samchain/econo-pairs-v1 huggingface dataset:
Not surprisingly, the “save now, pay later” culture has been reversed. In the United States, the “pay now, save later” culture has worked for the US economy, as people have better job opportunities. We should not promote such culture in our economy because generally people, especially those in the provinces, cannot easily earn extra income to pay for their increased debt burdens. This is why I try to tell people that we should not adopt the Western way of “pay now, save later” mentality too rapidly, or allow this mentality to become a norm in our society; otherwise a host of problems would arise. Credit card and personal loan business still have benefits for consumers in terms of their convenience, particularly for those customers who have financial literacy and self-control. However, there is a need to control and supervise this business to prevent retail customers from overspending and, at the same time, prevent the operators from overcharging interest rates and fees. Ladies and Gentlemen, Let me bring you to the second issue that concerns me even more than the change in value placed on our saving culture. Recently I notice that business and economy are putting greater emphasis on size and growth. People get excited with large investment projects; such as the newly opened 12 billion baht shopping complex. People admire big businesses with large earnings and profits, and businesses that achieve high rates of growth and expansion.

The intimate and warm relationship between customer and shopkeeper, and sense of community has also disappeared with this new phenomenon. In its place are brightly-lit neon hyper stores, which while luxurious and comfortable, lack the human touch of familiar faced shop-owners. Throughout the nation, the livelihood of the owners of these family-run stores has been taken away, and profits accumulated with a few large chains and franchises. Shop owners who previously ran their own businesses have no option but to become employees of these large corporations instead. This situation has arisen because we have opened our society to Western culture and influence. We have stood by and watched small, family-run shops fight a battle against the large chain stores with incomparable financial standing – a battle they are sure to lose. If authorities recognize the importance of the distribution of income as well as the distribution of opportunities, these family-run businesses would be able to continue with their livelihoods, and large multinational corporations could be prevented from overwhelming these small businesses. The process of globalization will bring about access to new technologies, which will help improve the efficiency of our various economic sectors. But in the meantime, the process of globalization opens our economy to the possibility of large multinational corporations taking over local businesses. We should welcome globalization in as much as it helps us enhance efficiency, reduce costs, and improve competitiveness, in the business which has to compete in the international arena.
In this respect, flexible wage setting, resulting in particular in sufficient wage differentiation, is crucial in order to strengthen or at least maintain competitiveness and improve employment opportunities, in particular for less-skilled workers. •  Furthermore, many studies point to the potential that competition has to increase employment and to boost productivity trends by improving production efficiency and by enhancing the incentive to invest and innovate 1. In the European Union, significant progress has been made in strengthening competition and increasing economic integration over the last two decades. The single market has already brought sizable benefits for the European economy. 2 However, much remains to be done, in particular in some market services sectors. The extension and deepening of the internal market remains a priority as regards further financial market integration, the pursuit of effective  1  See the ECB Occasional Paper Series No 44 “Competition, productivity and prices in the euro area services sector”, by the Task Force of the Monetary Policy Committee of the ESCB, April 2006. 2  The European Commission recently estimated that the single market has brought about an increase of 2.75 million extra jobs and an extra increase in welfare of € per head in 2006, corresponding to a 2.15% increase of the EU’s GDP over the period 1992-2006 (See European Commission, “The single market: review of achievements”, November 2007). 2  BIS Review 31/2008  competition in the energy market, and the implementation of the Services Directive.

In our communication, we seek to be open about our response pattern. Many important economic decisions depend on economic agents’ expectations concerning the future. The inflation target and our response pattern influence and can change their expectations. The task of stabilising inflation is facilitated when households, firms and market participants have a good understanding of how monetary policy works and how Norges Bank sets the interest rate. Chart: Forecasts of inflation and the output gap in the June 2011 Monetary Policy Report The monetary policy response pattern can be communicated in several ways. In our Monetary Policy Report, we present a chart with our forecasts of inflation and the output gap. Combined, they provide a picture of key assessments underlying our interest rate decisions, and hence our response pattern. The interest rate is set so that inflation and the output gap move in balance. If inflation is well below target, the interest rate will normally be low so that the output gap increases and eventually pushes up inflation. Inversely, if inflation is too high, the interest rate will be raised so that the output gap narrows and inflation recedes. As shown in the chart, in our latest Report from June we presented a scenario where the output gap increases somewhat further ahead, with the downturn in the wake of the financial crisis being followed by a mild upturn. The low level of inflation would then move up to target.
However, we must not believe that problems in the financial sector can simply be regulated away, and we must not have exaggerated faith in our ability to fine-tune the economy. But an important contribution will be to ensure that those who take financial risks on behalf of others hold more capital. Monetary policy has faced considerable challenges in recent years. We think it is important to learn from history and from the experience of other countries and to apply those lessons in the further development of monetary policy. This is why we are launching a research project, “Flexible inflation targeting: challenges and possibilities”. An important part of the background for this project is the fact that international monetary policy research has often focused on closed economies, with more relevance for large countries such as the US. Our small, open economy presents particular challenges. How does this restrict the room for manoeuvre in monetary policy? And how should monetary policy respond to changes in the terms of trade? The project will include analysis of some of the issues I have mentioned today. There is a need for more research on how financial stability should be taken into account in monetary policy. The project will also draw on the experience we have gained over the past 10–15 years as the Norwegian economy was exposed to a financial crisis and a number of supply-side shocks. Monetary policy communication is also developing. 11  See Bank of England: Monetary policy trade-offs and forward guidance, August 2013.

Let us take as our starting point the following scenario, which has similarities to the economic situation over the past few years. Interest rates abroad have fallen and there are prospects that they will remain low for an extended period. At the same time, higher capital requirements for banks have seemed likely for some time and, in response, banks have increased their lending margins. In this chart, we have used the NEMO model to analyse how these factors affect the economy, including the interest rate. Low interest rates abroad widen the interest rate differential against other countries. This points towards a stronger exchange rate, which will result in lower inflation and output further ahead. At the same time, banks keep lending margins higher than normal for a period in order to build up capital. Higher bank lending margins and lending rates dampen growth and inflation. Both higher lending margins and lower interest rates abroad imply a lower key policy rate in Norway. In this scenario, the central bank reduces the key policy rate, but by less than the decrease in interest rates abroad. As a result, the krone appreciates. This leads in the short term to lower activity and inflation, but a lower key policy rate and slightly lower bank lending rates will gradually result in higher capacity utilisation and higher inflation. Borrowers, however, only experience a limited reduction in bank lending rates because of the assumed rise in bank lending margins. Somewhat lower interest rates and higher output nonetheless result in increased credit growth.
Even if the central bank could, through intervention in the foreign exchange market or actions to influence domestic interest rates, fix the nominal exchange rate at some particular level, and even if it succeeded in fixing not simply the bilateral rate but the trade-weighted rate, this would only determine the real rate for the short term. This is because any monetary policy actions, such as exchange market intervention or changes in interest rates, in due course have a feedback effect on domestic inflation. More specifically for example, depreciation tends to raise prices. In a market-based economy the central bank, if it already uses monetary policy to set the nominal exchange rate, cannot separately control inflation. Eventually any initial gain in competitiveness from depreciation is offset by the inflationary feedback, most obviously so in highly import-dependent economies such as Hong Kong. Empirical studies do not reject the hypothesis that this feedback is eventually 100%, although the full offset may occur only after a considerable lapse of time. Meanwhile the real rate is also affected by movements in price levels in other economies, which lie beyond the home central bank's influence. In sum, the central bank cannot, except perhaps for the short term, dictate the real exchange rate. Equilibrium of the real rate The second misconception about the real exchange rate is that a weak rate (if it could somehow be arranged) would necessarily be a good thing, because of the benefit which an improvement in competitiveness, thus measured, would bring to the economy.

From the monetary policy perspective, the prospect of persistent deflation presents the possible concern that, even with near-zero interest rates, people may prefer to sit on money balances rather than to spend, and that this may hinder recovery in real activity. To a certain extent the problem may only be illusory. Behaviour should be no different when interest rates are zero and inflation (or, strictly speaking, projected inflation) minus 2%, than when interest rates are 5% and inflation plus 3%; the real rate is the same in each case. But deflation does prevent real interest rates from going negative. It is a matter for debate as to how much of an impediment to recovery this limitation could be. Possibly it would only become significant if the expected pace of deflation was rather sharper than it has been. In assessing the causes and impact of deflation, and the possible remedies, it is appropriate to distinguish between the price level for goods and services on the one hand, and that for assets whether financial or real estate - on the other. For goods and services, the consensus view is probably that a low, stable positive rate of inflation is preferable to a negative one. Nevertheless, both the economy and society may be able to cope for a certain period with modest deflation - in the range of, say, 0-2% pa - without too much difficulty.
Zeti Akhtar Aziz: Brief remarks on managing financial instability and shocks in a globalising world Introductory remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the Tun Ismail ali Chair Public Lecture, Kuala Lumpur, 6 February 2004. *  *  *  We are indeed honoured and privileged to have Dr. Yilmaz Akyüz, holder of the Tun Ismail Ali Chair in Monetary and Financial Economics at the University of Malaya, to speak to us today on “Managing Financial Instability and Shocks in a Globalizing World”. The Chair on Monetary and Financial Economics at the University of Malaya was established by Bank Negara Malaysia in recognition of the contributions of the late Tun Ismail bin Mohamed Ali, the first Malaysian Governor of Bank Negara Malaysia. It is our hope that this Chair would contribute to enhancing expertise and knowledge in the area of monetary and financial economics. Ladies and gentlemen, Let me make a few brief remarks on the topic of today’s lecture, based on our experience in managing the Malaysian economy. Uncertainty and instability are the defining feature of the international financial system today, as borders have become more porous, financial markets more integrated and as financial flows have surpassed trade flows as the dominant determinant of the international financial environment. Emerging market economies have become more vulnerable to international shocks which can have a significant adverse impact on the economy. Malaysia has approached this more challenging environment by increasing our own resilience and tolerance level to these shocks.

Tarisa Watanagase: Japan-Thailand – partnership in prosperity Dinner talk by Dr Tarisa Watanagase, Governor of the Bank of Thailand, to the Japanese Chamber of Commerce, Bangkok, 25 March 2008. *  *  *  Ladies and gentlemen, I would like to thank the Japanese Chamber of Commerce for the invitation to speak before you tonight. It has been a year since I gave a talk at a similar function held by the Chamber. I remember we had a lively exchange of ideas then, and I am glad you keep in touch. With long presence in Thailand, the Japanese Chamber has played an active role in promoting common understanding between Thai government agencies and the Japanese business community here. Japan-Thailand economic relationship is both special in breadth and depth. Even a casual observer cannot fail to notice this prosperous partnership. Trade between our nations has doubled in value over the past 5 years; that’s roughly 14 per cent increase per year. On the investment front, Japan’s annual direct investment in Thailand has been steady at close to 3 billion US dollars over the past few years, considerable uncertainties notwithstanding. Japanese financial service providers are lively participants in the Thai financial system. Ladies and gentlemen, Much has happened since we last met. The story of financial disruption is playing out in the US and reverberating across the world. Oil prices have increased by more than 50 per cent.
It is therefore essential to find a solution to the NPL problem, but we must recognise that it will take time and no single instrument is likely to be a “magic bullet”. Rather, it will require a comprehensive strategy involving a panoply of instruments. The ECB is already working on this and has issued clear guidance to the banks it directly supervises. But supervisory action is not enough on its own. The private sector and national and European authorities also have roles to play. Several significant impediments affect the prices of NPLs, to varying degrees across euro area countries. The market for distressed debt can be characterised as a “market for lemons”. This is a situation where investors demand a premium to protect themselves from the uncertainty that better-informed banks will try to sell them assets whose credit quality is worse than it may seem on the surface. This results in limited market activity, as the prices that investors are prepared to pay for NPLs are much lower than the prices banks would be prepared to sell them for. Structural inefficiencies in debt and collateral enforcement also contribute to the lack of market turnover. The legal procedures for collecting a simple claim take too long and cost too much in many euro area countries. On the demand side, investors are also deterred by high uncertainty around recoveries and their timing, and by barriers to entry such as licensing requirements. These symptoms of market failure, aggravated by legal constraints, call for a public policy response.

The European Commission has recently announced that it will come forward with a proposal for a comprehensive and coordinated strategy to deal with NPLs, including a blueprint for national AMCs. It will be then imperative that all relevant authorities act rapidly and decisively to implement the necessary measures to overcome the NPL problem thereby strengthening the ongoing European recovery. Much hard work is needed, on many fronts, to deliver these benefits. But neither partial solutions, nor further delays, are viable options if we want to tackle the NPL burden and avoid a renewed build-up of NPLs in future cyclical downturns. 2/2  BIS central bankers' speeches
Prasarn Trairatvorakul: Recent challenges and the way forward Speech by Dr Prasarn Trairatvorakul, Governor of the Bank of Thailand, at the Japanese Chamber of Commerce Dinner Talk, Bangkok, 22 March 2012. *  *  *  Good evening, Distinguished guests, Ladies and Gentlemen, I would like to thank the Japanese Chamber of Commerce for inviting me to speak again at this special annual event. Each of these years has brought us yet more economic surprises and challenges. In 2010, the world economy grew surprisingly fast and the Thai economy promptly rode on the wave of global recovery. Then last year, the European sovereign debt problem erupted and depressed the global economic environment, while at home both of our economies were badly hit by devastating natural disasters that took a heavy human and economic toll. In Thailand, the damage from the floods was indeed severe. Output loss was estimated to be around 3.2 percent of GDP and economic activity contracted sharply by 9 percent year-on-year in the last quarter of 2011. Manufacturing and agricultural outputs as well as exports were severely dented. The automobile industry, which was just recovering from the supply chain disruptions following the earthquake and tsunami in Japan, was hit especially hard. But as you are well aware, shocks from natural disasters are temporary in nature. They tend to be followed by rapid resumption of economic activity as things get back on track, as was the case with Japan in the aftermath of the earthquake.

Without bold actions, economic as well as political ones, the potential for Europe to be swept into a downward spiral of collapsing confidence and stagnant growth looms large. This grim possibility will remain a drag on the global economic backdrop and hence a key risk factor for the Thai economy in the foreseeable future. BIS central bankers’ speeches  1  While the potential impact on Thailand through financial channel appears limited due to low direct exposure of the Thai financial institutions to the European financial system, the impact through trade could be significant. This reflects Thailand’s strong trade tie with Europe, which accounts for around 10 percent of our total exports. Fortunately, any such slowdown in Thai exports can be cushioned to some degree. A key reason is Thailand’s shift towards more intra-regional trade within Asia, as well as our success in diversifying into alternative export markets more generally. Against this backdrop of continuing headwinds from abroad, I believe that Thailand is poised for a sustained upward growth trend. Despite the floods, our long-term growth trajectory remains intact. We project that economic growth will rebound to 5.7 percent in 2012 driven mainly by strong domestic demand. Fiscal spending through flood-relief and stimulus measures will play a supportive role. The latest economic data show private consumption already recovering swiftly. Business confidence has also rebounded strongly and investment is projected to regain a firm footing by the third quarter of this year.
Recent research looking at the pre-crisis period suggests that where banks face limited competition in their domestic markets, and firms are more dependent on them, financing constraints for SMEs have been higher.3] Matching credit supply and demand We are already seeing signs in the euro area that a rebalancing towards capital market financing is taking place: as bank credit to corporates has fallen, it has been approximately matched by issuance of corporate bonds. It would nonetheless be naïve to expect this transition towards a new financing mix to occur seamlessly. While on aggregate, euro area credit supply might be sufficient to meet credit demand, I see two factors that might lead to an imperfect match between supply and demand for certain firms. They are the location of those firms and their size. 1  See for example Arcand, Jean-Louis, Enrico Berkes, and Ugo Panizza (2012). “Too much finance?” IMF Working Paper No. 12/161, or Manganelli, Simone, and Alex Popov (2013). “Financial dependence, global growth opportunities, and growth revisited.” Economics Letters, 120(1), 123–125. 2  OECD (2014). “The role of the financial sector for economic growth in OECD and G20 countries,” internal paper prepared for the Economic Policy Committee. 3  Ryan, R., O’Toole, C. and McCann, F. (2014), “Does bank market power affect SME financing constraints”, Journal of Banking and Finance, January. BIS central bankers’ speeches  3  Location In terms of location, the cost of and access to finance in the euro area remains strongly based on national conditions.

We still have a long way to go, to be sure, but I am confident that Europe has now moved from being a risk to the global economy to a partner in global growth. Thank you for your attention. 13  Bank of England and European Central Bank, “The impaired EU securitisation market: causes, roadblocks and how to deal with them”, joint paper, April 2014. See also the communication from the Commission on Long Term Financing of the European Economy, COM(2014) 168 final, March 2014. BIS central bankers’ speeches  7