samchain/econo-pairs-v1 huggingface dataset:
Better information about the credit risk profiles of the largest, internationally active banks, including the composition of their portfolio by internal ratings, would also be useful. A commitment to the use of advanced analytical tools, stress testing, and improved disclosure comes under the widely discussed rubric of seeking out and adopting industry-wide best practices. It is, perhaps, most important to note that the development of best practices is a dynamic, not a static, process that can only be enhanced by consistent risk management efforts over a long time horizon. In sum, I am led to conclude that diligent market discipline using techniques such as those I suggest here is in the long run the essential element needed to achieve both public and private goals. All market participants bear the difficult responsibility of determining and exacting adequate compensation for risk. While the public sector has a responsibility to increase the effectiveness of its overall regulatory and supervisory framework, it is the private sector’s continuous reassessment of risk and advancement of risk management techniques that ultimately will serve to preserve a safe and sound financial system while simultaneously rewarding individual institutions with long-term profitability. In the public sector, we can help markets work more effectively by ensuring that regulated financial institutions support the trading process by making sound credit decisions. We can also work to improve bank supervision by our ongoing examinations of bank risk measurement and management processes, a major focus of the examination process.

The interest rate decision in September Let me move on to the stance I took at the most recent monetary policy meeting around a month ago. I, like the rest of the Executive Board, then voted to raise the repo rate by 0.25 percentage points. At the same time, my assessment was that the forecast for the repo rate that we made in June still appeared reasonable. Today I shall return to why I made this assessment. Increased uncertainty abroad… On the whole, my view in September was that international growth was good and had not changed significantly since June. But this does not prevent the view of growth in some individual countries having changed in important respects. In September our assessment was that growth would be lower than we had expected in June, in the United States in particular, but also in Europe. At the same time, developments were slightly stronger in a couple of our neighbouring countries and in several emerging markets. However, the international risk outlook had changed gradually in connection with the rising unrest in the financial markets. The change in the risk outlook largely originated in the United States. There the problems in the housing market had worsened and according to several statistics house prices in the United States fell on average, measured as an annual change. The question we asked ourselves at the September meeting was to what extent the problems would spread and slow down activity in the rest of the US economy.
11  All speeches are available online at www.bankofengland.co.uk/speeches  11  V. Conclusion My Lord Mayor, three weeks ago the Chancellor and I attended the G7 in Canada. Even though there were threats of protectionism in the air, the UK had consistently positive agenda focused on openness and partnerships.   Global Financial Partnerships to take advantage of the enormous progress reforming the financial system over the past decade;    Free trade in services to address chronic trade imbalances, while promoting inclusive growth; and    Free trade for SMEs so that the many can take advantage of the new platforms, the new finance and the new economy. This eagerness reflects our confidence that the UK can seize enormous, new opportunities by building connections. The Bank recognises that a new economy, a new world and new demographics demand a new financial system. That’s why we are building the infrastructure so that UK households and businesses can transact anywhere, anytime with anyone whether around the corner or around the world. That means connections between small businesses in Scunthorpe and their clients in Shanghai and between households in Belfast and firms in Bangalore. We now have a balance sheet fit for a new world order with greater reliance on markets in a wider range of reserve currencies. That means connections between banks, investors and markets around the world consistent with the City’s traditional global role.

I then want to say something about the importance of personal financial education. There are two distinct parts to the strategy. One involves visits to secondary schools. Below director level, more than 400 people working at the Bank have volunteered as “Ambassadors”, who explain to school pupils what we do and why. People on our policy Committees do the same. It’s now rare that, on one of my regular trips around the country to hear from businesses about what’s going on in the economy, I don’t also make a visit to a local school. In all, we reckon we’ve talked to 12% of the UK’s state secondary schools in the past 18 months alone. 2  All speeches are available online at www.bankofengland.co.uk/news/speeches  2  For our part, we very much enjoy these visits. And the feedback has also been good. Central banks are not often associated with the words “positive”, “appreciated” and “inspiring” so you can imagine how invigorated our Ambassadors are when they hear them. The second strand is a package of online materials – something we’ve named “EconoME” – to help non-specialist teachers of students aged between 11-16 years deliver quality financial education. EconoME comprises three one-hour lessons focussing on financial decision-making and the implications of these decisions on students and the world around them. The resource draws on real-world examples, provided by the Bank of England, which shows how the Bank makes decisions and the practical skills we employ to understand the likely outcomes of those decisions.
Then I will discuss the implications for Thailand, before moving on to policy navigation of the Bank of Thailand. Financial volatility has manifested itself throughout 2015. Let me briefly recap some of them: •  Only a few months ago, the Chinese equity market recorded one-day steepest loss of 8.5 per cent and trillions of dollars were wiped off from the global equity market within a day. The fluctuations in the Shanghai stock index perfectly exemplify the market volatility where from the beginning of this year the index rose by 60 per cent up to June, before collapsing to 10 per cent loss by August. •  There have also been sharp capital outflows from Emerging Markets, resulting in large Emerging Market currency depreciations. Indeed, the Institute of International Finance expects that capital flows to Emerging Markets will turn negative for the first time since 1988. •  On the commodity front, Brent Crude Oil price plunged below 50 dollars per barrel this year, having peaked at over 110 dollars just one year ago. Against this backdrop, market participants have been increasingly concerned about investment and business implications. So what brought about heightened volatility in the global markets? I will attempt to answer by highlighting two key sources of volatility. In the aftermath of the global financial crisis, unconventional monetary policies – most notably successive rounds of Quantitative Easing – were implemented by major advanced economies. This abundant global liquidity contributed largely to strong asset price gains and higher risk appetites.

Thus, even if global growth were to be robust, it is unlikely that Emerging Market export growth would recover quite as strongly. I would certainly be remiss if I failed to mention another potential risk in Emerging Markets which could have impact on the real economy; that is a rapid buildup in Emerging Market corporate indebtedness. Ultra-loose global monetary policies have made it much easier for firms in Emerging Markets to raise funds – or borrow – especially from abroad. However, in the wake of tighter financial conditions, Emerging Market firms are facing greater difficulty to repay or roll over their debt. In summary, I have highlighted two key sources of volatility: first, continued excess liquidity amid diverging monetary policies, along with shifting market expectations about the future path of monetary policies; and second, the global economic transition to the “new normal” steady state. The process is ongoing, and will probably take some time – and it may not be smooth – before the new steady state is reached. 2  BIS central bankers’ speeches  Ladies and gentlemen, Against the backdrop of such a volatile “new normal” world, I will now turn to the implications for Thailand. The impact will be realized on both our financial markets and the real economy. However, as I shall elaborate, the Thai economy has strong buffers that will make it relatively resilient to external shocks. Let me start by looking at implications for the financial markets and the exchange rate.
The global standardsetters are open to such ownership, but only on the condition that legislation and regulation provide the powers for effective consolidated supervision and transparency of such structures, including the parent company. This implies for instance that the bank group can be protected from the risks emanating from the non-financial owners, such as through ring-fencing. In my experience, nonfinancial ownerships have often caused problems for banks and the supervisors must monitor such relationships closely. This applies in particular to so called “pocket banks” which are dominated both in ownership and activities by the needs of the parent company or major owners. Should banks have a widely spread or a concentrated ownership? I have an open mind on this issue, too. Both alternatives have their advantages and disadvantages. A broad ownership may better protect the interests of the minority shareholders, but if financial problems occur the majority owners have stronger incentives to provide capital injections. The governance of a bank is sometimes promoted by having strong owners, but there are also examples of strong owners misusing the bank for their personal purposes. All in all, you should be open to different forms of ownership but monitor them closely. Should you allow different forms of banks, such as commercial banks, savings banks, credit unions, development banks and micro-finance institutions? In my view: Yes, of course. Competition is best served by having a range of bank ownership structures such as shareholding, mutual ownership, nonprofit organisations, etcetera.

However, this should not stop an action started by the supervisor to deal with a presumed problem in the bank. The supervisory management and staff must also have reasonable protection should they be sued for their bona fide decisions taken as supervisors. In some countries the supervisors are harassed by frivolous lawsuits by bank owners, managers or other parties. Even if the supervisor is in the end acquitted from any guilt, the process may take years. During this time the supervisor will be severely hampered in performing her job having to concentrate on her defence. Such lawsuits will also reduce the willingness of other supervisors to take necessary supervisory decisions, since they are themselves afraid of being sued. A first line of defence is to take all major supervisory decisions in a collegiate fashion at the top level. Thus only the agency such can be sued as an institution. Nevertheless, should individual supervisors be sued, they must be provided assistance in the court proceedings, such as legal counsel and protection against any costs. Of course, if the supervisor is finally found guilty and have not acted in good faith, the supervisory agency could reclaim any outlays. The second issue is that the supervisors must have a sufficiently large and skilled staff with satisfactory resources. With too few, or not adequately skilled supervisors, bank problems may not be detected early enough which may lead to major crises. With too many supervisors interventions in the banks might become excessive, thus interfering in banks’ daily business.
Now let us now turn briefly to the possible financial relationship between the Albanian banking system and the production foreign investments flow. Undoubtedly, the positive influence foreign direct investments have on economic growth depends largely on their recipient countries’ circumstances. It requires a substantial level of financial system development as a crucial precondition. A developed financial system improves the efficiency in allocating the resources and it further enhances the country’s capacity to absorb the FDI. The entry of new investors will orient the concentration of market segments to large-size businesses. Their impact, along with the lending capacity of our banking market, are believed to be the crucial proof for their success in Albania. In more concrete terms, the circumstances in Albania are such that there is an asymmetrical distribution of total assets between banks in the market. The reference is only to banks, since in terms of total assets, the banking system shares more than 90 per cent. Other non-bank financial institutions play a more insignificant role than the commercial banks. As far as the latter is concerned, there are many qualitative banks in the market, whose presence is an attractive factor for absorbing the FDI. On the other hand, the concentration of assets and banking loans in a few commercial banks bears the risk of creating an oligopolistic environment where only a few banks establish the terms for new loans. Such a situation would increase the investment cost in the public and private sector and in households, as well.

Under these conditions, a revision in inflation targets has become a technical necessity. Therefore, the Central Bank of Turkey proposed the government to revise the targets for 2009 and 2010 to 7.5 and 6.5 percent, respectively; and to set the target for 2011 at 5.5 percent, and the government accepted our proposal. I would like to re-emphasize that, we will not treat the revised targets symmetrically. Monetary policy will aim to keep inflation below the revised target path. Dear Guests, We stick to our price stability objective. At the same time, we are aware of challenges we have to face. First of all, the rapid rise in food prices may be more permanent than expected due to rapid economic growth, slowdown in agricultural productivity and employment shift from agriculture to industries. Considering the fact that food has a higher share in the consumption basket of developing economies, including Turkey, this would lead to a decoupling in inflation rates between industrialized world and developing countries for years to come. 2  BIS Review 79/2008  Similarly, commodity prices may remain elevated for the foreseeable future, which may prove to be a challenge for Turkey in particular. Note that Turkey is a net commodity importer in contrast to many other developing countries. Last, but not least, price stability necessitates stability in financial markets. We need to put our house in order to attract foreign capital with long-term horizon, rather than highly mobile short-term capital.
Although the economic recovery has provided for an appreciable reduction in this rate, it still stands at around 19%. Foreseeably, several years must go by before unemployment in Spain falls to levels comparable with those of other developed economies. Of note in Spain’s case is the heterogeneity of the unemployment rates in different regions, from levels slightly over 12% 4/7  in Navarre to close to 29% in Andalusia, with Catalonia in the lower part of the table at around 15%. Monetary and financial policy in the face of the crisis The recovery in the developed economies, and in particular in the euro area and of course in Spain, has necessitated far-reaching actions in all economic policy areas. Early efforts by the central banks focused on alleviating the liquidity problems affecting the financial system. But the serious worsening of the situation opened the way for more powerful plans, both in the financial and monetary realms and in terms of fiscal initiatives to boost aggregate demand. Regarding monetary policy, the depth and persistence of the crisis has required an ongoing effort by central banks. Over these years, the monetary authorities have broadened their range of instruments, resorting to non-conventional tools that have enabled monetary stimuli to be deepened and that have been conducive to their pass-through to lower borrowing costs, thereby encouraging household and business consumption and investment decisions.

From end-2007 to mid-2009, US GDP fell off by more than 4 pp; in the case of the euro area, the loss between the first quarter of 2008 and the second quarter of 2009 was close to 6 pp. After the double-dip recession, which ran until the first quarter of 2013, a slow recovery ensued, with modest but sustained rates of increase in output. Only in the second half of 2015, seven years after the first recession began, did the euro area regain overall the pre-crisis levels of income and consumption, levels which even today have still to be restored in the case of gross capital formation. As to the euro area unemployment rate, while it has moved on a declining trend since the current recovery phase began, it remains at close to 10%, almost 2.5 pp above the level prevailing in early 2008, and double the rate in the US economy. In Spain, which had built up most significant imbalances, the depth and seriousness of the crisis was unprecedented. From 2007 to 2013, GDP fell by close to 8 pp and, foreseeably, it will only be this year, in 2017, that income will reach its pre-crisis levels. As in other episodes of our economic history, the most severe costs were felt in the labour market. In the 2007-2013 period, employment declined by over 18%, taking the unemployment rate, four years back, to 26% of the labour force.
For 2019, we now expect inflation of  Page 1/4  Berne, 15 June 2017 Thomas Jordan  News conference  1.0%, compared to 1.1% last quarter. The conditional inflation forecast is based on the assumption that the three-month Libor remains at –0.75% over the entire forecast horizon. Global economic outlook  I would now like to turn to economic developments abroad, as these have a considerable bearing on the inflation and economic outlook in Switzerland. In line with our expectations, the global economy has strengthened further in recent months. Global GDP growth in the first quarter was more robust than in previous quarters. This is due in large part to an encouraging upturn in emerging economies. In the euro area, too, economic recovery has gained strength. Owing to the stronger economic growth, the labour market situation in advanced economies has improved further; with full employment now almost reached in the US, Japan, the UK and Germany. Across the euro area, unemployment has declined again. Despite these positive developments in the real economy, inflation remains modest in most advanced economies. Against this background, monetary policy in Japan and the euro area in particular is likely to remain very expansionary. In the US, monetary conditions are expected to gradually normalise. In our new baseline scenario for the global economy, we anticipate that economic developments will remain favourable. For 2017, economic growth looks set to be its strongest in six years.

In addition, the strong Swiss franc continues to weigh on some industries. Momentum in the labour market reflects this mixed picture. Although the situation continues to improve, the pace is only moderate. Seasonally adjusted unemployment has again receded slightly in the past three months. Companies are nevertheless still cautious about taking on new staff. For 2017, we continue to expect growth of roughly 1.5%. Exchange rates, interest rates and inflation expectations  I will now review changes to monetary conditions since the beginning of the year. The trade-weighted nominal exchange rate for the Swiss franc has remained stable overall in the last six months. In the run-up to the French presidential election, there were episodes of increased upward pressure. After the decision in France, the franc again weakened somewhat against the euro. By contrast, it appreciated slightly against the dollar. In real terms, the franc has virtually remained unchanged on a trade-weighted basis over the last half-year and is still significantly overvalued. Interest rates in Switzerland have remained virtually unchanged in recent months. The interest rate differential to the euro area has remained stable as well. Short-term rates in the US, on the other hand, have risen slightly, reflecting the tightening of monetary policy there. Inflation expectations for Switzerland have increased somewhat over the past half-year. Households, companies and financial analysts are now expecting an inflation rate of just above zero, also for the short term. In the longer term, meanwhile, expectations are around 1%.
The markets’ reaction has demonstrated that the Royal Decree-Law has been most effective in restoring confidence in the Spanish banking system and has ushered in a new stage in the process of savings bank restructuring, adding to the progress of recent years in cleaning up balance sheets and reducing the sector’s capacity and fragmentation. The Royal Decree-Law has some very specific aims. The first is to strengthen the solvency of all Spanish banks, setting a level of core capital of at least 8%. Also, given that investors’ misgivings centred on a small group of unlisted banks with a greater dependence on the wholesale market, it was decided to require those banks to hold core capital of 10%. Additionally, the Royal Decree-Law stipulates that credit institutions needing government funds will have to pursue their financial activity through a commercial bank. This measure speeds up the strategy followed so far. Savings banks that have to increase their level of core capital may raise that capital on the market through the commercial banks which, in most cases, they have created and started up since the end of last year. Investors now have highly granular information on the portfolios of these banks, which moreover will be audited and published shortly. Sometimes it is alleged that the injection of capital into the savings banks has come late and that Spain should have followed the example of other countries which injected huge amounts of public funds into their major banks immediately after the Lehman crisis.

In this context, 2011 will remain a difficult year for almost all economic agents, especially for Spanish banks, which must strive to defend their bottom line. Their net interest income will come under pressure from the stagnation of business volumes and the increase in financing costs, although, to qualify this, the pass-through of higher marginal rates to average margins is relatively slow. Furthermore, despite the substantial efforts made, the Banco de España’s provisioning rules will continue to compel banks to carry on recording provisions to restructure their assets. Against this backdrop, banks must counter the negative pressure on  6  BIS central bankers’ speeches  profitability through cost containment, especially in those banks involved in restructuring processes. Banks will continue to suffer from the flatness of their main line of business, namely lending. Solvent demand will remain low and, if credit usually only recovers at the end of an adjustment phase, in the Spanish case, since households and corporations have to reduce their debt, solvent demand for credit can be expected all the more to take longer to grow. Given this outlook, it is most important that the banking sector is ready to provide credit when the related solvent demand recovers in parallel with the improvement in the situation of corporations and households. Accordingly, the restructuring measures adopted to date have prevented the survival of zombie banks which, were it not for their integration into the best banks, would have ultimately proven useless for providing credit.