samchain/econo-pairs-v1 huggingface dataset:
Had Continental Illinois been allowed to fail without any intervention, the comptroller of the currency later testified, “we could very well have seen a national, if not an international, financial crisis the dimensions of which were difficult to imagine”.2 The comptroller went on to declare that the largest 11 national, commercial banks were too big to fail. But the problem has become more significant since that time for several reasons. First, the biggest financial institutions have become much larger, both in absolute terms and relative to the overall size of the banking system. This reflects many factors including the end of prohibitions on interstate banking, the repeal of the Glass-Steagall Act restrictions separating investment from commercial banking, the rapid growth of the capital markets, and the globalization of the economy – all of which created intense competitive pressures to expand in order to gain economies of scale and scope. In commercial banking, consolidation occurred at a rapid pace. For example, Bank of America was the outgrowth of over 160 different mergers, which pushed up the size of the original acquirer from $ billion of assets in 1980 to $ trillion today. In the securities  2  Conover, C.T. 1984. “Testimony: Inquiry Into the Continental Illinois Corp. and Continental Illinois National Bank”. Hearings Before the Subcommittee on Financial Institutions Supervision, Regulation, and Insurance of the Committee on Banking, Finance and Urban Affairs, U.S. House of Representatives, 98th Cong., 2nd Session, September 18, 19 and October 4: 172–391. P. 288.

2  BIS central bankers’ speeches  industry, some partnerships became public companies, in part, so that they could more easily obtain the capital needed to expand rapidly. For example, when Goldman Sachs went public in 1999, it had about 15,000 employees and $ billion of assets. Just eight years later, the firm had expanded to 35,000 employees and $ trillion of assets. In the mid-1990s, the top five banks in the United States had total assets of $ trillion or about 14 percent of gross domestic product (GDP). The top securities firms had total assets of $ billion, or about 9 percent of GDP. By the end of 2007, the top five banks had assets of $ trillion or 49 percent of GDP. Similarly, the top securities firms accounted for $ trillion, or about 27 percent of GDP. In addition, the firms’ off-balance-sheet exposures rose sharply. Second, the complexity and interconnectedness of the largest financial firms increased markedly. Factors behind this include the adoption of a universal banking model by some commercial bank holding companies and the rapid growth of trading businesses, especially the over the counter (OTC) derivatives market. In the early 1980s, there were no true U.S. “universal banks” that combined traditional commercial banking with capital markets and underwriting activities. By 2007, there were several operating in the United States, including Citigroup, J.P. Morgan, UBS, Credit Suisse and Deutsche Bank.
In this point, I should emphasize that we expect and encourage more interest by home and foreign academics for this series of seminars. I invite the academy and all the researchers to consider this invitation as a repeated one and become more and more active in discussing the strategies and development of economic policies. The Bank of Albania is entirely open and invites all the stakeholders to boost this cooperation. Today’s workshop represents in itself a concrete example of interest for cooperation between the parties and of our aim to boost it further. Moreover, distinguished personalities from the finance and the academia have been present in various lectures, workshops or conferences. I am personally involved in this open discussion through a cycle of lectures held in the Albanian universities and in eminent and prestigious European universities. Young economists who represent the future and a key basis of human capacities should be also encouraged to do economic research. We aim at establishing a culture of research and of a supportive structure with new elements that do have not only the desire but also the necessary knowledge to study the economic phenomenon. To this purpose, the Bank of Albania organizes annually the Governor’s Award for the Best Diploma, which encourages the students of economics to carry out economic research, mainly focused on the areas of a central bank’s activity. In conclusion, I encourage you to consider the benefits deriving from the useful critics and recommendations during this workshop.

Consequently, the availability and quality of economic data represent a key factor to the development of timely and accurate economic research, to the maximisation of benefiting from them, as well as to the minimization of wrong decision-making and the costs it carries over. Unfortunately, the availability and quality of these data cannot be labelled as satisfactory. In addition to problems of collecting and calculating the statistical basis, the data base is related to and influenced by the speed and various stages of the development of the Albanian economy and by the changes of policies promoted by the taking place of these stages. The Bank of  BIS Review 132/2007  1  Albania has continuously and will constantly call on the improvement of economic data. In this context, today’s workshop places special emphasis on the discussion of the estimations and approximation of some economic time series for some important economic indicators, as well as on their role in the development, ethics and the quality of research of empirical nature. Economic research is essential for a wide range of areas. Hence, no institution can and less can a small central bank cope by itself with all the needs for economic research. Quite contrary, the institutions need to identify the areas and issues of economic research where they possess certain comparative advantages and then, closely cooperate with each other.
But they necessarily remain our best judgements and that, of course, leaves us vulnerable to assertions that we do not give sufficient weight to this or that factor. For what it is worth, at the time of our last forecast in November, our central projection – on the assumption of 6% interest rates – was for output growth of around 2½% over the next couple of years, with RPIX inflation remaining modestly below target this year but rising to 2½% in 2002. There was, of course, a good deal of uncertainty around that central projection, as there always is, for the reasons that I’ve tried to explain. But on the basis of that forecast the short answer to the question: can our steady economic progress be maintained over the next couple of years is a cautious “yes”. Since that forecast was completed things have gone in different directions. The prospect for external demand has somewhat weakened and so too has the oil price. There are mixed messages relating to  2  BIS Review 1/2001  tightness in the labour market, but earnings growth has so far remained reasonably well contained - as it must continue to do. On the domestic demand side, private consumption growth has remained stronger than we had supposed, while the growth in private investment has been weaker; meanwhile it is not clear that underlying public sector demand has – at least yet – picked up as rapidly as planned. The exchange rate has fallen, and so, too, have market interest rates.

Malaysia has also taken advantage of globalisation to strengthen its economic and financial relationships with the major trading blocs across the globe. In 2006, the total value of the external trade exceeded RM1 trillion for the first time. Foreign direct investment has been sustained, particularly into the new areas of growth. The private sector continues as the main driver of growth for the fifth consecutive year, while the public sector plays have a supportive role. GDP per capita at current prices has increased to about USD 6,000 in 2006. While Malaysia continues to attract investment, both domestic and foreign from the traditional sectors, new sectors such as the manufacturing, services, and oil and gas sectors are gaining in importance. Resources are flowing into new growth areas such as revitalised agriculture sector, high-technology manufacturing industries and biotechnology. The services sector such as information technology services, shared services and outsourcing, health and medical tourism, and financial services, in particular Islamic finance has increased its market share. The Malaysian Islamic banking system saw in particular strong performance in 2006 with higher profitability, and has remained well capitalised. Islamic banking assets amounting to about USD34 billion or 13 percent in terms of market share. The takaful sector stands at USD1.7 billion. The Malaysian Islamic capital market has been equally encouraging. Islamic corporate bonds now amounting to USD36 billion, or 48 percent of the total corporate bond issuance in Malaysia. The domestic bond market plays a crucial role in ensuring that the financing needs of the economy are being fulfilled.
Only then, can financial institutions expect to support the low income and vulnerable segments of our communities as long-term partners to create opportunities that will improve lives. A clear picture of policymakers’ role in promoting an enabling environment for financial innovation and technology Finally, policymakers can play a meaningful role to promote an enabling environment for innovation to support financial inclusion initiatives. I shall focus on three areas. First, regulation should aim to be technology-neutral and outcome-focused, proportionate to risks and harmonized across sectors. A technology-neutral approach allows policymakers to assess the merits of innovations based on the outcomes, without fear or favour for the underlying technology. Regulation should be proportionate to the risks that products or institutions present to the broader financial system. This requires continued efforts to strengthen the capacity among national regulators and supervisors to assess the benefits and cost of regulation. Only then can we really move from proportionality as a concept to practice. Regulation between different sectors should also be harmonised to focus on activities that should be regulated, rather than the institutions conducting such activities. For example, if an e-commerce platform collects, pays interest on and mobilises deposits, a banking license may be necessary as public interest is involved. Second, communicating clear expectations to the market while incorporating feedbacks through engagements with the private sector is important.

However, as I will discuss below, in practice the rationale for considering monetary aggregates is a little different. What variables should a central bank consider when setting the interest rate? In the regime I just described, the answer to this question is pretty simple: anything affecting inflation over a two-year horizon. Variables such as inflation expectations, wages, output, the exchange rate, commodity prices, and so on, have important effects on inflationary forecasts and must be taken into account when deciding the future path of monetary policy. There are other variables that have caught particular attention and I would like to take a brief look at them. These are the prices of assets (e.g., stocks, housing), the exchange rate and monetary aggregates. Two questions arise with regard to asset prices. One is, should they influence monetary policy decisions? And the other is, what must be done when those prices contain speculative bubbles? I will address this second question in the next section. But it must be noted that we must avoid the confusion between inflation and financial stability. Concern about asset price bubbles and distortions is at the core of financial stability analysis, but its impact on inflation is different. If stock or housing prices affect future inflation, they should be taken into account in monetary policy decisions. And this actually occurs via the effect of these prices on aggregate demand, output and, in the end, inflation. Hence, the monetary policy seems to have a stabilizing effect by leaning against the wind.
In financial law, the accession countries need to satisfy a number of provisions of the Treaty which have been applicable to the EU Member States since before the establishment of the ECB and the start of the third stage of EMU. In particular, statutory provisions providing credit facilities for public entities with a national central bank have to be revoked, together with provisions providing access for public entities to funds from credit institutions on terms which are not market-oriented. Moreover, capital movements need to be liberalised and statutory obstacles to the freedom of capital movements removed. BIS Review 84/2001  3  Some of these changes may be difficult to introduce before accession, and several accession countries will only achieve full compliance at a later stage when accession is imminent. In the area of banking law, more immediate progress has been achieved. For instance, several accession countries have introduced completely new banking legislation, aiming at compliance with the standards for EU financial markets in accordance with EU Directives relating to credit institutions. A similar need for legal implementation pertains to the areas of capital markets and payment and securities settlement systems, but in these fields further changes are required. Finally, the reduction of risks related to central bank operations also requires a legally sound collateral regime, which provides legally effective arrangements not only for repurchase and pledge transactions, but also in relation to insolvency proceedings. Again, this is a technically difficult area where the accession countries still need to catch-up with EU standards.

Against this background, it needs to be stressed that monetary policy in an enlarged euro area would not – and could not - include, as an own objective, the promotion of the catching up process of any participating country. Notwithstanding that catching up is desirable, it is our conviction that the best contribution the ECB can make to enhancing the growth prospects of current and new participants in the single currency area is to guarantee stable prices. Moreover, it should also be realised that the entry of new Member States into the euro area will neither lead the ECB to redefine the scope for monetary policy, which is the formulation of a monetary policy for the euro area as a whole. If individual countries are faced with an asymmetric economic development, national economic policies should be used to tackle the problems that might be the result of such an asymmetric development. Concluding remarks I should like to close my presentation here. Yet, before concluding my remarks, let me stress that we at the ECB, as well as at the Eurosystem level at large, are fully aware of the magnitude of the political, economic and institutional challenges faced by accession countries along the road towards the adoption of the euro.
If I see inflation continuing to rise and, most importantly, inflationary expectations beginning to spread, I will be the first out of the box to advocate the removal of the substantial monetary accommodation now in place. I cannot think of anything more damaging to the welfare of hard-working Americans who have jobs, those who are unemployed and barely eking out a living, retirees who are earning minimum returns on their savings, or any consumer already stretched thin, than to have their purchasing power reduced by still higher inflation. Yet even though I am a central banker and am professionally disposed to being a worrywart, I am more optimistic about the economic outlook than the consensus. American businesses and workers have made very important improvements in their efficiency and competitiveness that will aid growth. If we can add to that a sound long-run budget deal, the recovery could gain even more strength. We are a resilient people. I know it is fashionable to think we have somehow been infected with an economic stasis with no way out, but as a Texan and an American, I am culturally unable to accept that view. During the Q&A that followed a recent speech of mine abroad – in New York – a questioner cited the sickly economic pace of the first quarter and then recited the consensus view that very weak growth will likely ensue for the rest of the year and beyond. In response, I cautioned that forecasting based on current trends can be very misleading.

The punch line, of course, was that if you didn’t believe a man could fend off a croc with his bare hands, then you yourself were in “de-Nile.” We are no longer in denial about our national economic plight. Our great country now finds itself in a very difficult predicament. It is true that the situation here in Texas is relatively better than that of the nation; Texas is an oasis in a national economic desert devoid of lifegiving job creation. We went into the Great Recession last and were one of the first to come out. As we have for the past 20 years, we continue to outpace the rest of the United States in employment growth by a significant margin. Since the Great Recession officially ended in June 2009, only North Dakota (a plucky state whose hearty population totals less than that of Collin or Denton counties) has seen faster job growth than Texas.1 As I speak, Texas has almost as many people employed as we did before the recession began. Our banks are in better shape than those in the rest of the country; we are benefiting from the blessings of nature, with copious amounts of oil and gas and abundant agricultural production; our fellow citizens have seen to it that our Legislature continues to hew to a tax, regulatory and legal environment that attracts job-creating investment and encourages business formation and growth.
Though such deterioration in  2  BIS Review 104/2007  price competitiveness has been expected for some times, we have not seen real sector adjustments keeping up with the pace of changes in financial environment. For those waiting to hear about the exchange rate trend, I will have to disappoint you as always. I would just like to say that, given the current inflation targeting framework, monetary policy can take care of exchange rate as long as there is no conflict with inflation. And, we have no target level for the Thai baht in mind. Foreign exchange market is intervened when there is too much volatility in the market. The objective is to smooth the country’s adjustment during the transitional period. Looking forward, the baht movement would depend largely on external developments which I have already discussed. Moreover, there are also internal drivers: large surplus in current and capital accounts. The Thai stock market remains one of the most popular destinations in emerging markets for foreign investors, given its relatively low P/E ratio. During the first 7 months of this year, foreign investors became net buy about 4 billion US dollar. Such inflows together with foreign direct investments have also added pressure on the currency. Ladies and Gentlemen, I would like to turn to the third and final part of my talk today, which is Thailand’s approach in coping with the risks and challenges posed by globalization. Indeed, the challenges of globalization are constantly changing.

Deposit and credit growth of the banking sector continued, with revival in the lending to the corporate sector, accompanied with a decline of the NPL ratio in the first quarter of 2018 to 5.1%, due to claims collection. Current account deficit in 2017 additionally reduced to 1.3% of GDP, reflecting the positive contribution of the foreign capital companies on the export side, which indicates further strengthening of the economic fundamentals. Regarding the recommendation from the last year’s dialogue, the central bank prepared draft strategies for NPLs management and strengthening the use of local currency, both agreed 1/2  BIS central bankers' speeches  with the Ministry of Finance and currently subject to consultation with other relevant stakeholders. In both areas, as already being confirmed in the assessments and final conclusions, we have already achieved tangible results; however the adoption of these comprehensive strategies will put in place additional mechanisms to deal with these issues. In light of the challenging time that we have faced in recent years, we need to point to the maintenance of price and financial stability as important pillars of the macroeconomic stability, as well as the need to continue strengthening the fundamentals and resilience of the economy. Implementation of structural reforms and strengthening institutional capacities, including sound public finances, should remain main priorities for faster income convergence and EU integration. Thank you! 2/2  BIS central bankers' speeches
I also think that this reduction in potential GDP should be ascribed to the recession of 2009, rather than being spread out over a longer period of time before and after the recession. This means that the GDP gap was approximately – 4 per cent when the crisis was most severe in 2009. Instead of increasing according to trend by over 4 per cent between 2007 and 2009, GDP fell by 5.5 per cent. This resulted in a fall in actual GDP of approximately 10 per cent in relation to the trend. However, potential GDP also fell as a result of the crisis by around 4 per cent. This means that the GDP gap only fell by around 6 per cent. The level of the GDP gap is significant for monetary policy. A large negative gap indicates both that inflationary pressures can be expected to be low and that there are more compelling reasons to support production and employment through an expansionary monetary policy. My assessments indicate that the GDP gap was lower before the crisis than appears from a GDP gap based on HP trends. HP gaps do not work well as measures of resource utilisation in deep recessions. However, despite this, my own assessment corresponds fairly well with the level that the HP gap indicates for 2009. It is also compatible with current forecasts indicating that the GDP gap should be largely normal by the end of the forecast period.

Since then, Asia has also been affected by the globalisation of terrorism, geo-political risks and disease. Indeed, this time last year, the mobility of people in the region was paralysed by SARS and geo-political risks prevented Governors from having an annual meeting for the first time in the Bank’s history. And recently there have been predictions that the large accumulation of foreign reserves and the associated domestic monetary management problems are presenting considerable risks to financial stability. I do not believe that another Asian financial crisis is in the making. But the fact remains that, by being relatively small and open, Asian financial markets are vulnerable to shocks. Just earlier this week, the greater realisation that the interest rate upturn in the United States may come sooner and increases possibly larger than expected sent shock waves through equity markets in the region. This is regardless of the comfort offered by the much higher savings rate of economies in the region and the generally low level of indebtedness, of households and corporations. This is also regardless of the increasing inter-dependence within the region, as evidenced by the rapid expansion of intra-regional trade, particularly in final products, and correspondingly reduced dependence of the region as a whole on import demand from developed economies. I have no doubt that Asian financial markets should remain open and, for those less open, continue with financial liberalisation, in order to benefit from the greater efficiency in the international allocation of capital that comes with globalisation.