samchain/econo-pairs-v1 huggingface dataset:
Prasarn Trairatvorakul: The rise of Asia – finding the right balance for policy Address by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Japan Bank for International Cooperation (JBIC) seminar on “Outlook for the Global Economy and Financial Markets 2011”, Bangkok, 8 February 2011. *  *  *  Distinguished Speakers and Guests, Ladies and Gentlemen, It is my honor and pleasure to address today’s distinguished audience on the outlook of and the main challenges facing the global and Thai economies. Rather than giving you data and projections, which are readily available, I would like to take this opportunity to share with you my observations on the economic future of Asia and Thailand. While economic recovery in the West will likely be constrained by crisis legacies, the rapid bounce-back in Asia and its fast rising role in the world economy have made many believe that Asia is on the continued rise, to the extent that Asia is entering a golden age. Nevertheless, there are questions whether Asia can manage the risks associated with continued growth, particularly inflationary pressure and the impact of volatile capital flows. In line with this introduction, my presentation today will focus on four related topics. First I would like to pose a question whether Asia is truly approaching a golden age. Secondly, to sustain the rise of Asia, I would like to highlight the need for Asian economies to build capacities, as well as strengthen innovation and productivity.

Based on my experience as a central banker for more than 30 years, it requires a deep understanding of the economy and the financial system to make the right policy decisions. Such policy formulations needs to be based on rigorous assessments that provides the insights that will guide the decision making process. This is aided by relevant statistics, and complemented by sound judgement. Central banks are therefore not only major consumers of statistics, but also producers and disseminators of monetary and financial data. More importantly, central banks, have placed much importance on providing sufficient analysis and assessment in conjunction with the release of statistics. This aims to provide context, avoid misinterpretation and reduce uncertainty for the economic agents. BIS central bankers’ speeches  1  Key global trends shaping the universe of statistics As the world evolves, two key trends have emerged and in turn, created new and diverse demands, challenges, and opportunities in the field of statistics. First, the steady liberalisation and deregulation of economies and financial markets have resulted in intricate interlinkages within domestic financial systems and spanning across borders. While financial markets have become more interconnected globally, capital and labour mobility across borders have also intensified while trade and investment barriers have been dismantled. This has resulted in closer proximity to growing markets and facilitated the creation of globalised supply chains by corporations. These developments have had wide ranging benefits, including better risk diversification, improved efficiency and greater economies of scale.
In addition, the euro zone has undergone tremendous changes in the institutional settings by the establishment of the Single Supervisory Mechanism by the ECB, along with the Single Resolution Mechanism and other accompanied ongoing or upcoming reforms. Another area of reforms in the European Union was the strengthening of fiscal and macroeconomic policy through the Fiscal Compact and accompanying macroeconomic surveillance mechanism, aiming at sound public finances and preventing from macroeconomic imbalances. What urgently came to our knowledge during the last crisis was the importance of the financial stability for the overall macroeconomic stability, but also the so-called “doom loop” between banks and sovereign that emerged from this crisis, adding yet another specific experience that we should all be aware of in the future. BIS central bankers’ speeches  1  On the recovery process and sustainable growth The data since mid of the last year and the forecast for this year are pointing to an upturn of the global economy, although it is still fragile and surrounded by risks. The economic recovery of the European Union is crucial for stronger revival of the region, considering the trade relations, although due to specific factors, countries in the region differ in terms of their position in the economic cycle. In 2013, the Macedonian economy grew by 3.1%, mainly driven by the strong net export and the strengthening of private consumption in line with curbing down of the unemployment.

Collectively, our Cornerstone Members, Global Partners and Knowledge Partner will forge a community of practice to support the green transformation of commercial banks in Asia. 18. Today we are also publishing the Alliance’s first thought leadership paper, in collaboration with the Hong Kong Institute for Monetary and Financial Research. The paper presents a curated overview of the effects of climate risk on financial institutions and financial markets, methods for measuring climate risk, the evolving practices as well as regulatory initiatives that seek to address climate risk. 19. Ladies and gentlemen, we are excited to embark on the transition path with the Alliance members and partners. We are confident that the learning and sharing among peers will encourage cross-fertilisation of ideas and the continued advancement of green finance best practices. Starting from Hong Kong, we wish to create a lasting ripple effect in emerging markets throughout Asia and beyond that will contribute meaningfully to the global effort in tacking climate change through the power of finance. 20. Thank you. 1 Source: ASIFMA https://www.asifma.org/wp-content/uploads/2020/12/asifma-fosda-esg-  and-sf-data-challenges-and-opportunities-in-asia-f20201221c.pdf
Along with the growth of the economy, the volume of business of Saudi banks has grown at a phenomenal rate during 1997-2006, with their assets growing by about 125.5 percent, deposits by 313.5 percent and capital and reserves by 83.7 percent. Their average risk-weighted capital to asset ratio, during this period, has generally exceeded 20 percent which is considerably higher than the minimum of 8 percent recommended by the Basel Committee on Banking Supervision. In recent year, Saudi banks have become increasingly involved in the domestic economy. During 1997-2006, they liquidated a part of their net foreign assets to meet higher domestic credit demand, thereby raising the share of domestic credit from 39.1 percent of total assets to 57.73 percent, or from 24.1 percent to 38.6 percent of GDP at current prices. Nearly 95.8 percent of domestic credit represented banks' claims on the domestic private sector which went up by 233.1 percent over this period. During this period, there was a sharp increase in the consumer loans which grew from a miniscule 6 percent in 1997 to 36.4 percent of total bank credit by 2006 reflecting the needs of a youthful population and changing risk environment. Saudi banks have also been investing in government securities, thereby contributing to the development effort of the government. However, these investments as a percentage of total assets have declined from 21.8 percent in 1997 to 14.3 percent in 2006 due to the government's recent policy of retiring some of its debt.

Against this backdrop, we are well positioned in Saudi Arabia to have a strong financial system that is serving the economy well. The system that has evolved over the years is broad-based and has a variety of institutions providing a wide range of financial services to savers and investors. It is efficient, technologically advanced, well-supervised and working on sound principles. It has demonstrated its strength and resilience during the Gulf conflicts  BIS Review 85/2007  1  in the 1990 and in 2003, and various financial crises in the past decades. On all occasions, its stability has remained uncompromised The Saudi Arabian Monetary Agency (SAMA) is at the apex of the Saudi financial system. It has almost completed fifty years of its existence. Over these years, it has played a crucially important role in the consolidation and development of the Saudi economy, by evolving a monetary system for the country based exclusively on national currency, striving for the promotion and maintenance of domestic price and exchange rate stability, and promoting the growth and ensuring the soundness of the financial system. It has also been managing the Kingdom's foreign exchange reserves, besides acting as a banker to the government. Before I describe the important contribution of commercial banks and deal with other sectors of the Saudi financial system to managing the domestic and international fund flows, let me mention some important achievement of SAMA. SAMA is ordained by its Charter to promote and maintain domestic price and exchange rate stability.
But the flip-side is that this process has moved forward in fits and starts, it has not enjoyed a broad degree of consensus and it has sometimes failed to be as rigorous and ambitious as the gravity of the situation required. Likewise, since the onset of the tensions there has been – occasionally notable – headway in the ongoing adjustment of the most vulnerable national economies, sometimes in step with the strict conditionality imposed under the financial support programmes under way. But here, too, action has broadly tended to be behind instead of ahead of events. BIS central bankers’ speeches  1  In these conditions, it is the European Central Bank that has positioned itself as the fundamental bulwark against the crisis. And, ultimately, this is buying time for the Member State governments, in both their responsibility for domestic economic policies and as co-managers of the common European Project, to make resolute progress in resolving the problems at the root of this crisis. We should not forget that the extensive range of non-conventional measures deployed by the ECB since the start of the crisis – the 3-year LTROs being one of the most recent and successful examples here – are, by their very nature, limited over time. And, more important still, these measures do not affect the fundamental imbalances which are ultimately at the source of and responsible for the crisis.

The intensification of the sovereign debt crisis from the summer of last year interrupted the mild recovery that the Spanish economy had begun a year earlier, with a decline in GDP of 0.3% in the final quarter of 2011. This pattern ran into the first quarter of this year, so that the Spanish economy is, once again, in recession. As in the case of the 2008–09 recession, national demand is displaying the greatest weakness. All domestic demand components declined in the fourth quarter of 2011 and have continued to do so during the first few months of this year. A strongly negative factor during all these ups and downs has been the need to reverse the accumulated imbalances (the assignment of excessive resources to housing, high indebtedness and competitiveness losses), as part of an adjustment process that has still to be concluded. More recently the intensification of the sovereign debt crisis and its effects on the financial system has compounded matters, leading to a tightening of the economy’s financing conditions and eroding agents’ confidence. The downward revision of euro area growth prospects and the stepping up of fiscal consolidation have contributed to a further contraction in consumer demand and investment, and the acceleration in the decline in employment has further fuelled these trends. In the face of slack national demand, the external sector has once again acted as a shock absorber, alleviating the negative impact of lower spending on output.
Fiscal stability and fiscal discipline are basic assets of Spanish economic policy which, however, are not always easy to manage, as shown by the vagaries of the European fiscal framework. It is thus very important that the review of the Fiscal Stability Law and of the Autonomous (Regional) Government Financing system should not lead to a weakening of fiscal discipline. In a situation in which it is necessary to make headway simultaneously in job creation and in productivity gains, the role of supply-side policies geared to improving the workings of the economy and expanding its potential growth is crucial. One of the main messages in the Annual Report presented today is precisely that it will become increasingly difficult for the Spanish economy to keep raising its levels of well-being if it does not make progress on both these fronts. Maintaining high levels of job creation is, and will continue to be, a powerful means of expanding the economy’s growth potential, but it will be impossible to sustain economic momentum in the long term if the economy does not improve its competitive position in the increasingly dynamic international setting. And to do this, it is essential to significantly improve the poor performance of productivity. Under this approach, labour market reform heads the list of transformations that are needed.

A krone that is stable - but too strong - also entails costs in the form of low activity. Similarly, a krone that is stable but weak - is a source of high inflation. Petroleum revenues generally provide substantial, but uneven currency inflows into Norway. The currency flows might have resulted in a strong krone and wide variations in the exchange rate. This tendency is countered when the annual use of petroleum revenues over the central government budget is predictable and independent of annual revenue inflows, and the remainder is invested abroad. The capital outflow through the Petroleum Fund contributes to both curbing the appreciation of the krone and maintaining its stability. Norges Bank has not defined an exchange rate target. Nevertheless, developments in the krone are of considerable importance to interest-rate setting because exchange rate developments have an impact on inflation and output. Although the krone may fluctuate in the short term, 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 long-term average following periods when the krone has been particularly strong or particularly weak. This provides a basis for stable exchange rate expectations. Economic developments and prospects As I mentioned in the introduction, the current picture is a broad-based economic recovery with low inflation.
Likewise various aspects of the internal audit function may well be centralised. So for global groups, the control of the activities in the various legal entities scattered across the planet will hinge on the adequacy of controls located not in those particular countries but centrally. In a way it is simply an extension of the vulnerability of banking entities to problems arising elsewhere in the group. But in this case solvency of the individual entities will depend on the adequacy of systems and controls located in another part of the group. Massive intra-group transactions to move risk between entities will also affect the position of the various subsidiaries. One obvious question is why firms do not dispense with such a plethora of legal entities and operate a simpler branch structure. The answer seems to be that differences in tax structures and even regulatory requirements in some countries still encourage the use of legal entities in different jurisdictions. In that case should regulators try to lean against this BIS Review 21/1997  - 12 -  centralisation? Here I think the answer must be that the regulators should not try to discourage greater central control of risk. Where a firm is running one type of risk in different locations it must make sense for the total risk to be controlled centrally. But this does create a problem for supervisors because supervision has to be structured along legal entity lines (given that it is legal entities which fail). Responsibility for legal entities cannot be transferred between supervisors.

Thus, prudential tightening may not be able to be transmitted to a significant part of the banking sector but it may affect only smaller locally-owned banks. It follows from our discussion that the supervisory authorities may gain by the increasing transparency in financial markets which will allow consumers and other bank borrowers to be more aware of the risks inherent in foreign currency borrowing. Efforts to enhance this transparency could be encouraging or requiring banks to discuss exchange rate risks explicitly with borrowers before contracts are signed. On the other hand there is a need to discuss with banks means of assessing the risks arising from foreign currency denominated loans and adjust existing loan classification schemes or provisioning if warranted (FSAP recommendation for Albania). Monetary policy is constrained by the degree to which policy instruments are able to transmit into the economy. A tightening of policy interest rates’ effect may be constrained even in floating rate or adjustable peg regimes. A moderate tightening of policy may not be very effective in slowing the economy because of the high degree of euroization and the uncertainty associated with the final effect of exchange rate changes in balance sheets and the real economy. Many of the above issues require a significant degree of co-ordination between home and host authorities that can help fill supervisory gaps, given the very high levels of foreign bank ownership. In the process of improving the regulatory base, standards set by international institutions and especially the ECB are crucial in orienting regulators. 6.
Recent soft and hard data on economic activity have been somewhat weaker (EA GDP growth for the 3 rd quarter was released at 0.2% qoq, due also to exceptional factors in Germany), although less so in France (French GDP for the 3rd quarter was up 0.4% qoq). But our outlook for inflation is firmer. There are increasing signs that the labour market is tightening and nominal wage growth is picking up: the Phillips curve is back to work, albeit a bit later than expected. At the Governing Council of the ECB, we are thus confident in the sustained adjustment in inflation back to our objective. But our policy normalisation is still based on what I like to call a “quartet” of non-standard instruments: The monetary policy rhythm in recent years has been largely set by our net asset purchase instrument. But net purchases will very probably end in December. The end of our net asset purchases will not, however, mean the end of our monetary stimulus, far from it, because the three other instruments in the “quartet” will take up the beat; Our second instrument is the stock of purchased assets which we will reinvest in full for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation; Our third instrument is policy interest rates. This is a conventional instrument used in unconventional ways.

Distinguished clients and invited guests Private investment is a critical source of long-term capital for spurring sustained economic growth and diversification while promoting innovation by supporting the micro, small and medium sized enterprises (MSMEs). Chairperson In order for the financial sector to fully satisfy the credit demands of the productive sector in Zambia, commercial banks must not be overly conservative in terms of their risk appetite for 2  BIS central bankers’ speeches  MSMEs. Rather, Banks should seek to better understand the risks associated with lending to these enterprises. Further, it is important that banks better understand the risk associated with lending to specialized and growth sectors such as agriculture, tourism, manufacturing and mining by deliberately developing relevant human resource skills in these sectors. Ladies and gentlemen In its quest to see the financial sector take up an active role in financing the productive sector and facilitating the flow of investment into the economy, the Bank of Zambia continues to undertake a number of policy and structural reforms. Among these reforms is the new increase in the minimum capital requirement for banks to K520 million and K104 million for foreign and local banks respectively. These capital levels are expected among other things to: i. Make the banking system strong enough to withstand shocks and instability in the economy should they occur;  ii. Enable banks to underwrite big ticket transactions;  iii. Make banks contribute more to the growth of the economy; and  iv.
While many challenges remain, Asia is at the cusp of experiencing significant collective economic growth and development. Asia should however significantly draw important lessons from the global financial crisis and recognise the implications of greater interdependence. In addition, the sovereign debt crisis in Europe relates not only to fiscal matters but to debt management which has significant implications for financial markets. While fiscal issues may remain a national matter, its financing and its broader consequences needs to be addressed. Given the positive environment in Asia, the opportunity needs to be taken to put in place the necessary arrangements to best address these challenges. The world is increasingly now looking towards Asia. With these enabling conditions, Asian economies would be better positioned to collectively strive and work towards achieving the shared vision of financial and economic integration that will not only unlock our potential but also enhance the prospects to contribute towards a more balanced and sustainable global economy. 4  BIS central bankers’ speeches

Recently, Thai universities have offered international courses, aiming to attract students from GMS countries, who express greater interest to study in Thailand. Health is another important dimension of people connectivity. An increasing number of citizens from the GMS have chosen to receive medical services from Thai hospitals. I am certain that this trend will continue to rise in the future. Ladies and gentlemen, Let me now turn to the fourth aspect of regional integration, financial connectivity, which is a principle area of policy that the Bank of Thailand, in collaboration with other agencies, will continue to drive going forward. Better connected financial systems support and underpin all other aspects of connectivity. Infrastructure development, trade and investment activities, and people mobility need wellfunctioned financial infrastructure and proper eco-system in order to thrive. In the past decade, financial regulators of GMS countries have made noticeable progress to promote financial connectivity. Examples include introducing a more accommodative regulatory regime to allow Lao entities to raise funds from the Thai capital market. As a result, since 2013, the Lao government and firms have issued baht-denominated bonds, worth 28 billion baht in total, to 2  BIS central bankers’ speeches  support infrastructure projects in Laos. For the banking sector, the Bank of Thailand has encouraged banks to expand their regional presence to support growing trade and investment. As of now, there are 30 branches and subsidiaries of Thai commercial banks, set up in GMS countries.