samchain/econo-pairs-v1 huggingface dataset:
Banks with CDO exposure have already made full provisioning and recognized losses in line with IAS 39, and presently all sub-prime related CDOs have been unwound. Thai banks also have very low exposure to investment banks like Lehman Brothers and have no investment in US GSE securities. In all, total exposure of Thai banks to foreign investment is about 1.2 percent of total assets, about half of which are sovereign assets. Having said this, we are very mindful of the risk from second round effect of slowdown in global growth and domestic growth, which can affect credit, market, as well as liquidity risk. To handle this, the Bank of Thailand has been holding dialogue with top managements of banks to discuss financial stability outlook, and have conducted stress-test to ensure that banks are alert to these risks and are able to manage them to ensure adequate capital and liquidity. We will continue to hold candid and two-ways dialogues with all the banks operating here to ensure that we can manage these challenges and dynamics of the global turmoil. Ladies and gentlemen, I would like to conclude with some lessons learned so far to increase our immune system going forward. First, growth must be based on strong macroeconomic foundation, with prudent fiscal and monetary policy, flexible policy options, and strong external positions.

On this note, I must stress that under-investment in human capacity and system of mid- and back-offices, as opposed to fronts, could prove costly. Building the capacity of mid- and back-offices may require in-house investment, as recruitment from market may not be as easy as front-office, but possibly more important, a change in management culture, which can only come from leadership of top management. Ladies and gentlemen, For those more conservative banks or financial markets, not affected in this first round hit, I also say that they cannot afford to be complacent. As in risk rating framework, it is neither the risk exposure nor risk management ability that determines bank’s riskiness, but the danger lies in the gap between the two. Therefore, banks, though engaged in less complex products would still be at risk if their ability to manage such risk is lagging behind their products. Indeed, the gap between risk exposure and management capacity becomes more important in a very volatile macroeconomic and financial environment. This is since such a gap may possibly emerge or expand undetected, given the dynamics of market events. Even with plain vanilla products, the exposure can become complex due to the number of positions used for different hedges and at different strikes. This is not to mention the complex layers of counterparty, with counterparty risk and concentration risk. At such time as this, caution is vital, because even conservative banks could be exposed to market risk from domestic assets as well as currency risk.
42  A small number of financial market commentators had opined that use of the tri-party repo infrastructure for the ON RRP facility would make it harder for market participants to borrow the Federal Reserve’s Treasuries in securities lending to facilitate settlement, and therefore result in less liquid Treasury markets. However, use of the Federal Reserve’s securities lending program has been stable since liftoff, suggesting that the design of the ON RRP facility has thus far not contributed to any increase in the scarcity of specific Treasury collateral. 43  If the total amount of propositions received is less than or equal to the amount of available securities, awards are made at the specified offering rate to all counterparties that submit propositions. In the event that the value of propositions received exceeds the ON RRP’s capacity, awards are made at the rate at which the capacity was achieved (the stop-out rate), with all propositions below this rate awarded in full and all propositions equal to this rate awarded on a pro rata basis. The stop-out rate, which can be any value at or below the specified offering rate (including a negative rate), is determined by evaluating all propositions in ascending order by submitted rate up to the point at which the total quantity of propositions equals the overall size limit. The ON RRP FAQs provide more information on the auction mechanism.

2  BIS central bankers’ speeches  This leads me to my final point, which is, how the Bank of Thailand plans to deal with these potential risks on both the external and internal fronts. For external risks, recognizing that sizeable capital inflows could be out of line with real developments, and that spillovers can persist in the near future, we need to closely monitor the external environment to capture these risks. It is also important to improve Thailand’s capacity to cope with international capital flows by developing a systematic capital flows master plan, and promoting the use of financial hedging instruments and the foreign exchange risk management capability of the private sector. The Bank of Thailand also stands ready to implement emergency measures of varying degrees to deal with volatile capital movements as appropriate. In addition, to prevent these inflows from causing economic and financial instability, the Bank of Thailand has prepared a toolkit of macro prudential measures to ensure the soundness of the macro economy and the financial sector. Measures to prevent overheating in particular segments of the property market are one example. Ladies and Gentlemen, It would be uncommon for a central banker not to mention inflation and monetary policy in any speech. I would therefore like to emphasize that the Bank of Thailand’s monetary policy aims to achieve domestic price stability and tighten to more normal levels consistent with Thailand’s macroeconomic fundamentals. Price stability helps foster a stable and predictable macroeconomic environment conducive to investment and growth.
Mervyn King: The inflation target ten years on Speech by Mr Mervyn King, Deputy Governor of the Bank of England, delivered to the London School of Economics, London, 19 November 2002. The references for the speech can be found on the website of the Bank of England. * 1. *  *  Introduction  Ten years ago, in this very room, Robin Leigh Pemberton (then Governor, now Lord Kingsdown), delivered the first LSE-Bank of England Lecture. It was entitled “The Case for Price Stability”. In the twenty-five years prior to that lecture, prices had risen by over 750%, more than over the previous two hundred and fifty years. So the audience on that evening in November 1992 had grown up in a world in which rapidly rising prices appeared inevitable. They were the inflation generation. To them price stability seemed remote. Inflation was simply taken for granted. But that LSE-Bank of England Lecture coincided with the introduction of a new monetary framework the inflation target. Since then price stability has become a reality. Over the past decade inflation has averaged 2.5%, and has been no lower than 1.5% and no higher than 3.3% Alan Greenspan defined price stability as when “expected changes in the average price level are small enough and gradual enough that they do not materially enter business and household decisions.” With inflation expected to remain close to 2.5%, it is no longer a material concern to families and businesses in this country.

Examples of how the option value to waiting can lead to significant increases in required rates of return are given in Dixit and Pindyck (1994). BIS Review 68/2002  9  Chart 6 Consumption and deflation in Japan, 1985-2002  Note: Inflation is measured using the consumer price index excluding foodstuffs. The overnight interest rate is the nominal overnight uncollateralised call rate. Source: Thomson Financial Datastream. (iii)  Aversion to long-term contracts and excessive resources devoted to hedging inflation risks. As we have seen, high inflation goes hand in hand with greater uncertainty about future inflation. Inflation is, therefore, associated with a positive risk premium to compensate investors for that uncertainty. The longer the time horizon, the greater the risk premium is likely to be. That discourages long-term contracts and interest rates in such contracts will often depend upon future spot interest rates. Floating-rate mortgages are a good example. With a floating-rate mortgage the borrower is exposed to the risk of sharp fluctuations in the proportion of income that is devoted to debt service, as many households in Britain still remember from the late 1980s when interest rates doubled to 15%. Fixed-rate mortgages eliminate that risk, but at the cost of introducing a new risk: the real value of the outstanding debt may change relative to the value of the house. John Campbell and João Cocco (2002) have suggested that a superior contract would be a fixed-rate mortgage where the principal was index-linked. That would reduce both income and capital risk.
Another way to promote creativity is to create a facilitative environment for public private partnerships provides the best prospects to drive innovative strategies. With advances in technology, the scope and potential for such partnerships have increased exponentially. We see this in partnerships between mobile network providers and financial institutions in sharing data which can increase financial inclusion among borrowers that do not have a prior credit history. Partnerships that leverage on e-marketplaces and social media platforms also have enormous potential to increase the reach and development impact through the deployment of innovative strategies. Enhance corporate governance For many institutions, the ability to significantly increase their impact is closely tied to issues of corporate governance. Narrowly defined financing targets and links between business and Government have led to suboptimal resource allocations, increased moral hazard, and market 3/4  BIS central bankers' speeches  distortions. These can pose a drag on the economy and the overall development agenda. Broader confidence can also take a hit on suspicion of undue preference in extending financing, making it more difficult to mobilise resources for development. The critical appraisal and monitoring functions are largely shaped by the strength of its corporate governance. These require competent and professional boards to be installed, clear rules of engagement with their stakeholders, and stronger performance management standards that are aligned with development outcomes.

The current unusual circumstances are one of the main drivers for the prolonged boom in the local property sector. The risk of over-heating in the property sector to financial stability in Hong Kong is no smaller than that seen in 1997. We should note in particular that while mortgage rates were generally over 10% in 1997, after the burst of the property bubble, US interest rates have fallen, and mortgage rates in Hong Kong have spiralled down reaching about 2% in 2004. The situation we faced now is just the opposite. Mortgage rates are around 2%. And, even if the low interest rate environment were to remain until 2015 as anticipated by the US Federal Reserve, the US interest rates are bound to head back to more normal levels. Will mortgage borrowers in Hong Kong then be able to withstand the impact of interest rate hikes and property price falls? For example, under a 30-year mortgage, even though the borrower will be able to enjoy a low interest rate in the first two years, the repayment burden could become much heavier as a result of interest rate hikes in the years that follow. This could have serious consequences for the well-being of those families in the coming years. Therefore, I hope that the public will be cautious and should not underestimate the risks that rising interest rate could have on repayment ability, asset prices and the overall economy in Hong Kong. 2  BIS central bankers’ speeches
BIS central bankers’ speeches  11  16  In July 2015, the FOMC announced that changes in administered rates would go into effect on the day after its policy decision. Otherwise, the intraday timing of a policy change could result in various operations being conducted with inconsistent settings. 17  ON RRP is currently offered to a broad set of counterparties; these counterparties make up a fairly large proportion of the lending community in overnight money markets. By offering this large group of counterparties an alternative, risk-free investment option, ON RRP should improve lenders’ market power and help keep money market rates near or above the ON RRP offered rate. Even if money markets were perfectly competitive, ON RRP would likely still be effective at supporting the floor provided by IOR, for example through addressing segmentation between secured and unsecured money markets. 18  The preservation of enough activity in the federal funds market to maintain the viability of the effective federal funds rate was one component of this. 19  A final operational change to improve the transmission of IOR into market rates was a revision to the interest calculation methodology that became effective in July 2015. As originally implemented, interest on excess reserves (IOER) was paid on each bank’s average balances over a two-week maintenance period, at the average interest rate.

A study by the Carbon Tracker Initiative estimates that as much as $ billion of coal assets across Southeast Asia can no longer yield the expected economic return in the next decade due to tighter environmental policies and competition from cheaper renewable energy. Conversely, as climate change mitigation efforts intensify globally, environmentally responsible companies can be expected to outperform their benchmarks. Besides technological advances and policy changes, growing consumer awareness of environmental issues will also affect companies’ bottom lines and thereby the risk-return calculations of investors in these companies. Finally, as I mentioned earlier, beyond the cold calculation of climate-related risks and returns, many investors want to invest in a way that contributes to leaving behind for future generations a planet that is habitable, green, and pleasant. Sustainable investing is becoming a live issue in Asia. The story of Asia’s huge infrastructure needs is well-known. The Asian Development Bank has estimated that developing Asia needs to spend $ trillion annually on infrastructure up to 2030. What is less well known is that climate mitigation and adaptation costs will add another $ billion to the region’s annual investment needs. This is a significant load. It will require a radical change in the way public sector policies, private sector financing, and investment decisions are made. Ensuring sustainability is very much a part of Singapore's ethos. Making the best use of limited resources has, for a long time, been a key part of our nation-building process.
Consequently, Malaysia’s cheque usage had fallen from 6.6 per capita in 2013 to 5.8 per capita in 2014. This is indeed an encouraging development. 1  Australia, the United Kingdom, Sweden and Norway. 2  Norway, Sweden, Denmark and Finland. BIS central bankers’ speeches  1  To reduce the country’s reliance on cash usage, the Bank has issued the Payment Card Reform Framework (Framework) which took effect in stages beginning 2 January 2015. The Framework aims to ensure that the cost of accepting payment cards is fair and reasonable, whilst creating an enabling environment for the wider acceptance of payment cards, especially by smaller merchants. Over the next six years till 2020, together with the banking industry we plan to expand the payment card acceptance network from about 240,000 terminals to 800,000 terminals and further accelerate the use of debit cards. These measures, if implemented successfully, will lessen the need for cash payments. While this target seems ambitious, we can achieve this milestone with collective efforts by all. Cash and cheques are still the main modes for bill payments in Malaysia Whilst efforts are being made to facilitate the wider acceptance of payment cards, bill payments in Malaysia are still predominantly made with either cash or cheques. In Malaysia, bill payments made via electronic channels 3 are still relatively low at 2.4 transactions per capita 4 in 2014 compared to more than 10 transactions per capita 5 in countries with successful electronic bill payment platforms such as Australia.

This should move in tandem with the industry’s plans to promote the usage of electronic fund transfer services such as the Interbank GIRO (IBG) and the Instant Interbank Fund Transfer (IBFT) via different payment channels, and to drive more pervasive usage of debit cards. To provide the public with an alternative channel to access JomPAY services, banks should also accelerate the offering of JomPAY via the network of about 12,000 ATMs and 2,700 self-service Internet kiosks (SSKs) nationwide. This would expand the accessibility of online bill payments to a greater segment of the society, including those that have limited access to the Internet. This is also one specific area where MyClear and MEPS should mobilise their resources for the collective good. To drive the reduction in paper-based bill payments over-the-counter (OTC), the banking industry should also deploy more payment card terminals at merchant outlets, government counters and at the premises of collecting agents such as bank branches and post offices. With a high penetration of 45 million debit cards for a population of 30 million, Malaysians have the option of using their debit cards to pay bills over-the-counter, thus lessening the need to carry cash. In addition, banks should continuously enhance the value proposition of JomPAY to bring greater convenience to consumers and efficiency to the business processes of corporate customers. Efforts should be directed towards creating an end-to-end solution by integrating electronic bill payment facilities with electronic presentment of bills and e-invoicing to minimize the cost of print-and-mail billing.
Broadly speaking, we believe that this goal was attained. The current circumstances are different. Once again, we are facing a crisis which could adversely affect economic activity and agents' income. However, this time, some loss of income is inevitable, insofar as it is caused by the rise in the prices of goods that we do not produce. Attempting to avoid the adjustment that is needed will only trigger a more persistent and protracted inflationary process, with very negative consequences for competitiveness and economic stability. A different monetary policy response is therefore needed. I will now address the role of each area of economic policy in the current setting, beginning with monetary policy. ECB monetary policy The ECB is responsible for maintaining price stability in the euro area. That is how it can best help ensure sustainable economic growth over the medium term. To explain the ECB's response to this inflationary episode, it is useful to remember that it defines price stability as a symmetric inflation target of 2% over the medium term. The aim is therefore not to stabilise current, observed inflation, but to stabilise inflation over a two to three-year horizon. This is justified because our actions affect inflation in a very gradual way, achieving their maximum impact after about two years, and is particularly appropriate in the face of certain kinds of shocks – such as adverse supplyside shocks, which push inflation and activity in opposite directions in the short term.

In some countries, where systemic risks have increased appreciably, it may also be appropriate to apply macroprudential policies that enhance the financial system's resilience. Their procyclicality, however, should be avoided. Vulnerabilities and risks in the non-bank financial sector have also increased and should be monitored closely. At the same time, headway needs to be made in improving this sector's regulatory framework, in particular to address leverage and liquidity mismatches. An incomes agreement As I was saying, on the information available, there is no evidence of second round effects occurring at present, at least not on a widespread basis. Euro area wages have remained subdued. In fact, real wages have declined significantly. However, wage growth is gaining pace, underpinned by strong labour markets and the effect of inflation on wage demands, both of which are expected to continue. Profit margins have also remained moderate overall, albeit with much heterogeneity across countries, firms and sectors. Nevertheless, the pass-through of costs to final prices has also been increasing and has been higher than in previous episodes. Moreover, as I said before, the longer the current high inflation persists, the more likely these second-round effects are. To avoid this, it is essential that economic agents accept as inevitable the loss of income caused by the rise in the cost of imported commodities.
To address these issues, the Basel Committee has proposed a new Accord which would allow firms to use externally or internally generated credit risk ratings to differentiate more precisely between different risks. There would also be a significant expansion in the recognition of collateral, credit derivatives and guarantees as means of reducing overall risks. These proposals are currently under discussion by central banks, regulators and market practitioners. Given our financial stability responsibilities, the Bank of England has been closely involved in this process. A team led by Patricia Jackson at the Bank has been providing technical and policy support to the Basel Committee, and we hope to have an agreement in the course of next year. The new Accord does not, however, go to the point of recognising VaR-type models for measuring credit risk on portfolios as whole. At present, these models are not judged to be sufficiently robust to form the basis of a regulatory regime. A central issue is the sheer lack of information. Many types of loan have no publicly visible price, so the models lack a large and reliable data base. The behaviour of loans under different scenarios, and the correlations between different assets - both key inputs to any VaR model - have in many cases to be assumed rather than measured. And testing the ex post performance of the models is difficult. Where credit instruments lack market prices, model predictions can only be compared to data in the event of defaults, which are relatively rare.

This contagion may not be fully in any individual firm's interests - or powers - to resolve, and it is this 'gap in the market' which creates the need for public involvement via central banks. Fortunately, banking crises do not occur every day of the week. But they do happen: an IMF study counted 54 across the world between 1975 and 1997, of which 12 were in developed countries. Such crises can have enormously harmful effects: recent Bank of England analysis suggested that, over the past quarter century, total output losses during banking crises have averaged around 15-20% of GDP in the countries in which they occurred. Whilst the Bank has responsibility for maintaining systemic stability, the day-to-day supervision of individual banks and other financial firms in the UK has been the responsibility of the Financial Services Authority (FSA) since 1997. Co-ordinating our system-wide perspective with the FSA's supervision of individual institutions and the Treasury's legislative responsibilities is essential to the smooth functioning of the new arrangements. A Memorandum of Understanding, signed by the Bank, the FSA and the Treasury in October 1997, sets out our respective responsibilities, both in 'normal' times, and in a crisis. And we work hard to foster these relationships, helped by the fact that I am a member of the FSA Board and Howard Davies is a non-executive director of the Bank. The three institutions also get together each month in the so-called 'tripartite Standing Committee' to exchange information and discuss current threats to financial stability.