samchain/econo-pairs-v1 huggingface dataset:
However, at present, private sector spending has been affected by the decline of consumer and investor confidence, leading to a situation where those with purchasing power are cautious in their spending. This confidence has to be restored. Those who are able to invest have to begin investing. But a good starting point to restore confidence is to have a clear economic policy framework which can be realised only by having people electing good citizens to run the government. If the people are confident in their government and in the policies of that government, then confidence in the economy will be restored speedily. The third issue: Fiscal policies for economic growth Fiscal policies will play an important role in the process of economic recovery next year. At present, government spending amounts to a fifth of GDP, which is not considered as a high level. But for other countries, people are used to the system which the government plays a major role. Government deficit at a level which is conducive to economic recovery should therefore be readily understood and accepted. 6  BIS Review 6/2001  Therefore, fiscal policies must play a more important role in stimulating the economy, but should maintain a balance between economic stimulation and long-term fiscal discipline. The fourth issue: Monetary policy On monetary policy implementation, the Bank of Thailand’s view is that the Thai economy at present and in the near future continues to need low level of interest rate rather than a high level.

Those completed included: Data Management Group - a centralisation of data collection that were originally performed by many departments within the Bank; introduction of the use of information technology for the dissemination of information for public use through the Bank of Thailand's web site; Financial  4  BIS Review 6/2001  Markets Operations Group - to develop working efficiency by increasing skills in risk management and the modernisation of the trading room; another group which has been completed under the programme was the Supervision Group. On personnel development, most of the Bank of Thailand's staff lacked systematic development. In the past year, therefore, heavy investment was put on staff training by doubling the budget for this purpose. Moreover, staffs with high potential were assigned job training in outstanding private sector companies in order to increase their vision and experience and to understand how the private sector works. A job evaluation system has been applied to each position in order to put the right man on the right job. Most importantly, we have introduced performance evaluation and individual development plans in accordance with international standards. Next year, the Bank of Thailand will start a new salary structure to be consistent with job evaluation, and to set out a clear work target and plan for each group. The most important change that occurs has been the improvement in the decision- making process. Today, all Bank of Thailand policies have been made on the basis of sound principles and reasoning that can be explained clearly to the public.
Another condition is that the resort to central bank liquidity should be expensive, bounded in time, and addresses only emergency situations. This matters particularly in the euro area, where overreliance on central bank funding, including emergency liquidity assistance, can delay the necessary restructuring and changes in banks’ business models. And finally, there should remain a strict separation between capital and liquidity assistance that reflects the division of tasks between central banks on the one hand, shareholders and fiscal authorities on the other hand and avoids that monetary policy is held hostage of financial or fiscal dominance. Liquidity ought to be provided to the banking system as needed, but it should not be a substitute for a lack of capital. Thank you for your attention. BIS central bankers’ speeches  9

As a consequence, consumers can benefit from lower prices, higher real incomes, and greater variety and quality of goods and services. Increased openness may also reduce wasteful rentseeking behavior on the part of protected industries and the related costs of corruption. These benefits from open trade are very evident in India. Academic research has found substantial gains for India following its dramatic trade reforms in the 1990s, which benefited consumers via lower prices and firms via higher markups. These higher profit margins spurred innovation and provided funds for the development of new products. Looking ahead, the upcoming implementation of the goods and services tax in India—which will create a common market internally—is expected to provide many of the same benefits as trade liberalization does internationally. Openness to trade has certainly played a large role in the economic ascent of Asia. Following the rise of Japan, Korea, Taiwan and others, fast growth in China and India has lifted hundreds of millions of people out of extreme poverty—an unprecedented feat in human history. The benefits 2/6  BIS central bankers' speeches  of economic integration and other reforms are exemplified in India’s higher growth rate since the introduction of market reforms in 1991. Growth has averaged 6.5 percent annually in the postreform period, compared to about 4 percent annually over the prior 40 years. Indeed, India is the fastest-growing major economy in the world today.
ASEAN has undertaken gradual and sequenced liberalisation of identified financial services sub-sectors through the ASEAN Framework Agreement on Services (AFAS). Five rounds of negotiations have been concluded, with the sixth round of negotiations expected to be concluded by next year. In the area of financial markets, an Implementation Plan for an Integrated Capital Market has been developed to enhance market access, linkages and liquidity. ASEAN has also made  2  BIS central bankers’ speeches  significant advancements in the areas of supporting financing for infrastructure development, as reflected by the establishment of the ASEAN Infrastructure Fund in 2011. Notwithstanding these developments, a crucial driver for greater financial integration within the core of ASEAN financial systems is the banking sector. ASEAN banks have a significant role in supporting the financial integration process. Over the recent decade, we have witnessed the rising prominence of ASEAN financial institutions within the region, driven by the growing business fundamentals in the region and the strengthened capacity of the financial institutions. ASEAN commercial banks are predominant mobilisers of financial funds, as our experience shows, the banking sector is the most matured component in the financial sector of most jurisdictions. The banking sector therefore serves as an important conduit to increase connectivity among all ASEAN nations and in fostering financial integration. Towards this end, the ASEAN central banks have endorsed the ASEAN Financial Integration Framework in 2011 and are in the final stages to launch the framework for banking sector integration.

The standard deviation of quarterly growth rates over the past decade was less than half that in earlier periods. Can these gains in terms of greater stability be attributed to a more stable monetary regime? After all, a sceptic might argue that the causation runs from a more stable economic environment to lower inflation. But some of these alternative explanations, such as the rise in the share of services in total output and better inventory management, are part of longer-term trends and do not fit well with the observation that volatility has fallen sharply over the past decade. And shocks to the UK from the world economy and from the sterling real exchange rate have been as large, if not larger, over the past 3 five years as in earlier periods. 3  Most of the evidence on the link between inflation and stability comes from the United States where the greater stability of output is evident over the past two decades. A number of recent studies have concluded that at least part of the explanation for greater stability can be attributed to better monetary policy, for example Taylor (1998).
Vítor Constâncio: Presentation of the European Central Bank Annual Report 2015 to the Committee on Economic and Monetary Affairs of the European Parliament Introductory remarks by Mr Vítor Constâncio, Vice-President of the European Central Bank, to the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 7 April 2016. *  *  *  Mr Chairman, Honourable Members of the Committee on Economic and Monetary Affairs, Ladies and gentlemen, I am honoured to once again present the ECB’s 2015 Annual Report to your Committee. Please allow me to take this opportunity to express my heartfelt thoughts, and those of the ECB’s Executive Board and ECB staff, for the victims of the recent attacks in Brussels, in the heart of Europe. Our thoughts are also with their families and friends. Events like this remind us that Europe must stand together. And our institutions have a role to play in this respect. The presentation of our Annual Report to those representing the European Union’s citizens is a key element of our accountability, which is a necessary counterpart to our independence. That is also why we have decided to publish our feedback to the input you provided in the Resolution on the 2014 Annual Report, together with this report. This is the first time we have done so. This decision reflects the importance of having a fruitful dialogue between our institutions, for the benefit of European citizens.

The ECB is contributing here with its work on options and discretions in the CRD IV/CRR framework, but you as legislators can also play an important role to complement our action. Second, we should implement the missing elements of the international regulatory agenda. I will come back to this. Third, we need to complete the banking union with the European Deposit Insurance Scheme (EDIS). The European Commission’s proposal sets out a clear roadmap towards a single EDIS, which I strongly welcome. It already provides safeguards against moral hazard, and ensures that banks pay for their own risks. I understand that you will discuss the proposal  BIS central bankers’ speeches  3  later today. I am sure that the European Parliament as co-legislator will play a decisive role in this process of strengthening and completing the banking union. Fourth, progress needs to be made to foster private risk-sharing via financial markets. We have therefore strongly supported the European Commission’s initiative to establish a capital markets union (CMU) from the very start, as you will remember from my introductory remarks to this Committee last year. A well-functioning, diversified and integrated capital market would support the transmission of our monetary policy, create deeper and more liquid markets, and increase the shockabsorbing capacity of the European economy, thereby contributing to financial stability. The revitalisation of the securitisation market is an essential element of this agenda, as it can free up capital for lending and thus increase funding for the real economy.
In this current environment, the emerging economies are challenged by both the weakening global growth and the spillovers arising from the policy actions in the major advanced economies. While continuing to register reasonable economic growth, the momentum of the growth has moderated in most emerging economies, affected by slowing external demand and uncertainty in the financial markets. Nevertheless, current ongoing shifts occurring in the emerging economies have contributed to sustaining our economies. It is the growing importance of domestic demand in most of the emerging economies in Asia that is creating a  2  BIS central bankers’ speeches  huge cumulative domestic market, and this is resulting in greater regional integration with an increase in intra-regional trade. Greater regional and inter-regional integration of the emerging economies through the proliferation of interlocking networks of trade, investment and finance, has contributed to provide mutually reinforcing support to economic activity in the emerging economies. In Malaysia, the decline in external demand while affecting overall growth, has been partially offset by stronger domestic demand, following the robust resumption of private consumption and investment activities, and the diversification of exports to the regional economies. In addition, the wide-ranging reforms implemented since the Asian financial crisis have resulted in strengthened financial intermediaries and a more developed financial system. This has allowed for the economy to better intermediate the volatile cross-border flows without disruption to the financial system.

Our challenge concerns more the nature of this financing: developing equity financing more than debt financing. Flat tax is a welcome step towards a greater tax neutrality between the different forms of investment. I have already stated this, insurers must create new tailored products, in the area of life insurance, which are less liquid but allow savers to benefit from the higher returns offered by equities in the long term, with a form of capital protection. The PACTE law on growing and transforming companies, presented by the Minister of the Economy, could provide an opportunity. Banks are also considering offering a new long-term savings product: I understand this point of view, provided that the aim isn't to create a new tax loophole; we have had enough of this great French speciality. 2/3  BIS central bankers' speeches  My last wish concerns the Banque de France, and it is a commitment to our transformation, which we want to be exemplary for the public service. In 2018, we will be over half way with our strategic "Ambitions for 2020" plan, which aims to improve our services to the French and European economies, while achieving significant savings: as of this year, our net spending will be almost EUR 100 million lower, in current euro, than it was in 2015: this is what we are "giving back" to the national community. In 2018, let us also be exemplary in our commitment to the social and territorial cohesion of the country, in order notably to help our most underprivileged citizens.
This is something that I view as being critical to successful implementation of the New Accord. (b)  Challenges for banks  Within the United States, supervisors have long considered how the new framework will apply to our banks. Recently, our efforts have focused on the preparations and challenges ahead for some of the largest U.S. banks as they look towards implementing the IRB approach to credit risk. Among other important topics, the dialogue has focused on application of the minimum standards for entry and ongoing use of the IRB approach. Our sense from this interaction is that banks have both the desire and commitment to continue to develop their internal ratings systems in a manner consistent with the ideals embodied in the IRB framework. The discussions with the industry have also highlighted a number of areas where banks may need to expand their efforts in preparing for implementation. These include the design and structure of rating systems; the availability and quality of credit data; and the role of corporate governance in evaluating bank assessments. I will touch on each of these in turn. Rating system design The design of a risk rating system is key to its effectiveness. The Basel Committee believes that banks’ internal rating systems should accurately and consistently differentiate between degrees of risk. The minimum IRB standards in this area build on leading risk management practices observed in the industry.

In the current crisis, the MA has worked as expected and has shielded insurers from the market dislocations that occurred in March of this year. As spreads have increased, annuity writers have not had to recognize the full impact on their capital requirements and have been able to discount their liabilities at a higher rate. In Chart 1, you can see both corporate spreads and the resulting MA. As spreads widened in mid-March, as you can see, the MA from this portfolio would have tracked it closely, absorbing much of the impact on insurers’ balance sheets. Importantly, however, this analysis assumes that the underlying assets have not been downgraded. If and when downgrades increase, the MA will reduce. The point of MA is to separate the noise from the signal, the signal being represented by an asset’s rating: if the rating is unchanged, then changes in spreads are identified as noise and absorbed by the MA. If assets are downgraded, then the decrease in rating is reflective of increased risk borne by insurers, and which we expect to be appropriately capitalized. As the effects of Covid-19 have developed, we have been working to provide further guidance to insurers in cases where Solvency II could be unhelpfully misinterpreted, in order to avoid unintended consequences. For instance, the recent follow-up to insurers on the letter3 from Sam Woods to clarify the PRA’s position on the treatment of covenant breaches and insurers’ internal ratings during Covid-19. Another supervisory action was taken in relation to the TMTP.
Membership in the funds is mandatory and the funds are financed ex ante by fees from the member banks. These funds had a wider mandate than just paying out depositors at the closure of a failed bank. If liquidating the failed bank and paying out the depositors was considered a more costly alternative than recapitalizing the bank or providing guarantees or financial support to facilitate a take-over, the funds were free to do so. However, by the end of 1990, bank-owned funds had effectively depleted almost all of their capital and it became apparent that the larger banks might also face problems. To make sure that there would still be a safety net present, the government established the Government Bank Insurance Fund - or GBIF in early 1991. At the same time it was made clear that it was through this fund only that public money might be injected into failing banks. The central bank might provide liquidity support only once solvency was assured. The GBIF was given a specific grant by the Storting (parliament). The new fund could lend money to the banks’ own guarantee funds to enable them to recapitalize failing banks. Later, as the crisis escalated, the GBIF was permitted to recapitalize the banks directly. In both cases, strict conditions were attached.

If asset prices have been driven up to unsustainable levels that do not correspond to the underlying fundamentals, we are faced with a special kind of problem. We know from experience that speculative asset price bubbles eventually burst. When they do, collateral values will fall and balance sheets deteriorate, potentially threatening the stability of the banking system. To avoid this kind of development, the central bank needs to closely monitor the potential for excessive credit growth and the possibility of asset price bubbles building up. It seems that historically the forming of speculative price bubbles has been closely linked to an excessive expansion of credit. But we need to operationalise both the concept “excessive” and the difficult concept of an asset’s “fundamental value”. As history has shown us, judging to what extent rising asset prices reflect strong fundamentals, rather than the “irrational exuberance” of investors, is easier said than done. Nevertheless, certain important risks related to asset prices need careful watching in today’s world. The first risk is that imprudent lending could fuel unwarranted asset price increases - as so often in the past. Although there is little evidence to date of a general lowering of credit standards, credit growth has been very rapid and loans to finance equity purchases have risen sharply in some countries. BIS Review 65/2000  4  Ensuring that investors are not sheltered from the consequences of their sometimes misguided investments is important for maintaining prudent lending standards.
But it is encouraging that Chen Shui-bian’s inauguration speech took a more conciliatory tone, suggesting that he is aware of the grave dangers, although he still left open the possibility of independence. In Southeast Asia, terrorism will be a major preoccupation for many years to come. Another terrorist attack will shake confidence in Southeast Asia, damaging growth prospects. The Southeast Asian waterways are vital lifelines for Japan, China and South Korea. A maritime terrorist attack that disrupts them will have wide economic and political repercussions. Unfortunately, there is widespread discomfort among Muslims everywhere with American policies in the Middle East and towards the Israel Palestine conflict. Mainstream Muslims are afraid to speak up against extremists for fear of appearing pro American. This is a serious problem that has not yet been adequately addressed. One important question is the role of Islam in Southeast Asian countries. Traditional Southeast Asian Islam is syncretic and tolerant, but it is increasingly influenced by more austere Middle Eastern variants of Islam, especially Wahhabbism. Which way this battle for the soul of Islam goes is a key uncertainty that will determine the future of the region. In Malaysia, Prime Minister Abdullah Badawi won a clear victory over PAS, the opposition Islamist Party. He did not challenge PAS’ contention that Malaysia should be an Islamic State, but instead fought PAS on what kind of Islamic State Malaysia should be. His victory bolsters his vision of progressive Islam and should encourage mainstream Muslims everywhere.

Supervision is about how we use it in practice. For me, two critical elements of supervision are that it is forward-looking, and it requires the use of judgement. Sounds obvious, but sadly hasn’t been consistently done well in the past, with bad consequences. Supervision is therefore a skill – in fact it’s quite a few skills. The essence of the job is to understand risks in firms, and where necessary to step in and do a number of things: point out risks, or their significance when the firm seems to have failed to notice – through either lack of awareness or intent; or point out that while the firm may have identified the risk, it has failed to understand or calibrate its significance. This leads me to a couple of important points. First, our assessment of risks can differ from firms because our objective represents the public interest, and there is an externality in the risk in question which affects the public interest in ways that do not register with a definition of private interest. The causes of the financial crisis sadly remind us of this. It means that we have to be very clear and forthright on what is the public interest, and thus why we supervise. Second, risk is our business. This conference is about supervising large, complex financial institutions. I read too often the criticism of supervision that we cannot understand the risks of these institutions, and so we should give up all hope of doing so.