samchain/econo-pairs-v1 huggingface dataset:
Looking at variables whose imbalances tended to be associated with crises in the past, we do not see these variables approaching crisis levels but rather staying at low risk levels. What we are observing is a mainly sentiment-led slump in demand and  BIS central bankers’ speeches  1  subsequently an opportunity for strong domestic rebound when sentiment improves. I would like to explore some key variables in more detail. Financial volatility is well contained amidst economic slowdown. Exchange rate has been relatively stable and international reserves have remained high, reflecting some degree of confidence among foreign investors and appropriate exchange rate management. Inflation expectations are firmly anchored, allowing monetary policy some room to address the downside. We benefit from this stability because consistent macroeconomic policy commands credibility from the public. It is worth mentioning a risk when it comes to volatility: that even with the Fed’s QE tapering already factored into the markets, the monetary policies of advanced economies continue to exhibit likelihood of change. These policy changes could cause Thailand to experience capital outflows or a volatile exchange rate. The Bank of Thailand closely monitors these risks and currently assesses them to be manageable given Thailand’s financial structure. Credit risk is also moderated by the wisdom of the private sector. Private companies have recently kept leverage in check at a cautionary debt-earnings ratio. Financial institutions are carefully managing loan quality, as household debt levels that have been decelerating since last year indicate.

The EU’s new Markets in Financial Instruments Directive (MiFID), for example, is expected to bring about important changes and intensify competition in the European financial market. This development will also influence the future of financial market infrastructures in Switzerland. Against this background, it is certainly crucial for the Swiss financial market infrastructures to persistently foster their competitiveness. They have pursued this strategy so far, and will need to continue doing so in the future. BIS Review 87/2006  1
In addition to the EEC Act, various legal amendments and process improvements were implemented over the past couple of years to improve the ease of doing business in Thailand and ensure that laws can be adjusted to accommodate new business practices in a timely manner. With these reforms, Thailand’s position in the World Bank’s Doing Business Ranking improved from 46th in 2017 to 26th in 2018, and we should continue to see further improvements in the ease of doing business in Thailand going forward. Another important development, which provides a strong foundation for digital economy, is the nationwide broadband internet project. Over the past years, the project has brought fiber optics network to almost 25,000 villages in remote parts of the country, enabling access to free-WiFi hotspots as well as home broadband at affordable prices. As such, human capital development can improve greatly through better access to online information, remote education, and online healthcare services. Business opportunity can also be greatly expanded with greater access to online marketing platforms and more cost-effective communication tools. This new and expanded online connectivity is a critical milestone which will bring economic opportunity and productivity to people in the rural area whose potential has been limited by the previous lack of supportive infrastructure to connect with the modern world. Ladies and gentleman, Let me now turn to Bank of Thailand’s initiatives to help uplift Thailand’s longterm competitiveness.

Co-operation is essential in many areas, since the basic indicators of the country’s economic performance, for example gross domestic product, cannot be compiled without data on trade in services, which is supplied by the Czech National Bank, and, conversely, the balance of payments cannot be compiled without data on foreign trade in goods, which is supplied by the Czech Statistical Office. However, our working contacts run much deeper, among other things the exchange of information for maintaining up-to-date registers or collaborating to eliminate duplication of effort in collecting statistical data from respondents. There is very close cooperation in the field of methodology. One recent example is the joint preparation of a new method of monitoring real estate prices to ensure that the data is as up-to-date as possible. Daily contacts are also maintained in the area of data publication, for example when presenting information under the Special Data Dissemination Standards project, an IMF standard adopted by the Czech Republic at the end of the 1990s. There is not enough time at this forum to list all our other joint activities. I do think, however, that the Czech National Bank’s involvement in organising this conference proves that co-operation between the two institutions is fruitful. Ladies and gentlemen, I wish this statistical conference every success and do hope that all sessions live up to your expectations. I also wish you a pleasant stay at the Czech National Bank as well as in Prague. 2  BIS Review 49/2004
Third, even in the case where the central bank knew that financial imbalances were building up, the size of the interest rate rise needed to reduce the imbalances might be so large that it could lead to a severe economic downturn. In Norway, the central bank is one of the institutions with responsibility for analysing and monitoring the financial system. As a flexible inflation-targeting country, we have chosen to incorporate financial stability considerations into the monetary policy decision-making process, partly because asset prices and debt are important for inflation and output, and partly because it provides focus on potential risks to financial stability. It may also be useful to cross-check by assessing our interest rate policy in the light of simple rules like the Taylor rule, which are less dependent on a specific analytical framework for the Norwegian economy. On the other hand, the rules will not capture all details in the projections, but can provide an indication of whether the current interest rate level is reasonably adapted to the economic situation. As we now publish our own interest rate forecast, market interest rate expectations are one cross check of particular interest. If expectations deviate from our projection, it may indicate that the market has a different view of future economic developments. If we are to influence interest rates in the money market, we must be able to explain such deviations. Of course, it might also be the case that the market’s view is the most accurate.

In a period of increasing cross-border labour flows, substantial technological advances, changes in competitive conditions and new trade patterns, we may, with our very open economy, have to accept a somewhat greater variability in inflation and deviations from the target, as we have witnessed over the past two to three years. Thank you for your attention! 4  BIS Review 26/2006
Indeed, the ECB has taken a number of measures to provide liquidity to credit institutions in the euro area, thereby alleviating their funding needs. Such measures include fixed-rate tender procedures with full allotments, longer-term refinancing operations up to a maturity of  2  BIS central bankers’ speeches  36 months, the expansion of eligible collateral accepted in the refinancing operations, and FX tenders aimed at mitigating funding costs in foreign currency. And the ECB will stand ready to withdraw liquidity when upward risks to medium-term price stability materialise. Right now transmission channels are obstructed for two reasons, one conjunctural and one essentially structural. The conjunctural reason is that sovereign spreads in some peripheral countries, which are today the basis for the pricing of bank funding, can rise above what fundamentals would suggest, as they reflect various concerns felt by market participants, from over-pessimistic views of macroeconomic trends to redenomination risk. The correlations between the yield levels of euro area bank bonds and those of the respective banks’ sovereigns are elevated and have lately increased somewhat further, particularly in the peripheral economies. This has also been the case for credit default swaps. This reflects a spillover effect from the sovereign market to the banking sector’s funding costs and impairs the transmission of lower monetary policy interest rates to the real economy.

While this does not seem to be a great concern to market participants today, the current fiscal path is unsustainable. In the long run, ignoring the budget math risks driving up longer-term interest rates, crowding out private sector investment and diminishing the country’s creditworthiness. These dynamics could counteract any favorable direct effects the tax package might have on capital spending and potential output. Favorable near-term outlook Turning to the near-term outlook, the prospects appear favorable for another year of above-trend growth. Consumer spending should continue to grow at a moderate pace, supported by solid fundamentals. Household income is being bolstered by faster compensation growth and continued healthy employment gains. Moreover, the aggregate household balance sheet remains in good shape, due in part to rising home prices, a strong stock market, and only moderate growth in household debt. Over the past year, home prices have risen by about 7 percent on a national basis, and the S&P 500 equity index has risen by nearly 20 percent. In contrast, household debt has risen about 4 percent over the past year, only slightly higher than the growth in personal income. Further, the household debt service burden is low, reflecting the extended period of low interest rates. Of course, the aggregate figures mask some underlying problems. Two issues worth highlighting are the persistent growth in income and wealth inequality and the burden of rising student loan debt.2 Many people of more modest means don’t directly benefit from rising home and stock prices.
This very fact that intellectual inputs from research are a precious resource in times of stress and multi-faceted uncertainty confirms me in my view that central banks’ investment in economic research, be it in-house or through partnerships with academia, is a very valuable asset. Therefore, I also warmly welcome this conference as being one brilliant illustration of the benefits brought by our three years long partnership with Toulouse School of Economics (TSE). Note however that, while the organization of high-level academic conferences has been an important achievement within this partnership, it is not the only one. Indeed, many avenues of fruitful collaboration have developed. Two series of regular joint seminars, one on monetary economics, the other on financial stability, and several workshops have notably contributed to strengthen the links between Banque-de-France and TSE researchers and stimulate the scientific and policy debates. I would also like to take this opportunity to thank Jean Tirole for his personal involvement in the exchanges with Banque de France. Last but not least, let me also advertise the new Banque de France – TSE Senior and Junior Prizes in Monetary Economics and Finance which purpose is to distinguish outstanding contributions by academics. The first prizes will be awarded for the first time on 16 March 2012. In the remaining of this address, I will first discuss the sovereign nature of the current crisis, its origins, implications and the associated challenges. Then, I will focus on the response of the Eurosystem to this crisis. 1.

The key topic within this block is the interaction and mutual influence of these two components of the Bank of Russia’s set of tools used to address the task of maintaining price stability and financial stability. Finally, work stream 6. New challenges to monetary policy. Within this block, we will analyse such long-term trends in economic development and finance as the introduction of digital currencies, innovations in the financial market, and climate and demographic changes. We will also estimate how these issues might impact the implementation of central banks’ monetary policies in the future. We have already started our analysis within all these work streams. The results of the Review will be discussed until the end of 2022 Q1. Following the discussion, we will compile a summary report in 2022 Q2 and publish it on the Bank of Russia website together with analytical notes addressing individual issues. The summary report will present the Bank of Russia’s opinion on the topics reviewed and proposals regarding a possible adjustment of the parameters of the Bank of Russia’s monetary policy. The report will then be discussed with the public and the professional community. We are going to sum up the results by the middle of 2022. It would be possible to conclude whether we need to adjust our policy following the Review only after we complete the analysis and the extensive discussion of its findings.
Furthermore, efficient and well-balanced financial system will allow the system to better manage and absorb shocks as the market would be less prone to one-way market conditions and possesses greater liquidity. The experience of the Asian crisis, for example, points to the critical importance of the development of long-term local currency debt market, to increase the depth and the breadth of financial market. In addition, the lack of diversified structure and market may lead to increased risk from concentration of credit and maturity risks in the banking system. Lack of markets may lead to the mispricing of risk and excessive delay in correcting large exposures, as well as increased vulnerabilities from capital inflows. Ladies and Gentlemen, The interaction between financial markets, economic growth and monetary policy is by no means a new issue for central bankers. Indeed, the continued deepening of capital markets is a significant issue for policymakers, and particularly for central bankers, since smooth functioning and efficient financial markets are crucial in ensuring an effective transmission of monetary mechanism. The best contribution that monetary policy can make to Thailand’s capital market development and its economic growth is to maintain steady medium-term price stability. Such a policy is beneficial, as it will minimize the adverse effects of inflation and high inflation uncertainty. As we all know, price stability brings numerous benefits.

These include a rate of inflation no higher than 1½% above that in the three EU countries where it is lowest, a one-year record of average nominal interest rates on long-term bonds no more than 2% higher than in the three EU countries where inflation is lowest, and membership of the ERM for at least two years without devaluing the currency and without exceeding the deviation band. Iceland will obviously not be fulfilling these conditions in the immediate future. Some form of EMU membership in the future would therefore not release Iceland from the obligation to bring inflation down to a similar level to that among its trading partner countries. It may be added that even if Iceland fulfilled all these conditions, it is extremely unlikely that it would be able to negotiate, in the foreseeable future, associate membership  4  BIS Review 95/2001  of the EMU or some kind of other bilateral currency cooperation with it. All the signs point in the opposite direction, whatever the phrasing of individual articles in the Treaty of Rome and Maastricht Treaty might suggest. Furthermore, it should be pointed out that twelve Eastern European countries are waiting to be admitted to the European Union and, later, the EMU. The ECB and Community leadership have firmly underlined that these nations should fulfil all the conditions for participation in EMU. Thus the EU is highly unlikely to agree to set any precedent which these nations could take advantage of as a short-cut into the EMU.
So what are the implications of the U.S. experience? The context and purpose of any stress test should dictate the form it takes. Both the SCAP and CCAR models likely have some lessons for other such exercises, but in circumstances of market stress, the SCAP model is more relevant than the CCAR model. In such episodes, our experience suggests:   First, the stress scenario needs to be severe to be credible.   Second, disclosure of the results is needed at a sufficiently granular level so that private analysts can make their own independent assessment.   Third, the results need to be credible in terms of expected losses.   Fourth, there needs to be a credible capital backstop so that market participants can be sure banks will be able to raise the capital that they need under a stress environment, one way or another. One tricky issue is how to treat sovereign debt exposures. This was not an issue in the U.S. SCAP exercise. This is difficult because there is a complex interaction between fiscal soundness and bank soundness, which is very hard to model. This illustrates a wider point – that all situations are importantly distinct and that while we can all learn from each others’ experiences in this field, there is no one-size-fits-all approach. BIS central bankers’ speeches  5  6  BIS central bankers’ speeches

More recently, the Central banks in the East Asian region have come together to put in place a comprehensive regional surveillance system that is supported by a comprehensive integrated crisis management framework that would deal with any imminent financial crisis in the region. These initiatives are aimed at effectively preventing or containing developments that could trigger destabilising consequences, thereby promoting regional financial stability. Deposit insurance system Ladies and Gentlemen: Following the restructuring and reform of our financial system, Malaysia has two years ago implemented the deposit insurance system as part of our efforts to build a cohesive and mutually reinforcing financial safety net system. The deposit insurance system has an important role not just in promoting confidence with explicit coverage of deposits, but also in reinforcing sound risk management practices. It therefore has embed features that complements the supervisory process in promoting sound risk management practices in the financial institutions. In addition, the deposit insurance corporation in Malaysia is also mandated with the responsibility for the “least-cost” resolution of problem financial institutions. 4  BIS Review 130/2007  A comprehensive approach was thus adopted in establishing the Malaysia Deposit Insurance Corporation (MDIC). To promote depositors confidence, the deposit insurance scheme was designed to ensure that there was optimum coverage with sufficient reach to retail depositors. In designing the deposit insurance scheme, about 95% of all depositors are covered in full while in value terms about 35% of total deposits is covered.
Nevertheless, this supportive action clearly showed us that systemically important banks are associated not just with advantages, but also with significant risks for the general public. Second, the reputation of the financial industry worldwide has suffered considerably in the wake of the crisis. In the general public at large, the enormous losses, the government rescue packages, the manipulation of the Libor interest rates and the suspicion of improper agreements in the setting of exchange rates, have led to a loss of confidence in the banks. This is true of Switzerland, in particular, where, after all that has occurred, questions relating to the banks’ sets of values and the benefits of a large banking industry for our country are being increasingly raised. Third, the most important pillar of the Swiss banks’ export business – cross-border wealth management – has suffered major reputational damage. For many decades, the practice whereby the assets held by foreign bank customers in Swiss bank accounts included an element of untaxed wealth was tolerated internationally. In recent years, however, this situation has landed Switzerland in politically delicate situations on many occasions and involved several banks in legal disputes. A worldwide change in values and the disclosure of cases of assisted tax evasion have discredited bank secrecy as a legitimate instrument for the protection of the privacy of foreign customers. Its economic importance for the Swiss banks has therefore largely dissipated. These developments have also resulted in considerable legal uncertainty and increased the risk of individual bank export markets disappearing, either partially or completely.

With a share of an estimated 26% of the world market, the Swiss banking centre is the leader in this area.5 In addition, the two big banks, UBS and CS, are among the most important institutions worldwide in some areas of investment banking, such as derivatives and foreign exchange trading. How did Switzerland, a comparatively small country, end up with a banking centre with such a wide international reach? A number of different elements may serve to explain this. First, I would like to mention the conditions which make the banking centre attractive for international investors. They include political, legal and economic stability, reliable banks, and a convertible currency whose value remains stable. In addition, a role in the steady inflow of foreign funds was played by the banking secrecy provisions established in 1934 and the enhanced protection of privacy associated with these provisions. These advantages appear particularly striking from a historical point of view, since, after the two world wars, neutral Switzerland presented a great contrast to the surrounding countries, which were suffering from currency turmoil, inflation and an increased risk of expropriation.6 Second, Switzerland’s prosperity and the relatively narrow local capital market – in terms of Swiss economic power – mean that Swiss investors seek investment opportunities beyond the national borders. At the same time, our economy also has a strong international focus.