samchain/econo-pairs-v1 huggingface dataset:
Prasarn Trairatvorakul: Challenges to central banks in the era of the new globalisation Opening remarks by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Bank of Thailand International Symposium 2010 on “Challenges to central banks in the era of the new globalisation”, Bangkok, 15 October 2010. *  *  *  Professors, Fellow Central Bankers, Distinguished Participants, Ladies and Gentlemen, It is a great pleasure for me to welcome you to the Bank of Thailand International Symposium 2010 on “Challenges to Central Banks in the Era of the New Globalisation”. This event is the fourth in a series of International Symposiums organized by the Bank of Thailand, which have been a forum for prominent academics, policy makers and market practitioners to meet and discuss current issues related to central banking and monetary policy, especially from an international perspective. As the world begins to recover from the global financial crisis, a new stage of globalisation has emerged and brought along a transformation of the economic and financial landscape. The meeting today will again be an opportunity for us to share views and address key challenges facing central banks during this time of change. I will highlight three of them. First, the global financial crisis has brought to the fore the importance of financial stability as a necessary condition for economic stability. The need to fulfill this objective will forever change the way central banks conduct their policy.

On a larger scale, uncertainties pertaining to the post-crisis international monetary and reserve currency system – the one in which dominant currencies are likely to grow weaker and newly emerging currencies grow stronger – will also pose important challenges to monetary, exchange rate, and reserve management policies. Ladies and Gentlemen, To tackle some of these challenges, we are very fortunate to have with us today many distinguished speakers from both academia and central banks. In the morning sessions, we will hear from the academic point of view the implications of the changing financial and regulatory landscape. During lunch time, our keynote speaker will share his insights on the future of the international monetary system and what implications entail for policymakers. BIS Review 146/2010  1  Later in the afternoon, we hope to bridge academic thinking with practical policy considerations. Let me conclude by saying that it is impossible to have answers to all the big questions in a one-day conference like this. But I am sure we can contribute to the better understanding of many difficult issues and come up with useful policy recommendations. Most of all, I hope that this forum will be followed by continuing discussions and cooperation among all participants, which would be a true measure of success of the conference. I wish you all a fruitful meeting and memorable stay in Bangkok. Thank you. 2  BIS Review 146/2010
Bandid Nijathaworn: The pursuit of monetary and financial stability in emerging market economies Remarks by Mr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the Bank of England/Cornell University workshop on New Developments in Monetary Policy in Emerging Economies, Centre for Central Banking Studies (CCBS) at the Bank of England, London, 17-18 July 2007. *  *  *  First, let me thank the CCBS and the Cornell University for the invitation. Today my topic is the pursuit of monetary and financial stability in emerging market economies, based largely from the draft paper that has been circulated. What the paper attempts to do is to draw attention to the unique context of emerging markets compared to developed economies in the attainment of monetary and financial stability. Specifically, the paper discusses the underlying cause of the differences, and highlights the key implications of these differences for the pursuance of monetary and financial stability in the emerging market context, in terms of short-term stabilization challenge, long term structural challenge, and the challenge in implementing structural reform. I  The unique context  A good starting point to discuss the issue is to take note of the two stylized facts of emerging market that are unique to its policy setting. The first is the greater income and consumption volatility in emerging markets, both in terms of level and growth, relative to developed economies.

While it is unclear how effective domestic monetary policy can be in checking excessive asset price volatility, the threat of financial instability has given rise to a more prominent role for macro-prudential measures to reduce the procyclicality of the credit market. As we see it, the primary challenge in this respect is how best to move forward. Combining the use of prudential measures with monetary policy is a useful policy option, but it is still an unsettling issue because of the concern for efficiency. In practice, discretionary prudential measures pose difficulty in the  4  BIS Review 89/2007  form of potential regulatory forbearance, market distortion, timing effectiveness, and the difficulty in modeling early warning system. Rule-based prudential measures, on the other hand, pose difficulty in policy calibration. This is to say calibrating this type of policy tools has so far proven difficult for emerging market where data availability is limited and large structural breaks are usually present. Turning to longer-term perspective, the attainment of monetary and financial stability is determined predominantly by embedded structural features of the economy. This points to the importance of pursuing long run structural reforms. On this issue, we discuss the role that financial sector development and policy institutions and framework can play in this respect. First, financial development The first point we make on financial development is the importance of a well-balanced financial structure.
The vulnerabilities are more visible, when financial and NIIPs are observed, with several countries having moderately weaker positions. This indicates necessity for further policy changes, or bold structural reforms to improve the productivity and correct for the imbalances on the external front. The focus must be even stronger, given the subdued global outlook and rising risks on global trade and GVCs. Most of these countries are small and open, included in GVCs as well, indicating rising risks and need for policies to reduces vulnerabilities, and prevent adverse spillovers. 14  Table 1 External sector assessment – latest Article IV reports Current accunt possition  REER possition NIIP position  Financial flows  Albania Bulgaria Bosnia and Herzegovina Croatia Czech Republic Hungary Montenegro North Macedonia Poland Romania Serbia Slovenia Moderately  Substantially  Stronger Broadly in line Weaker Source: IMF, latest Article IV  Conclusion The snapshot of the global external profile reveals narrowing of the imbalances after the global crisis, and concentration of the imbalances in the advanced economies. Despite the lower magnitude, close to half of the current account imbalance does not seem to be aligned with the fundamentals and desirable policies. Furthermore, lower flow gaps, visible through lower current account and financial flows, were not sufficient to curb stock imbalances visible through the historically highest global NIIP. As far as CESEE the region is concerned, a simple analysis of the  external sector profile reveals compression of the current account gaps, slowdown in financial flows, and adjustment of the IIP position.

It indicates that most of the countries managed to proceeds with their reforms on the external front, elevating their export potential and enabling “quietness” of current accounts. Furthermore, looking into the geographical direction of trade for the region, several countries, are heavily exposed to Germany with a share of exports to Germany in total exports of around 30% or above. North Macedonia alone has the largest increase of this share in the last decade (2008-2018) of around 33 p.p. reaching 47% of total exports in 2018. The rising trade integration, indicates larger dependence on external developments, and hence exposure to potential shocks. 9  Chart 6 Trade balance  Source: IMF, BOP database  The rising current account imbalance prior to the crisis reflected the strong economic growth, supported by increased financial inflows, mostly in form of FDI and private sector borrowing. Domestic private sector credit intensified, thus fueling domestic demand. As for the fiscal position, as important driver of the current account dynamics, the reveals that in most of the countries (except Hungary, Albania, Croatia) before the crisis fiscal stance was prudent and with fiscal space was in place. The fiscal response to the crisis was countercyclical, with fiscal position strengthening afterwards, but yet its impact on the current account gap does seem to be consistent and visible across the time, suggesting predominant role of the private domestic demand.
In order to prepare our region to be as competitive as possible, policy makers, firms and workers need to accurately gauge which industries and jobs will grow fastest. Given the trend over the past few decades, it is no surprise that the new jobs being created across the region and nation are most likely to be in industries with a high share of workers with a college education. Thus, education and worker training is likely to continue to be very important in maintaining the economic vitality of our region going forward. Conclusion In summary, the recovery in our region continued at a slow pace during the second quarter of 2011. While overall job growth has been sluggish through the recovery, we find that there has been a great deal of job churning below the surface throughout our region. So far, this job churning is about evenly balanced between old and new job creation. The evidence to date is pretty clear that these new jobs, on balance, are in industries that employ workers with higher levels of skills and education. I will now ask Jaison Abel to provide additional details on the regional economy. 1  Groshen, Erica L. and Simon Potter. 2003. “Has Structural Change Contributed to a Jobless Recovery?” Federal Reserve Bank of New York Current Issues in Economics and Finance 9, no. 8. Groshen, Erica L., Potter, Simon, and Rebecca J. Sale. 2004. “Economic Restructuring in New York State.” Federal Reserve Bank of New York Current Issues in Economics and Finance 10, no. 7.

Since then, the industry has lost jobs in New York City and in New Jersey. This recent job loss has been particularly significant in the city’s securities industry, which has shed nearly 4,000 jobs since April. More difficulties may lie ahead, as there have been many recent announcements of consolidations and layoffs in the region’s banking sector. Despite weak labor market conditions overall, some sectors are enjoying robust growth in the region. In particular, the professional and business services and education and health sectors have continued to add jobs. These are high-value-added services that the region can export to other parts of the country and overseas, and provide jobs that tend to be performed by highly skilled people. As such, these sectors help support the broader economy and are likely to provide a source of growth for the region going forward. It is difficult to say when the pace of job growth will pick up. As such, we will continue to monitor our region’s economy and job situation closely. Job creation in the region The fact that the recovery has been so sluggish might lead you to believe that no jobs are being created. However, this is not true. Beneath the high unemployment rate and overall slow job growth lies a considerable amount of job churning. Ongoing losses in some sectors are being offset by gains in other sectors. Today we look inside this churning for clues about how these changes are playing out in our region.
This will help to cool the labour market and contain some of the domestically-driven inflationary pressures that historically have threatened to become more persistent. Concluding remarks  7/8  BIS - Central bankers' speeches  These are the three main arguments of my monetary policy reaction function at present. Developments on these three fronts will shape my policy decision in November. As I have hinted, these three elements are not only important in themselves, but they also interact with and feedback from one another, in ways that can only really be captured by an encompassing analysis. That is why it is valuable and necessary to base our next policy decision on the comprehensive assessment embodied in our November policy round, which will ultimately be reflected in the November MPC forecast. Given the uncertain world and volatile markets we face, November can seem a long time away. At present, I am still inclined to believe that a significant monetary policy response will be required to the significant macro and market news of the past few weeks. But I will see when we get to November how events have evolved in the meantime. As always, my policy choices will be driven by the data and guided by pursuit of the inflation target. And with that, I am happy to take your questions. The views expressed in this speech are not necessarily those of the Bank of England or the Monetary Policy Committee.

Jansson, Per (2013), How do we stop the trend in household debt? Work on several fronts. Speech at SvD Bank Summit, Stockholm, 12 March, Sveriges Riksbank. King, Mervyn (2012), Twenty years of inflation targeting. The Stamp Memorial Lecture, London School of Economics 9 October 2012, Bank of England. Kocherlakota, Narayana (2013), Low Real Interest Rates. Speech at the 22nd Annual Hyman P. Minsky Conference April 18 2013, Federal Reserve Bank of Minneapolis. Kocherlakota, Narayana (2014), Monetary Policy and Financial Stability. Presentation at the 2014 International Research Forum on Monetary Policy March 21 2014. Federal Reserve Bank of Minneapolis. Lagarde, Christine (2014), Navigating Monetary Policy in the New Normal. Speech at the ECB Forum on Central Banking 25 May 2014. IMF. Mishkin, Frederic S. (2011), Monetary Policy Strategy: Lessons From the Crisis. In Jarocinski, Smets and Thimann (eds) Approaches to Monetary Policy Revisited – Lessons from the Crisis. Sixth ECB Central Banking Conference 18–19 November 2010. ECB. Norges Bank (2012), Monetary Policy Report 2012/1. OECD (2010), Counter-cyclical economic policy. OECD Economics Department Policy Notes, No. 1, May 2010. OECD. Reichlin, Lucrezia and Baldwin, Richard, (eds), (2013), Is Inflation Targeting Dead? Central Banking After the Crisis. Vox eBook, Centre for Economic Policy Research. Reserve Bank of New Zealand (2012), News release announcing 2012 Policy Targets Agreement, 20 September. Smets, Frank (2013), Financial Stability and Monetary Policy: How Closely interlinked? Economic Review 2013:3. Jubilee issue. Sveriges Riksbank. Stark, Jürgen (2010), In search of a robust monetary policy framework.
We would delude ourselves if we thought that, unless we wish to crush all risk out of the financial system, regulation can entirely eliminate these phenomena. However, only a decade on from one of the most spectacular and damaging financial crises the world has ever seen, we can set ourselves the more modest objective of leaning strongly against them, to make things less bad next time round. This is what our horizon-scanning activity is for. It aims to pre-empt and mitigate risks to our objectives which arise in two main ways. First, firms may risk up in ways that are excessive or not properly controlled or capitalised. Second, the new regulatory framework is in part designed to change firms’ behaviours, but as the framework settles down market participants have some short-term private incentives to find the weak spots in it and push business into those cracks – in other words, to conduct regulatory arbitrage. Often things 1 See for instance: Panics, Manias and Crashes – Kindleberger et al; and This Time is Different – Reinhart & Rogoff 2  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  2  we should worry about are a combination of these two things. And it is sometimes inherently harder for the regulator to observe and act on these risks, relative to asking important but simpler questions such as whether a firm meets its capital requirements. Now I appreciate that that may all sound rather philosophical.

In a more specific aspect, the European integration processes will slowdown, as far as our firms will not be able to withstand the competitiveness pressures. For this reason, I think that the regional and Albanian authorities should continue with the implementation of structural reforms, which aim to: Increase the formalisation level of the economy, as a tool for raising competitiveness, for promoting consolidation, for improving the governance of firms, and for lowering their financing costs; Promote the development of firms in fields where the region and Albania provide competitive advantages, such as tourism or the agro-industry, and in those fields that have high value added, such as the information technology or the financial services. Development capital markets, as a tool to support new and innovative firms and as a partner to share the financial risk of entrepreneurs in the stage of the expansion and development. Dear participants, Let me emphasise that, notwithstanding the focus on the future challenges, the report shows optimism for the region. It notes that, unlike the other emerging economies, the presentation of productive industries will contribute to the increase of employment. Also, the regional integration in industry has the capacity to generate growth of productivity, to better compete with the imports and contribute to the growth of regional exports. The institutional adoption and convergence is considerably important for the integration of Albanian firms in the global output chain, and for strengthening their sophistication and specialisation in the global market.
As MAS’ regulatory framework has generally been regarded as conservative, we are in a good position to adopt these standards. We are mindful of maintaining a balanced approach and not over-swinging the regulatory pendulum. We will work closely with and consult the industry and the public. In the area of regulatory standards, we will review the Corporate Governance Regulations and Guidelines for locally incorporated banks and significant life insurance companies, introduced in 2005 and which were implemented in 2007. MAS’ review will focus on the effectiveness of risk management at the Board level, including the role played by Boards in safeguarding the safety and soundness of their institutions and in addressing market conduct risks. This would include a review of the Board’s role in setting remuneration policies to manage risks effectively. Giving further impetus to risk management, the locally incorporated banks are conducting more detailed stress tests internally as part of their Basel II implementation process and the results will be used in their capital planning. For foreign banks, MAS is continuing our close cooperation with home supervisors through regular discussions as well as participation in supervisory colleges. In the second area of ensuring well-functioning markets, several new measures, to enhance the MAS Standing Facility and strengthen the SGS primary auction system, will be implemented. The MAS Standing Facility has been a key channel of providing liquidity to financial institutions.

We must counter this by creating credible transparency and reacting to any possible alarming rumours swiftly and in a co-ordinated fashion. This is one of the tasks of the Swiss Staff 2000 which involves the Bankers’ Association, the important providers of services like clearing, settlement and the Exchange, banking supervision and the central bank. It seems indispensable that the authorities play an important part both in active and reactive communication. And, secondly, we must diligently carry on our preparatory work, continuously and openly report on the progress made, as well as adjusting the allocation of resources in accordance with the risks involved. At the same time, we must bear in mind that we will be faced with unexpected friction and bottlenecks. While it is true that the millennium transition poses a veritable challenge, I am fully convinced that it is manageable and that we will rise to the occasion. Let us all build on the positive relationship between our ongoing efforts to improve our readiness including a whole variety of contingency plans and the chance to eventually enjoy the pleasure of having been wrong and unnecessarily pessimistic in providing for all kinds of gloomy scenarios. 3  BIS Review 46/1999
Conclusions  I don’t think that you were much surprised by my saying that I don’t think much of lax regulation. Given the obvious tendency towards exaggeration and erroneous developments in financial markets, and the potential damage for the economy and society, good regulations are an indispensable prerequisite for ensuring that the financial sector is able to function properly in the long term. This does not mean that the consequences of regulation and supervision for the banking industry’s ability to function should not be considered. The desire of some to make up for the rigour of the rules with less stringent supervision is something I reject. That would be the wrong approach. But what are required are not only good regulations, but also a well-functioning supervisor that exercises tough but fair control to help ensure a stable banking system and a level cross-border playing field. A decisive factor for the success of the SSM will not just rest on banks in the euro area being subject to a consistent supervisory approach. Rather, both supervisory legislation and the powers of European supervision must take further steps in the direction of harmonisation. Finally, it is not possible for every conceivable situation to be covered by regulations, nor can every crisis be anticipated from a supervisory point of view. Although regulation and supervision can ensure a certain measure of protection, or build a line of defence, as it were, they cannot and should not eliminate every risk.

Annual accounts A few quick words on MAS’ financial statements. The Authority’s total assets grew 18.6 per cent during the year ended 31 March 2003 to $ billion. About 11 per cent or $ billion is due to the transfer of the Currency Fund from BCCS. All other assets and liabilities of BCCS as at 30  2  BIS Review 33/2003  September 2002 were similarly transferred to the MAS and have been incorporated into our financial statements. The net assets of the Currency Fund at the end of the financial year provided 112 per cent asset backing for the currency in circulation of $ billion. MAS’ profit after provisions for the financial year ended 31 March 2003 declined by 2.8 per cent to $ million as our investments continued to be affected by the low global interest rate environment and volatile financial markets. Conclusion In closing, let me restate MAS’s priorities going forward. Supporting economic growth while maintaining domestic price stability will remain the key focus of monetary policy. In the financial sector, we will continue to partner with industry players to build on our successes in key growth areas like asset management, the debt market, and treasury business, while looking out for new niche areas and opportunities. We will continue to refine our regulatory and supervisory framework as we progressively shift the emphasis from a rule-based regime to a risk-based and disclosure-based approach.