samchain/econo-pairs-v1 huggingface dataset:
Veerathai Santiprabhob: Monetary policy and financial sector development policy of the Bank of Thailand Speech by Dr Veerathai Santiprabhob, Governor of the Bank of Thailand, at the Thailand Focus 2015 “Opportunity Growth and Reform”, Bangkok, 2 December 2015. *  *  *  Chairman of The Stock Exchange of Thailand, Secretary General of The Securities and Exchange Commission, President of The Stock Exchange of Thailand, Chairman of Phatra Securities, and President of Asia Pacific Bank of America Merrill Lynch, Distinguished guests, ladies and gentlemen, A very good morning to you all. I would like to thank The Stock Exchange of Thailand, Phatra Securities, and Bank of America Merrill Lynch for the invitation to join this year’s Thailand Focus event. I am much honored to be addressing this prestigious group of audience, and especially investor friends of Thailand from abroad. The title of my talk this morning is “Monetary Policy and Financial Sector Development Policy of the Bank of Thailand”. I would like to share with you the Bank of Thailand’s roles in supporting the Thai economy as we venture ahead in the volatile world. This year, there would be few among us who failed to notice turbulence in the financial markets worldwide. But what probably matters more is the shifting global economic forces that lie at the heart of such an incident. In the first part of my talk, I will explore volatility in the context of a “new normal” world where we observe, for instance, stagnant growth and low inflation.

The first idea I wish to draw your attention to when contemplating the future is that the favourable results of the Spanish economy in the past two decades cannot be attributed to a single cause; rather, they are due to a host of reasons. Accordingly, if we wish a similar performance in the coming years, we shall have to tend to the overall block of favourable factors we have enjoyed in past years and not believe that a simple repetition of one of the recipes applied may suffice. That is all the more relevant bearing in mind that some of the impulses in the past - such as those stemming from devaluations or from European funds, for instance - will not come round again. In my opinion, those who say we should focus exclusively on sound fiscal policies are mistaken, as are those who believe wage moderation will suffice and those who think that it is enough simply to continue pushing through structural reforms. I believe any partial approach is erroneous. We must look to all the fronts. If our fiscal performance or the labour climate worsens, if the consensus on the broad thrust of economic policies I referred to earlier is broken, or if we bring structural reforms to a halt, it will not be possible to maintain favourable results in the future. BIS Review 32/2007  3  True, having joined the euro area, some sources of instability have disappeared.
3, June 1958, pp. 261–297. Morgan, D P and Stiroh, K J (1999), “Bond market discipline of banks: is the market tough enough?”, Federal Reserve Bank of New York Staff Reports, No.95. New Economics Foundation (2011), “Quid Pro Quo: Redressing the privileges of the banking industry”. Organisation for Economic Co-operation and Development (2010), “Corporate Governance and the Financial Crisis: Conclusions on emerging good practices to enhance implementation of the Principles” available at http://www.oecd.org/dataoecd/53/62/ 44679170.pdf Oxera (2011), “Assessing state support to the UK banking sector”, Oxera Consulting Limited. 16  BIS central bankers’ speeches  Perotti, E C, Ratnovski, L and Vlahu, R (2011), “Capital Regulation and Tail Risk”, Centre for Economic Policy Research Discussion Paper, No. 8526. Reinhart, C M and Rogoff, K S (2009), “The Aftermath of Financial Crises”, American Economic Review, vol. 99(2), pages 466–72, May. Hickson, C R and Turner, J D (2005), “Corporation or Limited Liability Company”, Encyclopedia of World Trade since 1450, Macmillan. House of Commons Treasury Committee (2010), “Too important to fail – too important to ignore”, Ninth Report of Session 2009–10, House of Commons 261-i. Turner, J D, “Liability Regimes, Shareholder Capital, and the Genesis of Bank Regulation in Britain”, Mimeo. Turner, J D (2009), “ ‘The last acre and sixpence’: views on bank liability regimes in nineteenth-century Britain”, Financial History Review Vol. 16, Issue 2, pages 111–127.

In addition, we Executive Board members hold around thirty speeches every year, where we can describe our views of economic developments. This all means that there are good opportunities for the general public to find out how monetary policy decisions are made. This openness from the Riksbank makes it possible for all those who are interested to follow our policy and see whether we live up to our principles. I am convinced that transparency has been a central issue in gradually building up confidence in the Riksbank and the inflation target. Conclusion To summarise, let me observe that the changeover in economic policy in Sweden at the beginning of the 1990s, and to which I have described the background, has worked well. The inflation target for monetary policy has contributed to providing a stability in economic policy that was lacking in the Swedish economy during the 1970s and 1980s. There have also been significant developments in the monetary policy framework during the period we have practised inflation targeting and I hope that I have been able to give you some insight into how our monetary policy strategy has developed and how it works. How it works now, I should perhaps add. The strategy and framework are of course something we are constantly working on to refine and improve. This is something that will probably be discussed in the future economic debate in Sweden.
Studies made by the OECD indicate that powerful budget consolidation processes have only been carried out in connection with serious crises, and the 1990s began with the most serious recession in Sweden since the Depression of the 1930s. GDP fell three years in a row, 1991-1993, and employment fell by more than 500,000 persons during these three years. At the same time, letting the krona float free in 1992 had led to a depreciation of the krona of around 20-25 per cent and a large increase in exports. There was thus a strong growth in demand from abroad that made it easier to constrict domestic demand. The budget consolidation succeeded beyond expectation. Public finances were improved from a deficit of around 11 per cent of GDP in 1993 to a surplus of around 2 per cent of GDP in 1998. The target had been aimed at achieving a balance in public finances in 1998. The major part of the budget consolidation was achieved by reducing the public expenditure as a percentage of GDP. There are considerable similarities between the problems at the beginning of the 1980s and the 1990s. In both cases, Sweden’s international competitiveness had deteriorated and we had large deficits in both the current account and public finances. However, the major difference between developments in the 1980s and developments in the 1990s was that fiscal policy was much stricter in the 1990s and inflation was brought down to a level comparable with other countries.

In the light of the picture of economic developments outlined in the February Inflation Report, the Riksbank concluded that there was reason for gradually moving towards a more neutral monetary policy. Although inflation is currently low, developments in the real economy are strong and as capacity utilisation increases, inflation is expected to approach the target of 2 per cent. Raising the repo rate by 0.25 percentage points therefore appeared reasonable. The rate for the continued adjustment of monetary policy will depend as usual on the information received. To understand the aim of monetary policy, it is necessary to be aware that monetary policy normally has an impact with a relatively long time lag. It is not aimed at the current low inflation rate, but at the expected inflation rate a couple of years ahead. One must also take into account the fact that even after raising the repo rate to 2 per cent, monetary policy is still expansionary. During the entire forecast period, the repo rate is expected to be lower than what can be considered an average key rate in the long term, and lending is expected to continue to increase relatively strongly, even after an interest rate rise. In my opinion, the information received recently does not significantly change the picture outlined in the Inflation Report.
Conclusion  It is my foremost impression that we, in Norway, have a fairly efficient payment system, but that it is not quite as robust as we would like. There is room for improvement. For interbank systems, I particularly see possibilities in the following areas: -  Review and “streamlining” of the retail netting system  -  Limit the practice of early crediting  -  Address foreign exchange settlement risk  -  Improve the use of collateral  As for the retail system, we already have a very efficient system in place, and here competition will push new products and services. As I pointed out in my introduction, the transition from cash payments to deposits has yielded substantial efficiency gains, but has also led to new forms of risk. As such, the public’s choice of means of payment and payment instrument affects both risk and efficiency in the payment system. It will also be interesting to see the effect of real-cost pricing on the public’s use of cash. Experience has shown that the public’s choice is affected by relative prices. So far, we have had positive experiences with real-cost pricing in Norway. The usual cost concept is a little too narrow, however, and it may be time to take a closer look at “risk adjusted real-cost” prices. Different payment systems give rise to different risk in the payment system. This relationship is not always reflected in the prices charged customers.

Often this is due to a lack of information about what the actual risk is to the customer, the bank and the entire payment system. In this respect, the banks have an important responsibility to identify and manage the risk in the payment system. Only then will it be possible to say that the risk is “known and understood”. Norges Bank also has a responsibility in this area, such as establishing a regulatory framework that provides better incentives than what the present system offers. We all have a common goal: a more efficient and secure payment system. BIS Review 7/2000  14
On the basis of this figure, the scale of the recession in Spain appears to have been in line with global trends. However, taking into consideration the magnitude of the decline in domestic spending (8% over the same period), the intensity of job destruction (over 2 million jobs lost since employment was at a peak) and the rise in the numbers unemployed (over 4.5 million at the start of this year), it is clear there are singular factors involved in the contraction in Spain. These mirror the major imbalances built up during the expansionary phase – in particular, the excessive concentration of resources in the real estate sector and  2  BIS Review 86/2010  high private-sector debt – and the persistence of serious structural deficiencies in the functioning of the labour market. This series of factors has prompted a reduction in household spending, driven by the slowdown in income and the losses in wealth accumulated since the start of the crisis, and furthered by the deterioration in confidence and in expectations of future income, the tightening of lending standards and households’ perception of the need to restore health to their financial position. That explains the rapid increase in the household saving rate, which reached an alltime high in 2009 of close to 19%. The fall-off in household spending compounded the contraction in external demand and the highly adverse conditions for business investment, namely high uncertainty, a rise in the cost and availability of financing, and falling profits.

We must, moreover, act with the urgency demanded by our responsibilities as active members of the common European project in defence of stability and the success of this project. The report I present today is specifically geared to contribute to this task. From spring last year, the economic indicators offered signs that the world economy was emerging from the most critical phase of the gravest real and financial crisis since the Great Depression. Progress since along the path to recovery has been much more evident in the emerging economies, for which the latest projections indicate growth rates above 6% for 2010. By contrast, the developed countries’ economies are recovering at a considerably less dynamic rate, of around 2%. This turnaround confirms that the rapid and energetic economic policy action to support financial systems, to stimulate demand and to sustain confidence was pivotal in halting a spiral of recession and financial instability which, had it continued, would have undoubtedly had disastrous consequences for the world economy. Halting this recessionary spiral was crucial for placing the world economy once again on a path of sustained output and employment growth. But if the incipient recovery – still subject to considerable uncertainty and risks – is to take root, further measures on various fronts will be needed. The bulk of the measures adopted to check the accelerated economic and financial downturn were exceptional. Accordingly, they have to be withdrawn.
Speech Central Bank of the Republic of Turkey  Prof. Şahap Kavcıoğlu, Governor The Future of Finance Summit 28 September 2021, Istanbul  2  Mr. Minister, Distinguished representatives of the finance sector, Distinguished members of the press, Dear Guests, First, I would like to thank A Para Team for their kind invitation. Today, I will share our views on the Role of Central Banks amid a Pandemic. I think it would be useful to break the issues that economic policy has focused on since the beginning of the pandemic into two periods. The first was a period in which economies came to a standstill with historically unprecedented shutdowns across the globe. In this period, central banks and other policy makers took many measures to prevent job losses and bankruptcies and to make sure financial markets continued to function. The second period is still ongoing with accelerated recovery amid faster vaccination in the face of global output failing to keep pace with increased demand and surging global inflation due to rising commodity prices. In the first period when coronavirus spread around the world, the global economy suffered a much deeper downturn than the financial crisis of 2008. As the pandemic also caused a large-scale supply shock, the negative impact on economies was much bigger and more permanent than in 2008. The economic effects of the pandemic were felt worldwide and more deeply than the global financial crisis while policy responses were diverse and unprecedentedly strong.

It is in the region’s interest that we should cooperate to increase our collective strength. I hope you, as key decision makers of your exchanges, will take this opportunity to consider possible ways of working together. EAOSEF is well placed to facilitate this process. I wish you a fruitful discussion at this forum. 1  Asia Economic Monitor, Asian Development Bank, December 2003. 2  The Asia/Pacific region accounted for 90% of total flows into emerging markets. Reference: Capital Flows to Emerging Market Economies, The Institute of International Finance, Inc., 15 Jan 2004. 4  BIS Review 22/2004
François Villeroy de Galhau: Green Finance – a new frontier for the 21st century Opening keynote by Mr François Villeroy de Galhau, Governor of the Bank of France, at the International climate risk conference for supervisors, Amsterdam, 6 April 2018. * * * Accompanying slides of this speech. Ladies and Gentlemen, What location could be more appropriate for a conference on climate change than Amsterdam? Two thirds of Dutch territory is at risk of flooding as sea levels rise. 1 It is no coincidence that this country’s mathematicians, including Prof. Laurens de Haan, have made decisive contributions in determining a safe height for sea dikes based on extreme value theory. 2 Yet the interest of central bankers and supervisors in climate change may seem more surprising. Though unexpected, it is not fashion, it is conviction: climate stability is, in the long run, one of the determinants of financial stability. This is even more important to us in Europe because the Treaties entrust the Eurosystem with the task of “supporting the general economic policies in the Union”;3 this includes “the sustainable development of Europe based on […] a high level of protection and improvement of the quality of the environment”4 (Art. 3). And one thing is certain: time is running out. At the One Planet Summit in Paris last December, President Macron issued a stark warning that “we are losing the battle” on climate change. Mark Carney will tell us later on whether we have escaped the “tragedy of the horizon”5 he famously described.

The sustainability of fiscal policy is very important for restoring confidence in Estonia and adopting the euro. When looking at the changes made in the budget this year and at the new fiscal strategy, it has to be pointed out that the support of fiscal policy to the economy was remarkable in 2008. The state budget swung from a 2.7% surplus to a deficit in the course of one year. This year, the share of state expenditures in GDP may rise to 43%. Thus, it is important to ensure fiscal sustainability this year and also in the next years. Thereafter reserves must be restored. In Eesti Pank's estimate this means an extra 7 billion kroon cut in addition to the curtailments already made. Actions related to fiscal policy must be decisive, but thoroughly considered. I am not so pessimistic as to absolutely agree with the opinion that the government has reached the stage where it faces just "bad and very bad solutions". But it is also clear that there is no simple or simplified way to rekindle growth. Measures need to be taken on both the revenue and the expenditure side. But I think it should be kept in mind that it is state expenditure that has soared over the past years. On the other hand, the tax burden that has been relatively stable so far is one of the main strengths of the Estonian economy, leaving sufficient room for private initiative. To conclude, I will repeat the main message of Eesti Pank's spring forecast.
But, if we look at the right-hand side of this slide, it is intriguing to see such a close relationship between the exchange rate and relative bond term premia differential as that observed during the course of this year. Conclusion Let me conclude. Deciphering exchange rate movements, and giving them a structural interpretation, remains a topic that requires the dedication and passion of many researchers. Much has already been learned, but much still remains to be understood. The introduction of unconventional monetary policy measures forces us to think more deeply about the channels through which such 9 / 11  BIS central bankers' speeches  measures affect the exchange rate, with regard to their impact both on the expected future path of short-term interest rates and on risk premia. An important aspect in this endeavour is to gain a better understanding of the role of portfolio rebalancing. Evidence is growing, and my remarks today are intended to add to this, that portfolio rebalancing is a major transmission channel of central bank asset purchases. At the same time, the signalling and portfolio rebalancing channels of central bank asset purchase programmes might, at times, work in opposite directions, with unclear implications for the exchange rate. Moreover, in an integrated global financial system, unconventional policy measures have been shown to often trigger large cross-border capital flows.

I am confident the banking industry will use this moment to identify the best opportunities to restructure and improve its performance and expand its activity, thus reassuming its role as the engine for the country’s economic development. Thanking you for the invitation, I would like to wish you all good health and a prosperous and successful New Year! Happy New Year! 2  BIS central bankers’ speeches
Therefore, the state of the financial system should have implications on the conduct of monetary policy of economies following a FIT regime since it affects the transmission channels and the business cycle. Another issue is whether macroprudential tools may be used to complement monetary policy. For example, adjusting capital requirements over the cycle or introducing dynamic provisioning may have effects on the output gap, inflation and interest rates. This is similar to the case of automatic stabilizers of fiscal policy, which of course have implications on monetary policy. Therefore, there should not be conflicts between financial stability and price stability tools, as long as financial regulation reduces the procyclicality of the banking system. From the point of view of the inflation target, this is just part of the environment in which decisions have to be made. Perhaps a more controversial issue is the use of macroprudential tools as a substitute for monetary policy. A recent case in some emerging markets has been the use of banks’ reserve requirements to tighten credit by reducing the need to increase the interest rate, and collateral effects on asset prices, especially the exchange rate. The advantage of using the interest rate for monetary policy is that we have relatively good knowledge of the transmission channels. Changes in monetary policy interest rates affect the cost of financing, asset prices and the availability of credit. The macroeconomic consequences of changing regulation are less well understood. Tightening restrictions on banks may create disintermediation and move credit to unregulated segments of the market.

However, it is interesting to note that emerging market economies also enjoyed a Great Moderation, but it came in the second half of the 1990s, much later than in developed economies, which coincides also with the time in which inflation was conquered, supporting the hypothesis that it was good policies rather than good luck (De Gregorio, 2008). It is easy to discredit the Great Moderation in the current juncture. However, the resilience of emerging market economies to the global crisis was impressive. Indeed, emerging markets had a recession, but much milder than in the past and with a remarkable recovery. And this was, of course, the consequence of much better macroeconomic management. The case of Chile illustrates this point. We did suffer a recession, but the size of the initial impact and the speed of the recovery were quite different from previous episodes. In the second half of 1998, affected by the Asian Crisis, Chilean GDP fell by 4.3% quarter to quarter. Returning to the initial GDP level took us one year. But, comparatively, the unemployment rate more than doubled between the beginning of 1998 and mid-1999, reaching almost 12% and staying high, around 9.5%, until 2005. The effects of the 2008–2009 crisis were very different. Economic activity fell, but less than in the previous episode, by 3% between the end of 2008 and mid-2009. The recovery was much faster and only two quarters after the downturn, by the end of 2009, GDP was comparable to the precrisis level.