxically, fostering risk-taking in order to keep a high return on equity. In the immediate future, disorderly deleveraging is one of the main downside risks to the recovery process. A macroeconomic assessment of the reforms is underway and will help us strike the optimal balance. The broader point here is that the proposed reforms may have significant macroeconomic consequences and these should be factored in when designing and implementing them. A critical issue put forward relates to the behavior of banks with respect to the capital buffers that they retain on top of the existing minimum. If banks target buffers above the regulatory minimum, which is an endogenous market outcome, they may need to raise even larger amounts of equity than what can be expected by just looking at the current package. We know from empirical studies that weaker capitalized banks typically exhibit weak loan growth compared to other better-capitalized banks. We also know that banks may find it less costly to adjust loan volumes and loan pricing than capital, as frictions in the market for bank capital make the latter option more expensive.
The past five years have seen a number of damaging financial crises that have afflicted emerging market economies. Sudden reversals of short-term capital flows to some of those economies resulted in crises that led not only to deep recessions and sometimes political crises, but also a renewed debate about the role of the IMF in providing bailouts to some of these countries. Despite this volatility in international economic conditions the British economy, to date, has experienced greater stability. At first sight, this is encouraging. The UK has weathered some of the recent international economic storms, and achieved a post-war record of uninterrupted economic growth, falling unemployment, and inflation lower and more stable than for a generation. But no two storms are ever the same. Do the clouds on the international economic horizon threaten our economic stability at home? We cannot know. Rest assured that the Monetary Policy Committee will always act to maintain stability by keeping inflation on track to meet the target of 2½%. But the recent stability of inflation owes a good deal to the fact that economic shocks from overseas have tended to offset rather than reinforce each other. It would be rash to assume that it will be at all easy to keep inflation over the next five years within the 2%-3% range within which it has largely moved over the past five years. What matters most, however, is that any such deviations from target are short-lived, and that inflation expectations generally are firmly anchored on the target.

Mervyn King: No country is an island Speech by Mervyn King, Deputy Governor of the Bank of England, at the Institute of Petroleum Annual Dinner, London, 21 February 2001. *  *  *  No country is an island - in terms of economics, if not geography. Trade and capital flows link all the economies of the world. Since 1970 the volume of world trade has increased more than five-fold. Globalisation is not a slogan; it is a fact. The economic winds can rapidly alter direction bringing significant changes in the economic weather. What happens in the world economy is of great importance to your industry. But no business in a country, such as the United Kingdom, which exports and imports almost a third of its national output each year, can ignore global economic developments. Recent events have reminded us of just how volatile that economic weather can be. Only a few short months ago, the United States was experiencing rapid economic growth at a rate which surprised us all. The new frontier had become the new economy, and some had forgotten that economic downturns are a regular feature of a market economy. Share prices had reached levels four times that of a decade earlier, and the price earnings ratio of America's top 500 companies was over forty, an unprecedented level. Now, after a swift and sharp fall of business and consumer confidence, the business cycle appears to be alive and well, and living in the United States.