samchain/econo-pairs-v1 huggingface dataset:
It is important that we continue reducing the cost of doing business, in conjunction with the private sector, in order to improve investments in various sectors of the economy. The agriculture sector, for instance, remains underdeveloped despite the country possessing large tracts of arable land, adequate water and relatively good weather. This is one sector where the country can easily take advantage of its comparative advantage. The achievement and maintenance of a low and stable inflation rate, preferably single digit, therefore remains key to promoting investment, enhancing business planning and confidence in the economy, maintaining external competitiveness and stabilising people’s incomes. In the medium-term, Government continues to pursue market and structural reforms in partnership with the private sector with the view of consolidating the gains so far attained for sustained economic growth and development. Despite the adverse effects of the global economic meltdown, there are still prospects for appreciable economic growth in 2009 and the years ahead. GDP growth is expected to be led by growth in agriculture; construction; financial services; manufacturing; transport and communication; and wholesale and retail trade. Conclusion In conclusion, we all agree that Zambia remains vulnerable to effects arising from the ongoing global financial crisis, particularly if it is prolonged. We hope that the actions that most affected countries, led by the US and the EU, have taken would help cool down the financial crisis and bring back the much needed confidence in the financial systems.

Exchange market intervention, irrespective of whether foreign exchange is bought or sold, is not an appropriate instrument for influencing the krone over a longer period. We do not wish to act in a way that may trigger a game situation in the foreign exchange market. Foreign exchange intervention rather than a change in the interest rate may give ambiguous signals to foreign exchange operators and a game situation may arise. However, interventions may be appropriate if the krone deviates substantially from the level that the Bank judges to be reasonable in relation to fundamentals, and if exchange rate developments weaken the prospect of achieving the inflation target. Interventions may also be appropriate in response to pronounced short-term fluctuations in the krone when liquidity in the foreign exchange market falls to a very low level. Although the krone may fluctuate in the short term, when inflation is low and stable, it will generally stabilise over time. When inflation has been higher in Norway than among our trading partners for a longer period, the krone has generally depreciated. When inflation in Norway is expected to be broadly in line with that of other countries, the exchange rate will normally also return to its normal range following periods when the krone has been particularly strong or particularly weak. Exchange rate expectations cannot be directly observed, but information from Consensus Forecast, a survey conducted among economists, may be an indicator.
Mainland GDP is projected to show sustained strong growth in 2006. The output gap is expected to increase over the next two years, but will peak at a fairly moderate level as gradual increases in the interest rate dampen demand growth. Growth in the global economy is projected to remain high, resulting in both high demand and favourable prices for the Norwegian export sector. There are prospects that high petroleum investment will contribute to sustaining the high level of activity in the Norwegian economy. In 2008 and 2009, a continued high level of petroleum revenues may imply an expansionary fiscal policy. Interest-rate setting since last summer has been oriented towards a gradual increase in the interest rate – in small, not too frequent steps – towards a more normal level. Based on Norges Bank’s assessment of the driving forces in the economy, this strategy appears robust. Output growth is strong and the labour market is becoming tighter more quickly than expected. Higher growth in the economy may in isolation suggest a faster increase in the interest rate ahead. This would reduce the risk of bottlenecks in the economy, with rising cost inflation and continued debt build-up. On the other hand, the objective of bringing inflation up towards the target and anchoring inflation expectations argues for restraint in the upward movement of interest rates. On balance, this implies that the interest rate outlook remains virtually unchanged compared with the previous Report.

But the interest rate should also contribute to equilibrium in the market for real capital in the long run. To achieve this, the real interest rate must not over time deviate too much from the return on real capital. Substantial deviations can give rise to undesirable fluctuations in the markets for real capital that have no basis in economic fundamentals. In Norway, both short- and long-term real interest rates are at the moment at a low level, compared to the past few decades. This is also the case in many other countries. How large the deviations from the neutral and the equilibrium rates are, on the other hand, is less clear. Neither the neutral rate nor the equilibrium rate are variables that can be observed. Economic theory can contribute insight into the factors that determine the equilibrium rate, but attempts to quantify it based on theory yield an uncomfortably broad interval. An alternative is to use historical average interest rates on the basis of an assumption that actual real interest rates will vary around the equilibrium rate. This method also poses problems, however. 2  BIS Review 22/2006  Throughout the period 1870-2005, the average long-term real interest rate in Norway has remained close to the average in the UK and the US: Norway 2.2 per cent, the UK 2.0 per cent and the US 2.8 per cent. In all countries, fluctuations in real interest rates have been substantial in periods. The real interest rate has fallen markedly since the beginning of the 1990s.
The road we have travelled these almost six years has formed an institution which has developed with the challenges it met. It has fine-tuned its processes and its machinery and I think it is well placed to face challenges today and further down the road. |9

Prasarn Trairatvorakul: Unleash prosperity through regional connectivity Address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the “AEC+3 Summit and Expo”, jointly sponsored by Kasikornbank, the International Trade Promotion Department, the Board of Investment and The Economist magazine, Bangkok, 2 November 2014. *  *  *  Chairman Banthoon, Distinguished Guests, Ladies and Gentlemen, 1. First of all, I would like to thank Kasikornbank for inviting me to speak here at the AEC+3 Summit. This event comes at an opportune time in light of the excitement surrounding the ASEAN Economic Community. 2. As single entities, the countries of ASEAN are characterized by their diverse size and development. As a unified bloc, however, the picture changes dramatically: ASEAN is the world’s third in terms of population and the world’s fifth in terms of trade and investment flows. Being the world’s most diverse economic region is also a key strength which has hurled ASEAN into an important player in the global supply chain. 3. Much has been achieved already, yet much more is still within our reaches. But to reach our potentials, we need to enhance on connectivity, not only within ASEAN but also with our Plus Three partner countries. It is on this theme of connectivity that I will focus this evening: I will first provide a snapshot of what has been achieved under ASEAN financial connectivity.
In other words, he suggested that  BIS Review 92/2007  3  practicing “moral suasion” would pay more dividends to a central bank than seeking cover under the law. Caution against the excessive creation of money Exter belonged to the old guard of economists who believed that economic prosperity cannot be attained by printing money. This was indeed going against the popular tides of the late 1930s and 1940s. At that time, Keynesianism had been accepted by the mainstream economists on both sides of the Atlantic as a new religion. It explicitly advocated the desirability of deficit financing as a strategy for attaining full employment. Exter doubted the validity of this claim both in his public speeches and writings. In this respect, Exter was a loner and belonged to the minority of economists of the day. The fact that there were no supporters for his views did not prevent him from making public what he believed to be true. On the very first day of the establishment of the Central Bank of Ceylon, in a press interview he gave as its first Governor, Exter warned against the use of the Bank for things it cannot fulfill. “Today, we can only be filled with high hopes for the future. It would be a mistake to expect startling results immediately from the establishment of the Central Bank. There is no financial wizardry by which the Bank can suddenly pull out of a hat a higher standard of living for everybody.

Since the risk weights given to such unsecured advances exceed even 100 percent, it is necessary for the Central Bank to plan for a higher level of reserves than the minimum 15 percent. The Central Bank management, having taken this prudential requirement into account, has decided, as a part of the Bank’s modernization program, to raise the reserve level up to 100 percent of the domestic assets of the Bank. This is being continued by the Bank since 2003 and the reserve level today stands closer to 100 percent. However, it would be prudential to revisit even this percentage today in terms of its adequacy in view of the level of ever rising unsecured provisional advances and Exter’s warning that the profits earned by inflating the economy should not be distributed. The build up of reserves by the Central Bank to be equal to its domestic assets has another monetary dimension. On the liability side of Bank’s Balance Sheet, it has liabilities on account of currency issue and demand deposits maintained by commercial banks. These liabilities are known as monetary liabilities, since they constitute the reserve money of the system. All other liabilities, including the capital and reserves, are, therefore, called nonmonetary liabilities. When reserves are built-up to be equal to the Bank’s domestic liabilities, its monetary liabilities would vary exactly in accordance with the movement of the Bank’s net foreign assets.
Household debt growth has been higher than income growth since 1999. The debt burden, defined as debt in relation to disposable income, has therefore increased markedly. Households’ financial position is nonetheless sound. As measured here, housing wealth in Norway is almost four times higher than total household debt. Debt and wealth are, however, unevenly distributed. Combined with any marked turnaround in the housing market, this would create problems for exposed groups. However, the financial situation of households as a whole is satisfactory. Unemployment is unusually low, but must be expected to increase somewhat in the medium term. Household disposable income is expected to show continued high growth ahead. Due to the long period of strong debt growth and sharply rising house prices, however, households’ financial position has become more vulnerable. Corporate sector Corporate profits have been very high in recent years. These positive developments have been broadly based and are mainly driven by favourable economic conditions in Norway and abroad. Enterprises have on average large financial buffers. Banks’ lending to the property industry accounts for approximately one third of their lending to the corporate sector. This sizeable exposure to one industry is a possible risk factor in relation to financial stability in Norway. Both property enterprises and their tenants are in a generally healthy financial position. Prices in the commercial property market have risen considerably in the past two years, and market participants are expecting the sharp rise to continue. Lower demand in the Norwegian economy may result in a slower rise than the market expects.

From a regulatory perspective, it is important to note that responsibility for ensuring that payment and settlement systems work smoothly and meet the requirements of the financial industry lies with the system operators and market participants. The role of regulatory authorities is to establish certain guidelines, especially for infrastructures that are of critical importance for the stability of the financial system, and to intervene rapidly in cases where market forces do not provide an adequate infrastructure. BIS Review 103/2009  1
Several economies have been using basic tools such as loan-to-value ratios and concentration limits on particular sectors. These tools are simple to understand and enforce. While their application to only particular sectors appears ad hoc, and a broader counter-cyclical capital buffer to reduce credit growth across the board might seem more appealing, the experience has been that an approach that is targeted towards sectors such as a real estate has the merit of not reducing credit to other sectors such as the corporate and SME sectors. Their efficacy probably stems from simplicity and consistent applications, which condition expectations in the market. 21. Fifth, the term “macroprudential” suggests that these are essentially prudential tools, but with a “macro-orientation”. Indeed, many tools that are “microprudential” in nature also serve the macro-needs as well. Loan-to-value ratios not only raise the buffer for losses but can also constrain credit growth in the economy. Similarly, macro-measures such as the tightening of interest rates can also lean against the build-up of asset prices and serve a microprudential purpose. Pursuing macroprudential objectives therefore does not mean that we have to have a narrow box of tools, each dedicated to a specific purpose. In fact, the interaction of various tools is significant – they can work in the same or opposite directions, and their cumulative impact may be greater or smaller than we anticipate. It is probably more appropriate for us to take an eclectic and holistic approach. 22.

I hope that that time can also be used, by bankers working with your community of corporate treasurers, to richen the options for working-capital finance and longer-term funding available across the business community. Such has been the call during similar periods in the past, going back more than a century. But it also offers opportunities. Innovation, which we must not make a dirty word, might help. Meanwhile, monetary policy will underpin the recovery so long as that remains consistent with anchoring inflation expectations in line with achieving the 2% target over the medium run. We shall not let that slip. 6  BIS central bankers’ speeches
Unless we deliver effective resolution regimes, public finances will be under more pressure. So, summing up why the resolution reforms are so important: if you believe in solving Too Big To Fail, in an international financial system that is not only free but also safe, in shielding taxpayers from the risks in banking, and in shielding banking from politics, you will be committed to making a success of resolution. Thankfully, the extent of progress since the 2008/09 bailouts, while still incomplete and needing continuous political impetus, is good. It has involved agreement on a global model for resolution regimes capable of handling the largest and most complicated firms; legislation in some, but not yet enough, jurisdictions to embed that regime; the development of high-level resolution strategies that can be applied to different types of global group; concrete steps towards agreement between countries on how to apply those strategies across borders to specific institutions; and plans for top-level reviews of the adequacy of the resolution plans for each Global SIFI. If that progress has not been faster, which is an understandable concern, it is for the good reason that the required reforms involve an agency of the State, the resolution authority, having powers that affect property rights.

That would help to provide some protection, beyond the DGS, for users of the monetary services that banks provide via overnight and short-term deposits; it could provide a small degree of protection against runs; and there could be an element of social justice in insulating, say, small firms and charities from the first line of loss. But, I say ‘some’ uninsured deposits because I am doubtful whether very large, wholesale deposits placed at term maturities (eg billions of pounds for six months or more) should be preferred. They are not monetary deposits, in the sense of being transaction balances; and they are not placed by households or small firms or charities. Moreover, if they were to be preferred, it would be likely that a chunk of bonded finance would over time morph into borrowing-instruments that had the legal form of ‘deposits’. That would increase the cost of any residual bond issuance. 9  See Tucker, P. M. W. (2009), The crisis management menu, “Too little attention was paid to core liquidity holdings: a treasury portfolio comprising the [Floating Rate Notes] issued by other banks does not leave a distressed bank with many options in the face of system-wide stress.”  10  Of course, if the DGS is bankrupt and a country’s government is bankrupt, the DGS may not be able to pay out. That is very serious, but it cannot be solved by the design of bank resolution regime.
It is, of course, difficult to say exactly how large the foreign exchange reserve would have to be to assist the banks with liquidity in a crisis situation. The amount could be either larger or smaller, but let’s assume that two-thirds of the reserve, that is SEK 200 billion, is available for this purpose. What does it cost to maintain a foreign currency reserve like this? And who should reasonably pay this “insurance premium”? Let us examine the cost first. One way of looking at the matter is that Sweden, as a nation, has borrowed SEK 200 billion more than we otherwise would have needed, and the cost for this, quite simply, is the average interest rate on the government debt. But this would be to disregard the fact that the Riksbank can actually invest the money we have borrowed via the Swedish National Debt Office in interest-bearing assets, let alone that choices are limited as the assets must have extremely good liquidity, that is to say that cash must be available at very short notice. If we assume that the difference between the deposit rate and the lending rate is about forty basis points, the annual cost for borrowing SEK 200 billion would thus be about SEK 800 million. Is this a lot or a little? This can be discussed, but, last year, the four major banks had a combined balance sheet total of SEK 11 300 billion and pre-tax profits of SEK 70 billion.

They needed every dollar they could get back from their European counterparts. So the European dollar problem bounced back to the United States. In this situation, the US central bank (the Federal Reserve) decided to supply the European Central Bank (the ECB) and a number of other European central banks, including the Riksbank, with dollar loans. While this had already been carried out on a smaller scale since 2007, it escalated steeply in conjunction with the Lehman collapse. This lending was conducted via what are known as currency swaps, in which (put simply) the Federal Reserve lent dollars against collateral in euros or other local currency. In this way, the ECB, the Riksbank and other central banks could provide their domestic banks with loans, not only in their own currency, but also in dollars. The flow of dollars from the private market was thus  2  BIS central bankers’ speeches  replaced by a flow of dollars from the Federal Reserve (see Figure 1). This saved a number of European banks which otherwise would have gotten into trouble, but what was probably more important from a US point of view was that it also saved a number of US banks. Figure 1. Federal Reserve’s lending to other central banks USD Billions 600  500  400  300  200  100  0  Sources: Federal Reserve and the Riksbank  The way that this drama played out in Sweden can clearly be followed by examining the Riksbank’s lending activities (Figure 2).
Further, retail deposits cover a very significant portion (75%) of the total stable funding needs (60% for European banks as a whole). Assets - The Spanish banking industry’s consolidated assets grew by 2.1% in 2022. Financial instruments in Spain declined by 7.7% and those stemming from business abroad (expressed in euro) increased by 9.6% to 53.7% (up 4.3 pp on a year earlier). - Much of the decline in financial instruments in Spain owed to the reduction in balances held with central banks (-31.9%) and, to a lesser extent, to the drop in loans to the resident private sector (-2.5%). Meanwhile, the increase in financial instruments abroad was due to the growth in lending to the resident private sector in third countries (10.3%) and in debt securities (16%), against the background of a depreciating euro. - Debt securities grew by 11.7% and represented 13.6% of total assets at December 2022.3  3  At consolidated level, more than 80% of debt securities have a general government counterparty. 3  - As for the reduction in the stock of lending to the resident private sector in Spain (down by 0.7% in 2022), the results of the Bank Lending Survey (BLS) indicate that both supply and demand-side factors contributed to these developments. The decline came despite the larger volume of new loans (+8.9%) and the increased drawdown on existing credit lines (+12.9%). - The stock of loans to households was down by 0.2%, essentially due to lending for house purchase, while other lending to households held stable.

Lastly, it must be borne in mind that the short and medium-term challenges posed by the recent period of extraordinary crises do not make tackling the banking sector’s structural challenges – such as those linked to the management of climate-related risks, digitalisation and growing competition from technology firms – any less urgent. Thank you. 10