samchain/econo-pairs-v1 huggingface dataset:
Although this concern has been present for quite some time in many central banks, including the Central Bank of Chile, the international debate has stressed the need to have a macroprudencial policy framework in place, with its own tools to tackle this objective. Countries have already begun to consider this framework as one of the pillars that sustain a good economic policy. Having been spared a crisis or acute stress from a financial crisis since the early 1980s, and in particular after the latest crisis, has allowed us to watch this debate with prudence and pragmatism, without needing to take hasty policy measures. We already have some of them in place, but as the international debate on these policies is settling and the evidence about  6  BIS central bankers’ speeches  the efficiency and costs of different tools accumulates, it will be important that we assess their efficiency and carefully study if we should introduce additional tools in our general framework. Thank you. References Akinci, O. and J. Olmstead-Rumsey (2015). How Effective are Macroprudential Policies? An Empirical Investigation, mimeo. Bruno, V., I. Shim and H. Shin (2015). Comparative assessment of macroprudential policies. BIS Working Paper no 502. Cerutti, E., S. Claessens and M.L. Laeven (2015). The Use and Effectiveness of Macroprudential Policies: New Evidence (No. 15–61). Working paper 15/61. International Monetary Fund. Claessens, S., S.R. Ghosh and R. Mihet (2013). Macro-prudential policies to mitigate financial system vulnerabilities. Journal of International Money and Finance, 39, 153–185. Kuttner, K.N. and I. Shim (2013).

It is also relatively accepted that actions taken under this scheme are designed to increase the resilience of the financial system and its participants when dealing with shocks, or the flip side of the coin, to reduce their vulnerabilities. These definitions have also allowed to specify that macroprudential policy is different from monetary policy, since their objectives (price stability versus financial stability), as well as their emphasis and tools, are different. For instance, while monetary policy operates on the  BIS central bankers’ speeches  1  basis of projections of the most likely scenarios for the economy over a given period, macroprudential policy operates based on tail risk scenarios that are therefore less frequent. As for the tools they use, monetary policy is mainly conducted with just the benchmark interest rate, whereas macroprudential policy has been associated with many and varied tools, including limits to leverage or credit users’ financial expenditure, limits to banks’ foreign currency mismatches and the use of some sources of funding, application of reserve requirements and other restrictions to credit growth. About the latter, it is worth noting that, while it is possible to motivate the need for macroprudential policies based on various externalities and market failures, so far its implementation has progressed in an ad-hoc and experimental manner, and the tools used are not necessarily aimed at resolving such externalities at their origin.
But there are a number of circumstances that almost certainly contributed, although there is still debate on their relative significance. Poorly adjusted regulations and insufficient oversight One fact that definitely did play a role is that the regulations and supervision did not function satisfactorily. One of the problems was that there was too much focus on the situation of individual agents and too little focus on the financial system as a whole – too much micro and too little macro, if you like. Moreover, the supervision lacked the necessary international oversight as it was largely conducted on a domestic basis by each individual country. There were also loopholes in the regulations that, for instance, meant that some institutions and markets were not covered and could expand without the authorities having any real oversight. Things were not made easier by the fact that there was also great ingenuity in the financial markets that resulted in new financial instruments, where no one properly understood the risks. So all in all, one can say that the deficiencies in regulation and supervision meant that the brakes did not catch when events got out of control and the risks became too great. A North Atlantic property bubble… One of the main reasons behind the financial crisis is sometimes said to be that a property bubble arose in the United States, which then burst and spread extensively. This is largely true, although a simplification.

Businesses and governments are looking for best response strategies to ensure smooth expansion of their enterprises and the economy in general. Tonight, I would like to focus on 3 related and timely subjects. I will begin with my view on the outlook of the Thai economy and the risks surrounding its prospects. Then, I would like to outline what I think is necessary for monetary and exchange rate policy going forward. And lastly, I would like to talk about how we can foster private investment and what Japanese businesses can do, in your role as investors and employers, to help make Thailand an even better place to invest. Ladies and gentlemen, As you well know, the Thai economy had to weather through a host of challenges over the past 2 years. To my mind, and from the view of the Monetary Policy Committee, domestic political uncertainty, high and rising energy prices and sharp US dollar decline were at the top of our concern. Indeed, political uncertainty, coupled with rising retail oil prices, took a toll on private sector confidence and consumers’ purchasing power. These negative developments dented domestic demand during the first 9 months of 2007. The fall of the US dollar, while widely anticipated, had been a major risk that could disrupt Thailand’s robust export activities. In fact, the risk was even greater after the extent of the US financial crisis became clearer during the second half of 2007.
Anita Angelovska Bezhoska: New statistical requirements in the post-crises era Speech by Ms Anita Angelovska Bezhoska, Governor of the National Bank of the Republic of Macedonia, at the event on the occasion of the European Statistics Day, Skopje, 17 October 2018. * * * Dear Prime Minister of the Republic of Macedonia, Zoran Zaev Dear Eurostat Director General, Mariana Koceva Dear Ambassador of the European Union, Samuel Zbogar, Dear Finance Minister, Dragan Tevdovski Dear President of MANU, Taki Fiti Dear Rector, Nikola Jankulovski Dear Dean of the Faculty of Economics in Skopje, Ljubomir Drakulevski Dear Director of the SSO, Apostol Simovski Distinguished guests, This year we are marking the European Statistics Day, exactly ten years after the outbreak of the global crisis. Its intensity and duration were so pronounced that in the last ten years it has become usual to make almost all reviews and insights through the prism of the “pre-and postcrisis period", and this is probably not surprising given that the great shocks inevitably lead to reassessment of the conventional paradigms. The statistics as well is no exception in this respect. As the great depression highlighted the need for development of the national accounts statistics, while the Asian crisis the need to better perceive the links between the domestic financial system and capital inflows, leading to the development of several new statistical standards, the global crisis of 2008 once again brought the financial system into focus.

The Bank set out some ideas on the design of such an open platform for SMEs last year.9  Data collection is also integral to the work that the Bank itself does in pursuit of its wider mission. Without the data we collect, we cannot identify risks, design good policy, and take action in a timely and targeted fashion. That’s why delivering ‘common data standards’, rules and methods that consistently label and describe financial data, are a priority long term reform for us. Reflecting that priority the Bank are setting up a joint transformation programme with the Financial Conduct Authority (FCA) and industry. And Sam Woods, the Deputy Governor for Prudential Regulation, and Nikhil Rathi, CEO of the FCA, recently published a letter to firms providing an update on this work, and asking firms to work with us in partnership to deliver common data standards and other crucial reforms. 10  AI and AIPPF  Yet another rapidly-developing area is the adoption of AI in finance. We know that finance is one of the sectors that has seen widespread adoption of AI in recent years.11 COVID-19 has accelerated this trend. Half of the banks we surveyed reported an increase in the importance of AI as a result of the pandemic. 12 The adoption of AI is already bearing fruit in a number of areas within the financial sector with a very wide range of use cases.
Worldwide, policymakers and markets have anticipated that the US sluggish recovery could face further downside risks as US fiscal and monetary policies could run out of “bullets” to provide the much needed stimulus. For the Eurozone, doubts on the potential contagion of sovereign debt crisis to other European countries remain, reflecting the ineffective impact of domestic policy on the economic recovery in these economies. Looking ahead, a more positive sentiment on the Eurozone is contingent on the growth performance of Germany and France in particular. But, recent signs of economic weakness in external and domestic demand in these countries have been somewhat worrisome, and new data release could either calm or jerk market sentiments. Despite these rather gloomy prospects in advanced economies, I remain cautiously optimistic on the performance of Asian economies for the rest of this year. My assessment is conditional on the ability of Asian economies to maintain economic resilience and pursue an appropriate policy mix to preserve economic and financial stability. Evidenced since the 2009 US crisis, major economies in Asia have been able to cushion the adverse impact of global economic roller coaster by expanding domestic demand, supported by expansionary fiscal policy and monetary accommodation. Once world trade has resumed growth after the initial contraction in the aftermath of 2008 US crisis, Asian exports have continued to grow robustly on the back of regional trade expansion and strong growth in Asia, particularly China and India.

But in practice we tend to say that there are prices that are beyond the control of monetary policy, that are somehow disconnected from the conduct of monetary policy, or that are “completely different”. Real estate prices, asset prices etc. Interesting, isn’t it? And conversely, in practice we know what financial instability looks like and what it is. But in theory we haven’t created a rigorous operationalised theoretical system for achieving financial stability, or even for defining financial stability. There is no single, universally accepted definition of financial stability, as quantifiable as the definition of price stability. And what is worse, many believe there will never be one. Again, quite interesting. So this, in my eyes, is the first constraint we face. At least in the area of financial stability, theory lags behind practice. Inflation targeting is a formalised, practical and handy system, while “financial stability targeting” is not, despite huge steps forward recently. And I can’t resist dreaming of a day when we have a system in the financial stability area that is as operationalised as inflation targeting. After all, back in 1978, the U.S. economic historian Charles Kindleberger, in his now classic book “Manias, Panics, and Crashes: A History of Financial Crises”, pointed out that financial upheavals had virtually always been preceded by credit booms, property price and asset price booms and increased leverage in the financial system. All these are, in a sense, monetary phenomena. So why couldn’t we go further here as well?
The benchmark prices of traded goods in the European market will be set in terms of euros, reflecting the fact that this is the currency in which most European producers will have their costs and revenues denominated. So when the pound falls against the euro, producers will tend to raise their prices in sterling terms to maintain euro revenues, creating a positive UK-euro area inflation differential, as we have seen recently. By the same token, the weakness of the euro against the pound in the first half of the last decade created a negative UK-euro area differential with UK inflation running below continental European countries. Chart 6 Euro-Area/UK inflation differential and exchange rate Euro/ sterling  %  0.3  2.0 1.5  0.2  1.0 0.1  0.5 0.0  0  -0.5 -0.1 -0.2  -1.0 Euro-area/UK CPI differential (RHS) *  -1.5  Euro-Sterling exchange rate (LHS) **  -2.0  -0.3  -2.5  -0.4 -3.0 1997 1998 1999 2000 2001 2002 2004 2005 2006 2007 2008 2009 2011  *: Euro-area CPI minus UK CPI. A negative differential implies higher UK inflation. **: Expressed as the deviation from its average over the same period. Source: Thompson Datastream  Chart 6 suggests that this inflation differential can be quite persistent as it takes time for prices to adjust. That is not surprising, as companies know that foreign exchange markets are volatile and so the initial response of prices to an exchange rate change is likely to be relatively small.

Chart 9 OECD measure of UK output gap Output gap as percentage of potential output 4 Real-time estimate  3  Latest estimate  2 1 0 -1 -2 -3 -4 -5  1991  1993  1995  1997  1999  2001  2003  2005  2007  *: Positive numbers indicate above-potential levels of GDP. Source: OECD  BIS central bankers’ speeches  11  The combined impact of data revisions and reassessments of the trend in underlying capacity can be seen in the way estimates of the “output gap” change over time. Chart 9 shows how the OECD’s estimate of the UK output gap has changed over the 1990s and in the 2000s prior to the recession. In general, the revisions have indicated that there was much less spare capacity in the economy than originally thought. The persistent “output gap” of spare capacity which was believed to exist in the mid-1990s has been revised away. And the OECD’s current estimate is that the UK economy was operating much further above capacity before the recession than thought at the time. These difficulties in measuring or estimating the margin of spare capacity can be remedied to some extent by looking at direct measures of spare capacity in firms from business surveys and indicators of labour market slack from employment data.
As we said in our press release in September, an early move in interest rates “could lower the level at which interest rates might otherwise need to be set”. That is why we raised interest rates last month and why the MPC is committed to the consistent pursuit of a symmetric inflation target. But that is not all. The new monetary policy regime is probably the most transparent and open in the world. We are committed to explaining our policy – both to improve the efficiency of monetary policy itself and also to build up support for what we are doing. Try going onto the Bank of England’s website – the address is www.bankofengland.co.uk – and you will find there the minutes of our meetings, as well as the Inflation Report, available to everyone. You will even find a copy of this speech. You may not always agree with our decisions, but I do hope you will understand the reasons for them. Since the MPC was set up, there is, I think, a better understanding of what we are trying to achieve. Most of those who disagree with particular interest rate decisions accept that it does make sense to have an inflation target. Some might wish that we interpret the inflation target in a way that better serves the interest of their own sector of the economy, but that would be to court popularity in the short term at the expense of achieving low and stable inflation in the long term.

Mr King speaks about interest rates, policy and the UK economy  Speech given by Mr Mervyn King, Deputy Governor of the Bank of England, to the Scottish Council Development and Industry, held in Edinburgh on 11 October 1999. * 1. *  *  Introduction  Twelve months or so ago, interest rates were 7½%; now they are 5¼%. Twelve weeks ago they were only 5%. So why do interest rates sometimes go down and sometimes go up? And why, in particular, did interest rates rise in September? At one level, the answer to these questions is straightforward: interest rates move – whether up or down – in order to keep inflation on track to hit the target of 2½%. But, at a deeper level, why should monetary policy aim at a target for inflation rather than at growth and employment? Most people in this audience today belong to the “inflation generation”. You will have lived through a time in which inflation was a fact of life. For much of UK history prices were relatively stable. But during the 1960s inflation started to rise. In the 1970s inflation averaged no less than 13% a year with a peak of over 27% in August 1975. During the following decade inflation averaged 7% a year, and it has fallen to around 4% in the 1990s. Between June 1997 – when the Monetary Policy Committee met for the first time – and August 1999 RPIX inflation averaged 2.6%.
That twenty year period has been far from a quiet one, for the Bank or the commercial property industry. The Bank gained operational independence for monetary policy through the Monetary Policy Committee (MPC) in 1997; had its role in supervising individual firms first stripped from it in 1998 and then, earlier this year, re-instated through the Prudential Regulation Authority (PRA); and, most recently, has taken on responsibility for so-called macro-prudential regulation through the new Financial Policy Committee (FPC). The commercial property industry’s fortunes have been just as undulating. But throughout those ups and downs, the Forum has remained a key source of intelligence for the Bank and the industry and an important sign of cooperation between the Bank and the industry. Since 1997, the Forum has helped inform the deliberations of the MPC and, over the past few years, the PRA and FPC. And it was the success of the Forum that led me, three years ago, to set up a parallel Residential Property Forum, chaired by Nick Ritblat. Some of you will have heard me say that the Forum is one of the best meetings I attend at the Bank. And I know some of you, on hearing that, have been left wondering just what my other meetings must be like. Speaking on behalf of the Bank, I wanted to say how grateful we are to you all for those contributions. But what has the Forum achieved during its life? And, looking forward, what could it achieve in future?

Yet even that was insufficient to save the world economy from the “Great Recession”. And the recovery from recession has been both slower and lower than almost anyone expected. Neglect of the credit cycle has shown itself to be anything but benign. The lesson from all of this is very clear. As policymakers we must do a much better job of taking prompt corrective action to lean against financial swings which, if allowed to persist, would otherwise put at risk the financial system and wider economy. We need to build defences to protect against the collateral damage from financial flood. We need to be popping, not mopping. Fortunately, that is exactly what is now happening. Regulators globally are pursuing a wholly new approach. It goes by the name of macro-prudential policy. And here in the UK, it is the responsibility of the Bank’s new Financial Policy Committee (FPC). Among the FPC’s tasks is to lean against pro-cyclicality in the financial system. That means smoothing out the stomach-churning highs and lows in the credit and asset price cycle, which have characterised the past. As evidence of this approach, consider the FPC’s recent actions in the UK residential property market. This market has defrosted at pace over the past twelve months. The financial stability risks from this re-heating may not be immediate, but nor are they hypothetical. Take the position of UK households. Despite some post-crisis deleveraging households’ debt burden, relative to income, remains high at around 140% – almost three times its level in 1980.
Nonetheless, while we do not think that the policy rate should be part of a macroprudential framework, we cannot completely rule out its use with financial stability considerations when facing a critical situation. The second question refers to the institutional framework for decision making regarding macroprudential policies. In this regard, a first issue relates to who should make decisions  1  Lim et al., 2011; Tovar Mora et al., 2012; Claessens et al., 2013; Kuttner and Shim, 2013; Bruno et al., 2014; Zhang and Zoli, 2014; Akinci and Rumsey, 2015; Cerutti et al., 2015. BIS central bankers’ speeches  3  regarding macroprudential policies at a system-wide level. A second issue refers to the decision making process within the central bank in relation to the macroprudential tools within its mandate. The aftermath of the financial crisis of 2008 has been widely active in institutional design around the world; particularly in countries were the crisis imposed large losses on taxpayers. There is a wide variety in the way decision making about macroprudential policies is organized, and to the extent to which decisions are mandates or recommendations. In the United Kingdom, a specific committee – the Financial Policy Committee – was set at the Bank of England with the responsibility for delivering financial stability through macroprudential regulation. Decisions by this committee, which is chaired by the Governor of the Bank and where the Treasury has voice but not voting rights, are mandatory for the prudential regulator (the Bank of England).

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