samchain/econo-pairs-v1 huggingface dataset:
1  BIS Review 82/2000  During this period, the Fed has looked at a large number of economic and financial indicators in an attempt to control inflation and smooth the business cycle. And, as I said, the Fed responded reasonably well to these events with fairly modest changes in its interest rate settings. Many among you are in a much better position than I am to know how much the US experience applies to Europe. I do want to mention, however, that an economist at our Bank, Glenn Rudebusch, recently did some research with Lars Svensson that questions the usefulness of monetary targeting.1 Now let me turn to the challenges for US monetary policy over the past five years or so. As I mentioned, these have been primarily on the real side of the economy. And while the developments in the US economy have been quite favorable, they’ve also been unanticipated, which has added substantially to the uncertainty we face as policymakers. The current economic expansion is now in its tenth year. It has lasted longer than any other in US history, and it has been remarkably strong. Real GDP growth averaged 4½% over the past four years and 6% over the past four quarters! The unemployment rate continues to hover around 4%, near its lowest level in thirty years. And core consumer inflation has averaged between 1¾ and 2½% over the past four quarters, depending on the measure used. Finally, US productivity has been truly remarkable.

Since then, the Fed has been able to accommodate ongoing deregulation and respond to shocks in the financial sector by focusing on adjustments in the federal funds rate. More recently, the challenges for the Fed have been on the real side of the economy - and here I’m referring especially to a technology shock. While a technology shock that boosts productivity is a wonderful thing, it also has created uncertainty about the proper course for policy. As I understand it, productivity growth rates have not yet begun to accelerate in Europe. However, it would seem to be only a matter of time before the ECB will face the challenge of responding to a comparable technology shock. In any event, I’d say that our recent experience makes a good case study in conducting monetary policy in the face of great uncertainty - an issue of importance to any central bank. Let me start with a brief look at the history of our experience with financial change. In the late 1970s, the buildup of US inflation pushed nominal interest rates up against the legal interest rate ceilings on most bank deposits. As a result, the market began to circumvent the ceilings by creating new instruments, and pressure began to mount to remove them altogether. In 1980, the Monetary Control Act did just that by phasing out the ceilings. Importantly for monetary policy, the act also permitted banks to pay interest on some checking accounts.
The decline is partly the result of debt restructuring, as well as transfers of non-performing loans to Asset Management Companies (AMCs). As at the end of July 2000, restructured debt totalled 281,222 cases with a corresponding credit outstanding of 1.7 trillion baht, while cases in the process of restructuring totalled 22,906 with a corresponding credit outstanding of about 773 billion baht. With cleaner balance sheets, banks are in a better position to start lending. 1  BIS Review 85/2000  Now that the situation has stabilized, post-crisis rebuilding and reconstruction in the banking system must be pursued vigorously, both through policy-induced means as well as through individual firms’ initiatives. To reduce reliance on bank credit, the capital market must be developed as an alternative channel for funding. This will help rectify an important weakness of the past whereby firms relied excessively on bank borrowing and were not able to access funds directly from the capital market. Among initiatives to promote the capital market which are being pursued by the authorities are the development of the domestic bond market, the corporatization of the Stock Exchange of Thailand (SET) to widen membership and participation, as well as acceleration of the privatization process to increase the supply of new listings on the SET. Looking ahead, competition facing the financial industry will come not only from the entry of new participants, especially foreign players, but from competition across industries or frontiers such as between banks and securities firms.

Tanya Sirivedhin: New challenges for finance and capital markets  Speech by Ms Tanya Sirivedhin, Deputy Governor of the Bank of Thailand, at the Conference on “Thailand-Finance and Capital Markets”, held in Bangkok, on 28 September 2000. *  *  *  Today’s conference is very timely, in view of the increasing role that finance and capital markets are likely to play in the future Thai financial scene. I have identified several aspects of the challenges of “Finance and Capital Markets” which I would like to share with this audience. I hope that the open discussion of these challenges will be an important input into the work of the Thai authorities, and what we envisage to be the vision for our industry. I shall frame the challenges in three dimensions: First, the challenges from rebuilding and strengthening the business and financial industry. Second, the challenges from the adoption of best international practices. Third, the challenges from the race to catch up with the new technological frontier of e-commerce and electronic trading. Rebuilding and strengthening the financial industry The 1997 economic and financial crisis brought to light many weaknesses in Thailand’s macroeconomic and financial management. In its aftermath, measures were undertaken speedily to shore up the currency and to restore confidence in the viability and sustainability of firms and businesses, both in the financial and non-financial industry. Through the implementation of these measures, there were inevitably many casualties.
The positive movements in household savings contributed to the growth of the lending activity, so according to the latest available data as of September 2017, loans increased by 4.3% on an annual basis, with a solvency that is almost twice as high as the statutory levels and volume of liquidity that enables optimal day-to-day operation. It is also worth noting that in spite of the political environment, the deposit growth and the trust in banks have been achieved in the environment of historically lowest interest rates, both on the financial markets in the euro area and on the domestic interbank market. Also, allow me to mention that in the forthcoming medium-term period, the deposit market will urge banks to make even greater efforts to modernize and increase their offer. We live in times of global digitalization, great advancements in information technology and its daily use in the financial sector. Innovation and application of modern technologies globally put competitive pressure on the traditional forms of banking, and encourage banks to constantly adapt, be proactive and inventive, and by changing their business models to new phenomena and conditions, ensure their market success. Such processes will inevitably touch the bank operations in the Republic of Macedonia. In perspective, the use of modern technologies will not only affect the market performance of banks, but will probably change radically their relationship with depositors and other clients.

In fact, even for countries such as the Republic of Macedonia, with relatively modest financial education and low utilization of modern technologies in the financial area, the question that arises is not whether, but when the digitization process will engulf the domestic banking system. In this light, I would like to point to the process of digitization and use of information technology not as a threat against the competition in banking, but as a new opportunity to bring financial services closer to as many clients as possible, to raise financial inclusion and literacy, and to ensure better allocation of resources, as phenomena of greater economic and social significance. 1/2  BIS central bankers' speeches  On the other hand, the application of new technological solutions brings changes in the range of risks that banks face and manage in their day-to-day operations. In addition to the conventional bank risks such as credit risk, interest rate risk, currency risk, the importance of non-financial operational risks will gradually increase. Increased use of modern technical solutions will mean greater significance of the risks related to the information systems security, the confidentiality of the data, the storage of information content, the access and the maintenance of the payment systems. At the end, before awarding the Best Counter Officers, allow me to express gratitude on my behalf and on behalf of the National Bank for their daily and painstaking work in the banks’ branches. Thank you for your attention and congratulations on the World Savings Day! 2/2  BIS central bankers' speeches
Trade balance and the REER  90  Index  Billion euro  120  80  100  70 60  80  50  60  40 30  40  20  20  10 0  0 2008  2009  2010  2011  Exports of goods and services Source: BIS, NIS Note: REER – 61 economies  2012  2013  2014  Imports of goods and services  2015  2016  2017  REER CPI_based (rhs)  Figure 3. Unit labor cost relative to EU 100  percent  90 80 70 60 50 40 2008  2009  2010  2011  2012  2013  Compensation per employee (% EU, PPS) ULC RO (% EU, PPS) (3=1/2) Source: Eurostat, NBR calculations  2014  2015  Labour productivity  2016  2017  (% EU, PPS)  0.0 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 Feb-18 May-18 Aug-18  Figure 4. International reserves  50.0  EUR bn.

Public debt sustainability in the long run percent of GDP 60  Public debt critical threshold  1st Scenario (decreasing public debt)  2nd Scenario (stabilizing public debt)  3rd Scenario (rising public debt)  3.9 1)  3.9  3.9  -0,3 2)  -1,0  -2,5  4,5 3)  4,5  4,5  50  Interest rate on public debt (%)  40  30  Primary balance (% of GDP)  20  10  Real economic growth rate (%)  Public debt/GDP  Scenario 1  Scenario 2  2028  2027  2026  2025  2024  2023  2022  2021  2020  2019  2018  2017  2016  2015  2014  2013  2012  2011  2010  2009  2008  0  Scenario 3  Note: 1) Public debt interest payments as a ratio to average public debt in 2014. 2) The primary government budget balance of 0.3 percent of GDP corresponded to a structural deficit of around 1 percent of GDP (MTO – Medium-Term Budgetary Objective) in 2014. 3) 2.8 percent is the real growth rate in 2014. Source: MPF, NBR calculations  Maintaining the deficit within the limits set by the MTO (medium term objective) ensures long-term sustainability of public debt  Figure 14.
By and large most scholars seem to agree that the resolution of the crisis in Norway was fairly successful. But even if it was, right there and then, there is no guarantee that the same recipe will be successful in future or in other countries. In recognition of this and to avoid moral hazard, the law establishing the Government Bank Insurance Fund has now been repealed and the Fund has ceased its operations. Even if government capital injections in the large problem banks were the right resolution method in the early 1990s, it is far from evident that such a rescue operation would be the right method should a large bank fail in the future. However, I think it is possible to identify some principles that should be adhered to in order to increase the chances of success. The focus must be on saving the financial system, not the individual bank. With regard to the way failed banks are handled, the division of responsibilities between various parts of government must be clear, as it was ten years ago. As then, owners should be the first in line to shoulder losses. Similarly, the board and top management responsible for the failure of a bank should not be allowed to continue. Hopefully we have all, bankers and authorities alike, learnt from the crisis. At the central bank, we have strengthened our surveillance of the soundness of our financial system (macro-prudential supervision).

BIS Review 58/2003  5
4 When formulating the criteria, there is a trade-off between being too general, which does not provide very much information, and being too specific, which might overly restrict policymakers’ room for manoeuvre and be less robust to changes in the economic landscape. The Bank has developed a set of criteria for an appropriate interest rate path. The criteria serve both the purpose of communicating the reasoning behind the interest rate path to the public and of providing an agenda for the Board discussion, which makes it easier to decide on a particular path. The criteria used by Norges Bank to assess the interest rate reflect policymakers’ general views and assessments. They are therefore not “carved in stone”, but can be changed and modified due to new insights. Currently, the Bank uses five criteria, which can be summarized as follows:  4  For example, the Swedish Riksbank communicates the criteria behind the forecasts as follows: “The Riksbank’s forecasts are based on the assumption that the repo rate will develop in such a way that monetary policy can be regarded as well-balanced. In the normal case, a well-balanced monetary policy means that inflation is close to the inflation target two years ahead without there being excessive fluctuations in inflation and the real economy.” (See p.3 in the Riksbank’s Monetary Policy Report). BIS Review 94/2008  3  1. Achievement of the inflation target  The interest rate should be set with a view to stabilising inflation close to the target in the medium term.

William C Dudley: Job polarization in the region Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Quarterly Regional Economic Press Briefing, New York, 30 May 2012. *  *  *  Good afternoon and welcome once again to the New York Fed’s Quarterly Regional Economic Press Briefing. I am pleased to have this opportunity to talk with the journalists covering our region – and through you, to the people in our District. This morning I will focus on regional economic conditions, with particular attention to job polarization, which I would define as the expansion of the number of jobs at the upper and lower ends of the wage and skill distribution and a shrinking of job opportunities for those in the middle. We will see how these trends are playing out in our region. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee (FOMC) or the Federal Reserve System. National economic conditions The U.S. economy is continuing to slowly recover from the after-effects of the housing boom and bust and the financial crisis. But the recovery has been disappointing. Indeed, when we look back at economic forecasts made over the past three or four years it is notable that growth has systematically fallen short of both the Federal Reserve and private-sector forecasts.
The second is a mismatch between the maturities and/or currencies of the assets and liabilities on either side of the balance sheet. Consider a simplified bank balance sheet, shown in Chart 4, with the bank’s holdings of loans, securities and reserves financed by a mixture of: (insured) deposits; other debt of various forms, including borrowing from other financial institutions collateralised against the bank’s assets, repurchase agreements, unsecured bank debt; and finally equity capital. This last category is the initial absorber of unexpected losses and is a key determinant of sustainable balance sheet size and thus of the supply of credit to the economy. That is, by the way, rather different from the standard textbook model, in which banks’ holdings of reserves and loans are financed solely by deposits and the size of the bank’s balance sheet  3  This could come about through: conventional asset substitution; an attempt by investors, such as pension funds, to maintain returns in order to match their commitments (Raghuram Rajan, 2005); or a movement down the risk spectrum as banks expand loans in order to maintain leverage as the value of their existing assets, and therefore also of bank equity, rises (Tobias Adrian and Hyun Shin, 2009). 4  Though Adam Posen (2010) notes that equity booms precipitated by technological innovations are typically less costly than real estate booms. BIS central bankers’ speeches  3  is determined by the product of its holdings of reserves and the money multiplier.

And in some countries, central banks are responsible for banking supervision. But such tasks do not by their nature have to be carried out by the central bank. Charts 1 and 2 show the balance sheets of the Bank of England and the US Federal Reserve1 during the crisis. The near-tripling in size is striking, reflecting operations in pursuit of both the financial and monetary (price) stability objectives. Before the crisis, central banks provided predominantly short-term loans to banks against generally only the safest collateral, mainly highly-rated government debt. But when financial intermediaries found their sources of finance drying up, particularly after the collapse of Lehman Brothers, we began providing  1  The US Federal Reserve’s outright securities holdings before the initiation of large-scale asset purchases on 18 March 2009 are included in the “Other” assets category and held constant at the level on this date for the remainder of the period. BIS central bankers’ speeches  1  larger loans, of longer tenors, against a wider range of collateral; the Federal Reserve also dealt with a broader range of counterparties. The same is true of the central banks of other countries caught up in the maelstrom, including here in Australia. This leads me to my first general lesson: in a crisis, central banks need to show flexibility. The demand for many of these support programmes wanes naturally as conditions normalise, but the crisis has also prompted permanent changes in monetary frameworks.
Conclusion Let me now summarise what I have said and draw some conclusions. The global capital markets are here to stay. They have contributed to the good economic growth in many countries in recent decades by providing capital efficiently. At the same time it cannot be denied that the global capital markets can generate problems, as we have seen in recent years. There have been marked fluctuations and they have spread from country to  7  BIS Review 52/1999  country. Shortcomings in national economic policy have been the cause in many causes but not in all. Small countries with less liquid markets have been heavily hit when highly leveraged funds have shifted capital between markets. For some countries with a weak political and economic system, the capital movements have been sufficient to elicit political crises and considerable social costs. A part has also been played by problems in financial institutions in the industrialised countries, even in the very centre of the international financial system through the Manhattan-based fund LTCM. Last autumn the US Federal Reserve found it necessary to reduce the instrumental rate and take the initiative in solving the problem of credit. Against this background it is not surprising that an active discussion is now in progress about what is called the new international financial architecture. International meetings are being held in quick succession.

Stage 3: loan applications and approvals The next stage is for the reduction in rates to induce an increase in the demand for credit. A key parameter for the response in quantities is the price elasticity of demand for credit. We have been hearing lots of positive comments about the state of demand in the housing  BIS central bankers’ speeches  9  market since early in the year: from builders, estate agents, lenders and contacts of our regional network of Agents, and this has recently reflected into an improvement in the data. Let me note that although the housing market is clearly gathering momentum, and house prices have started to hit the headlines, I must say that don’t see any evidence of bubble behaviour as yet, with mortgage lending still subdued relative to what is likely to be normal levels of activity. The housing market is recovering from a number of years of very low transactions, with house prices having risen well below the inflation rate. It is not surprising if we see an adjustment of relative prices when the market recovers and of course London has special demand pressures which are not present elsewhere in the UK, especially for highend housing. But we may well see a response in new housing supply in due course, limiting the effects of demand on house prices. Let me assure you that the Bank will not be complacent about allowing financial stability risks to build through an over-expansion of the housing market.
Towards the end of 2011, with a decision unprecedented in the history of the euro, the ECB’s Governing Council decided to conduct two three-year refinancing operations. At the end of February, or when the second three-year operation was completed, the net increase in loans granted to counterparties was around € billion. The motivation for the two operations can be summarised by the following strategic view. A central bank is mandated with the crucial task of ensuring the sufficient supply of liquidity to sound bank counterparties in return for adequate collateral. In normal times, “sufficient liquidity” means a volume of refinancing in line with the need for banks to meet the obligatory reserve requirements and the financing of other independent factors which explain the growth over time in the demand for money. In times of increased financial instability, “sufficient liquidity” indicates a volume of available central bank money which avoids the risk that – under such market conditions – the temporary inability of banks to provide refinancing leads to insolvency and thus to a situation of widespread default. In neither of the two cases – normal times or crisis periods – can the central bank be considered responsible for the survival of bank counterparties that are close to bankruptcy.

At that point, any additional monetary stimulus would require non-standard measures designed either to shape agents’ expectations as to future  2  BIS central bankers’ speeches  interest rate behaviour or to change the size and composition of the central bank’s balance sheet. Balance sheet expansion through programmes to purchase public and private securities is unquestionably an exceptional measure, but it is not exclusive to the euro area, and has already been adopted by other central banks. Between 2010 and 2014 the Federal Reserve, the Bank of England and the Bank of Japan doubled the size of their balance sheets after running out of room to further reduce interest rates and after having resorted to announcing their commitment to hold official interest rates at very low levels for a sufficient time. The design and implementation of programmes to purchase public and private debt securities must not fail to take into account the institutional characteristics of the area in which they are applied. Monetary policy in the United States or in the United Kingdom acts in a fiscal union, which makes it easier to resolve potential problems associated with the allocation of any costs incurred by the central bank in its monetary policy operations. In this respect, the unique characteristics of the euro area meant that complex technical adjustments had to be made when designing the announced programme.