samchain/econo-pairs-v1 huggingface dataset:
M R Pridiyathorn Devakula: Thailand's emergence from the crisis - new paradigm for sustainable growth Speech by Mr M R Pridiyathorn Devakula, Governor of the Bank of Thailand, at the International Conference on "Economic Recovery and Reforms", Bangkok, 28 October 2002. *  *  *  Distinguished Guests Ladies and Gentlemen, It is my great pleasure to be here with you tonight. I would like to begin by welcoming you all once again to Bangkok and to this important international conference on Economic Recovery and Reforms. I would also like to express our appreciation to the Faculty of Economics, Thammasat University, the main organizer of the conference, in allowing the Bank of Thailand to co-host the event. Our appreciation also goes to the distinguished scholars who came from all over the world to share with us their perspectives on this important topic. To many of us here, especially those in the Asian region, the 1997 financial crisis has completely changed our lives. It was, in a way, a sharp reversal of fortune when suddenly things that were thought to be good before the crisis became no longer good enough. And terms like ‘restructuring’ and ‘reforms’ have then become something of a norm. This long and tiresome journey has now lasted for more than five years, and naturally begs a question, “when are we going to get out of this abyss?” This question is particularly pertinent to Thailand. After all, the Asian crisis started here.

In an effort to further modernize our financial system, the Bank of Thailand, in cooperation with stakeholders and representatives from the SEC and the Department of Insurance, is in the process of drafting the country’s first Financial Sector Master Plan. Scheduled to be implemented in 2003-2012, the Master Plan is intended to increase competition within the Thai financial systems and at the same time to improve the soundness of the system as a whole. The preliminary vision for the future of commercial banking and financial services in Thailand given by a high-level steering committee comprises three pillars – accessibility and availability of financial services for all potential users nationwide; a competitive and efficient financial system; and finally fairness for all customers. This preliminary vision of the Master Plan reflects our changing perception of the country’s new financial architecture. As there are already two Asian financial centers in Hong Kong and Singapore, there is no point to try to be the third one. Instead, what Thailand needs is probably a more customeroriented financial sector with efficient operation and minimum systemic risk. The extent to which Thailand’s financial service landscape is going to change from today will depend on the results and recommendations of an ongoing study. What I can tell you now is that whatever the final outcome will be, for Thailand, this is a change to rectify past shortcomings for the better. As we are drafting our Financial Sector Master Plan, the SET is working tirelessly on its Capital Market Master Plan.
•  In conclusion we can say that Estonia has been quite successful so far. For a successful future, we should first realise how far Estonia has progressed. Then we can decide where Estonia wants to be headed. When we know what we want to achieve in the future, we have to answer another, often an unpleasant question: how, through which measures, and at what price can we achieve the desired result? And then there is nothing more to it but to embark on taking purposeful action... It is as easy as that. Or is it? •  It is a fact that as Estonia is evolving into a ‘boring and stable European country’, our society is supporting change for the sake of itself less and less. Stability, keeping one's word, and honouring contracts concluded either directy or indirectly is becoming an increasingly highly regarded value in the Estonian society. •  As Governor of Eesti Pank I would hereby like to recall that if anyone in Estonia has the right - and obligation - to stress the importance of stability, it is the central bank. Some very successful examples illustrating the fact that stability is held in high regard are the Estonian kroon that has held out splendidly for twelve years and the Estonian monetary system that has not been ‘copied from Europe’ but has been structured bearing in mind our specific situation.

If confirmed, this would be bad news for the European economy that needs investment following years of underinvestment in the aftermath of the global financial crisis. Moroever, the question is how the financial sector would react. What exactly do you mean by that? The financial sector often tends to act procyclically. Banks are a case in point, because they tend to amplify cyclical developments. When the economy is performing well, they are willing to grant credit, but when it is faltering, they are not so keen. Do you see such a risk at present? As far as the capital markets are concerned, credit risk premia have increased significantly over the past months – for both high and low credit-rated firms. That tightens borrowing conditions for firms on capital markets and weighs on the economy. On the other hand we have so far not seen any such tightening in bank lending conditions in the euro area. Overall, in light of these developments, we consider that the probability of a recession remains low. But are you worried that that will change, that the banks will tighten conditions too? Banks in the euro area now hold much more capital than before and are better able to withstand shocks. They also have larger liquidity buffers. That’s all good news. At the same time, bank equity prices have fallen sharply and profitability is often very low, as is also reflected in the banks’ very low price-to-book ratio of around 50%.
•  What about the more difficult question of whether monetary policy should be used to lean against the wind. The answer is a more obfuscating “that depends.” Specifically, it depends on the efficiency and efficacy of the macroprudential tools and institutional framework available, a point eloquently made by my colleague Don Kohn recently (Kohn 2015). •  Take the extreme case in which there are no macroprudential tools. In such circumstances monetary policy may be the only means of tackling system-wide financial risks, but it would come at the cost of significant effects on the real economy – precisely because monetary policy “gets in all the cracks.” For example, some empirical work by former Deputy Governor Charlie Bean suggests that setting Bank Rate around 200 basis points higher than it was over the over the period 2003–2006 would have reduced the growth in the ratio of household debt to GDP by just 2 percentage points from 2003–2007 at a cost of GDP growth over this period being 2.6 percentage points lower (Bean et al 2010). •  By contrast, the targeted nature of the tools available to the Financial Policy Committee under the current institutional framework in the UK makes them a natural first line of defence for dealing with build-ups in financial system vulnerability while minimising the knock-on effects to the rest of the economy – as was recognised in the financial stability knockout built into the MPC’s forward guidance.

For the United States, we predict a relatively good growth rate (for a developed country), this year and in the following years (Figure 5). GDP is expected to increase by an average annual rate of just below 3 per cent for the years 2010–2012. Growth is expected to be slower for the euro area. The annual growth rate in the euro area is expected to amount to just below 2 per cent for the years 2010–2012. Although GDP growth is now underway and is expected to continue during the forecast period in both the United States and the euro area, it will be a long time until GDP returns to pre-recession levels. This means that resource utilisation will be low for an extended period of time. This applies not least to the labour market, which normally lags behind the development of GDP. In turn, this will restrain price and wage developments abroad for the next few years. I will return to this issue later on. There is also considerable uncertainty about the strength of the recovery. The upturn in the period immediately ahead will partly be driven by temporary factors such as the effects of highly expansionary fiscal and monetary policies and an inventory cycle. There is therefore a risk that growth will be dampened again when the stimulating effect of these temporary factors declines. Experiences from previous financial crises, as reported by Reinhart and Rogoff, the International Monetary Fund (IMF) and others, also indicate that the recovery following a financial crisis will be drawn out.
In this regard, we would like to note that:   If the external scenario should worsen significantly, many EMEs with flexible exchange rates and inflation-targeting regimes would have scope to adjust monetary policy, thanks to a timely process of raising interest rates to contain overheating risks. Going forward, these economies will be able to react flexibly to changing global circumstances in a context of anchored inflationary expectations.   Other EMEs have limited room for maneuver, as their economies have expanded beyond their potential output, with widening fiscal and external deficits, and thus today face the risk that external shocks might unhinge inflationary expectations and force pro-cyclical monetary and fiscal policy adjustments.   A third group of EMEs has maintained structurally high national saving rates throughout the expansion phase of the global cycle and might be subject to a natural deceleration as the global economy cools down. In these cases, undertaking reforms to boost domestic demand would help sustain both medium-term global rebalancing and short-term policy accommodation.   Economies that are being affected by high commodity prices, particularly LowIncome Countries (LICs), should strive to develop targeted policies to the most vulnerable groups through efficient cash transfers, instead of across-the-board subsidies. The international community should strive to support these efforts through similar measures, as demand subsidies or export constraints in non-LIC economies exacerbate commodity price pressures. Policy advice by the Fund should be tailored to these different groups of economies.

  Structural reform fatigue is settling in, with electorates weary in both creditor and debtor countries to pursue tough measures to ensure medium-term fiscal consolidation and containment of the sovereign crisis in Europe. Moreover, financial markets remain jittery as the final outcomes of agreed commitments are not a foregone conclusion.   The risk of disorderly outcomes is high, and balance sheet repair, especially of those banks most exposed to the European periphery, should be bolstered. Hoping for the best is no substitute for preparing for the worst, and the markets are well  BIS central bankers’ speeches  1  aware of that. More extreme measures on debt restructuring might be unavoidable if fiscal transfers are ruled out and fatigue settles in debtor countries.   In an environment of financial uncertainty and fiscal retrenchment, monetary policy should remain supportive. Emerging Market Economies (EMEs) and smaller, financially stable AEs, are threading carefully in this uncertain environment, and as we saw a few years ago, it is unlikely that full decoupling will occur under most scenarios. The Fund’s advice should properly recognize that the rebalancing challenges are not the same across this heterogeneous group of economies; thus, an adequate level of differentiation in terms of policy advice is called for.
Mandate, interpretation and implementation 1  New Zealand was the first country to introduce an inflation target in 1989. Chile followed in 1990, Canada in 1991, the UK in 1992, Sweden, Finland and Australia in 1993 (Finland until 1998), Spain in 1994 (until 1998) and Iceland and Norway in 2001. A number of emerging market economies like the Czech Republic and Poland, as well as Israel, South Africa and Brazil, have introduced inflation 2 targets in the last few years. The ECB shall direct its monetary policy instruments towards price stability, which the bank has defined as inflation of less than 2 per cent. The target of the Swiss central bank has a similar formulation. In the US, price and employment stability are equally important. Experience with inflation targets has generally been good. Low and stable inflation has underpinned economic growth and employment. The fact that conditions were favourable for low inflation and renewed growth in many countries following the downturn and high unemployment in the early 1990s may also have contributed positively. Norway introduced an inflation target during a different phase of the economic cycle. We have experienced a prolonged upturn. The labour market is tight. High labour force participation and demographic conditions indicate that the possibility for further growth in the labour supply is limited. In addition, reforms that reduce the supply of labour were implemented.

Investment plans for 1997 appear to be less ambitious on the whole compared with capital spending plans at the same period in 1996. Nevertheless, the business leaders polled in January were more confident about future activity than they were a few months earlier. This could mean that previously postponed investment plans may be implemented in the coming months. However, plans for increasing output capacity remained few and far between, owing to the spare capacity currently available, and depend on stronger growth in demand. Retail sales in January were up markedly over December 1996, and only slightly down on the exceptionally high level recorded a year earlier. Employment levels remained stable in nearly all industrial sectors. They showed only a slight change in the services and retail sectors, but there were further falls in the building industry. BIS Review 23/1997
I strongly urge each of you here today to challenge the industry associations in your countries to develop an aggressive Year 2000 program for the mutual benefit of all their members. In fact, a largely unprecedented amount of cooperation already is taking place with respect to Year 2000. For instance, the Joint Year 2000 Council brings together more regulators and supervisors in one organization than has ever been done before. In April of this year, the four sponsoring organizations realized that they needed to pool resources and bring together their respective experts to discuss the issue collectively and to develop a common dialogue with the global supervisory community. The efforts of the Council to date have been valuable in communicating Year 2000 information to this community, and I support the continuation and expansion of these efforts. BIS Review 85/1998  -3-  The Global 2000 Coordinating Group, which consists of internationally active financial institutions, is another example of an important effort to foster cooperation on the Year 2000 issue. The firms represented on Global 2000 are working together to tackle several different aspects of the problem, especially the international dimension. They have approached this collective effort with a high degree of transparency and I applaud their efforts at cooperation. Cooperation is also needed between the supervisory community and the private sector.

Even if banks are successful at tackling their internal Year 2000 concerns, they may still face risks from critical services that they receive from vendors. In addition, banks should assess their credit exposures to customers that face significant Year 2000 challenges of their own. I hope that all financial organizations sufficiently address the Year 2000 conversion in time to limit possible disruptions. If they do not, we will find it increasingly difficult to deal with the issues arising from deficient organizations over the course of 1999. There will likely be some chance that vigorous catch-up efforts on their part will allow them to avert serious problems. On the other hand, the closer the time until January 2000, the more difficult it will be for the customers of that firm to find an alternative provider of financial services. Many banks already are indicating that they will be reluctant to take on new wholesale customers in the latter half of 1999. To avoid this bottleneck, supervisors need to take all possible steps to identify firms whose progress to date has been insufficient, and to pressure them to adopt a plan that will address their Year 2000 problems. BIS Review 85/1998  -6-  Inevitably, however, supervisors may face difficult enforcement issues during 1999 regarding those institutions that are not making appropriate progress.
Sebastián Claro: Chinese challenges facing Chile and Latin America Speech by Mr Sebastián Claro, Board Member of the Central Bank of Chile, at the 2012 Latin American Cities Conferences “Chile on the path to development”, organized by the Americas Society/Council of the Americas, Santiago, 30 August 2012. *  *  *  I would like to thank Consuelo Edwards and Yan Carrière-Swallow for their help in translating this speech from the original Spanish. Thank you for inviting me to this event that for several years now has been gradually positioning itself – both in Chile and in the rest of Latin America – as a seminar dealing with key issues for the region’s economic development. On this occasion, and at the organizers’ suggestion, I would like to share with you some thoughts on the economic development of China and its implications for Latin America. Rather than focusing on aspects of the Chinese economy – which I will come back to at the end of the presentation –, I would like to focus on those dimensions in which China’s spectacular growth affects the region directly. Let me begin by recalling a widespread debate in the region in the early 2000s. While Europe was boastfully launching its new single currency, Latin America was struggling to leave behind the havoc of successive crises that had hit the region, starting with Mexico in 1994.

Jean-Pierre Roth: The position of the Swiss franc exchange rate in the Swiss National Bank monetary policy strategy Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank and Chairman of the Board of Directors of the Bank for International Settlements, at the University of St. Gallen, St. Gallen, 19 December 2007. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  The exchange rate is an important factor in determining the domestic price level in Switzerland. Nevertheless, it is not a monetary policy goal for the Swiss National Bank and is only relevant insofar as it has an impact on future inflation. Our concerns about our currency's weakness should not be read as a hidden form of exchange rate policy but rather as genuine concern about future price stability. A sustained tendency to weakness on the part of the Swiss franc could trigger inflationary effects that – sooner or later – would have to be countered with monetary policy instruments taking the form of interest rate measures. In the medium-term, this could lead to a reduction in the interest spread between the Swiss franc and the euro. BIS Review 151/2007  1
I should perhaps make the point here that supervision is not aimed at suppressing activity, but rather at ensuring that risks are properly identified and managed and that disasters which might threaten systemic stability are avoided. Particular emphasis is placed on ensuring that management possesses sufficient understanding of the derivatives business and the associated risks, and has the appropriate internal mechanisms in place for monitoring and control. Officialdom in general, and central banks more especially, are sometimes characterised as being opposed to speculation and, by extension, as being suspicious of derivatives, which are often regarded as a convenient vehicle for speculation. That characterisation is mistaken. We are not opposed to speculation. Indeed, we recognise very clearly that financial markets cannot operate efficiently if the speculator is excluded. He plays a key role in the price formation process and is the essential counterparty to the hedger. The textbooks tell us that if the speculator stabilises prices he makes a profit, while if he doesn't he loses. The fact that speculators still exist is then taken as prima facie evidence that their activity is on balance stabilising, although I am also conscious of the counterargument, namely that they are destabilising and lose money, but the population of them is constantly being replenished by fools who think they can do better. However, although we acknowledge the generally positive role of speculation, we are very much opposed to manipulation.

BIS Review 91/2001  1  growth in the interest rate swap market has also been associated with the continuing development of the Hong Kong dollar bond market, where well-rated names may combine issuance of longer-term fixed-rate paper with a swap to secure floating-rate Hong Kong dollars at sub-HIBOR, or, particularly in the case of some international borrowers, link this also with a currency swap to obtain US dollars at sub-LIBOR. As regards exchange traded products, there has been a recent surge of activity in HIBOR futures. This may owe something to the steep downtrend in interest rates this year, which could have prompted both those who expect it to continue and those who are content to lock in borrowing at current low rates, to enter the futures market in order to speculate or hedge on their respective hunches. All in all, as these various examples illustrate, the derivatives infrastructure in Hong Kong has developed well to meet the evolving requirements of the business and financial communities. Supervision Despite for the most part providing a beneficial service, derivatives trading also has the potential to bring disaster. Mere mention of the word Barings is no doubt sufficient to make the point. It is for this reason that the relevant authorities exercise supervision of derivatives activity. In the Hong Kong context, HKMA supervises the banks and other deposit taking institutions to ensure suitably prudent behaviour, while the SFC regulates exchange trading and the other players.