samchain/econo-pairs-v1 huggingface dataset:
Banks will need to further build on this significant progress in order to meet the challenges going forward. These include macroeconomic challenges, growing pressure from increasing competition, and the changing regulatory environment. Obviously, the ability to meet these challenges varies among banks. But we, as regulators, are well prepared to steer a steady course for the banking system as a whole. As you know, the first phase of the Financial Sector Master Plan has been completed. We have already seen significant consolidation and increased efficiency of the banking sector. We are moving onto the second phase of the Master Plan, which will further step up the pace of reform. This will increase the efficiency of the system and ensure that it can meet intensified competition that will come with globalization. BIS Review 20/2007  3  Let me emphasize that globalization is a pervasive process. Given financial innovations, it can transcend national borders even without an explicit market opening. Our liberalization strategy is to ensure strengthening of the domestic system, and allow gradual opening of the banking sector. This will mean new entries into the system, as well as more intensified competition between existing players. The phasing of this process will be consistent with continued economic and financial stability. The banking system must be prepared for greater competition. Improved risk management framework will be the critical success factor for banks' ability to meet future challenges. These include the adoption of IAS 39, currently underway, and the new Basel Capital Accord at the end of next year.

A database of capital flows is also being upgraded. When we are satisfied that the situation has normalized – that is, the one-way speculation has more or less disappeared, and that the exchange rate movement is in line with other regional currencies – then we should be able to remove this measure. I will specifically address this issue again toward the end of my talk today. My third and final point has to do with how we should deal with the challenge of global dynamism in the medium and longer terms. 2  BIS Review 20/2007  Global dynamism in the form of international competition and the unwinding of global imbalances will remain with us for the foreseeable future. During the transition, monetary policy can and must play a vital role in supporting the economy in its adjustment to the impact of global imbalances. As the balance of risk shifts from inflation to growth, the Bank of Thailand will ensure that monetary policy will continue to focus on stability while supporting growth. On the external stability front, should there be a disorderly unwinding of global imbalances, we may see rapid US dollar depreciation, which will put greater pressure on the baht. Adjusting to these rapid exchange rate movements is inevitable. Last year, the Bank of Thailand intervened when necessary in the FX market to smooth the adjustment.
Boris Vuji: Resilience, adaptability, and cooperation Speech by Mr Boris Vuji, Governor of the Croatian National Bank, at the conference "Policymaking in Choppy Waters: Fostering Resilience in Central, Eastern and Southeastern Europe (CESEE)", Dubrovnik, 3 June 2023. *** Dear Prime Minister Andrej Plenkovi, dear Managing Director Kristalina Georgieva, dear ministers, governors, distinguished guests, ladies and gentlemen, good morning to everyone. After a beautiful evening yesterday, that served as a perfect introduction to our gathering, it is my great pleasure to also welcome you to the official part of our conference. As you know, the conference is jointly organized by Croatian National Bank and the International Monetary Fund. This is the third biennial conference that we started in 2017, when the MD of the Fund was my current boss in the Governing Council of the ECB. At that time neither of us knew that today we would be sitting together in the ECB Governing Council. That much about the predictability, which has poorly served us on a much grander scale over the last years. So, I would first like to express my sincere gratitude to our IMF colleagues for excellent cooperation during the preparation of the conference. We are both happy that we have managed to gather top policy makers and speakers at this beautiful location to talk about very topical issues.

As we know during the 30 years or so immediately preceding the First World War, major world currencies were based on gold, in the sense that the value of the currency in one way or the other was closely linked to the intrinsic value of the metal itself. However, after the First World War, countries one after another abandoned the gold standard and adopted what is called the fiat money. That is, paper money and the gold had gone through a divorce. Therefore under the prevailing circumstances printing money and managing the financial system had become more important, which created a more compelling need for the establishment of strong institutions to take care of banknote issuing and to safeguard the value of money. In this regard, Turkey did not and could not stay uninvolved in this general tendency. Having won the War of Independence, the founders of the Turkish Republic were aware of the need to establish a central bank. The establishment would have been the economic crowning of the political achievements and was considered to be the most significant symbol of sovereignty as well as economic independence. Thus, the idea of establishing a national central bank was debated intensively at the 1st National Economic Congress held in Izmir in 1923. The ideas discussed and the deliberations made were crystallized in the preparation of “The Draft Law on the Republic Issue Bank” with the contributions from European scholars.
36 The inflation target was finally formalised in a new regulation on monetary policy in 2001, a good eleven years after New Zealand, nine years after the United Kingdom and eight years after Sweden. The mandate for Norges Bank states that monetary policy shall, in addition to securing price stability, contribute to stabilising output and employment. It is possible to give weight to cyclical fluctuations in interest rate setting, and to new information, as long as there is confidence that inflation remains near the target. The central bank’s announced interest rate strategy ahead will be adjusted as new information emerges. This stands in contrast to the parity system, which was more rigid. The authorities cannot systematically allow policy to be more expansionary than announced to bring down unemployment. As Kydland and Prescott demonstrated, this would lead to  33  Another difference is that under parity policy the authorities stabilised the price of gold and not the price of a basket of representative goods – the consumer price index. Today, stabilisation of the consumer price index would be described as price level targeting. Inflation targeting, on the other hand, implies stabilisation of changes in the consumer price index. There is also a difference in that there is no longer any redemption obligation. Confidence is not based on gold reserves, but more generally on responsible economic policy as a basis for achieving the inflation target through the active use of the interest rate.

There is nothing in our history that indicates that monetary policy, or any economic policy for that matter, has found its final form. But there is one certainty: keeping promises and creating confidence are fundamental both for monetary policy and more generally for growth and development. The man who built this house, Hans Rasmus Astrup, died in 1898, just before the housing market crash in Kristiania and the ensuing crisis. House prices plummeted by more than 50 per cent at that time and several banks collapsed in the next few years. The outfall of the  37  Woodford, Michael (2003): Interest and Prices, Princeton University Press. 38  Woodford (2003) points out that the central bank’s announced interest rate strategy can be adjusted as new information becomes available. However, in order to maintain confidence in the announced interest rate path and for it to be useful, the public must not have reason to expect systematic deviations. 10  BIS Review 136/2008  current crisis is hardly likely to be as dramatic. Prime Minister Jens Stoltenberg has stated that “the Norwegian authorities are prepared to implement necessary measures to secure confidence in the Norwegian banking system”. This is a promise that the government authorities both have the ability and will to fulfil. BIS Review 136/2008  11
The policymaker could point out the assumptions embedded in the rapid rise in asset prices and question the accuracy of the assumptions. Obviously, the policymaker might be ridiculed by true believers about the lack of understanding about the important nature of the innovation. But I suspect that over time, a proactive central bank that laid out the risks clearly would gradually gain credibility with market participants. Use of the bully pulpit would allow the central bank to signal its concern. This might shift the risk/reward trade-off by raising the risks that the talk might foreshadow more forceful action. That, by itself, could temper behavior. Announcement effects can be very powerful, especially when they can be followed by changes in policy. The second set of tools includes those that are macroprudential in nature. I would define macroprudential tools as regulatory and supervisory actions that are not applied on a firmspecific basis. These include tools designed to temper demand or increase supply in the asset subject to the bubble or to increase the ability of skeptics to take the other side of the market in which the bubble may be occurring. For example, to counteract a housing bubble,  8  This argument has been made by many others. See, for example, Frederic Mishkin. How Should We Respond to Asset Bubbles? May 15, 2008. 9  An example of a sustained rise in asset prices that was not a bubble is the bull market in U.S. equities that began in the 1950s.

For example, the technology stocks associated with initial public offerings were very difficult to short because the available supply or “float” was small – a high proportion of the shares in the companies were held by the original venture capital investors and subject to lock-up periods before the shares could be lent out to short sellers or sold. Similarly, housing is notoriously difficult to short. The option of selling one’s home in order to rent is expensive not only in terms of time and effort, but also in terms of transaction costs. And, shorting complex structured finance products was difficult because there were no standardized instruments; the securities rarely traded and were very difficult to value. It was not until the development of the ABX indexes – which allowed investors to buy and sell credit default swaps on pools of structured finance obligations – that investors had a vehicle that allowed them to short subprime mortgagebacked securities more easily. 6 Asset bubbles often come to an end when the basic belief system is contradicted by events. This can happen very naturally as a matter of course because economic fundamentals deteriorate, or because there is a change in rules or regulations that disrupts the balance between supply and demand. In the technology boom, this might occur because each company cannot get to the market first. So even if there is a first-mover advantage, not everyone will be able to take advantage of it.
Simon M Potter: The implementation of current asset purchases Remarks by Mr Simon M Potter, Executive Vice President of the Markets Group of the Federal Reserve Bank of New York, at the Annual Meeting with Primary Dealers, New York City, 1 March 2013. *  *  *  Thank you all for attending today’s annual primary dealer meeting. Primary dealers play an important role in financial markets and an integral role as counterparties for operations to implement monetary policy. You are also an important source of market intelligence for the Desk, providing insight into market developments, structure, and functioning dynamics. A meeting like this provides a valuable opportunity to communicate our counterparty expectations, as well as strengthen our ongoing relationship. Given your important role in the implementation of monetary policy, I thought I would take this opportunity to discuss the Federal Reserve’s ongoing purchases of Treasury and agency mortgage-backed securities (MBS). As you are well aware, at the September 2012 Federal Open Market Committee (FOMC) meeting, the FOMC decided to increase policy accommodation by purchasing $ billion per month of agency MBS and continue the Maturity Extension Program (MEP). Then at its December meeting, the Committee chose to continue buying $ billion per month in longerterm Treasury securities following the completion of the MEP.

2  BIS Review 10/2005  The Federal Reserve is now gradually increasing interest rates and the first measures aimed at reducing the US budget deficit have been announced. This may curb growth in domestic demand and imports of goods and services. However, the US authorities will probably not go as far as to bring economic growth to a halt, with an accompanying increase in unemployment. The US issues the world’s most important settlement and reserve currency. States and agencies in the US have access to dollar-denominated loans in major international capital markets. The exchange rate risk lies with foreign creditors. The US may have a long-term interest in maintaining a stable dollar that is used in international payments. But this may be weighed against short-term interests: If the dollar depreciates, the US trade deficit will be reduced with a limited impact on domestic production. The US is not the only source of trade imbalances. They also reflect very low growth in continental Europe and the largely export-based growth in Asian countries. Countries other than the US must therefore also contribute in order to prevent growth in the global economy from faltering. With limited domestic growth capacity and high unemployment, many industrial countries are poorly equipped to cope with a weaker dollar and lower US demand. The challenges are perhaps particularly demanding in Japan and some large European countries. The situation is not negative across the board. There is solid growth in a number of European countries such as Spain, Ireland and the Nordic countries.
14 However, by the same token, a faster balance sheet reduction than currently anticipated by markets could trigger some yield tightening. Second, compared with QE, QT conveys much less information about the future path of interest rates. Purchases and interest rates were linked in the ECB’s forward guidance, as I have already explained, but the ECB no longer employs forward guidance on rates as a policy instrument. Therefore, the ECB’s balance sheet adjustments alone no longer provide direct information about the timing of its interest rate adjustments. Again, this weakens the announcement effects of QT compared with QE. In sum, all these arguments point, in my view, to the need for the balance sheet reduction in the euro area to be very gradual and predictable. It is also essential that balance sheet reductions leave room for action against fragmentation if it reappears, whether either through flexibility in PEPP reinvestments or through activation of the TPI should this prove justified and necessary. 15 A coherent monetary-fiscal mix In the last part of my address, I wish to focus briefly on how the monetary -fiscal policy mix should be in the current context. High inflation and monetary policy normalisation present a complex scenario for fiscal policy. The normalisation of policy rates and of the Eurosystem balance sheet means that  13  See M. Bernardini and A. Co nti (2021), “Assessing the flexible implementatio n o f the ECB’s pandemic asset purchases”, Banca d’Italia Covid-19 Note, 20 December 2021.

Norman T L Chan: The future of Asia’s finance Welcome remarks by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the IMF-HKMA Joint Conference, Hong Kong, 28 February 2014. *  *  *  Good morning, Deputy Managing Director Zhu Min, Counsellor Jose Vinal, Ladies and Gentlemen, 1. It gives me great pleasure to welcome you to this Conference jointly organised by the IMF and the HKMA. The theme of this Conference is “The Future of Asia’s Finance”. In order to predict the future, one must understand and learn from the past. If we don’t understand where we are and what has brought us here, it is very hard to predict where we will be in the next 5–10 years. 2. Asia’s finance is now at a crossroad. We have to decide where we want to go and how to get there. This is not the first time and won’t be the last that Asia’s financial markets are facing this situation. 3. The last time Asia was at a crossroad was 1997/98 after the eruption of the Asian Financial Crisis. In the two to three decades before mid-1990s, Asia produced a couple of economic miracles: the emergence of the Four Asian Dragons and four Asian Little Tigers, all of which went through phenomenal economic growth and significant rise in living standards. However, unlike the developed economies in the West, Asia’s growth in this period was propelled mainly by bank finance.
But, as a French and European citizen, I cannot help and feel proud of having one the two main currencies in the world. In sum, benefits of the euro include a high degree of credibility of monetary policy reflected in the level of long-term interest rates; diminished exchange rate volatility; completion of the single market and encouragement to cross-border trade. None of this, of course, can be taken for granted. Benign conditions currently prevailing on financial markets can be reversed. Shocks may be coming, which would impact negatively European economies. Despite some signs of cooling, imbalances are still building up, especially in the housing sector, fuelled by a dynamic expansion of credit, although in no way comparable to those in some other developed economies. But I have the strong conviction that we are fully equipped to deal with any contingency, and, provided the necessary structural reforms are undertaken, keep the economy on a path of growth and stability. BIS Review 51/2007  1  2)  How have those successes been achieved? A lot comes, in my view, from the institutional and operational framework in which monetary policy is developed and implemented. The independence of the ECB and of the 13 participating NCBs is enshrined in the Treaty. They are institutionally, operationally and financially independent from European Community institutions and national governments. We have a clear and transparent definition of price stability: inflation below but close to 2% over the medium-term. The monetary policy framework of the Eurosystem is “medium-term” oriented.

Before doing so, however, I shall offer a brief overview of the financial situation last year in Spain. Spanish banking system Inevitably, the Spanish financial system was affected during 2001, albeit unevenly, by the aforementioned shocks. The economic slowdown throughout the year translated into a lesser rate of banking activity than in previous years, resulting in growth in total assets of 7.3% in consolidated terms. Though below this, the growth rate of credit remained high, especially in respect of mortgage lending, which made for an increase in the level of debt and, in turn, saw credit markets gain weight relative to securities markets. The Spanish banking system was scarcely affected by the shocks discussed earlier, with the exception of the Argentine crisis, whose repercussions were more telling. Notwithstanding, our banks are weathering the storm caused by the Argentine crisis thanks to an appropriate and prudent provisioning policy. Although this has meant reduced earnings, these have still continued to outgrow those of most of the major international banks. The cyclical turnaround has also led to an increase in bad loans. Yet owing to the relatively strong growth of credit, this has not been reflected in default ratios, which have held at historical lows. The solvency of Spanish banking institutions was bolstered last year, breaking with the trend seen since 1997, although this improvement is mainly attributable to secondary capital.
By forcing all of the banks that participated in the SCAP to have sufficient capital to help them withstand a stress environment, this process improved confidence and increased the willingness of banks to engage with each other. It also made it easier for the banks to be able to tap the capital markets. The SCAP exercise made a bad state of the world less likely, helping to create a virtuous circle rather than a vicious one. The SCAP exercise was developed and conducted in response to the crisis and a specific need. Now, we need to figure out how to conduct these types of exercises on a systematic basis. Such exercises may even need to be hardwired into the supervisory oversight of the financial system. Transparency In some critical segments of our financial markets, both before and during the crisis, limited or ineffective disclosure undermined market discipline and this contributed to the accumulation of risk. In the years leading up to the crisis, the lack of transparency contributed to increased risk and leverage in off-balance sheet vehicles, structured credit products and in over-the-counter securities such as asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOs) and their associated derivatives. Once the crisis was underway, the opacity of many of these vehicles, structures and securities contributed to the concerns about counterparty credit risk. This uncertainty exacerbated the erosion in market liquidity conditions and further intensified the crisis.

Incorporating incentives into personnel management may also improve the efficiency of public spending. 23  García-Louzao, Hospido and Ruggieri (2022) find that the employment stability afforded by a permanent contract in Spain can lead to cumulative wage differences of up to 16% between a worker on this type of contract and another on a temporary contract, over 15 working years. Bertheau et al. (2022) show that job displacements in a collective dismissal lead to a significant reduction (of 16 pp) in Spanish workers’ employability five years later. Part of this reduction can be attributed to the lower investment in active employment policies in Spain. 24  According to Eurobarometer (2023), only 7% of Spaniards say they trust political parties (as against 27% in the EU) and only 47% local and regional public authorities (56% in the EU). Furthermore, trust in the three branches of the state is also low. In 2023, 24% of those surveyed trusted the Government (as against 32% in the EU), 16% Parliament (33% in the EU) and 46% the judiciary (54% in the EU). 7  The correction of imbalances According to the available estimates, the structural budget deficit stood at around 4% of GDP, above the estimate in 2019 (3% of GDP), and the public debt-to-GDP ratio stood in 2022 at 113.2%, almost 22 pp above the euro area average.