samchain/econo-pairs-v1 huggingface dataset:
No single key figure, taken alone, is capable of providing a comprehensive picture of the risks involved. Therefore, our risk assessment is based on a range of key figures developed to measure risk, each of which has its own justification along with certain limitations. In order to evaluate the overall risk of our investments, we use the value at risk method (VaR). Additional risk analyses are also necessary because of the method-related limitations of VaR (it provides no information about possible extreme losses; moreover it tends to underestimate the risk of large losses, particularly in times of low volatilities). We therefore conduct a number of additional stress and scenario analyses. For all of these risk calculations we take account of the SNB's tendency towards a long-term investment horizon. The methods used to assess and limit the risks linked to our active management of investments include the 'tracking error' method. This shows us the extent to which our actual investments deviate from the given benchmarks. Our Risk Management unit has a complete and up-to-date picture of all investment positions. This is based on a dedicated IT solution which aggregates all positions from different supplier systems on a daily basis and evaluates them according to different criteria. This permits any critical developments to be identified in good time. Within the bounds set by monetary policy, we work to achieve the greatest possible diversification of financial risks and to attain adequate compensation for the risks we enter into.

In other words, we always assess the risks in conjunction with the expected benefit. One example of a poorly compensated risk, from the point of view of a Swiss franc investor, is the USD currency risk on bonds. Our experience has been that expected earnings on bonds in other currencies, such as euros or sterling, are comparable, while currency risks are significantly lower. Consequently, and also because another important reserve currency was available in the form of the euro, we have substantially reduced our share of USD investments over the past few years. Along with the expansion in the range of permissible bond classes and the addition of shares, the risk/return profile of our foreign exchange reserves has improved substantially. This has helped to ensure that results on foreign exchange reserves have remained positive for the past ten years. Naturally, part of the background to this development has been the favourable interest rate environment that has prevailed since the mid1990s. Our analysis of the overall risk for all investments shows that the traditional risk factors such as the gold price and the dollar exchange rate continue to dominate. Gold poses the most substantial contribution to risk. By way of illustration: The gold price in terms of Swiss francs has fluctuated by over 10% in about half of the years that have elapsed since 1980. In terms of the SNB's annual result, this means that gold can be expected to contribute more than +/- CHF 3 billion to the result every second year.
The impact of asset purchases and sales on the economy is state contingent, with the smooth functioning of financial markets being a key determinant of the likely impact. Back in its August 2021 Monetary Policy Report, the MPC judged ‘that the impact on monetary conditions of a reduction in the stock of purchased assets, when conducted in a gradual and predictable manner and when markets are functioning normally, is likely to be smaller than that of asset purchases on average over the past’. [17] The analytical results discussed today support these conclusions, and thereby the approach to unwinding the QE asset portfolio based upon them. That is not to deny that asset sales have the potential to tighten monetary and financial conditions – indeed, the monetarist framework would suggest that some tightening is likely. I would certainly expect them to do so. But as long as we undertake any gilt sales programme in a gradual, predictable and well-communicated manner in a reasonably benign market environment, we can still use Bank Rate as the marginal instrument to achieve the inflation target over the medium term, conditional on how QT has influenced asset prices and the wider economic situation. Concluding remarks The analysis I have presented explores whether monetary quantities play an additional role in the transmission of monetary policy to aggregate spending (and thus pricing) decisions, beyond that already captured by the impact of changes in the official policy interest rate.

Page 6  Where analysis of monetary transmission matters is in calibrating any policy response. The MPC needs to ensure that the monetary impulse transmitted through asset prices helps navigate the narrow course between, on the one hand, preventing above target inflation from becoming embedded in expectations and, on the other, introducing unnecessary volatility into activity and employment, and adding to any undershoot of the inflation target at longer horizons. Crucial to this is ensuring monetary developments do not accommodate price, wage and cost setting behaviour inconsistent with achieving the 2% inflation target. And one aspect of that assessment is how the evolution of the stock of assets held by the central bank as a result of QE plays out. At the Bank of England, we stopped buying assets through the creation of central bank reserves last December. The process of shrinking the QE asset portfolio – so-called quantitative tightening (QT) – commenced in February, as we ceased reinvestment of maturing bonds from that portfolio. And we are currently considering whether – and, if so, how – to begin sales of gilts held in that portfolio. (The MPC has promised to report further on its prospective approach to sales at its August meeting.) Thinking through the implications of QT for the overall stance of monetary policy is therefore key to our current policy analysis. I hope to shed some light on my considerations in that regard. Future: What implications can we draw for the future?
In view of the favourable economic climate, the Executive Board judged that a further increase of the repo rate was justified. In my opinion, the information that has subsequently become available does not warrant any change to this conclusion pending our next meeting. 2  BIS Review 11/2006

Prasarn Trairatvorakul: Growth, sustainability and inclusiveness – Thailand’s key success factors Dinner talk by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Japanese Chamber of Commerce (JCC), Bangkok, 23 March 2011. *  *  *  Ladies and Gentlemen, Let me begin by extending my deepest condolence to the Japanese business community in Thailand on the immense losses caused by the unprecedented earthquake and tsunami in Japan. Despite the tragic incidents, I am confident that the strength and determination of Japanese people, together with supports from all around the world, will enable Japan to recover swiftly. For today, I would like to thank the Japanese Chamber of Commerce for inviting me to share with the distinguished audience my assessment of the Thai economy. I also look forward to hearing your views and concerns regarding the economic prospects. Needless to say that Japan and Thailand have a long history of close economic relationship, with Japan being the top foreign investor in Thailand. As such, Thailand has become a production hub for several Japanese industries, including vehicles, electronics and electrical appliances. I therefore hope that our discussion today will help align understanding and further strengthen the partnership between our two economies. For my presentation this evening, I would like to offer my assessment of the economy based on what I see as the three most important attributes that determine the economic progress for Thailand – the “key success factors”, if you will. First is that growth must be sustainable.
It took the British over four decades to lift the capital controls that were imposed partly for this reason. The most usual way to describe the problem is to consider the capital that is likely to seek an exit as soon as the controls are lifted. This includes the failed banks’ estates, the potentially volatile ISK assets held by non-residents – usually called offshore krónur – and possible outflows from Icelandic residents as well. In this context, we are best equipped to predict what would happen if the controls were lifted from the estates without any mitigating measures, as we have mapped out the estates in infinitesimal detail. There is greater uncertainty about the offshore krónur. Following the Bank’s foreign currency auctions in the past few years, some of the remaining capital could be held by patient investors, as some of the parties behind it swear faithfully that it is. But it is safer to verify and secure this before we open the exit doors wide, and there are ways to do it. The greatest uncertainty centres on potential outflows from residents. To a degree, it is possible to estimate resident investors’ need to increase the share of foreign assets in their portfolios, but naturally, they may undertake such foreign investments at varying tempos. The most important factor either way is the level of confidence in Iceland and its financial system at the time the controls are lifted, which is obviously an unknown at this point.

Therefore, it is extremely important that the parties involved – particularly the social partners and the Government – make every effort to push matters in that direction. It is important that the decisions taken in wage negotiations over the next several months be based on correct information. The report published jointly by the social partners last month, entitled In the Prelude to Wage Negotiations, contains cogent information on wage developments in recent years. According to the report, the emphasis placed on the lowest wages in recent years has borne fruit, at least in part. For example, office workers’ and general labourers’ wages rose most during the period from 2006 through 2014, and they rose in excess of the general wage index. The report also confirms what has previously been reported, that wages and productivity per hour worked are relatively low in comparison with trading partner countries and that Icelandic workers compensate somewhat for this with longer working hours. This highlights the fact that, in the long run, increased productivity is the premise for higher real wages. In this context, the weak productivity growth in recent years could give some cause for concern. On the other hand, it also reflects the growth of labour-intensive sectors such as tourism, which have been supported by the low real exchange rate and have facilitated a more rapid decline in unemployment than would otherwise have been possible.
Therefore, while formal schooling is an important source of skill and quality development, experience in the workplace is equally essential for human resource development. As members of the business communities, your role as investors and employers will help make Thailand’s real sector more competitive by investing in the best technology and capacity to use that technology efficiently. This will in turn increase the attractiveness of Thailand for international trade and investment, especially as Thai exporters have benefited from new market penetration and the growth of intra-regional trade. We recognize that the US is the largest single trade partner for Thai exports, though its market share has been declining. As for US direct investment in Thailand, the US ranks fourth in terms of the size of FDI, accounting for about 12 percent of total FDI inflows annually since 2000. Ladies and Gentlemen, I turn now to the last part of my talk which focuses on the roles and directions of the Bank of Thailand in fostering economic growth, investment, and financial stability. Let me touch on two topics here, namely 1) the three new financial legislations that will enhance the transparency and efficiency of central bank responsibilities in safeguarding monetary and financial system stability, and 2) the second-phased financial sector master plan. The three new financial legislations, which were passed at the end of 2007, are the new Bank of Thailand Act, the Financial Institution Business Act (FIBA), and the Deposit Protection Agency Act.

Tarisa Watanagase: Thailand’s economy in 2008 and preparations for the future Keynote address by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the luncheon gathering of US and Thai business representatives to celebrate the 175th anniversary of Thai-US relations, at the Ministry of Foreign Affairs, Bangkok, 29 April 2008. *  *  *  Excellencies, Distinguished US and Thai business representatives, Ladies and Gentlemen, It is my honour and pleasure to accept the Ministry of Foreign Affairs’ invitation to speak at this gathering of distinguished members of the US and Thai business corporations and to join you in celebrating the 175th anniversary of Thai-US relations. My goal today is to contribute to your understanding of the prospects of the Thai economy and investment environment in 2008 and beyond. My talk will comprise three parts. First, I would like to draw your attention to Thailand’s economic prospects and risks in the near term. Second, I will focus on some key challenges in enhancing the economy’s resiliency and competitiveness while managing those risks. Finally, I would like to highlight to you the roles of the Bank of Thailand in fostering economic and financial stability going forward. Ladies and Gentlemen, Since my last meeting with the American Chamber of Commerce in Bangkok last September, the economic tide has already turned in Thailand’s favour. In 2007, the Thai economy managed to grow by 4.8 percent for the whole year, given boost by GDP growth rate of 5.7 percent in the fourth quarter of the year.
The rates charged/paid on the OSF lending/deposit facility are less attractive than Bank Rate, so as to discourage regular usage. But they are more attractive than the penalty associated with missing a reserves target outright. As a result, the OSF deposit and lending rates should impose a corridor around Bank Rate. By providing a floor and cap, this corridor should ensure that reserve account holders never need to transact in the market at a rate very different from Bank Rate. Chart 3 illustrates a stylised demand curve for reserves, and shows how the OSFs provide a corridor around Bank Rate. The demand curve is dictated by the scarcity value of reserves – if a bank is short reserves, it will bid in the money market to attract them. But it should not bid higher than the lending facility rate, which provides a cap on the market rate. As it gets closer to being within its tolerance range, a bank will be less willing to bid up to attract reserves. If a bank has excess reserves, it should be willing to lend in the interbank market at less than Bank Rate in order to shed them. But it will not lend below the deposit facility rate, which provides an effective market rate floor.

10  BIS central bankers’ speeches  In the case of supply curve C, there is no intersection between the RSS and the demand curve. We then face a decision about where to allocate. To date, we have chosen to allocate at the bid closest to the RSS, rather than allocating at the intersection of the RSS and the discontinuity in the demand schedule. There are pros and cons to that approach. For example, the current practice lacks transparency in that counterparties can observe significant variance in the auction clearing spreads, and might take false signals about the RSS as a result. Set against that, allocating at the RSS could mean providing liquidity to counterparties at a rate lower than any of the bids in the auction. Review to date Following their launch in June 2010, the Bank is reviewing how the ILTRs have functioned (Table 3 provides the key auction statistics to date). That work is still going on, but so far the operations have worked well. A few key points of interest are:   Participation levels have been lower than in the extended-collateral LTRs at the peak of the crisis, but broadly in line with the long-run/pre-crisis average.   Although the sample is small, the 6 month auctions appear to have generated greater demand relative to the amount on offer (higher cover) than the 3 month operations. Anecdote from counterparties suggests that reflects the attractiveness of securing longer-term liquidity and the relative scarcity of market sources of 6-month funding.
Indeed, the history of innovation in financial markets provides many examples of periods of rapid change accompanied by fraud and abuse, by challenges in assessing value and risk, by concerns about the adequacy of investor and consumer protection, and by unexpected behavior of prices, defaults and correlations. To some degree, these types of problems are the inevitable consequence of change and innovation. Although recent experience as well as theory provide some reassurance against the concern that credit market innovation would make markets more volatile and the financial system more vulnerable, these judgments require qualification. Some aspects of this latest wave of innovation are different in substance – therefore potentially in their implications – from their predecessors. And these differences require attention. There are three aspects of the latest set of changes which I think deserve more reflection. The first is about the role of market liquidity and liquidity risk in how credit markets work. Credit market innovations have transformed the financial system from one in which most credit risk is in the form of loans, held to maturity on the balance sheets of banks, to a system in which most credit risk now takes an incredibly diverse array of different forms, much of it held by nonbank financial institutions that mark to market and can take on substantial leverage. U.S. financial institutions now hold only around 15 percent of total credit outstanding by the nonfarm nonfinancial sector: that is less than half the level of two decades ago.

The stronger these shock absorbers, the more resilient markets will be in the face of future shocks, and the more confident we can be that banks will be a source of strength and of liquidity to markets in periods of stress and that the financial system will contribute to improved economic performance over time. Thank you. 4  BIS Review 29/2007
In contrast, a stronger impulse from public expenditure is expected, particularly from investment. On the private consumption side, we expect it to keep growing for the rest of the year at a slower pace than was forecast in June (table 2). Annual CPI inflation, still affected by high monthly variations early in the year and the direct effects of the recent depreciation of the peso will remain above 4 percent throughout the remainder of 2014. By 2015, in line with the lower inflationary pressures that are inferred from the cyclic evolution of the economy and the high basis of comparison, annual inflation of both the CPI and the CPIEFE will have a quick descent to 3 percent. Then it will hover around 3 percent until the end of the forecast horizon, this time the third quarter of 2016 (figure 9). This inflation trajectory is based on the assumption that the indirect effects of the nominal and real depreciation of our currency will be more than offset by the state of the capacity gaps over the projection horizon. The Board’s assessment yields that the current level of the real exchange rate (RER) is consistent with the cyclical state of the economy and the internal and external financial conditions, although it is slightly above the range of its estimated longterm values. As a methodological assumption, it considers that the exchange rate will have a slight appreciation in real terms over the long run, as the cyclical conditions of our economy normalize.

Rodrigo Vergara: Chile’s September 2014 Monetary Policy Report Presentation by Mr Rodrigo Vergara, Governor of the Central Bank of Chile, of the Monetary Policy Report before the Honorable Senate of the Republic, Santiago de Chile, 3 September 2014. *  *  *  The Monetary Policy Report of September 2014 can be found at http://www.bcentral.cl. Introduction Mr. Vice-president of the Senate, Senator Eugenio Tuma, honorable senators, ladies, gentlemen, Thank you for your invitation to the Board of the Central Bank of Chile to present our Monetary Policy Report. As is the norm each September, this Report coincides with the annual report from the Central Bank Board to the Senate, where we share our vision on the recent macroeconomic and financial developments in Chile and abroad, as well as their prospects and implications for monetary policy conduct. Chile’s economic outlook has seen important changes over the past few months. In particular, the slowdown in output has been more pronounced than anticipated and is expected to be also more persistent. A year ago, when we came to the Senate to present our vision of what would be the economy in 2014, we projected that it would expand in the 4 to 5 percent range. Today, as I will detail in a moment, we estimate that growth will be between 1.75 and 2.25 percent this year and between 3 and 4 percent in 2015, that is, less than our estimate for medium-term growth in our economy.