samchain/econo-pairs-v1 huggingface dataset:
At this time, we have mostly completed Basel II’s key guidelines with only a few remaining issues. This includes finalizing Pillar 1 – namely, Minimum Capital Adequacy Return Form, and the Recognition of External Credit Assessment Institutions and the Mapping Process Under the Standardized Approach (SA). On the commercial bank’s side, our assessment shows that the preparation for Basel II implementation is on track. In terms of capital impact, based on end of June data for 2006, our quantitative impact study shows that the BIS ratio for the whole industry is expected to decline approximately by 1.5 percentage point. This means Basel II implementation will not have a major impact on the Thai banking industry. At this time, while most of our banks have decided on using the SA for calculating minimum capital, they are fully aware of the need to improve the database to support a more advanced risk management process. Reflecting this, larger banks are in the process of developing advanced internal rating systems to be fully compliant with Basel II advanced approaches in the near future. By the end of this year, banks in Thailand will also begin parallel calculations of the required capital under Basel II. And we, at the BOT, are keeping a close watch on this progress with keen interest. Regarding the implementation of IFRS, I have to say the readiness amongst Thai commercial banks and foreign bank branches do vary a great deal.

A slowdown in economic activity is not solely caused by interest rates. Other factors that deserve to be mentioned are the contractionary impact of fishing quota cuts, the downturn in the IT sector which is closely linked to global trends, and fluctuations in power-intensive development projects which are unaffected by domestic interest rates. Cutting interest rates now would have a limited immediate effect on the supply side of the economy, while high interest rates act with full force on the demand side where they serve to reduce inflation and domestic demand, which will contribute to improved macroeconomic balance and low inflation. Iceland’s currency options I have outlined various aspects of the Central Bank’s monetary policy. As I mentioned, Iceland has not taken part in European currency cooperation. Various currency framework options that Iceland ought to consider are often named in public discussions. A detailed account of most of them was given in the Central Bank’s 1997 report on the EMU. It is frequently said that Iceland ought to adopt the Euro as its currency, either unilaterally or through associate membership of the EMU. I strongly warn against simplifying the options available to us in this respect. Even if associate membership were being offered, which does not seem likely, it seems fair to assume that any country which was interested in it would need to fulfil the Maastricht Treaty requirements for EMU membership.
And as Chief Cashier Cederstrøm could report: “…Its effect was instantaneous – no one got sicker, and everyone got better – the Spanish flu was no longer raging at Norges Bank.”  n  sr  o ati  n: T  h e o d or K i  tt e  l se  Nowadays, most of us would have politely declined the offer of cognac during working hours. The vaccine is a safer bet. There are brighter and better days ahead. The pandemic will soon be on its way out. For those who have become unemployed or furloughed or had their lives put on hold, this is heartening news. This also gives hope to business owners who have struggled to keep going. Yet for many, operating conditions have changed. The pandemic is leaving its mark. Businesses have closed, study plans have changed and demand in the labour market has likely shifted towards new skills. Ill  In the meantime, we must hold firm to the characteristics of our society that have proved to be strengths in the face of crisis. Throughout the pandemic, the health sector has been able to provide care for all severely affected Covid-19 patients. We have leaned on a well-developed welfare system. Covid-19 patients and symptomatic persons have been able to stay at home. The unemployed have not been left without income. In economic policy, there has been room for forceful action. But perhaps most important of all, the crisis has shown the importance of trust and solid institutions.

Last winter we saw how short the path was from a local virus outbreak in Wuhan to a global health crisis. Covid-19 followed the same routes as tourists, labour and goods. The virus showed how closely interconnected and interdependent countries are. 2 See The Productivity J-Curve: How Intangibles Complement General Purpose Technologies Erik Brynjolfsson, Daniel Rock, and Chad Syverson NBER Working Paper No. 25148, https://www.nber.org/system/files/working_ papers/w25148/revisions/w25148.rev0.pdf  6  NORGES BANK  Chart 5 Growth in global trade has stalled Share of global GDP. Percent 30  30  Trade in goods Trade in services  25  25  20  20  15  15  10  10  5  5  0 1977  1983  1989  1995  2001  2007  2013  ECONOMIC PERSPECTIVES 18 FEBRUARY 2021  0 2019  Sources: Refinitiv Datastream, WTO and Norges Bank  A rising number of countries have been integrated into world trade over the past decades (Chart 5). The gains have been substantial. Poverty has been reduced. Crossborder cooperation has enabled technology to advance faster than it would have done otherwise. Since the financial crisis, growth in global trade has stalled. While service exports have continued to rise, trade in goods as a share of global GDP has been more or less flat in recent years because a number of sources of growth in goods trade are drying up. Large countries such as China and India are now fully integrated into the global economy.
We have mapped out a clear strategic direction to ensure that our operational framework focuses on the primary responsibility of achieving financial and monetary stability. Among the major changes being proposed BIS Review 85/2000  2  in the new Bank of Thailand Act is the adoption of inflation targeting as a framework for monetary policy. This is aimed to provide a clear and transparent rule of operation and signaling to market participants. The proposed amendment of the Bank of Thailand Act clearly states that the overriding objective of the central bank is price stability. To implement this, a Monetary Policy Committee has been set up, the results of whose deliberation are to be disclosed regularly to the public, and an Inflation Report is to be published quarterly. As for our supervision function, we are moving towards a risk-focused supervision and improved disclosure and accountability system. The formal policy framework is to be set by the Financial Institution Policy Committee which similarly has members from outside the BOT. May I add that to expedite the promotion of transparency, we have set up these two committees even before the new law has come into effect. Thus highly respected and well qualified outside persons now have a say in the deliberations on both monetary policy and financial institution policy. The technological challenge The 1997 crisis set back economic and financial development in Thailand by many years. These have to be made up through speedier reforms and a catching up process.

12  Figure 1 Inflation indicators (*) (annual change, percent)  7  7  6  6  Services  5  5  4  4  3  3  2  2  1  CPI  CPIEFE  0  1 0  -1  Goods  -2  -3  -1 -2  -3 13  14  15  16  17  (*) As from January 2014 the new indexes with annual base 2013=100 are used, so they are not strictly comparable with previous figures. Sources: Central Bank of Chile and National Statistics Institute. Figure 2 CPI inflation (*)  CPIEFE inflation (*)  (annual change, percent)  (annual change, percent)  6  6  6  6  5  5  5  5  4  4  4  4  3  3  3  3  2  2  2  2  1  1  1  1  0  0  0  11 12 13 14 15 16 17 18 19  0 11 12 13 14 15 16 17 18 19  Dec.17 Report  Sep.17 Report  (*) Gray area shows forecast as from the fourth quarter of 2017. Sources: Central Bank of Chile and National Statistics Institute (INE).
36 Chart 12 plots dividend payout behaviour among US firms during this period. Dividend reductions occurred just less than 50% of the time, as might be expected. Similar behaviour has been found among UK quoted firms during the 19th century. 37 Now fast forward a century. As Chart 13 illustrates, dividend behaviour has altered dramatically. Between 1980 and 2010, the world’s largest 200 companies reduced dividends only 8% of the time. This was despite dividends being greater than earnings in over 10% of cases – and, indeed, dividends being positive despite negative earnings in 5% of cases. Chart 14 plots the standard deviation of earnings and dividends across a panel of international firms. Over recent years, earnings have been more than six times more volatile than dividends. Berkshire Hathaway has again bucked the trend. Since 1967, it has paid dividends only once. And that may have been once too often for Buffett: “I must have been in the bathroom when the dividend was declared”. Patience and discounting A more direct test of short-termism would involve estimating directly the discount rate people assign to future outcomes. Conducting your own test is fairly simple. Ask your friends how they would feel if the price of their favourite luxury good were to rise by 10%. Then ask them how they would feel if the price of their house were to rise by 10%. The first is likely to meet with a frown, the second a smile. In general, people dislike goods price inflation, but like asset price inflation.

In every crisis, depositors would typically ask for foreign currency cash, inducing exchange rate pressures and prompting monetary policy tightening in order to counter those pressures. Euro adoption was the only way to get rid of currency mismatches and endow the central bank with the ability to provide euro liquidity in the case of emergency. This eventually took place at the beginning of this year, after a process that was internally started in 2017 and followed a new, more complicated procedure (due to the changed euro area architecture after the crisis). EDP, MIP, BU... The process was successfully completed in the shortest possible time, five years. Before the introduction, however, we also had to deal with public fear of unwarranted price increases, in particular due to the euro introduction taking place during a period of high inflation. Nevertheless, the immediate impact of the changeover on the aggregate price level was in line with the experiences of other Member States, around 0.4 p.p. What were the immediate effects? Credit rating agencies responded promptly to the elimination of currency and liquidity requirements, increasing the sovereign rating by two notches immediately following the formal decision on euro adoption. Also, market participants repriced government bonds, reducing the yields by around 80 bps, with some additional price in effect taking place even before the decision. At the time of the entry, reducing high mandatory reserve requirement from 9% to 1%, and foreign currency liquidity requirement from 17% to 0, substantially increased excess liquidity.
With the 1980’s liberalization policies, the barriers on foreign exchange transactions of commercial banks were removed and the Turkish residents were allowed to open foreign exchange deposits in 1983. Beginning from that date, the volume of foreign currency denominated deposits had started to increase. In my opinion, the liberalization of the financial system without macroeconomic stability and the necessary institutional and structural changes made the economy more vulnerable to shocks in 1990’s. Besides, the imprudent fiscal policies resulted in high levels of public sector borrowing requirement and put the debt sustainability on top of the agenda. Along with it, the accommodative monetary policies and the lack of the Central Bank independence led to high and chronic inflation rates. In order to tame inflation and to achieve the macroeconomic stability, a number of exchange rate based stabilization programs were launched, but all of them were either interrupted or abandoned, causing loss of confidence to economic policies. Accordingly, 1990s and the early 2000s were the times, during which Turkey had frequently faced with economic crises and turmoils. Average annual inflation realized as around 75 percent in the period between 1990 and 2001. The ratio of net public debt to GNP reached to 90 percent by 2001. All these, coupled with the currency-blind market regulations such as blanket guarantee on foreign exchange deposits boosted the financial dollarization in Turkey. A closer look into the figures indicates how severe the dollarization was.

As we all know, the choice of exchange rate regime is of critical importance for a central bank. The empirical findings show that in economies with serious balance sheet mismatches, the policy makers prefer fixed or controlled exchange rate regimes 5 ..  2  Eichengreen, B.; Hausmann, R. (1999); “Exchange rates and Financial Fragility”; NBER Working Paper No:7418. 3  De Nicolo, G.; Honohan, P.; Ize, A. (2003); “Dollarization of the Banking System: Good or Bad?”; IMF Working Paper; WP/03/146. 4  Galindo A.; Leiderman L. (2003); ”Living with Dollarization and the Route to Dedollarization”; Inter-American Development Bank; Working Paper; 526; p. 14. 5  Choi, W.; Cook, D. (2004); "Liability dollarization and the bank balance sheet channel"; Journal of International Economics; Vol. 64(2), p. 247-275. 2  BIS Review 124/2006  On the other hand, flexible exchange rate regimes provide more room for monetary policy that enables to respond to external shocks freely. It has also been found by using cross-country data for the banking sector that more volatile exchange rates reduce the share of the foreign currency denominated loans and deposits 6 , thus contributes to prevent dollarization. However, even if a flexible exchange rate regime is chosen de jure, dollarization and high pass through effect from exchange rates to inflation may cause “fear of floating”, thus monetary authorities are put under pressure to intervene in fluctuations in exchange rates at all costs.
These indirect effects account for part of the widening incidence of above target inflation developments across a broad set of core goods and services components of the overall index. Third, these shocks have been large. Again, it is useful to use energy prices as an example. Page 5  Looking at the daily data, from its trough in May 2020 at 8 pence per therm, spot UK natural gas prices rose to above 500 pence per therm in the immediate aftermath of the invasion of Ukraine. Taking a wider perspective, we have seen European wholesale gas prices rise by more than 300% over the past year, while electricity prices have risen 30% and oil prices by 50% over the same period. And fourth, since the UK is a net importer of goods and energy, these large rises in international goods and energy price represent a deterioration in the UK terms of trade. Simply put, the goods the UK buys from the rest of the world have become more expensive relative to the services it sells. Other things equal, this will weigh on the international purchasing power of UK residents. In practice, we anticipate a squeeze on UK household real incomes, which constrains domestic spending and demand, and threatens to open up a margin of economic slack and eventually higher unemployment in the UK. So it is not just UK inflation that is affected by the large external price shocks, but UK incomes, spending and employment too.

If there is one message that a wider public audience takes away from my remarks this morning, I hope it is that. Returning inflation to its 2% target is at the heart of the MPC’s actions over the past 10 months. Ceasing asset purchases; starting to raise Bank Rate; beginning to shrink the asset portfolio; considering starting to sell gilts acquired via QE: all these actions serve to tighten monetary conditions and weigh against inflationary pressures. Of course, there is always the question of whether these actions should have come earlier or been more aggressive. In assessing these claims, we need to be wary of hindsight bias, and recognise the benefits of adopting a measured, determined and purposeful approach to the transition from the very accommodative policies introduced during the global financial crisis and maintained more or less ever since. But now that the initial stage of that transition have been successfully navigated, an immediate issue for monetary policy makers is whether the pace of policy tightening now needs to change. In May, inflation reached 9.1%. [4] The MPC forecasts a further rise to around 11% later in the year, once rises in international commodity prices stemming from Russia’s invasion of Ukraine pass through to UK utility and food prices. For an MPC member charged with achieving the inflation target of 2% – someone in ‘the price stability business’, if you like – this is obviously a very unsatisfactory situation.
The transparency of the CDS market should also be enhanced. Data warehouses, because they hold the register of all positions, are key players in that respect: whatever their location, they should provide supervisors and regulators with access to all the data they need to conduct effective macro- and micro-surveillance. With both a stronger market infrastructure and greater transparency, we will be in a good position to ensure that CDS provide a safer contribution to the financing of the economy. Most of these remarks have been focused on the major and vital impetus to enhance financial regulation. I cannot conclude without mentioning that changes in financial regulation are not a panacea for strengthening financial systems and ensuring that the new financial order will be less prone to instability. What is also absolutely critical is that macroeconomic policies do not derail financial stability. As I mentioned in my introduction, there is no free lunch in being a member of a monetary union. The credibility of policies for financial stability is contingent upon the conduct of other policies. Disciplined fiscal policy is a precondition to achieve macroeconomic and financial stability. Looking into the future, a macro-prudential policy framework could provide further rooms for maneuver. In a nutshell, macroprudential policy could alleviate some of the constraints associated with the conduct of monetary policy when faced with asset price instability. It might also alleviate the burden on fiscal policy by limiting systemic risks and thus lowering the need for state financial rescue packages.

Michael C Bonello: Single currency issues – a central bank perspective Speech by Mr Michael C Bonello, Governor of the Central Bank of Malta, at the conference “The Euro - the impact on business”, organised by the Malta Federation of Industry, 16 January 2003. *  *  *  By way of introduction, it is important to stress that Economic and Monetary Union (EMU) and the euro are key aspects of the Treaty on European Union. They are a logical consequence of the process of European integration, and in particular of the economic rationale of increased trade as the driving force for the further integration of citizens, institutions and markets. Indeed, the arguments for more closely integrated markets, namely that greater trade and financial integration will increase economic efficiency and improve welfare, can equally be made for a single currency. In the case of the EU, the advantages of a single market postulated by economic theory appear to have been amply realised. Since internal borders were removed ten years ago, it is estimated that the Single Market has helped to create 2.5 million extra jobs; the EU’s combined GDP in 2002 was 1.8%, or euro 164.5 billion, higher than it would have been; and each household was on average 5,700 euro 1 better off. Market opening is, therefore, not only good economics but also very good social policy. Further benefits can be expected to flow from the introduction of the single currency.
The fact that the question of possible gold sales by the SNB in the market has not arisen until recently is due to several technical and psychological factors: • • • •  Gold is still valued at its last official price of 1971 in the SNB’s balance sheet, only one-third of its market value is shown; In the past, the SNB was required to back 40 per cent of the banknotes in circulation with gold, which did not leave any room for action; The sale of gold requires a fundamental reform of the Swiss monetary system, which, because of our direct democracy, is a long and complex process; Finally, in the public’s mind, the Swiss franc and gold were so closely linked that the idea of selling gold seemed to be rather unrealistic. Things started to move in February 1997. At that time, a first decision regarding demonetisation of gold was taken by the Economic Committee of the National Council, one of our two houses of our parliament. Two months later, in May 1997, the market became fully aware of the gold issue, when the President of the Confederation proposed to parliament to allocate a part of the revaluation gain on gold to fund a Swiss Foundation for Solidarity which would provide assistance to persons in need in Switzerland and abroad. It was established from the outset that the initial contribution to the foundation would be in the form of a 500 tonnes gold donation by the SNB.

Time lag of the reaction of the banking sector to the change of the Bank of Russia key rate remains large though, according to our estimates, gradually shrinking. This refers to deposit rates as well. As lags shrink, the effectiveness of the interest rate channel of the Bank of Russia monetary transmission mechanism will improve. As for the foreign exchange transmission channel, its impact is complicated due to the high volatility in the foreign exchange market which resulted, inter alia, from the restricted access of Russian banks and companies to external markets. In order to normalise the situation with foreign exchange liquidity, the Bank of Russia has introduced reverse transactions to provide it. Interest rates on these transactions have been decreased to the level of LIBOR rates plus 0.5 pp. The volume of foreign exchange liquidity provision is determined by the demand estimates based on the balance of payments forecast. The next one-year repo auction of 15 December will accept Eurobonds and provide for the possibility of early deal termination by borrowers. In the near future the Bank of Russia also intends to consider the introduction of foreign exchange lending secured by non-marketable assets. Foreign exchange loans, extended by banks to companies with stable income in foreign currency, are supposed to be eligible as collateral. Bank of Russia forecast The current situation requires updating the forecasts and adjusting the policy to ensure financial and price stability enabling the economy to adjust to the new conditions and start developing as quickly as possible.