samchain/econo-pairs-v1 huggingface dataset:
The ERPT could be higher in case of large and rapid baht depreciation, especially if coupled with rising oil prices. This could trigger a non-linear passthrough to inflation and could have a contractionary effect to the economy. This has not materialized. We will keep close monitoring. c. In Thailand, there is less chance of wage-price spiral given that there remains slack in the labor market. Moreover, the nature of the labor market structure in Thailand, where there is flexibility in labor movement and a lack of labor bargaining power, has helped suppressed wage pressure and prevented broad-based and persistent increases in inflation. On the contrary, a tight labor market such as in some AEs could also set a wage-price spiral effect in motion. In such circumstances, bold rate hikes are necessary to prevent a shift to a high-and-entrenched inflation regime. • Thailand has low share of wage earners at 44% and little wage indexation. • Labor cost is relatively low at 15% of total production cost. (2) Limited risks from Fed tightening to derail a smooth take-off 1. Depreciation of the baht (and most other Asian currencies) has been influenced by the US dollar. 2. Interest rate differential is not causing the capital outflow. Thailand actually saw net capital inflows of 4.8 billion USD YTD. In the past 8 months, only 3 of out 8 months that saw net capital outflows. 3.

The recovery should also be resilient to potential slowdown in world economic growth given that the initial pick up this year is mostly driven by domestic demand while growth momentum next year mostly reflects the continued rebound in tourists from abroad, which tend not to be sensitive to global economic activity. Bilateral inbound tourist flows in the past are relatively resilient to home economic conditions. This reflected the fact that there is a lot of pent-up demand and Thailand is a cost-effective value for money destination. 2. Balance of risk has tilted towards inflation Headline inflation is expected to peak in Q3/22 and gradually return to target range next year, but what’s concerning is that core inflation is increasing. a. Headline inflation is uncomfortably high and above the target range. It has been around 7.6% in June and July, the highest in 14 years. The rise of headline inflation has been supply-side driven and largely concentrated in food and energy-related categories. There has not been any sign of demandside pressure unlike in the US and UK. However, the risks are titled to the upside given possibilities of broader and faster cost pass-through and rising demand pressures as the economy gains strength. b. Core inflation has continued increasing for 4 consecutive months mainly due to faster cost passthrough such as from raw foods to prepared food prices. This is a sign or an indication that inflation engine might get fully started.
Promoting innovation based on financial data by creating a common space for financial data - Facilitating digital access to legally required financial information disclosed by financial institutions through standardised and machine-readable formats; - Promoting innovative computer technologies to facilitate reporting and supervision (so-called reg-tech and sup-tech); - Encourage data sharing between companies in the financial services sector inside and outside the EU (‘open finance’). 4.4. Meeting the challenges and risks related to the implementation of digital technologies: - Keeping financial stability, protecting investors and consumers on the principle of ‘same business, same risks, same rules’, regulating the business of the big tech corporations involved in provision of financial services; - Protecting consumers and the public interest – adapting the rules of consumer protection and personal data protection to digital financial services, ensuring the effectiveness of and making the legislation on money laundering, financing of terrorism, and tax avoidance fit for the digital age; - Enhancing the digital operational resilience. 5. Legislative proposals As part of the Digital finance package, the European Commission published proposals for the development of three regulations: 5.1.

Further steps to digitise financial services in the EU The further development of digitisation will continue to be among the main priorities, and the following measures are expected to be taken in order to accelerate these processes and reach their full potential at European level: 4.1. Eliminate the fragmentation of the digital single market by: - Legislative changes aimed at creating opportunities for interoperable use of digital identity throughout the European Union. This will allow easy ‘onboarding’ of new customers entirely online, in full compliance with the requirements for combatting money laundering and terrorist financing; - Facilitating cross-border provision of financial services, including by introduction of a harmonised regime for new activities such as crowdfunding, credit intermediation, and cryptocurrency services; 4.2. Adaptation of EU legislation to facilitate digital innovation: - Regulation of activities with cryptocurrencies and financial instruments based on tokens by introducing a comprehensive regulatory framework by 2024, allowing the implementation in the financial service sector of distributed ledger technology (DLT) and cryptocurrencies, taking into account the related risks;  3  - Promoting cooperation and use of cloud computing infrastructure, including through the development of a legislative framework for the supervision of information and communication technology (ICT) providers for the financial sector; - Promoting the use of artificial intelligence tools in the financial services sector; - Adherence to the principle of technology neutrality of legislation, combined with the issuance of interpretative guidelines on how existing legislation on financial services should be applied to new technologies in order to reduce legal uncertainty. - 4.3.
We have seen the emergence of principal trading firms, changes in regulations of key intermediaries, and the growth of nonbank financial institutions.2 With this evolution, it is vitally important to ensure that safeguards and systems also evolve so that these markets function well in all circumstances and conditions, including unprecedented events like the pandemic. We need to reflect on and learn from these experiences and consider ways to make these and other markets more robust, thereby minimizing the potential negative consequences to the economy and the need for extraordinary policy responses. Market Conditions in September and March I know it might seem like a lifetime ago, but allow me take you to mid-September of last year. A number of otherwise ordinary occurrences—including corporate tax payments and settlement 1/4  BIS central bankers' speeches  of newly issued Treasuries—were expected to put some upward pressure on short-term rates, but the market response was out of proportion to the magnitude of the shock. Conditions in funding markets became highly volatile, with both secured and unsecured lending rates rising sharply. Indeed, the size of the reaction in repo rates, the spillover to the federal funds market, and the emergence of strains in market functioning were well outside of recent experience. And the market stress was looking to get worse, not better. 3 4 In response to these developments, the Federal Reserve conducted a series of large-scale repo operations with the aim of calming conditions in funding markets and bringing the federal funds rate within the target range.

They quickly restored market functioning and averted what could have been a much more severe pullback from markets and the flow of credit to households and businesses.8 Indeed, the rapid restoration of market functioning helped restore a robust flow of credit at historically low interest rates to the economy, which has provided a boost for the recovery. Lessons Learned I don’t like to be ominous or foreshadow the future. But, if another crisis were to occur, we must to be able to look back on this time and know that we learned everything we could from recent events. After the financial crisis of 2008, a significant amount of work both in the United States and around the world was invested in studying the causes of that crisis and finding ways to make the financial system more resilient. The ultimate goal of those reforms was to ensure that the next time the global economy was hit by a major shock, the financial system would be a source of support for the economy, rather than amplify weakness. Those efforts were hugely successful. The resilience of the U.S. banking system in particular has been a key factor in positioning our economy for a strong recovery, despite the enormous challenges posed by the pandemic. It’s crucial that our financial system can handle shocks and disruption.
It would operate with intra-day credit from its clearing bank, J.P. Morgan Chase, and overnight credit from the Federal Reserve. The Federal Reserve would provide credit that was fully secured by the collateral of the broker-dealer and this would continue for a period of time to enable the broker-dealer to wind down its trading book in an orderly manner – thereby mitigating to some degree the impact of the failure on financial markets and the economy. At the point in time when an orderly liquidation of the broker-dealer became practical, a petition would be filed for a receivership under the Securities Investor Protection Act. This became the contingency plan, although it was always subject to the Lehman board of directors deciding to file a Chapter 11 petition, a matter that was their responsibility and not ours. On September 15, Lehman’s board of directors elected to place the parent company in Chapter 11 while leaving Lehman’s brokerdealer open for business so it could wind down its operations. A look at the hypothetical alternative of lending to the Lehman holding company itself reveals that it was in fact not viable. By Monday, September 15, Lehman faced a total erosion of market confidence, and so the Federal Reserve would have been lending into a classic run. Had Lehman not filed for bankruptcy on September 15, but opened as if it were business as usual, creditors and counterparties would have rushed to protect their positions, using all legal remedies, causing the liquidity crisis to spread throughout Lehman’s organization.

On Sunday, September 14, we learned that Barclays could not proffer the needed guarantee without a shareholder vote. This vote would take days, if not weeks or months, and there was no way to predict if the shareholders would even vote for the transaction to proceed. I explored with counsel whether the U.K. government, or one of its instrumentalities like the FSA, might waive this U.K. requirement, such that the guarantee could be delivered and the rescue effected. I learned that the U.K. authorities were not amenable to a waiver. Thus, Barclays ceased to be available as the willing buyer that we needed to rescue Lehman, and there was no other interest from any firm of sufficient size and capability that could acquire Lehman, a company with consolidated assets of about $ billion. 5  Timothy F. Geithner, Secretary of the Treasury, Statement before the United States House of Representatives Committee on Financial Services, April 20, 2010. 4  BIS Review 112/2010  Many have asked why, when the Barclays guarantee problem presented itself, the Federal Reserve did not step forward and guarantee the trading obligations of Lehman pending its merger with Barclays. They observe that we lent approximately $ billion to Maiden Lane LLC to facilitate the merger of J.P. Morgan Chase and Bear Stearns, and they look at our commitment to lend up to $ billion to AIG.
Therefore, it is extremely important that the parties involved – particularly the social partners and the Government – make every effort to push matters in that direction. It is important that the decisions taken in wage negotiations over the next several months be based on correct information. The report published jointly by the social partners last month, entitled In the Prelude to Wage Negotiations, contains cogent information on wage developments in recent years. According to the report, the emphasis placed on the lowest wages in recent years has borne fruit, at least in part. For example, office workers’ and general labourers’ wages rose most during the period from 2006 through 2014, and they rose in excess of the general wage index. The report also confirms what has previously been reported, that wages and productivity per hour worked are relatively low in comparison with trading partner countries and that Icelandic workers compensate somewhat for this with longer working hours. This highlights the fact that, in the long run, increased productivity is the premise for higher real wages. In this context, the weak productivity growth in recent years could give some cause for concern. On the other hand, it also reflects the growth of labour-intensive sectors such as tourism, which have been supported by the low real exchange rate and have facilitated a more rapid decline in unemployment than would otherwise have been possible.

The liberalisation of the capital controls is a collaborative project undertaken by the Central Bank and the Government, which actually means that elected representatives have the last word on the actions taken – particularly if and when tools are used that are not in the Bank’s toolbox. Honoured guests: I have spoken at some length on monetary policy and the labour market, on the one hand, and the capital controls, on the other. But I have done so with a purpose, as these are by far the greatest economic challenges facing us at the moment. Yet the Central Bank’s sphere of activity includes many other functions as well, not least those centring on the structure and stability of the financial system. Let us hope that, when we convene a year from now for the Central Bank of Iceland’s 55th Annual General Meeting, we will have resolved successfully the urgent issues now facing us and can turn our attentions to these other areas of activity. In the field of financial stability, emphasis has been on the risks related to the capital controls and on the formulation and implementation of the prudential rules that, in our opinion, must be in place once the controls are lifted. That work is well underway. And as regards risk assessment and contingency planning, the Systemic Risk Committee and the Financial Stability Council will be meeting next month, and the Central Bank’s Financial Stability report is scheduled for publication on 22 April.
The examination of the economic history of countries shows that there is a set pattern of the transformation of the structure of economies. The pattern has been from agriculture to industry and then to services. This trend has been equally observed in both developed and developing economies alike. In the first stage, which covers the pre-industrial era, the almost entirety of the economic value was created by agriculture. With fast industrialization, the source of a country’s economic value got shifted to industry. The wide-spread development of markets, first internally and then globally, led to the creation of a new growth sector in the form of services. This is because, the existence of an efficient services sector was necessary for further growth in both the agriculture and industry. When the natural resource endowment of countries set an effective limit on further expansion of agriculture or industry, the vacuum was filled by a sudden boom in services. Good examples of this phenomenal development from the modern era are Hong Kong and Singapore. Both these countries have been able to create wealth through rapid industrialization supported by a strong and dynamic services sector. 1  2  “Staying Relevant in the Midst of Globalisation”, Experience Singapore, July, 2006. p.12  BIS Review 4/2007  Throughout its history, Sri Lanka has been a beneficiary of being an active partner in global trade.

According to Dr S Arsaratnam 4 , both the Sinhala kings and the Dutch used Arabic traders to export elephants, gems, areca nuts and spices, and import rice, textiles and other requirements in the 16th to early 18th centuries. The British period that followed the Dutch rule is marked by a continuation of the open-economy policy pursued by ancient Sinhala kings. During this period, the country continued to rely on foreign trade for wealth creation and maintaining high standards of living. Hence, the reliance on services, especially commercial services, for wealth creation was not a new policy paradigm for Sri Lanka. Around the time Sri Lanka gained independence from the British rule, the country’s GDP was distributed in the proportion of 46 percent for agriculture, 20 percent for industry and the balance 34 percent for services. The high share of both agriculture and industry amounting to about a two-third of GDP indicated the prevalence of a limit for their continued growth devoid of a vibrant and efficient services sector. This anomaly was to be gradually, and in a slow pace, corrected in the subsequent five decades. In 1960, a slight improvement in the respective shares was observed with agriculture falling to 38 percent and services rising to 45 percent. The period since then recorded a virtual stagnation of services till early 1980s when the country moved to an open economy regime.
14 A key variable here is the interest rate level: If current and anticipated rates are comparably low, loans tend to be taken out for projects which would not be profitable or not be financed at higher rates. Furthermore, lenders in such an  11  Uncertainty regarding the stability of individual banks can also result in banks no longer lending to one another, thereby mutually aggravating their difficulties and leading to even more restrictive lending practices. 12 Other aspects based on rational considerations that I did not examine further here and which can also lead to excessive borrowing or lending are (misplaced) incentives of an institutional, regulatory and fiscal nature, and the emergence of innovative financial products. 13 Cf. Kindleberger and Aliber (2005). 14 Cf. Jorda et al. (2016). Page 7/16  environment often take higher risks in order to achieve return and growth targets despite the low interest rates. Other key drivers for the increase in credit are movements in prices of assets such as shares and real estate. Rising prices for these assets and growing credit volume often go hand in hand and are mutually reinforcing. This applies to the real estate market in particular, since real estate is almost always part-financed by loans. Two mechanisms are at work here: First, rising asset prices produce ‘wealth effects’ in households. Households become richer and thus more creditworthy. This has a positive impact on household demand for loans. At the same time, rising asset prices translate into higher-value collateral for households to use.

Loans: Commonplace since ancient times  Source: www.openthemagazine.com  A Mesopotamian clay tablet with debt details from around 3000 BCE  5  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Loans fulfil two basic functions  Borrowers:  Loans enable borrowers to have future income at their disposal now Example: Start-up company Example: Buying a house Example: Government debt  Creditors:  Loans allow creditors to make optimal use of their available capital Example: Investments of an entrepreneur  6  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Part 2: Under what circumstances is lending detrimental to an economy?
Interest rate and exchange rate developments in recent weeks suggest that our monetary policy measures are gradually gaining traction. Economic outlook By introducing the minimum exchange rate, the SNB moderated the risks and adjustment costs to which the Swiss economy was exposed and bought it some time to adjust to a stronger franc. We are aware that the discontinuation of the minimum exchange rate will mean that Switzerland has some difficult times ahead. The higher Swiss franc exchange rate – and especially the speed of Swiss franc appreciation since the discontinuation of the minimum exchange rate – is particularly challenging for exporters and industries facing competition from imports. BIS central bankers’ speeches  5  In 2014, the Swiss economy recorded year-on-year growth of 2%. This increase was slightly above long-term potential growth and reflects the robust state of our economy. The exit from the minimum exchange rate has led to a deterioration of economic conditions. We thus expect a much more modest expansion of real economic output this year of just under 1%. A noticeable weakening in the economy may be expected, particularly in the first half of the year. In the short term, significant underutilisation of production capacity may be expected and unemployment is likely to increase moderately. There is of course a particularly high degree of uncertainty attached to such forecasts. For one thing, they will depend on how the Swiss franc exchange rate evolves in the coming months. For another, it is not certain how international conditions will develop.

A structural dynamic factor approach applied to Swiss data”, SNB Working Papers No. 9, 2013, or Drechsel, D. et al. (2015): “How are firms affected by exchange rate shocks? Evidence from survey based impulse responses”, KOF Working Papers No. 371, January 2015. 6  BIS central bankers’ speeches  We have revised our forecast downwards for the current year, from –0.1% to –1.1%. Inflation is expected to reach its low point in the third quarter of 2015, at –1.2%. We anticipate inflation of –0.5% for 2016. As you can see from chart 7, inflation will move back into positive territory only at the start of 2017. These forecasts assume that the three-month Libor remains at –0.75% over the entire forecast horizon, and that the Swiss franc weakens. Our forecasts show that the period of negative inflation is temporary. The SNB’s monetary policy strategy provides for positive inflation rates of below 2% in the medium term. So as long as the inflation rate returns to this range in the medium term, price stability will not be threatened. The important thing is that medium-term inflation expectations remain within a range that is compatible with price stability. While these inflation expectations have declined substantially, they are still in positive territory. This is confirmed in regular surveys by thirdparty providers, as well as in conversations between the SNB’s delegates for regional economic relations and company representatives from all sectors of the economy.