samchain/econo-pairs-v1 huggingface dataset:
chart 9).10 When comparing regulatory packages at international level, it is therefore important not to look at capital adequacy requirements in isolation. Additional measures with far-reaching effects on economic freedom can have grave unintended consequences. They therefore end  7  In the form of minimum common equity. 8  10% common equity (Swiss proposal) vs. 7% common equity plus 1% systemic capital surcharge (Basel III). 9  The financial market regulation reform package was passed in the US in summer 2010. 10  The European Commission proposes that a permanent European bank bail-out fund should be set up starting in 2013. Furthermore, the EU have called for size restrictions on banks in receipt of state aid (ING and Commerzbank) and divestitures (ING had to sell ING Direct USA). Lloyds Banking Group and Royal Bank of Scotland are also expected to shrink their balance sheets. In the United Kingdom, the Independent Banking Commission (the equivalent of the Swiss TBTF commission of experts) proposed high capital requirements alongside structural changes. Universal banks therefore have to separate out their UK retail business (no subsidiarity as in Federal Council proposal). BIS central bankers’ speeches  5  up costing considerably more than measures that create targeted incentives to allow market discipline to operate again. To sum up, an analysis of international differences in regulation shows that, in the past, stricter capital regulation was in fact a competitive advantage rather than a disadvantage for Swiss banks.

However, this is exactly what the proposed measures on convertible capital take into account. They create better conditions, so that capital structure will have less influence on a bank’s financing costs. Independently of this finding, it is argued that the reduction of the state subsidy – which is one aim of the new regulation – will lead to an increase in lending rates for clients. There are various arguments against this. On the one hand, structural factors within Switzerland’s banking sector limit the big banks’ scope for setting prices even today: There is a sufficient  5  Cf. Modigliani, F. and Miller, M. H., 1958. The Cost of Capital, Corporation Finance and the Theory of Investment. BIS central bankers’ speeches  3  number of domestic lending providers in the market, which keeps margins relatively low. On the other hand, the reduction in the subsidy will tend to lead to even more competition. The current disadvantage suffered by other banks active in the domestic market is lessened – the package of measures thus levels the playing field in the Swiss customer business segment. In this environment, an increase in lending rates by the big banks would lead to a loss of market share. A reduction in the subsidy is therefore more likely to manifest itself in lower returns on equity or lower compensation for the bank management than in higher lending rates. Empirically, there is no connection between the capital ratio and the credit volume, either.
The Bank of Thailand also plans to improve convenience of the general public by standardising the width of all bank notes, and to introduce chemically treated paper to promote hygiene and lengthen the life span of the notes in circulation. BIS Review 6/2001  3  Ladies and gentlemen, The most important factor for preventing the recurrence of the financial crisis is to put in place a framework of financial institution supervision in which the business sectors and the public place confidence. From the first of January next year, the Bank of Thailand will introduce a new financial institution supervision framework which is risk-based supervision, focusing on the risk management system of the financial institutions. Under this new system, the responsibility of the supervisor in charge of each institution will be clearly set out in order to ensure direct accountability. Their work will be supplemented by on-site inspection, where the supervisor will work with internal supervisor (off-site) of the Bank of Thailand and external auditors of the financial institutions. In order to promote transparency and to ensure that the financial institutions being examined understand the purpose of the visit, a formal audit program will be sent out to inform the financial institutions prior to the visits. The annual bank supervisor’s on-site visit plan requires that each institution be visited at least once a year. The process of bank examination will be timelier.

The Ministry of Finance will provide additional clarification and detailed explanation of the income tax treatment on more prescribed Islamic financing arrangements including financing through a partnership arrangement, project finance as well as interbank placement of funds6. This is in  6  The tax circular will cover Islamic financing arrangements based on Diminishing Musharaka (financing through a partnership arrangement) and Istisna (project financing) and interbank placement based on Wakala (agency contract) and Murabaha (sale at cost-plus) concepts. BIS central bankers’ speeches  3  keeping with our long-standing principle that Shariah-compliant products should not be disadvantaged in terms of regulatory and tax treatment where the economic substance and risks are similar to conventional products. We hope that this will expedite the development of more such financial products in Singapore. Conclusion 18. To sum up, the Middle East and Asia continue to present attractive opportunities. Both regions need to work closer together to achieve greater synergy and accelerate the global growth of Islamic finance. Singapore will play its part in this international effort together with our regional and industry partners. 19. I am glad to see more players from Middle East and Asia participating in this year’s Summit. I hope that you will take up the challenge to work together to spur the development of Islamic finance as a bridge between Asia and the Middle East. Thank you. 4  BIS central bankers’ speeches
And richer people are less likely to move larger distances than poorer ones (Chart 22). 32  All speeches are available online at www.bankofengland.co.uk/speeches  32  Chart 20: Distribution of house moves by distance in different regions (mortgage-to-mortgage movers in 2018, moving to South-East England and Scotland)  Sources: Product Sales Database and Bank calculations. Chart 21: Distribution of house moves by distance for different ages (mortgage-to-mortgage movers in 2018, upper and lower age quartiles)  Sources: Product Sales Database and Bank calculations. 33  All speeches are available online at www.bankofengland.co.uk/speeches  33  Chart 23: Distribution of house moves by distance for different (mortgage-and-mortgage moves in 2018, upper and lower income quartiles)  income  groups  Sources: Product Sales Database and Bank calculations. Take Yorkshire and Humberside. A third of all moves are within-region. East, West, Home’s Best. Some do move to the West (around 15%) and some to the East (7%). Although some head South-East for life in the slow lane (7%), a larger number move North to Scotland (around 10%). This only covers moves among those with a mortgage, so will not capture first-time buyers, students, renters or those retiring without a mortgage. It nonetheless offers a new lens on the housing market, locally and nationally. It is not difficult to see how these micro-level flow data could be augmented. Data from payments systems can, and are, being used to track flows of money.

That might be because they hold assets directly in their trading books. For example, the £ of credit trading losses of RBS in 2008 amounted to 40% of the total net accounting losses of RBS between 2007 and 2010. 5  Or they might be exposed to a corporate sector that, if asset prices adjusted, would have a debt overhang. Our stress tests show that losses on corporate loans can account for more than a third of banks’ losses in an economic shock, even though they account for only a fifth of banks’ loans. iii)  Markets lack resilience and so amplify adjustments  There are myriad reasons why this can happen and I’ll discuss some live examples later. 4  Research by Bahaj, Foulis and Pinter (2016) suggests that a 10% fall in UK commercial real estate prices is associated with a 1% decline in firm investment. 5 See the report by the board of the Financial Services Authority (2011), ‘The failure of the Royal Bank of Scotland’, for additional information. 4  All speeches are available online at www.bankofengland.co.uk/speeches  4  When markets amplify price adjustments, the other channels become more powerful. And there is also an important direct effect on the economy: the cost of new finance to the wider economy is driven up and its availability driven down. In extreme cases, markets can become dysfunctional and effectively shut out access to finance. UK high yield bond issuance markets were closed for four consecutive quarters during the global financial crisis of 2008-9.
2  BIS Review 13/2003  If we look at the period from 1986 and compare developments in nominal oil prices with the return on a fund managed according to the Petroleum Fund's investment strategy - a global portfolio containing bonds and equities in a 60-40 distribution - we see that the fund would have yielded a far higher annual return. What about the risk? How is it affected by a conversion from oil to financial wealth? History provides us with a clear, if somewhat surprising answer. A conversion from oil to financial wealth increases the return and at the same time reduces the risk. This is because wealth under the seabed (somewhat simplified) only consists of one asset, petroleum, while broadly invested financial wealth is highly diversified in many instruments whose return fluctuates at different rates. Today the distribution between financial wealth (the Petroleum Fund) and petroleum is about 20-80. If we venture to base our assessment on historical relationships, it is fairly clear that we have, relatively speaking, too much oil in our portfolio and that the current conversion to financial wealth is to our advantage. We have no guarantee, of course, that history will repeat itself, but relying on the opposite requires considerable courage. The Petroleum Fund can be invested in two main types of instruments; bonds and equities. The international bond market is about the same size as the equity market. Government bonds are a relatively safe investment, but the return is low.

The problems we encountered in communicating monetary policy, which arose in conjunction with the substantial rate cuts during the second half of the 1990s, were also a significant reason for the Riksbank's decision in 1999 to publish a clarification of the formulation of policy and the application of the inflation target.1 Among other things the clarification specified the situations in which there may be reason to deviate from the simple rule of aiming policy at meeting the target of 2 per cent CPI inflation one to two years ahead. My discussion today is based on exactly the same line of reasoning as in that clarification. The second example is taken from spring 2001. Higher food and energy prices due to foot and mouth disease and mad cow disease, as well as supply shocks in energy production, caused a sharp rise in CPI inflation. The price increases were judged to be temporary, and the Riksbank decided therefore not to raise the repo rate. As the prices rises were estimated to disappear from CPI inflation relatively quickly, there was no need in this case to depart from the Bank's simple rule of monetary policy. However there was a need in our external communication to illustrate clearly the assessment that it was mainly transitory price increases that had caused CPI inflation to be so high above target.
The strengths within Asia has been most evident in the recent global financial and economic crisis. Asia has demonstrated remarkable resilience in the face of the unprecedented international financial crisis. Most regional economies have seen positive growth since the second half of 2009, with prospects for a sustained recovery. The region has benefited from strong fundamentals and the financial reforms undertaken in this recent decade which has enabled the region to recover faster with a stronger performance. BIS Review 43/2010  1  Several other factors have contributed to this early recovery. First, the region had policy flexibility to respond to the consequences of the international financial crisis. Strong fiscal positions, including relatively low public debt levels, have allowed many Asian governments to implement larger fiscal stimulus. Second, the financial sector in the region is in good health. Disruption to credit flows to the private sector have been avoided. Third, households and the corporate sectors in Asia are not over leveraged, and thus are in a better position to resume consumption and business activity once confidence had returned. Fourth, Asia is also not plagued with wide scale unemployment. Fifth, increased intra-regional trade has contributed significantly to the resumption of international trade in most of the regional economies. The strong surge in exports in the regional economies in the recent months is due primarily to the significant rise in intra-regional trade. Strengthening of regional integration Regional integration will become an increasingly important factor in sustaining the future growth in the region.

Throughout Malaysia’s more than 50 years of development, the country has demonstrated economic flexibility to successfully shift to the new areas of comparative advantage to the new areas of growth. I believe, with the foundations in place, Malaysia has every potential to transition into a high value-added, high income economy. Concluding remarks Asia’s new role in the globalisation process has only just begun. The continuous dynamic evolution of Asia as greater regional economic and financial integration take place will contribute towards raising the standards of living in this region. In this context, the important partnership between the Government and the private sector remains a key element in ensuring stability and sustainable economic development in the future. 4  BIS Review 43/2010
Despite this forecast of an improved outlook, we will need very strong growth if we are to return to 5 per cent unemployment in a reasonable time frame. Economists frequently use a rule of thumb, called Okun’s Law, to characterize the relationship between output growth and unemployment. According to Okun’s Law, if the economy grows one percentage point faster than its potential for one year, the result will be a decline in the unemployment rate of approximately one-half of a per cent. Of course, I would highlight that this is a rule of thumb, and that the relationship is more complicated than this and, of course, subject to error. 2  Of course, some of this is the result of the unusual length of this recession. 3  Year over year, the growth is 2.5 per cent – which includes one quarter of negative growth (the second quarter of 2009). 2  BIS Review 62/2010  But using the simple rule of thumb implied by Okun’s Law, the left side of Figure 6 shows the rates of GDP growth necessary to return unemployment to 5 per cent over different time frames. The chart highlights that we need several years of very strong growth to reach 5 per cent unemployment. For example, to reach 5 per cent unemployment by the end of 2013, real GDP growth would have to average 5 per cent per year.

I would like to thank Raji Chakrabarti and Wilbert van der Klaauw and the New York Fed’s Research Group for organizing this timely conference, and for bringing together this superb group of scholars. Thank you all for your participation. I wish you a very productive and enjoyable conference. 1 Betsy Bourassa, Rajashri Chakrabarti, Andrew Haughwout, and Wilbert van der Klaauw assisted in preparing  these remarks. 2/2  BIS central bankers' speeches
Bandid Nijathaworn: Are there limits to transparency? Remarks by Mr Bandid Nijathaworn, Deputy Governor of the Bank of Thailand, at the IMF Conference on Central Bank Communications, Mumbai, 23 January 2006. *  *  *  First, let me thank the IMF and the Reserve Bank of India for the invitation. It is a pleasure to be here in Mumbai. And I should also congratulate the IMF for putting up what seems to be another useful and successful seminar. My contribution today is to speak on limits to transparency. Given the limitations of time, I want to begin by looking at the needs of central banks for limiting transparency, especially in the context of central banks’ own operations. Then, I want to speak on the challenge facing central banks in designing appropriate disclosure policy. And finally, I want to share with you my thought on how to approach transparency in the context of monetary policy. Transparency has now become an important policy aspect of central banking. Not only is transparency linked directly to the governance issue, but greater transparency also imparts important benefits to the effectiveness of central bank policies. In broad terms, three benefits from greater transparency are often cited. First, greater information provided by the central banks allows market participants to accurately evaluate the behavior and the performance of central banks. This is most important for public organizations like central banks. Second, financial markets tend to work more efficiently with greater transparency.

Other notable factors are the structure of the population, new housing construction and access to loans. Regardless of what it is that generates an increase in house prices, this probably stimulates household consumption via the wealth effect, just as a house price fall has the opposite effect. An increase in the value of houses and tenant-owned apartments can be realised in part by using the property as loan collateral. If this happens when interest rates are low, households will be more interested in mortgaging the increased value of their property in order to buy durable goods such as cars and household appliances, for example. House prices therefore have significance for demand and thereby for monetary policy. The lending potential and interest rates of banks and mortgage institutions are also important. Access to loans increases the chances of realising an increase in value but also makes it possible to finance a house purchase. In addition to the inflation target, the Riksbank has the task of promoting finan-cial stability, which is a prerequisite for a proper implementation of monetary policy. A functional payment system, capital supply and arrangements for spreading risks are a precondition for the efficient working of the economy in general. An important instrument for the Riksbank’s work on stability is the twice-yearly publication of a report that evaluates the risks in the financial system. Lending to households and the development of house prices have been recurrent themes in the Financial Stability Report in recent years.
1 Second, in the 1970s, U.S. monetary policy tried to do too much to stimulate growth and reduce unemployment when unrecognized structural factors  1  Friedman and Schwartz (1963). BIS central bankers’ speeches  1  stood in the way. Overly accommodative policy led to soaring rates of inflation. Third, the Treasury Accord of 1951 reminds us that an essential feature of good monetary policy is an independent central bank – one that is autonomous enough to make tough policy decisions. But, democratically elected authorities don’t just grant autonomy to unelected central bankers, nor should they. The price of autonomy is accountability. In order to maintain autonomy, we need to say what we are trying to accomplish and then honestly evaluate our progress in a way that the public and their representatives can judge clearly. The FOMC has recently made great strides in this direction by explicitly expositing a strategy that reflects the three key lessons of its history. The Committee’s “Statement of longer-run goals and monetary policy strategy” 2 was first made in January 2012 and has been reaffirmed each year since (chart 2). In it, the Committee indicates that price stability is understood to mean 2 percent inflation in the long run as measured by the annual change in the price index for total personal consumption expenditures (what we refer to as the PCE price index.)

Surely, they say, enormous increases in the monetary base are likely to be accompanied by substantial price level increases. The problem with this story is that the banks have not been lending these reserves nearly enough to generate big increases in broad monetary aggregates. And even if they did, as an indicator of inflation, the monetary aggregates lost their predictive content many decades ago. The evidence, again, is that inflation remains low. But what if? What if lending picks up? Well, that would be really terrific. Dramatically higher bank lending would surely be associated with higher loan demand and a generally stronger economy. Strong growth and diminishing resource slack would be part of this story, and a rising rate environment would be a natural force diminishing the rising inflation pressures. In the meantime, monitoring the entire state of the economy along with  6  Evans and Fisher (2011). BIS central bankers’ speeches  5  inflation seems like a sensible and appropriate safeguard against this currently low probability scenario. Third, another potential source of inflationary pressures would be rising inflation expectations. Here, I mean a breakout of inflation expectations separate from any fundamentals that might accompany the previously discussed cases of rising commodity prices and stronger bank lending. One could think of this as the spontaneous combustion theory of inflation. The story goes like this: Households and businesses simply wake up one day and expect higher inflation is coming without any further improvement in economic fundamentals.