samchain/econo-pairs-v1 huggingface dataset:
Derivatives instruments are beneficial for all firms and the decision to use these instruments is largely shaped by the goals of the firm rather than its size. Here, I would like to touch upon a point about the information transmission function of derivatives markets. Derivatives markets offer economic agents the chance to price their expectations of the future. Thus, thanks to derivatives markets, expectations become measurable and through prices, more information concerning the future is shared with other economic agents. This structure enables a more effective resource allocation mechanism through more effective financial markets in the economy as a whole. Besides their contribution to the effectiveness of the resource allocation mechanism, the development of derivatives markets helps the financial sector to grow. Hence, derivatives markets contribute to the increase in national income and employment by indirectly encouraging more effective resource allocation and by providing value added. Derivatives markets introduce new investment instruments to the financial intermediary system, or in a broader sense, to the financial system. This, in turn, increases the number of instruments investors can use in order to diversify their portfolios and thus deepens financial markets. If we analyze what the diversity in investment instruments means for our country, we see that thanks to the derivatives markets, both real sector and financial sector investors will be able to manage their risks in diversity in line with the world markets and this structure will help our country to integrate with world markets.

The Bank of Thailand has been proactive in this aspect. We have already upgraded our cheque clearing system from paper-based to image-based system, namely ICAS in Bangkok and the Metropolitan areas and we will launch the ICAS for the entire country within next year, and the new version of BAHTNET system will also be launched next year. In addition, a policy to set up a system for local switching (i.e. a system for switching, clearing, and settlement of domestic payment transactions via local debit card) has been prescribed, and will come into force within 2013. •  In Long Term (beyond 2015), ASEAN payment and settlement linkage should be explored. Currently, the Bank of Thailand is exploring the potential of linking our payment and settlement systems with that of other countries, such as the linkage with Hong Kong USD CHATS which aims to reduce FX settlement risk. The second consideration is new channel of payment and new technology Advanced development in Information and Communication Technology (ICT) has made it possible for money to move faster and more safely. Important development nowadays is ATM ASEANPay, operated by National ITMX, which already connects ATM system between Thailand and Malaysia. More connections will be made in the future, which will help facilitate retail payment and money remittance across ASEAN countries. Moreover, other payment channels and instruments such as e-banking, e-payment, and mobile payment will play an important role in enhancing efficiency and inclusiveness of financial services.
These tools can be broken into two groups: –  Those that are intended to directly affect the build-up of imbalances: for example, the FPC’s ability to impose sectoral capital requirements and its power to limit loan-to-value and debt-to-income ratios in the residential housing market. –  Those intended to improve the resilience of the financial system in the event of shocks and thus reduce the severity of a cyclical downswing, including the power to affect bank balance sheets through a counter-cyclical capital buffer, and a leverage ratio. •  The Bank’s actions in the residential housing market in June 2014 provide an illustration of the benefits of directing targeted macroprudential policy tools at sectoral financial stability risks vis-à-vis raising interest rates. Motivated by concerns over the growth of household indebtedness, the FPC recommended that no more than 15% of mortgages originated could have a loan-to-income ratio above 4.5. And in response to fears that households on variable rate mortgages could struggle to meet mortgage repayments if interest rates rose significantly in future, the Bank recommended a minimum 3 percentage point interest rate stress be applied at origination. So in a first best world where the institutional set up and macroprudential tools are available, I would let them do the leaning first rather than  2  BIS central bankers’ speeches  wield the heavy hammer of monetary policy. So far, this is the approach we have taken in the UK.

Attempts to attenuate the financial stability risks from this broad property price boom with targeted macroprudential measures resulted in a large number of measures being applied, even including LTV restrictions on stand-alone car parking spaces, to which the boom had spread. •  If loose monetary policy can lead to a build up of financial stability risks, then the converse must also be true – tighter monetary policy can be used as a means of reducing financial stability risks. Most empirical estimates show that a temporary tightening of monetary policy can be expected to reduce real debt levels – and  BIS central bankers’ speeches  1  hence the probability of crisis – by discouraging households and firms from increasing leverage in the medium term, even if the transmission (through reduced aggregate demand and a higher interest burden) involves a short-run move in the opposite direction (for example, Goodhart and Hofman (2008)). •  This was recognised in the design of the UK Monetary Policy Committee’s 2013 guidance that it intended to maintain a highly accommodative stance of monetary policy until economic slack had been substantially reduced. Recognising the financial stability risks that could emanate from a commitment to maintain low interest rates, the MPC set a “knockout” whereby their guidance would cease to hold if the Financial Policy Committee judged that the stance of monetary policy poses a significant threat to financial stability that could not be contained by the combination of macro and micro prudential policy tools available.
The global financial crisis that erupted in late 2008 had its influence on our economy by stiffening this cooperation. On the one hand, the system found itself in a difficult liquidity situation, while on the other hand businesses found it difficult to access markets. With some additional subjective reasons, the outcome of this was a deterioration of the system’s loan portfolio and companies’ liquidating capacity. Consequently, 2009–2010 marked a slowdown of lending growth to the economy, reflecting the increased prudence, fully justified by the system, and  BIS central bankers’ speeches  1  business inability to earn a meritable new loan. The period coincided with a review of balances and portfolio restructuring, when possible with provisions, directly affecting the system’s financial performance. The Bank of Albania has played a major role as a guardian of the country’s macroeconomic and financial stability. Macroprudence has been the prevalent word in our communication with the market, authorities and the public. We have translated macroprudence as a need for more capital and liquidity, and increased banking system payment capacity. Consequently, the Albanian banking sector did not experience contracting. The Bank of Albania has provided and continues to provide the necessary liquidity to the banking system, to stimulate not only to the market but also to the entire economy. Prudent policies and timely legal regulations guaranteed effective banking supervision and enabled satisfactory businesses’ access to bank loans.

Besides a legal relation, the bank-client relation is a human relation, one of trust. When a business delays the payment of a bank loan instalment, it should consider its judgement on the bank if the bank delayed the payment of the matured interest to that business. Dear ladies and gentlemen, On behalf of the Bank of Albania, I would like to invite the communities present in this event to strengthen their communication bridges, which is of benefit not only to them but also to the economy in general. 2  BIS central bankers’ speeches
Sometimes it is alleged that monetary policy is impotent in a climate of heavy capital inflows. Claims are also heard that the Central Bank’s monetary policy measures only exert an influence through the exchange rate and have no effect on long-term interest rates, and absolutely not on indexed interest rates. Certainly, a tight monetary stance does put significant upward pressure on the exchange rate, contributing to lower inflation in the short run. Central Bank policy rate hikes also have a very swift effect on the money markets, and interest rates on other instruments with maturities of a few months or years are soon influenced too. Central Bank policy rate decisions also have an impact on long-term interest rates, both indexed and nonindexed. All research in Iceland and everywhere else confirms this, but because the effect is transmitted with a long lag, monetary policy must be forward-looking. Interest rate decisions made today are not transmitted in full to long-term interest rates until one or two years hence. Thus the debate often focuses on the short-term effects of monetary policy, but people need to be patient and bear in mind the impact which does not emerge until well into the future. The Central Bank does not have the slightest doubt that interest rate changes in Iceland ultimately have the same effect as those in other countries, in other words that general economic principles apply just as much in Iceland as anywhere else.

The only conclusion that can be drawn from the massive growth in lending by the banks is that they have overstepped the mark. There is no question that this surge in lending is a major contributor to the current expansionary forces in the economy, which have fuelled inflation and call for a higher policy interest rate than otherwise. The banks are a pillar of the Icelandic economy. They insist that the Central Bank and the Government should act with restraint and promote economic stability, so they also have to make comparable demands towards themselves. In the long run, no economy can sustain this huge expansion in credit that originates in the banking system. Last week the Central Bank published its quarterly Monetary Bulletin in which it discusses economic and monetary developments and prospects and has published its new macroeconomic forecast. Without going into detail here, the broad finding is that robust private consumption will continue and investment will increase, especially business investment, for reasons including that aluminium-related projects have been stepped up for this year, as I mentioned earlier. Public consumption growth is expected to be modest, however. GDP growth will be 6.4% this year. It will be marginally less next year, when growth of private consumption and investment will also slow down. The positive output gap will widen considerably this year and in 2006. This year the current account deficit will peak at 12% of GDP, then shrink next year, contrary to previous forecasts.
Certainly, a decline in NPL ratios will also be facilitated by an environment of stronger economic growth. In the euro area, such conditions of strong and sustained growth will require the ongoing cyclical recovery to be supported by effective structural policies. In particular, reform efforts need to be stepped up to improve the business environment, which in turn will help increase productivity, employment and growth – and also make the euro area more resilient to shocks. Fiscal policies should support the economic recovery, while remaining in compliance with the European Union’s fiscal rules. The full and consistent implementation of the Stability and Growth Pact is crucial to maintaining confidence in the fiscal framework and ensuring the sustainability of public debt. At the same time, all euro area countries should strive for a more growth-friendly composition of fiscal policies, prioritising public investment and reducing the tax burden on labour. A clear policy focus on the growth agenda will contribute to enhancing confidence and reducing uncertainty about the future. In the case of the euro area, a stronger and more complete Economic and Monetary Union (EMU) will also help improve confidence. The socalled Five Presidents’ Report – “Completing Europe’s Economic and Monetary Union” –  2  BIS central bankers’ speeches  provides a roadmap for how to improve the architecture of EMU.

This was based on a comparison of 70 policy tightening episodes in 19 Advanced economies (AEs) and six Emerging Market Economies (EMEs). Strong growth and high job vacancies, as well as front-loaded rate hikes can help prevent a hard landing. Conversely, rapidly rising inflation, low term spreads and elevated debt levels raise the risk of a recession, especially if there are persistent negative supply shocks. Comparisons with the current conjuncture suggest a mixed prognosis across these factors. Overall, for the global economy to successfully stay on the ridge, inflation needs to peak soon, underpinned by improved demand-supply balance as multiple driving factors reequilibrate. This would lessen the constraints facing central bank’s responses – allowing the pace of monetary policy tightening to ease off by year-end. At that point, a relatively contained period of sustainable below trend growth should ensue with inflationary pressures gradually receding into 2023. If instead, the global economy veers off the ridge to a hard landing and equilibrating forces are stifled, the result will be higher inflation for longer, a more protracted period of monetary tightening, possibly higher unemployment, and mounting debt vulnerabilities. I note, but will not address here, that the Eurozone and other regions face additional idiosyncratic concerns which bear close monitoring. Singapore Economy: Some Pro-equilibrating Shifts  Some growth moderation The Singapore economy is moderating, with average growth of 4.1% (y-o-y) in H1 2022. Following the strong rebound of 7.4%, last year, the economy’s output gap is estimated to be mildly positive at mid-year.
2  See Giavazzi, F. and F.S. Mishkin (2006), "An evaluation of Swedish monetary policy between 1995 and 2005”, Reports from the Riksdag 2006/07:RFR 1, Committee on Finance. See also Sveriges Riksbank (2006), “Material for assessing monetary policy 2003-2005”, box in Inflation Report no. 1 and Sveriges Riksbank (2005), “Material for assessing monetary policy 2002-2004”, box in Inflation Report no. 1. 3  See the references in note 2. 4  BIS Review 52/2007  The Riksbank’s calculations imply, for example, that an interest rate a half a percentage point lower for six months would have led to lower unemployment corresponding to two or three tenths of a percentage point. However, I would like to emphasise that this type of calculation is very uncertain. Given this, I believe that monetary policy cannot be said to have contributed significantly to the high unemployment. What other possible explanations are there? What can explain the rise in unemployment? As I mentioned initially, unemployment was held down in the 1970s and 1980s with an economic policy that was not sustainable in the long term. I believe that this could have concealed structural problems in the labour market that only became visible when the economic policy regime was changed in the early 1990s. If one studies unemployment, particularly total unemployment, over a long period of time, one can see that it has shown a trend increase ever since the end of the 1960s. This also applies if one excludes the years after the change in economic policy regime.

Unemployment is instead determined in the long run by how well the labour market functions, for instance, with regard to matching unemployed persons and job vacancies. My main message here is that there is no clear-cut and stable relationship between inflation and unemployment, either in the long term or the short term. Simplified relationships between inflation and unemployment, such as the short-term and long-term Phillips Curves, may function as pedagogical tools. However, this type of simplified relationship is not practicable in determining how monetary policy should be conducted. Nor can such simple relationships be used to analyse to what degree monetary policy has contributed to higher or lower unemployment. Monetary policy is based on forecasts Let me go on to the next issue I intend to take up, namely the conditions under which monetary policy is conducted. This is an important aspect of a discussion of how far monetary policy can be considered to have contributed to higher unemployment. As monetary policy has an impact on demand and inflation with a time lag, the Riksbank must base its interest rate decisions on a forecast of future economic developments. All forecasts are uncertain. One therefore cannot expect that the Riksbank will always be able to exactly predict what will happen in the economy. It is also difficult to quickly bring inflation back on target once a deviation has occurred. This may also be unsuitable for real economy reasons.
William C Dudley: Economic opportunity and income mobility Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Association for Neighborhood and Housing Development Annual Community Development Conference, New York City, 11 April 2016. *  *  *  Good morning. I am very pleased to speak at the 6th Annual Community Development Conference. I would like to give a special thanks to the Association for Neighborhood and Housing Development for organizing this conference about issues of importance to the community development industry and to the future of New York City. At the Federal Reserve Bank of New York, we develop a wide variety of research and data products to gain a deeper understanding of regional economic conditions. We track the health of household balance sheets at the state and local level using data from the New York Fed’s Consumer Credit Panel. We also conduct an annual poll of small businesses to understand their credit needs and credit availability. My meeting with you today is part of our continuing efforts to understand what is going on at the grassroots level of our economy and to share insights from the New York Fed. The Federal Reserve has dual objectives, set by Congress, with respect to monetary policy – maximum sustainable employment and price stability. I would like to focus my remarks today on the first of these objectives.

We understand the importance of credit in allowing communities to grow, and the importance of the Community Reinvestment Act in requiring financial institutions to make investments in their communities. But, as my remarks here have indicated, credit is only one factor – and perhaps not the most important one – that affects the affordability of housing in our cities. I’ve addressed the importance of geographic mobility in supporting income mobility from the perspective of providing parents options for better neighborhoods in which to raise their children. Geographic mobility is also important in terms of individuals receiving the highest return to their human capital. Local economic shocks can depress employment and wages in some labor markets. This creates a strong incentive for individuals to move to an alternative labor market in order to more fully utilize their skills. Financial frictions to geographic mobility can reduce this movement of individuals across labor markets leading to less-efficient outcomes for the economy. Income mobility can be enhanced through policies that attempt to limit these financial frictions. This argues for avoiding, where possible, policies that create “in-place” subsidies where the household can access the benefits only while remaining in a specific location. The Federal Reserve has the twin objectives of maximum sustainable employment and price stability. Achieving the first of our objectives requires that every individual has the opportunity to achieve her full potential in life. Where you happen to be born should not determine your chance of living the American Dream.
Importantly we – and you – can see how we are performing month by month in relation to our mandate. We also have a tested analytical framework. We model possible future outcomes and we look at the balance of risks around a central view. We can rely on experience and judgement to make regular policy decisions. And we can alter our policy decision on interest rates each month as the data and circumstances evolve. ii)  Financial Stability and why it is different  If financial instability occurs, costs to society may be high. Damage to our reputation could be potentially high too. Yet judging the optimal amount of resources to devote to prevent crises is problematic. What degree of resilience do we want? And what should we be prepared to pay for  BIS Review 36/2005  1  insurance? This is a familiar problem in public policy – what is the optimal size of the fire brigade or army? The challenges we face in seeking to maintain financial stability are very different to those in the monetary policy arena. •  Firstly there is neither a clear over-arching analytical framework nor a commonly agreed set of indicators of incipient financial instabilities. •  Secondly the task is made harder because we are dealing with tail events – low probability scenarios – rather than central projections. It is about aberrant rather than normal behaviour and situations: less predictable and harder to model.

Rapid expansion of exports and moderate increase of imports led to improved trade and current account deficits, contributing to foreign currency demand and supply balancing and increased exchange rate stability. Monetary and fiscal policies have conveyed a careful macroeconomic stimulus. Withdrawal of the fiscal stimulus during the second half of the year, led to a more stimulating monetary policy, by reducing the key interest rate in July and a fuller introduction of it into the financial markets during the following period. Financial markets were characterised by an improvement of liquidity indicators and a decline in interest rates in almost all financial instruments. Furthermore, a prudent fiscal policy rendered budget deficit and public debt in line with 2010 forecasts. These developments are expected to be brought forward, in broad terms, in 2011 as well. Economic growth is expected to remain comparable to levels of 2010. However, it is expected to be driven by domestic demand to a large extent. The banking system is in a much better position compared with two previous years in terms of supporting the increase of domestic consumption and investment with funds. Moreover, inflation pressures are forecasted to be under control, budget deficit and public debt are expected to be further consolidated, and external position of the economy is expected to be more stable. Respecting this picture has important implications, which I will address later in more details, for policymakers and economic agents. Latest developments in global economy are characterised by continued economic growth in most developed countries and emerging economies.