samchain/econo-pairs-v1 huggingface dataset:
The Singapore economy is facing a demographic double-whammy: the effects of low birth rates over the last two decades combined with the entry into retirement of the baby boom generation. •  Singapore’s total fertility rate has been very low, at about 1.4 over the last 20 years. •  Baby boomers entering the “65 & above” age group, where significant numbers retire and leave the workforce, will surge by 65% during 2011–2020. 2  BIS central bankers’ speeches  The overall impact of this double-whammy is unmistakeable: Singapore’s resident labour force will start to shrink over the next few years, even after taking into account the inflow of net migrants. Singapore had previously supplemented its resident labour force with foreign workers. Total labour force growth averaged 3.7% per annum in the last decade (2001–2010); almost half of which was contributed by foreign workers. This is unsustainable. Foreigners (excluding foreign domestic workers) already account for about one-third of the total labour force in Singapore. Singapore is heading towards a demographic cliff. It cannot be avoided. The question is whether the economy achieves a soft landing or a hard landing. If we restructure our economy and raise our productivity, Singapore can grow at a slower but more sustainable pace with a moderate increase in costs and prices. If we do not, costs will continue to escalate, competitiveness will erode, and growth will dip sharply amidst higher inflation. The transition to productivity-led growth will not be easy.

Why macroprudential policy The conventional thinking pre-crisis was based on two assumptions: •  First, asset prices did not matter much. Central banks therefore focused on consumer prices and placed less emphasis on asset prices. •  Second, if risks in individual financial institutions were well controlled, the financial system as a whole would generally be safe. Regulators therefore focused on the safety and soundness of individual institutions and paid less heed to systemic risk. The collapse of the real estate markets in America and Europe, the breakout of the Global Financial Crisis, and the contagion of risk to seemingly sound financial institutions – against a backdrop of relative macroeconomic stability – showed both assumptions to be wrong. Thus was born macroprudential policy – which focused on the health of the financial system as a whole and its interactions with the macroeconomy, particularly developments in liquidity, leverage, and asset markets. In many emerging market economies, macroprudential policy has become an important complement to monetary policy to help secure economic and financial stability. In Singapore, the focus of macroprudential policy has been to promote sustainable asset prices. Asset prices matter for four reasons. First, volatile asset prices pose a risk to financial stability, especially when a run-up in asset prices is financed by easy credit and accompanied by a build-up in leverage in the economy. When asset prices correct, financial institutions’ vulnerability to default and loss increases. Second, asset price inflation is as distortionary as consumer price inflation.
Besides, slowdown in the Chinese economy may contribute to higher volatility of the Chinese Yuan; the movements of which can influence movements of the Baht and other currencies in the region. Against this backdrop, short-term slowdown in the Chinese economy needs to be closely monitored. (3) Geopolitical risks in many parts of the world remain elevated. These include long-standing issues such as the US-North Korea relations, Middle East conflicts, and development on Brexit. In addition, new sources of fragilities continue to emerge, such as the recent disputes between India and Pakistan and Venezuelan political tensions. While some of these conflicts may not be directly related to the Thai economy, the presence of geopolitical risks could introduce bouts of uncertainties and impair sentiments, leading to capital flow volatility in Thailand and other emerging market economies. (4) Lastly, on the domestic political front, given the unofficial result of our general election over the weekend, uncertainties remain on how a new coalition government is to be formed. The result of which will play a big part in determining major government policies going forward. Ladies and gentlemen, Talking only about short-term risk factors may curb the appetite of many in audience tonight. So, let me now turn to the long-term perspective on the Thai economy. Despite the risk issues highlighted, I am confident that the Thai economy possesses the resilience to support long-term growth and cushion against these risk factors.

The Thai Economy: The Current State and the Way Forward Speech by Dr. Veerathai Santiprabhob Governor of the Bank of Thailand Japanese Chamber of Commerce (JCC) Thailand Dinner Talk 27 March 2019 JCC Board of Directors, JCC members, Distinguished guests, Ladies and gentlemen, Good evening to you all, Thank you very much for inviting me once again to give a talk at the Japanese Chamber of Commerce Thailand. This event is a great opportunity for us all to exchange our views and ideas on the Thai economy and its prospects as we move forward into the year 2019. Your opinions and feedback are undoubtedly valuable to policymakers, like myself, and I look forward to a very engaging session tonight. Japan and Thailand have been in long-standing diplomatic relations for more than 132 years—and even much longer from a trade perspective, dating back to as early as 1600s. Time has shown that while the Thai economy has encountered many challenging transitions, business partnerships between Japan and Thailand have continued to remain strong, fostering economic opportunities for both our nations throughout the present day. As you all know, this year is a very special one to all of the Thai people as well as the Japanese people as both our countries will hold national celebrations for our respective head of state in early May—to celebrate and honor the coronation of His Majesty the King Maha Vajiralongkorn and the ascension of Crown Prince Naruhito to the Imperial throne.
It should be recalled that the ECB was the first central bank to adopt such a procedure, which provides a unique opportunity to fully explain and comment monetary decisions immediately. On the other hand, the Governing Council of the ECB has chosen not to publish the minutes of its meetings. The publication of these minutes would indeed present some drawbacks: - first, governing council members may “speak for the minutes” when these are very detailed, while, when they are not detailed, may not convey more information than a plain communiqué; - second, the publication of the minutes might also create more difficulties for moving from initial positions to new ones in the light of the arguments developed; - finally and most importantly, in the case of the euro area, the analysis of the votes could be read and interpreted as reflecting national interests or preoccupations, which would be misleading and could jeopardise both the independence of the members of the Governing Council and the credibility of our decision-making processes. 1.3. The Eurosystem is based on operational decentralisation The third imperative, operational decentralisation, is an essential feature of the Eurosystem. According to this principle, monetary policy decisions taken in a centralised fashion by the Governing Council of the ECB are implemented in a decentralised way by the national central banks.

All in all, if, as we are often emphasizing during this crisis, the post-crisis reforms have mitigated the risks to the sector’s financial stability, the implementation of the resolution framework has contributed to strengthening the banking sector in a crucial manner. Identifying gaps for a more robust resolution framework in the EU Accepting that we have made great advances in this field, we have to acknowledge also that there is still some way to go before we can truly assert our journey is over. First of all, it is important to recall that the European resolution framework is one of the three pillars of the Banking Union and it is essential to develop the third one – the much needed European Deposit Insurance framework – to ensure the resilience and well-functioning of this Banking Union. As this matter goes beyond the scope of this conference, I will rather concentrate on the second pillar of the Banking Union. So, entering into this resolution pillar, there are certain areas on which both policymakers and practitioners should concentrate, and it is precisely some of these gaps that I want to discuss today, namely: -  liquidity in resolution, the resolution approach to small and mid-sized institutions, avoidance of unlevelled playing fields, and the adequate treatment of systemic situations. The first issue to be addressed, as it affects all institutions alike, is the provision of liquidity to a bank in resolution.
2 The target horizon and real stability considerations When the inflation target was announced in January 1993, the Riksbank also formulated a tolerated deviation interval of ± 1 percentage point. One purpose of this was to illustrate that it is not suitable or even possible for monetary policy to maintain inflation at exactly two per cent all of the time. Changes in the policy rate, known as the repo rate in the Riksbank’s case, are a blunt instrument with regard to steering inflation in the short term. It takes time before interest rate changes have an effect and monetary policy must therefore be based on forecasts of the inflation rate a couple of years ahead. In addition, there is uncertainty over how the economy functions. It is therefore impossible to parry all shocks that affect the economy and so, temporary deviations from target will arise. The tolerance interval also provides scope for temporary deviations from target that may be justified with reference to the stability of production and employment. Let us say that a shock occurs, which makes inflation deviate from target. By not aiming to restore inflation to target as quickly as possible, scope is created to dampen fluctuations in, for instance, growth and employment. However, for the inflation target to retain its credibility, the deviations cannot be permitted to become too large or to last for exceedingly long periods.

9 Finally, our decision to publish our own forecast for the repo rate is of course a further step towards greater openness, clarity and more efficient communication. 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 In conclusion, let me note that it is difficult to say anything else than that the changeover in economic policy in Sweden at the beginning of the 1990s has on the whole been successful. 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. The consolidated public finances are another very important factor. 6  Chapter 1 of Blinder, A. S. (2004), The Quiet Revolution – Central Banking Goes Modern, Yale University Press, contains a discussion of political and economic arguments in favour of transparency in central banks. 7  See, for instance, Eijffinger, S. and P. Geerats, (2006), “How transparent are central banks?” European Journal of Political Economy, vol. 22, 1-21. 8  See Leeper, E. (2003), ”An Inflation Reports Report”, Sveriges Riksbank Economic Review, 2003:3, 18-42, for an evaluation of the Riksbank’s Inflation Reports.
One explanation could be that when property owners sell rental properties for conversion to tenant-owner associations, they take a larger part of the price difference between the two property types. While the utility value principle has certainly contributed to an evening out of rent levels over the economic cycle, it has also contributed to making it more profitable to allow apartment blocks of rented apartments to be converted to tenant-owner apartments than to sell them to another owner and continue to run them as rental properties. The second problem is that the regulation of rents, in connection with a number of other institutional factors, is holding back new production of rental properties where there is a demand for housing. The way prices on apartment blocks develop in future will depend on the supply and demand situation, as well as on regulations. The total growth in demand is steered mainly by population growth, while the distribution of demand around the country is steered by where growth occurs. In general, housing construction has been much lower during the 1990s than in previous decades. According to the National Board of Housing, Building and Planning’s most recent nation-wide forecast for the number of apartments in apartment blocks where construction has begun, just under 11,000 apartments had been started last year and just under 13,000 will be started this year, from a level of just over 9,000 in 2000. This can be compared with almost 42,000 new apartments in apartment blocks begun in 1990, immediately prior to the property crisis.

In addition, the experiences of the financial crisis have also led to a change in behaviour in the financial sector. The financial situation appears stable and the banks' increase in lending is not so high that it can be interpreted as greater risk-taking in the financial sector. Approximately SEK 420 billion of the total lending by mortgage institutions comprises loans to purchase apartment blocks. This is a large percentage, almost 40 per cent of the total lending by these institutions. However, the figures on lending during the 1990s show that both the percentage and the volume of lending in this area is declining. Statistics provided by the mortgage institutions with regard to gross flows of loans for various purposes with apartment blocks as collateral confirm this picture. In 1991 new building was the reason for most of the lending, while renovation and extensions accounted for only a minor part. During 2001, on the other hand, new building accounted for a small part, renovation and extensions for even less, while the largest percentage was for other purposes. Why is this? Naturally, it is related to the way the sub-markets function. The market for single-family dwellings functions well with buyers and sellers agreeing on a market price when houses are sold. Once a single-family dwelling has been built, the market functions well without any major disturbances from restrictions or regulations.
29.11.2016  The challenges of the European resolution framework Closing address of the Conference “Corporate governance and credit institutions’ crises”, Mercantile Law Department, UCM (Madrid) Fernando Restoy Deputy Governor  1 Introduction  Let me begin by thanking the organisers for the invitation to close this conference on corporate governance and credit institutions’ crises staged by the Law Faculty of the Madrid Complutense University. It is always a pleasure to return to the University where I was an undergraduate and a lecturer for several years, even if it is to a different Faculty from mine back then. The recent financial crisis, like others before it, has been marked by the use by national authorities of sizeable public funds assigned to preventing the bankruptcy of numerous credit institutions in situations of non-viability. To minimise systemic risk and prevent a serious deterioration in financial stability, substantial State aid in the form of capital was granted across the EU from 2008 to 2014. In countries such as Spain, Belgium and United Kingdom, the figures were around 5% of GDP, in Germany and the Netherlands between 2% and 3.5%, while in Greece and Ireland aid was in excess of 20% and 30% of GDP, respectively. Given the severity and high public cost of the financial crisis, the response by the international authorities has been most resolute. First, solvency requirements have been appreciably strengthened, which will increase the resilience of the financial system and, therefore, reduce the likelihood of similar crises in the future.

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2  BIS Review 69/2002  10  reached. Finally, it is also to be noted that an essential aspect of an eventual Euro-Mediterranean FTA is expected to be an obligation to achieve equivalence in standards. At this stage, therefore, a growth strategy that relies on closer links with these countries appears neither plausible nor likely to provide adequate opportunities in terms of market access. The only viable alternative thus seems to be to forge stronger ties with the EU, with whom Malta is already closely integrated through trade and investment. The EU accounts for more than half of Malta’s trade 11 in goods and for around 80% of incoming tourists. The EU is equally important as a source of FDI, 12 accounting for some 43% of the total in 2000. This suggests that strengthening the existing relationship with the EU is more likely to produce early results than attempting to develop ties with other regions starting from a very small base. Malta’s relationship with the EU - alternative scenarios Malta could, for example, retain, or attempt to upgrade, the existing Association Agreement. As it stands, this agreement is very narrow in scope, focusing on industrial goods to the exclusion of most agricultural products. In addition, it is severely limited by a set of rules of origin whereby local exports only benefit from preferential access to the EU market if the percentage of the value of the product that originates in Malta exceeds a minimum threshold.

The implication is that in order to reap the full benefits of the policy reforms currently under way, Malta does not only need to integrate further internationally, but has to do so through a structured approach that seeks to exploit potential synergies with other economies. The question then arises, “What kind of regional arrangement and with whom?”. Malta’s potential partners for regional integration Traditionally, partners to regional integration arrangements exhibit strong trade ties based on complementarity in terms of resource endowments and geographical proximity, as well as a common historical and cultural background. These criteria limit the scope for integration between Malta and a number of outlying European countries such as the transition economies of Eastern Europe and the EFTA countries. In fact, Malta’s commercial links with these countries are weak, with only a few economic sectors that could be of potential interest to both parties. In 2001 Malta’s exports to EFTA countries represented less than 0.5% of its exports to the European Union (EU). It follows that the EU and the countries of North Africa, many of which are participating in the Euro-Mediterranean Partnership known as the Barcelona process, are more likely to be potentially viable regional partners for Malta. As far as the latter countries are concerned, there is no doubt that they have made considerable progress in recent years. Most of them, however, require more time to be able to take full advantage of their potential.
Another simple way of seeing it is to think that the individual will want to borrow to acquire this good, even if her income is very low, presumably because she always expects to have the funds available in the future to repay. As we will see, however, it is possible that multiple equilibria exist, with low and high output, as a result of coordination failures. Uncertainty and the value of waiting Decision making under uncertainty has always been a complex thing to study. Often to simplify, we turn to quadratic specifications in order to use certainty equivalence. Surely this  1  This exercise is based on an MIT class exercise which, despite having saved my notes and after a number of inquiries with friends, I have been unable to find. The original model was somewhat more complex because it assumed strategic interactions among firms, and here the demand is only taken as given. More formal models were developed in Cooper and John (1988). For a thorough review of this literature, see Cooper (1999). 2  Note that because this is only an illustration, many aspects were left out of the analysis. In this case we are assuming that there is some friction in the price-setting mechanism that prevents firms from selling all they want at a given price. This friction may come from firms deciding how much to produce before they know the demand, which would lead us to incorporate the producers’ decisions to this story. Analytically, however, it would not change much.

13.02.2020  Thoughts on global financial stability and the European Capital Markets Union Annual Spanish Capital Markets Conference/AFME (Association for Financial Markets in Europe) y AEB (Spanish Banking Association) Pablo Hernández de Cos Governor  Good morning. Let me start by thanking José María Roldán, Chairman of the Spanish Banking Association (AEB), and the Association for Financial Markets in Europe (AFME), today represented by Rick Watson and Richard Hopkin. It is they who have organised this 11 th edition of the Spanish Capital Markets Conference and invited me here today. It is my pleasure to share with you some thoughts on matters related to the environment in which financial markets operate. In my address today, I shall first give a broad overview of the main risks to global financial stability and the various policy actions that policy makers could consider implementing to mitigate them. Secondly, I will discuss recent developments and the way forward regarding the European Capital Markets Union. The state of play of global financial stability  The global economic outlook worsened during 2019. Indeed, global GDP growth in 2019 is expected to be the lowest since the international financial crisis; in addition, the balance of risks to this growth remained tilted to the downside, mainly as a result of the continuing high level of geopolitical uncertainty. The downward revision of economic forecasts over the past year was across the board; in particular, however, it affected the euro area and emerging market economies.