samchain/econo-pairs-v1 huggingface dataset:
Thirachai Phuvanatnaranubala: Prospects for the Thai economy Speech by Mr Thirachai Phuvanatnaranubala, Deputy Governor of the Bank of Thailand, at the German-Thai Chamber of Commerce Annual Meeting, Bangkok, 18 February 2003. *  *  *  Ambassador Andreas von Stechow , Distinguished guests, Ladies and gentlemen, It is a pleasure for me to be here. My task today is to assure you, as one of our most important groups of foreign investors, that the Thai economy is doing well. And for this year my task is quite easy. 2002 was a good year for the Thai economy. Despite much uncertainty in the global conditions, the Thai economy made a robust recovery with stability, both on the internal and external fronts. You may recall that 2 years after the crisis, we started to have positive growth in 1999. GDP growth rates for 1999 and 2000 were strong at 4.4 and 4.6%. But the year after that, in 2001, the global downturn adversely affected our export and made growth for 2001 dip to 1.9%. However, we recovered in 2002 when growth for the first three quarters climbed back up to 4.9%. For the final quarter, our initial estimate is just over 5%, which would result in growth for 2002 the whole year at 5% as well. This is a good performance in the midst of slow growth in many parts of the world. So what has caused this? First, there was an export recovery. Export contracted as much as -7% in 2001.

In this respect, I can inform you that the government has made it very clear that they plan to consolidate the fiscal deficit to no more than 3.1% of GDP for fiscal year 2003. This is a good gradual reduction from 3.6% last year. The overall government debt is currently still at 54% of GDP, well under the cap of 60% announced in 2001. The rapid recovery of the general economy also helped boost tax revenue collection by as much as 10% in 2002, and looks set to repeat itself in 2003 as well, helping to narrow the budget deficit. Ladies and gentlemen, No one can plan for 2003 with absolute certainty. We are all following the news minute by minute, and even the best laid out plan for this year must contain several scenarios to cover for contingencies. But the one certainty I can assure you is that the macro economic policies in Thailand that aim for stability and sustainable growth will continue. BIS Review 8/2003  3
The stronger the increase in demand in relation to potential production, the greater the risk of prices and wage rising too fast, and vice versa. We must therefore analyse the entire economic outlook, despite the fact that inflation is our target variable. However, the Riksbank cannot affect potential production, i.e. how quickly the economy can grow without causing inflation. This is what structural policy can do. Structural reforms can promote both investments and labour supply and thereby have a favourable effect on the long-term growth capacity of the economy. A good structural policy can, for instance, contribute to a larger number of persons in various age groups choosing to work instead of remaining outside of the labour force. By improving the conditions for wage formation and price-setting, structural reforms can also contribute to increasing the economy’s capacity to adapt to different types of shock. Structural policy can thus be seen as a complement to monetary policy. The better the long-term growth capacity of the economy, the more  1  See the monetary policy memorandum “The Riksbank’s inflation target - clarification and assessment”, 4 February 1999, Reference no. 1999-00351 DIR. BIS Review 17/2003  1  quickly the actual growth rate can be without inflationary pressure arising, which would mean that the Riksbank had to react by raising the repo rate. Structural reforms are thus important from a welfare perspective. A high growth rate in the long term increases the possibility to pay high wages, extend welfare or invest more in infrastructure and education.

From having increased by almost one million during the years 1950 to 2000, they will now increase by only 70,000 over the coming fifty years. This will increase the demands on the older population to participate in the labour force. According to a study by Statistics Sweden, half of old-age pensioners will need to work to support themselves in year 2035. The age composition will also make tremendous demands on welfare services, which will further increase pressure on the labour market and the need for an increased supply of labour. The average costs for care and welfare increase drastically as people become older and public expenditure on pensions, medical treatment and care of the elderly can be expected to increase from approximately 18 per cent to approximately 23 per cent of GDP around the year 2030. When the long-term growth rate receives a weak contribution, or none at all, from the labour supply, the dependence on labour productivity will increase. Compared with other countries, Sweden has managed fairly well in this respect; it is productivity growth rather than labour supply that has created growth in recent years. Labour productivity increased particularly strongly during the 1990s, which was due to several factors. One important factor was that many companies with a low level of productivity were put out of business in connection with the recession at the beginning of the 1990s, while other companies chose to cut back on unqualified employees with simple work tasks.
The increased competitive pressure has been further amplified with the regulatory changes in the payments segment-PSD2, such as elimination of barriers to entry for third parties by providing access to data and accounts of the customers in the banks – so called “open banking". According to the research by PricewaterhouseCoopers 2, banks have very firmly moved from viewing open banking as a compliance exercise to an opportunity to compete, innovate, and deliver value and more than 33m people are expected to have signed up to open banking driven services by 2022. Against these background many fintech firms, that are not regulated entities, have launched new, differentiated and tailor made products, putting a significant pressure on traditional financial institutions. Very important factor that most probably will shape the future of the traditional banking industry is the way how traditional banks approach and embrace the financial innovations, be it directly on their own or through cooperation with new fintech companies. Not only will fintech companies try to behave like banks, but banks will also try to behave like fintechs. While some market observers estimate that a significant portion of banks’ revenues, especially in retail banking, is at risk over the next 10 years, others claim that banks will be able to absorb or outcompete the new competitors, while improving their own efficiency and capabilities.

The most frequently mentioned motives of the banks that have formal partnership with fintech firms or develop their own solutions for usage of new technologies included attracting new or maintaining the existing customers as well as cost savings. Among the technological solutions which are already in use or are in testing phase, most of the banks cited cloud services, usage of biometric properties for client identification purposes and using of big data analysis for credit scoring. Currently, the banks do not have experience neither with algorithms used for the purpose of investment advice or decisions nor with any DLT based solutions. The regulators and policymakers also face challenges. Rules and regulations should keep pace with innovation, providing supportive environment but also adequately assessing and mitigating potential risks. Consequently, to apprehend the full benefits of digitalization, the authorities need to reach across traditional policy reluctances and across different levels of institutions, and develop a unified approach to policymaking. The Financial Stability Board stocktake of regulatory approaches to fintech finds that majority of jurisdictions surveyed have already taken or plan to take regulatory measures to respond to fintech. The scope and scale of changes or planned changes vary substantially, depending, among other things, on the relevant size and structure of domestic financial and fintech sectors and the flexibility already provided by the existing regulatory framework. An example of innovation in the legislative area has been set up by the European Union with the revised Payment Service Directive (PSD2).
Increased reserves, enhanced stability, progress in the implementation of the plan to achieve a fiscal surplus in coming years, and buybacks of Treasury foreign debt in the secondary market have silenced the voices that prognosticated sovereign default. These factors contribute to the assessment that it is now considered safe to start removing capital controls on outflows and that the conditions have improved markedly for Treasury foreign borrowing, which could pave the way for other domestic entities. The Icesave referendum taking place this coming weekend could, of course, affect these prospects. If the “yes” vote carries the day, plans for capital account liberalisation and Treasury borrowing will proceed as currently planned. If the Icesave agreement is rejected, however, there are indications that two major credit rating agencies will decide to downgrade  BIS central bankers’ speeches  1  Iceland’s sovereign debt to sub-investment grade. This would impede foreign borrowing and delay capital account liberalisation, although it is not clear how strong or persistent these effects would be. The financial system is at a crossroads as well. The first phase of financial system reconstruction is largely complete. Iceland’s banks have defined balance sheets, private sector debt restructuring is underway, and changes have been made in order to address the most obvious flaws in the regulatory framework governing domestic financial institutions. A number of tasks remain unfinished, however, as regards establishing a stable, effective financial system.

It is not yet possible to state with certainty that financial institutions could fund themselves without the support of capital controls and the declaration of a blanket deposit guarantee. In this context, it is critical to enhance the functioning of the financial markets, which are important for trading, funding, and risk diversification – particularly the foreign exchange and equity markets. It is also essential that financial institutions and other entities re-establish their access to foreign credit markets. A further task is to formulate policy regarding the nature, size, and international relations of the Icelandic financial system. It is no less important to formulate policy concerning the tools and institutional structure for financial stability: the financial crisis has taught us that assessing systemic risk is key, as are sound arrangements for the application of tools to mitigate it. The final crossroads is faced by economic policy, as a result of the changes I have described. In short, it can be said that the tasks at hand are shifting from the achievement of stability to promoting growth, and from crisis management to longer-term development. In terms of monetary policy, this can be seen in the Monetary Policy Committee’s shift of its bias from monetary easing to neutral. This does not mean that interest rates cannot be lowered further, but it does mean that because inflation appears to have hit bottom, economic recovery has begun, and the effective policy rate is closer to equilibrium than before, it is not as clear what direction upcoming interest rate decisions will take.
Court as a whole will set the Bank’s strategy, determine its budget and in the hallowed language of the 1946 Bank of England Act - “manage the affairs of the Bank”. In this sense we remain a unitary board. But, under the present Bill, the sixteen non-executive members, as a group, will be given the specific duty of reviewing the performance of the Bank, including the conduct of its financial affairs, and including the procedures of the Monetary Policy Committee, satisfying itself inter alia, that the Monetary Policy Committee takes proper account of economic conditions in the various regions of the country. The prospective non-executive appointments to Court announced last week in fact include increased representation from the regions, with members from Scotland, Wales and Northern Ireland. The non-executives will have their own chairman, appointed by the Chancellor. The first chairman will in fact be Dame Sheila Masters of KPMG, currently Vice-President of the Institute of Chartered Accountants of England and Wales. They will be required to report on the Bank’s BIS Review 18/1998  -2-  performance to Parliament in a separate section of the Bank’s Annual Report. The Bank’s Remuneration and Audit Committees will, as now, be made up entirely of non-executive members of Court. All of this is in the spirit of the most modern principles of corporate governance. The Bank’s finances A second important change relates to our finances.

Such involvement would not normally involve the central bank in significant financial risk. But in more difficult - and mercifully rare - situations, where the failure of one institution could bring down other - otherwise viable - institutions, the central bank may need to consider acting in the role of “lender of last resort” to the failing institution, against poorer quality, less liquid, assets which might expose the central bank to financial loss. The key phrase here, of course, is “where its failure could bring down other otherwise viable - institutions”. The central bank safety net is not there to protect individual institutions from failure. It is there to protect the stability of the financial system as a whole. In the absence of a serious systemic threat, the right course would normally be to allow the institution to fail. If any institution felt that it could rely on being bailed out if it ran into real difficulty, that, too, would introduce “moral hazard”, encouraging excessive risk-taking and financial fragility in the system as a whole. There can be nothing automatic about “lender of last resort” assistance - and, when it is provided, it should always be on the most onerous terms that the borrower can bear: it is not provided to protect the shareholders who should be looked to first. Nor is it there to protect the management.
10  Microsimulation exercises conducted by Banco de España staff confirm these trends for the overall corporate sector in 2020. According to these exercises, around half of the companies are expected post losses this year. There is, however, substantial heterogeneity within the corporate sector. SMEs and, especially, firms in sectors more exposed to the shock, such as hospitality services, leisure and motor vehicles, will be significantly more affected. The share of firms with a high debt-to-asset ratio, proxied as net debt over net assets5 above 0.75, is expected to rise by around 7 pp. This increase is non-negligible but is relatively modest given the size of the shock. This result is partly driven by the deleveraging process of the corporate sector in the years in the run-up to the crisis, which brought this ratio to moderate levels in most cases. Companies operating in sectors more exposed to the shock will see a more significant worsening in their solvency situation, with an increase in the share of firms with a high debtto-assets ratio of more than 20 pp, in some cases. In terms of the debt-to-earnings ratio, the share of firms in a more vulnerable position will increase more significantly due to the sharp reduction in earnings. In particular, the percentage of firms with a net debt of more than 10 times their earnings, or with positive net debt and negative earnings, will increase by over 15 pp. In those sectors hardest hit by the pandemic, this figure will increase by more than 40 pp.

1  The impact of the COVID-19 crisis on the Spanish economy  To put the discussion on corporate sector risks and vulnerabilities in context, I will first briefly review the impact of the COVID-19 crisis in Spain. The Spanish economy has been one of the hardest hit by the pandemic among advanced economies, with GDP experiencing unprecedented quarter-on-quarter declines of 5.2% and 17.8% in the first and second quarter, respectively. In the third quarter, economic activity is expected to have partially recovered, with the latest information pointing to a weakening in growth momentum since the end of July as a consequence of the worsening of the health crisis over the summer months. Looking ahead, the Spanish economic outlook continues to be highly dependent on epidemiological developments, about which much uncertainty remains. In any case, the latest Banco de España forecasting exercise points to a large GDP fall in 2020 as a whole, which could range between 10.5% and 12.6% depending on how the pandemic evolves and, therefore, on the severity of the measures needed to contain it. In either of the two scenarios considered, this contraction in GDP would be followed by a fairly dynamic recovery in 2021 and 2022. This recovery, however, is expected to be incomplete, meaning that, by the end of the forecasting period, Spanish GDP would still be below its prepandemic level. 2  Firms’ liquidity risks and the economic policies implemented to tackle them  Let me now discuss the main risks that firms are facing in this challenging environment.
David Carse: Anti-money laundering and the role of supervision Speech by Mr David Carse, Deputy Chief Executive of the Hong Kong Monetary Authority, at the Hong Kong Institute of Bankers, Hong Kong, 23 August 2002. *  *  *  Ladies and Gentlemen,  Introduction I welcome the opportunity to talk to the Institute on the subject of the fight against money laundering and the role that supervision plays in this. This is a good time to speak on this subject since we are currently reviewing our 1997 anti-money laundering guideline in the light of the latest developments in this area. I will use this speech to highlight some of the issues that we are addressing. It is also a useful occasion for me to remind the bankers gathered here today how important it is to combat money laundering. This should really go without saying and I do not intend to dwell on it too much. The key message is that authorized institutions (“AIs”) should view anti-money laundering systems as an essential means of self-preservation - and not as a nuisance or an unnecessary expense that is imposed upon them. The events of 9/11 have heightened the international concern about money laundering. There is less and less patience with jurisdictions, and their banks, that do not comply with the international standards laid down by bodies like the Financial Action Task Force (“FATF”). The FATF has begun to “name and shame” jurisdictions that it regards as non-cooperative countries and territories (“NCCTs”) in tackling money laundering.

Barbro Wickman-Parak: The economy and the labour market Speech by Ms Barbro Wickman-Parak, Deputy Governor of the Sveriges Riksbank, at Skandinaviska Enskilda Banken (SEB), Stockholm, 29 April 2010. *  *  *  Sweden’s GDP fell by almost five per cent in 2009, compared with the previous year. We need to go back as far as the 1940s to find an individual year with a correspondingly large fall in growth. The large demand shock that followed in the wake of the financial crisis had an unavoidable and drastic impact on production and employment. It has been possible to alleviate these effects, but not to prevent them, despite forceful monetary policy measures and expansionary fiscal policy. Normally, changes in employment and unemployment occur two quarters after changes in production. This time, however, it appears as though the upturn in employment has already begun and unemployment has stopped rising, which is surprisingly early given the large fall in GDP. But unemployment is still high, and we are expecting a slow recovery in employment in the coming period. During the past three months unemployment has been around 9 per cent as a share of the labour force. Today I intend to talk about developments in the labour market in Sweden. I will begin by describing how employment usually varies over the business cycle and then discuss what is different this time. I shall conclude by discussing how we Executive Board members viewed developments in the labour market at our monetary policy meeting last week.
While many bankers did place profit ahead of the interest of the customers they serve, it is at the same time increasingly true that customers are also treating banking services more as a commodity. This means that customers shop around for the best bargain in town. They hop from one bank to another without regard to the value of any long term relationship between bank and customer. This shift of mindset from relationship banking to transactioncentric banking is another change that weakens the alignment of interest and of trust between bankers and customers. The introduction of deposit protection schemes in many parts of the world has been motivated by good intentions, but it does produce the side effect of moral hazard in that customers no longer need to care overly much about the trustworthiness of a bank because their deposits are protected by the schemes. Consequently, customers would tend to be drawn to the bank offering the highest interest rate on deposits or returns on investment products. Many customers would also opt for very large banks, regardless of their actual financial strength, in the belief that these banks are “too big to fail”. Unfortunately, this belief in “too big to fail” was proved right during the GFC as some governments in advanced economies spent billions of dollars of public money to bail out some of the largest failing banks and financial firms. 10.

Among our activities, we monitor economic performance on a monthly basis, we tap into the insights of the members of our Small Business and Agriculture Advisory Council and Upstate Advisory Board, we have constructed a consumer credit panel that allows us to better understand the financial condition of homeowners and students, we have developed a “Regional Mortgage Conditions” dataset and other housing tools at the county and zip code level to ensure that policymakers and counselors are well informed, and we conduct a biannual poll of small businesses to understand their credit needs and availability. Interestingly, our most recent poll, released in May of this year, shows improvements in small businesses’ ability to get credit throughout the region, though it remains a major growth challenge for these types of firms. As you can see, we have a lot to keep us engaged with the region. Much of this information can be found on our website, which I would invite you to visit and use as a resource. Now, I’d like to review recent developments in the local and national economies, and at the end of my talk will be happy to answer any questions you have. As always, what I have to say reflects my own views and not necessarily those of the Federal Reserve System or the Federal Open Market Committee.