samchain/econo-pairs-v1 huggingface dataset:
As a consequence, the bank capital framework de facto becomes a partial substitute means of achieving more forwardlooking provisioning, through the internal models regime for credit risk which requires the deduction from capital of expected losses in excess of provisions. A forward-looking approach to provisioning based on expected losses would help move to a more appropriate position where the accounting standard requires a prudent valuation of banking book assets and the capital regime can focus on unexpected loss. I hope that implementation of the new accounting standard for provisioning, IFRS 9, is a step in this direction. I now want to turn to the issues around risk-weighted assets in the capital framework. Basel I was a simple framework, as I described earlier. In my view, that was its strength and weakness. The strength was that it was quite easy (certainly by today’s standards) to see the balance sheets even of the largest banks laid out and broken down by broad risk weights. The weaknesses were two-fold. First, it provided little insight into how firms measured and managed risk. As a supervisor in the late 1980s and early 1990s, I remember well meetings with firms which would start by the firm reminding that while they had filled in the risk weighted assets form faithfully, it bore no resemblance to how they assessed and managed risk in the business – what is often called “economic” as opposed to “regulatory” capital.

What a Difference a Decade Makes Mark Carney Governor of the Bank of England Chair of the Financial Stability Board  Remarks at the Institute of International Finance’s Washington Policy Summit, the Reagan Centre, Washington DC 20 April 2017  I am grateful to Alice Carr, Wayne Chapman, Carsten Jung and Iain de Weymarn for their assistance in preparing these remarks. 1  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  Introduction It’s a pleasure to be back at the IIF’s Washington Policy Summit. 1  Last time I spoke here (in 2011) it was still early in the international financial reform process. From the IIF’s perspective at the time, there were three major concerns: -  The consistency of implementation across the G20;  -  The possibility of significant regulatory arbitrage in shadow banking; and  -  Whether the FSB/G20’s ambitious agenda would impair the recovery. Today, those debates have largely been settled. First, the new international minimum standards are being, by and large, consistently and promptly implemented in G20 jurisdictions. This progress is regularly assessed and transparently reported by the FSB 2  and the IMF. And in general, when countries have deviated from international standards, it’s because they have chosen to go further. Second, activities which give rise to similar risks are being treated consistently regardless of where they originate. A series of measures have addressed the major regulatory arbitrage opportunities that encouraged shadow banking. Contingent exposures of banks have been brought on balance sheet and appropriately capitalised.
The measure of inflation expectations that appears to have the strongest link to actual wage increases is firms’ inflation expectations one year ahead from the National Institute of Economic Research’s business tendency survey.7 According to this measure, inflation expectations have followed actual inflation fairly well. In other words, the agents have not been “tricked”, but have realised that inflation can deviate from the target in the short run. If wage increases are based on this measure, then in other words real wages have not been too high and unemployment has thus not been “unnecessarily high”. Before I move on to the next type of criticism, I would like to emphasise that what I have said here should not be interpreted to mean that I wish to make light of inflation undershooting the target. The Riksbank should of course do its best to attain the inflation target and I can assure you that we do. However, it is not an easy task, and I believe that many people understand this. Proposal for higher inflation target and target for employment Another type of criticism is aimed at the target formulated for monetary policy. It comes in slightly different forms, but a common theme is that the inflation target should be raised, and that it should be combined with an explicit target for employment or unemployment.

This is an essential element of robustness and, for outside investors, provides a strong guarantee of long term solvency. Its aggregate fiscal balance (with a 2010 deficit at 6,3% of GDP) is the most favorable of all advanced economies ( US is at 10,5%, UK at 9,6% and Japan at 7,7%). The same holds true for public debt which stands at 92% of GDP similar to 93% in the US versus 200% in Japan. But, of course, markets, and analysts do not look always at the euro area as a whole. Because fiscal policies remain national, they tend to assess separately the situation of public finances in each individual country. While most analysts would acknowledge the magnitude of the efforts undertaken, some tend to take a very pessimistic view about future outcomes. As I understand it, that pessimism can be articulated around two lines of argument. First, the amplitude of fiscal consolidation will negatively affect growth for a very long time making it impossible to service debt and leading unavoidably to some kind of restructuring. And second, this economic stagnation will trigger strong political reaction which, ultimately, would put the very existence of the euro area at risk. In short, the whole reasoning is based on the euro area, and more specifically, its periphery, being unable to return to normal growth anytime in the foreseeable future. This is a very dramatic assumption and it matters a lot because, as we all know, the dynamics of debt are extremely sensitive to forecasts about future growth.
The impact of a financial crisis emanating from the largest economy in the world that also serves as the world’s economic locomotive and provides the global reserve currency is likely to be pervasive and longer-lasting. There are no easy precedents, and we have to remain alert to new surprises. Moreover, the key pillars of economic theories that underpin much of our policy thinking are now being vigorously questioned. We need much more thinking and empirical work on how economies and people behave to draw out the critical lessons from this crisis. But based on what we know, we need to undertake policy changes to build a more stable, sustainable and resilient global economic and financial system. Much of this has to be globally coordinated, given the extensive linkages among economies and the financial system. In Asia, we face many policy challenges, and I will touch on three of these: managing the recovery, economic restructuring, and the regulation and development of the financial services sector. My main theme is that we must be cognizant that many Asian economies enter this crisis with different starting conditions, and going forward, face different challenges from those in advanced economies. Understanding these differences, and avoiding a onesize-fits-all approach, will be critical to the design of policies appropriate to each country and region. Managing the economic recovery First, the economy. The financial crisis hit Asia with unexpected speed and force.

However, it increases the difference in treatment between repo transactions with central banks and interbank repo transactions not backed by level 1 HQLA. 13  See Stein (2013, op. cit.). BIS central bankers’ speeches  5  pricing of the CLF should therefore strike the right balance to protect monetary policy without undermining the effectiveness of the LCR as a prudential instrument. On the one hand, in order to reduce pressure on demand for central bank funding, it is necessary that banks find it more attractive to pay the CLF commitment fee rather than to obtain central bank liquidity and leave it on their accounts at the central bank. A CLF that would only be used in stressed times would not serve our purpose. On the other hand, there is a danger perceived by some that a CLF could materially change the effectiveness of the LCR, as the definition of HQLA would de facto be substantially widened, which would offset the objective that banks should self-insure against liquidity risk. To avoid such an outcome, the following remedies exist: first, the pricing of the CLF in normal times should reflect the opportunity cost of a bank for holding HQLA rather than non-HQLA. As a result, reliance on the CLF should not be more attractive than holding private-market HQLA. Second, it has to be borne in mind that access to the CLF needs to be collateralised; hence collateral availability puts a “natural” limit to accessing HQLA in the form of a CLF.
5/6  BIS central bankers' speeches  This is supported by a growing ecosystem of banks and non-bank financial participants, asset managers and corporate treasuries, who have chosen to base their FX activities here. As the preeminent FX centre in the Asian time zone, which serves the different investment and hedging needs of market participants, it is important that Singapore play a leading role in adopting Code. Within Singapore, the Singapore Foreign Exchange Market Committee (“SFEMC”), will take on the responsibility to promote and encourage adherence to the Code. As a start, SFEMC members, comprising key sell-side banks and buy-side participants, will be using the Statement of Commitment to demonstrate their commitment to adhere to the Code. SFEMC will also be the key platform to collect feedback and views on evolving issues that could be brought to the GFXC and included into the Code over time. In terms of outreach, we will leverage on a public-private partnership approach to engage our market participants. MAS and SFEMC members have been actively engaging market participants through both sell-side and buy-side associations, and will continue to do so. These include the Association of Banks in Singapore (ABS), the Investment Management Association of Singapore (IMAS) and the Association of Corporate Treasurers (ACTS). If you have good ideas to share, on how we can do this more effectively, please reach out to us. Conclusion The Code is a tool to rebuild trust in the FX market, and we are confident that it can achieve its full potential with your support.

This Code extends to all wholesale market participants – sell-side, buy-side, non-bank market makers, trading platforms and market infrastructure. A question that we have been asked frequently comes from buy-side participants – Why does the Code matter to me? The application of the Code to all wholesale market participants, including the buy-side, stems from the belief that good practices should apply to all market participants and not only a subset. 2/6  BIS central bankers' speeches  With widespread adoption, the power of market discipline and peer pressure can be immense. This is important for a voluntary Code. The Code incorporates the principle of proportionality, given the diverse nature of market participants. What this means is that not every principle will apply directly to every market participant. In the case of a buy-side participant, you will find that only a portion of the principles have direct applicability. For example, most of the principles relating to execution are directly applicable only to sellside participants. Hence, the implementation burden may not be as significant as one would expect. Nevertheless, while the rest of the principles may not have direct applicability, they provide clarity to your counterparty relationship with the sell-side. By understanding the practices that your counterparties are abiding by, it informs what you should expect from the counterparty relationship. For example, in the hotly debated issues of mark-ups and last look, the good practices help you make more informed choices in selecting and interacting with your counterparties.
Nevertheless, although the positive signs of a recovery that we could already see in July have strengthened, there is still uncertainty about future developments. In the USA, which is suffering its most prolonged recession since the 1940s, there are signs of a light at the end of the tunnel. The housing market has improved and the statistics indicate that the fall in house prices has come to a halt (see Figure 4). After four quarters of falling GDP, growth in the third quarter is now expected to be positive (see Figure 5). The labour market is continuing to weaken, however, and unemployment has reached almost 10 per cent, which is an unusually high figure for the USA. Development in the euro area has been somewhat better than our assessment in early July. It appears that the fall in GDP has come to a halt. Several of the major economies have even reported positive GDP growth. However, the situation on the labour market has deteriorated further. Unemployment is almost at the same level as in the USA. The fall in Sweden's GDP is slowing down Development in a small open economy like Sweden is highly dependent on the development of economic activity abroad and Sweden has also been hit hard by the severe international downturn. GDP has fallen for five quarters in a row. However, since the beginning of the second quarter of this year this fall has slowed down and GDP even increased somewhat between the first and second quarters (see Figure 6).

Inflation measured in terms of the CPIF, in which mortgage rates are kept constant, is more stable but it is expected to be below 2 per cent for most of the forecast period (see Figure 8). My view of the situation At the latest monetary policy meeting, I advocated an unchanged repo rate and repo rate forecast. This was also the decision made by the majority. As in July, we also decided to offer our monetary policy counterparties loans at a fixed interest rate for one year. As I mentioned earlier, this can strengthen expectations that the repo rate will remain at the decided level throughout the maturity of the loans and also contribute to lower interest rates for households and companies in other ways. Many analysts felt that the decision to leave the repo rate unchanged was self-evident. The decision to retain the same repo rate path that we adopted in July was perhaps more unexpected. I will explain the reasoning that led to my conclusion that this constitutes a wellbalanced monetary policy. There are several factors to take into account in this decision. Perhaps the most obvious factor is the change in the economic prospects. As I mentioned earlier, the forecast for GDP growth in Sweden has been revised upwards somewhat. Irrespective of which indicators you look at, resource utilisation is still very low in Sweden and abroad and the development of employment is expected to be weak throughout next year.
Tarisa Watanagase: Inflation targeting – a reflection on Thailand’s experience Opening remarks by Dr Tarisa Watanagase, Governor of the Bank of Thailand, at the Bank of Thailand’s International Symposium on “Challenges to Inflation Targeting in Emerging Market Countries,” Bangkok, 13 November 2006. *  *  *  Honorable Guests, Distinguished Participants, Ladies and Gentlemen, First, I would like to extend a very warm welcome to all of you here today. This is the second time that the Bank of Thailand organizes a symposium at an international level. Our first international symposium, “Practical Experiences on Inflation Targeting,” was held in October 2000, a few months after we had adopted inflation targeting as a new monetary policy framework for Thailand. But this symposium today is the first one that brings together central bank governors, senior central bank executives, world-renowned academics and policy experts from leading international organizations. Many of you have extremely tight schedules and some have to travel a very long distance. I would like to express our great appreciation for your presence and very much hope that what we will learn together in this symposium is beneficial to all of us. Ladies and Gentlemen, Thailand formally adopted inflation targeting as a monetary policy framework on May 23, 2000. The change in policy regime was a result of our search for an appropriate nominal anchor after the floating of the Thai baht in July 1997. In the interim period, we used monetary aggregates as our policy target.

These flexibilities allow us to adapt rapidly and without undue stress to new developments and shocks. Among its other virtues, inflation targeting is purported to improve the transparency and accountability of monetary policy and to help enhance the central bank’s credibility. These were also what we hoped the new framework would deliver for us. On the transparency front, the establishment of the Monetary Policy Committee as the decisionmaking body has transformed the way we conduct monetary policy. Today, the public can see what decisions have been taken, by whom, against what objectives, and for what reasons. On the accountability front, we have now learned to operate in the environment where the public expects us to keep inflation within the target range. This makes us extremely conscious of every policy decision we make, which in turn allows us to avoid potentially costly policy mistakes. But perhaps the biggest change is on the credibility front. The way we conduct policy and our track record have helped us to regain any credibility we may have lost following the unsuccessful defense of the baht. Public confidence in the Bank enables us to anchor private-sector expectations about future inflation, which in turn reinforces the effect of our policy. Yet despite all the good things inflation targeting has brought us, it is not a panacea. In other words, there are limits to inflation targeting. An apparent example here is development of asset prices. Also, past successes do not guarantee future success.
Unilateral deregulation would be nothing less than a lose-lose scenario with serious consequences for the stability of the global financial system – we would be paving the way for the next financial crisis – as well as the competitive landscape for US and European banks. International cooperation on financial reforms is a common good that has been extremely precious during these past eight years and is crucial to our future. 5) The fifth challenge is to complete the European framework and ensure greater consistency between regulation, supervision and resolution. Since 2014, the euro area has taken decisive steps with its Banking Union, which now ensures the uniform supervision of the banks of 19 countries. But in order to complete it, further progress is needed on three levels. First, with regard to concrete mechanisms, the second pillar of the Banking Union, which deals with “resolution” in the event of difficulty, must be finalised and simplified. Second, laws and requirements, which all too often accumulate diverse additional regulations and amendments, should be coordinated in a consistent manner. Moreover, cross-border banking mergers in Europe are still too difficult. Lastly, as regards the interaction between institutions, we should develop a better interaction between the various European authorities, and even envisage, going 5/7  BIS central bankers' speeches  forward, a single authority that would strive to enhance the soundness of the European banking sector. And in addition to the regulatory aspect, we must endeavour to implement what I call the Financing Union for Investment and Innovation.

2,  2013, cited by Taryk Bennani, Laurent Clerc, Virginie Coudert, Marine Dujardin and Julien Idier, “ Politique macroprudentielle, prévenir le risque systémique et assurer la stabilité financière", Pearson, 2017, p.118. 9 See IMF World Economic Outlook, April 2015 and see Patrice Ollivaud and David Turner, “The effect of the global  financial crisis on OECD potential output", OECD, Working Papers, No. 1166, 2014. 10 See in particular “The impact of financial reforms”, Banque de France Financial Stability Review No. 21, April  2017. 11 Basel Committee, Basel III Monitoring Report, September 2017. 12 See reports by the Basel Committee’s Macroeconomic Assessment Group (MAG) and Long term Economic  6/7  BIS central bankers' speeches  Impact Group (LEI). 13 Financial Stability Board, Implementation and Effects of the G20 Financial Regulatory Reforms, August 2016,  2nd Annual Report. 14 Financial Stability Board, Global Shadow Banking Monitoring Report 2016, May 2017. 15 See US Department of the Treasury, “A Financial System That Creates Economic Opportunities", June 2017. 7/7  BIS central bankers' speeches
The steeper projected drop in investment considers shutdowns at several sites due to the sanitary crisis and the fact that companies have been re-evaluating their planned investment projects, which is consistent with the findings of the Bank’s survey. These showed that a non-negligible fraction of the respondents shelved their investment plans for this year and about half were having second thoughts about their execution. The projection also contemplates a near 2% contraction in consumption during 2020 with its private component being more concentrated in durables. This is in line with the significant depreciation of the peso and the double-digit drop in consumer goods imports in the early months of this year. The recovery of consumption will depend especially on the evolution of employment and income, and how companies manage to live through the most critical period without destroying a significant number of jobs. Chile’s exports will also shrink in 2020, reflecting the reduction in trade flows associated with the world recession. Actually, already in February and March they posted year-on-year drops. Imports will contract too due to weaken domestic demand. Thus, the substantial adjustment in business and household spending will not be compensated by the government’s savings depletion implicit in the announced fiscal package, so this year the current account balance will become marginally positive (Figure 9). 5  The medium-term inflation trajectory will be dominated by the sharp widening of the activity gap projected in the scenario just described.

Figure 4 2020 growth forecast in latest Monetary Policy Reports (*) (annual change, percent)  8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4 EE.UU. Eurozona  China  A. Latina  (*) Evolution of forecasts from MP Reports of September 2018 to March 2020. Source: Central Bank of Chile. 10  Figure 5 Commodity prices 2020 forecasts (1)  Terms of trade (2)  (USD/lb; USD/ barrel)  (índex, 2013=100)  3.00  65  110  110  2.75  55  100  100  2.50  45  90  90  2.25  35  80  80  2.00  25  70  Copper  70 04  Oil  07  11  14  17  20  (1) Evolution of the forecast between the MP Reports of March 2019 and March 2020. (2) Red diamonds show forecasts for the period 2020-2022 contained in the MP Report of March 2020. Source: Central Bank of Chile. Figure 6 How do you feel about the performance of your business over the next six months? 100  Very preoccupied  Slightly preoccupied  Not preoccupied  50  100 50  0  0 Unfolding of social conflict  Effects of Covid-19  Global economic situation  Tightened lending standards  How will your firm's number of employees evolve in 2020 with respect to today?