samchain/econo-pairs-v1 huggingface dataset:
I noted earlier that, to ensure continued momentum of expansion, what we need to see in Thailand this year is a stronger turnaround in domestic demand, especially in private sector investment. This is, in a way, the most important must-have macro development for Thailand this year. Financial environment supporting private sector investment, I think, is very positive and conducive this year, with lower oil prices, easing domestic inflation, ample liquidity, and a more stable interest rate environment. But to substantially lift investment, what we need to see in Thailand is a continued improvement in business sentiment and confidence. Here, therefore, lies an important issue for policy. On this, I am quite confident that the ongoing efforts by the Government to promote growth with stability will successfully lead to continued improvements in business sentiment and confidence, which will be positive for our investment going forward. I want to end my brief remarks this morning with a few year for our domestic banks and financial firms as they continue to support the economy while preparing for a number of important regulatory changes that are set to take place this year. Beginning this month, Basel II will be launched in the G7 economies. For Thailand, this means we will have less than two years to prepare for our own eventual adoption of Basel II, which has been slated for end 2008. At this time, most banks in Thailand have already decided on using the standardized approach for the calculation of minimum capital.

Andréa M Maechler: Investment policy in times of high foreign exchange reserves Speech by Ms Andréa M Maechler, Member of the Governing Board of the Swiss National Bank, at the Money Market Event, Zurich, 31 March 2016. *  *  *  The accompanying charts can also be found on the Swiss National Bank’ website. The speaker would like to thank Dirk Faltin and Marco Huwiler for their support in drafting this speech. She also extends thanks to Sophie Faber, Peter Kuster, Sandro Streit, Jonas Stulz and Martin Weder for helpful comments, to the SNB Language Services, and to Adrian Avdyli for preparing the data. Welcome to the SNB’s traditional Money Market Event in Zurich. I am delighted that so many of you have responded to our invitation. A year ago, you were welcomed here by Fritz Zurbrügg, my colleague in the Governing Board and predecessor as the Head of Department III. It was only a few weeks after the minimum exchange rate had been discontinued, and monetary policy was the hottest topic in town. This year, I will focus on the Swiss National Bank’s investment policy. In the past few years, the SNB has become a big asset manager. Consequently, I want to look at two questions today. First, what are the reasons for the significant increase in our foreign currency investments? Second, how does the SNB handle these foreign currency investments? However, I can’t leave monetary policy out completely.
When the price level target has been attained, the currency is allowed to float and monetary policy returns to normal, either with the old inflation target or with the continued use of a price level target if this is deemed to be advantageous in the longer term. It is easy for the central bank to implement part (2) and keep the exchange rate at a given level when the currency is strong and would appreciate if it were allowed to float. Initial doubts among the market participants and the risk of this method failing means that it would appear to be a good deal to buy domestic currency cheaply and then sell it at a higher price when the method fails. This would lead to a high demand for the domestic currency. The central bank, however, could sell as much domestic currency as it likes and would only see its foreign exchange reserves increase correspondingly. A large foreign exchange reserve and monetary base might be considered inflationary, but higher inflation and inflation expectations are exactly what the central bank wants in this situation. The difficult thing, in contrast, is to maintain a fixed exchange rate when the currency is weak and would depreciate if it was allowed to float, as was the case of the speculative attacks the Swedish krona was subjected to during the fixed exchange rate regime in the early 1990s.

They will instead have to create such expectations by other methods. If one of the countries manages to raise expectations of its future price level it will be sufficient in principle, however, for the other country to keep the exchange rate constant for its expected future price level to also rise. Roosevelt’s decision to allow the dollar to depreciate by 40 per cent against gold during the depression in the 1930’s can be mentioned  14  Coenen, G. and Wieland, V. (2003). “The Zero-Interest-Rate Bound and the Role of the Exchange Rate for Monetary Policy in Japan” Journal of Monetary Economics 50, 1071-1101. BIS Review 19/2009  7  as an example of a currency depreciation carried out with the express purpose of raising the price level in the country. 15 ”Quantitative easing”: ineffective if it is not expected to be permanent Why not just increase the money supply in order to create expectations of a higher future price level? As long as the interest rate is zero then households and firms, as we have already seen, are indifferent about the choice between money and securities such as Treasury bills or bonds. An increased supply of money will then have no effect other than households and firms holding more money and fewer bills and bonds. However, at some time in the future the economy will return to normal, the interest rate will be positive and households and firms will no longer be indifferent when choosing between money and these securities.
But human nature being what it is, they also began issuing paper notes equivalent to the value of precious metal which they don’t have in the vaults and the various currencies issued by the various banks became devalued very quickly. Another aspect to the whole thing is that people do cash in paper notes at times and banks have to hold large reserves sometimes up to 30% of their liabilities in order to make sure that they have adequate liquidity that may be used in case of unforeseen events. The first central banks in its relatively modern form were therefore established to provide the function of being the sole issuer of currencies and the single keeper of reserves as defined by law, notably the Bank of England in 1694 and epitomised in a tome in 1873, Lombard Street by Bagehot, Editor at the time of the Economist, where the concept of the Banking Department and the Note Issuing Department was so clearly explained. This gave credibility and value to paper currency and it was also a very much more efficient system in that the single reserves at the central bank could be used by the many commercial banks who thereupon kept much smaller contingencies, historically sometimes as low as 4 % of liabilities and accessed the joint “reserves” at the central bank whenever necessary enabling a much more efficient use of financial reserves than each bank having its own large reserves. Thus was born the term “banker to the bankers” and “lenders of last resort”.

We are also working on the inclusion of these risks in the stress test methodology for the Spanish financial sector. In sum, banks and supervisors alike are moving along this path, which poses all sorts of challenges. For instance, it is in no way straightforward to envisage these risks as part of the commonly used valuation and measurement methodologies. Moreover, there are cultural factors hampering their inclusion, which calls for involvement from the uppermost levels of organisations. And, above all, one of the main challenges is the lack of information, which enormously hinders further progress. Allow me briefly to refer to these valuation-based aspects and the absence of data. Traditionally in finances there is a tendency to value investments exclusively from the standpoint of economic return. The classic focus of study in finances would be cash flows; once capitalised or discounted, these enable us to compare different investment options. From a theoretical standpoint, responsible investment reminds us that we should not value and compare different investments looking solely at an Excel chart. Rather, we should perhaps look at variables that are not directly monetisable in the expected return on each investment. Measuring this “non-monetisable” return is clearly not straightforward. The approach being followed focuses on the measurement of “impact”. For example, environmental sustainability has for some time used measurements that take “footprints”, be they carbon, hydric, environmental, etc.
Chart 7: Percent of population with at least an undergraduate degree (or equivalent) (2015)  Chart 8: Unemployment rates (2016)  Source: ONS Annual Population Survey; Bank calculations. Source: ONS Labour Market Statistics; Bank calculations. 18  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  18  Chart 9: Youth (16-24) unemployment rates (2016)  Chart 10: Working age mortality rates, males (2014)  Source: ONS Labour Market Statistics; Bank calculations. Source: ONS Mortality Figures for England and Wales, Scotland and Northern Ireland; Bank calculations. Chart 11a: Real GDP per head growth (2008 to 2014)  Chart 11b: Scenario - Real GDP per head growth (2008 to 2014), without monetary stimulus  Source: ONS; Bank calculations. Source: ONS; Bank calculations. Notes: See footnote 16. 19  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  19  Chart 12a: Change in unemployment rates (2008 to 2016)  Chart 12b: Scenario – Change in unemployment (2008 to 2016), without monetary stimulus  Source: ONS Labour Market Statistics; Bank calculations. Source: ONS Labour Market Statistics; Bank calculations. Notes: See footnote 16. Chart 13a: Growth in median net wealth (2006/8 to 2012/4)  Chart 13b: Scenario - Growth in median net wealth (2006/8 to 2012/4), without monetary stimulus  Source: ONS Wealth and Asset Survey; Bank calculations. Source: ONS Wealth and Asset Survey; Bank calculations. Notes: See footnote 16.

This means that it is very unlikely that Bank rate will return to the levels seen immediately before the crisis in the near future. See Haldane (2015) and Broadbent (2016) for further details. 17 These simulations take no account of regional variations in the monetary policy transmission mechanism. They assume that Bank rate would have stayed constant, and there would have been no quantitative easing programme. This stylised simulation is estimated at the aggregate level, and applied uniformly across the UK. All regions are affected by the same percentage change in each variable. Net wealth is assumed to move in line with nominal GDP, and no distinction is made between the various different types of wealth (such as housing or financial wealth). It also assumes that the monetary regime does not change and agents do not alter their view of the MPC’s reaction function, despite observing extremely large economic shocks. 9  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  9  Without the support of looser monetary policy, all regions would then have experienced a contraction in real GDP per head since 2008. Every part of the UK would have been a Red Car region. This contraction would have been large, averaging 7%, equivalent to an annual average income loss of £ per person. Here in the North-East, the loss in annual income for the average household would have been similar in magnitude. The picture is similar if we turn to unemployment.
All the more, ad hoc policy meetings based on ad hoc policy documents should be minimized. This not only helps the central bank in its communication with the public, but also helps the decision-making body to maintain internal discipline. Separateness emphasizes that special attention should be paid to monetary policy in the central bank’s agenda. In order to avoid any attempt to displace the policy agenda by any other ‘extremely  1  For further details see Lombardelli, Proudman and Talbot’s article ‘Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making’, published in International Journal of Central Banking, Vol. 1, No. 1, May 2005. BIS Review 88/2005  1  important’ issue, separate meetings should be established for policy discussions. Indeed, a policy decision is worth a special ‘policy day’, split into: (i)  a staff presentation, when staff present the outcome of their analysis (based on a standard set of policy documents)  (ii)  a discussion of the analysis  (iii)  the policy decision  (iv)  communication of the decision to the public  Staff independence should protect the members of the decision-making body from the filtering of undesirable information which can occur whenever a particular decision maker directly manages the ‘Economic Department’. Although such behaviour is, with high probability, not intentional, this member can influence the interpretation of the ‘staff’ analysis in a way convenient to his own opinions. It could happen that the rest of the decision-making body members receive a biased analysis.

Zdeněk Tůma: Monetary policy governance - comments on the institutional set-up of inflation targeting in Albania Speech by Mr Zdeněk Tůma, Governor of the Czech National Bank, at the Bank of Albania Open Forum on "Preconditions for launching inflation targeting in Albania", Tirana, 1-2 December 2005. *  *  *  Monetary policy is without any doubt one of the most powerful tools for macroeconomic management. While the theoretical background for target-setting is well established, the task of making practical arrangements for conducting policy in order to achieve targets in an efficient way is certainly a very difficult one. Designing a well-functioning system for decision making is thus at the very top of the agenda for any central bank striving to establish a sound monetary policy framework. It is therefore highly commendable that the Bank of Albania is addressing the related issues well in advance. Today, I would like to make several comments on the issues where I feel the Czech National Bank can pass on some observations and know-how based on its almost eight-year experience with decision making under an inflation targeting regime. The discussion about the proposed institutional set-up in Albania provokes a more general debate about the properties of the ‘ideal’ monetary policy decision-making system. Such a discussion of this general issue could reveal some practical implications for the Bank of Albania.
David Miles: Leverage and monetary policy Speech by Mr David Miles, Member of the Monetary Policy Committee of the Bank of England, at The Economic and Social Research Institute/Foundation for Fiscal Studies (ESRI/FFS) conference, Dublin, 12 October 2010. *  *  *  I would like to thank Jing Yang and Gilberto Marcheggiano for research assistance and to colleagues at the Bank of England for helpful comments. The views expressed are my own and do not necessarily reflect those of other members of the Monetary Policy Committee. You do not need me to stand here in Dublin this morning and tell you what profoundly difficult economic times we are going through. As an elderly New York friend of mine enquired of me recently when I offered such a thought “for such pearls we need economists?” I feebly replied that knowing how much of a mess you were in was of some use and (with rather more confidence) that thinking how you get out of the mess was something economics could help with. Today I want to talk about setting monetary policy as we emerge from one mess and how we can reduce the chances of getting into another one. I am going to focus on the UK but I think much of what I say has relevance here in Ireland and beyond. That it has been a very bad mess is clear.

This second risk is one that I would consider small if it were clear that the economy was on typical upswing of the sort of cycle we used to think normal. But I do not see many of the signs that are usual in a normal upswing. Typical features of the early stage of strong cyclical upswing would be rapid growth in lending and in the money supply, signs of emerging shortages in capacity across several sectors, wage pressures moving up, and indicators of household and business confidence moving steadily higher. Neither the aggregate statistics on the state of the economy, nor surveys, nor the discussions that I have had with businesses across the UK, are consistent with this. Consider what has happened to wages in the UK – which for many firms are the most significant element of costs and are an indicator of underlying, domestically generated inflation pressures. Over the whole period from the mid 1990s to the onset of the financial crises UK-wide aggregate wage settlements fluctuated in a narrow band around 3.5%. Those settlements were consistent with inflation outcomes that stayed very close to the target set for the Bank of England. Whole-economy annual wage settlements have now fallen to around 1.5% – well below both the current rate of inflation and below the inflation rate thought likely over the next year (see Chart 16). So these are not normal times, which is why there is a risk that monetary policy is normalised too quickly.
We can also add forward guidance to this arsenal, on PSPP (including the reinvestment horizon) and policy interest rates, which we could strengthen further through a condition of a greater degree of persistence in inflation around our target. This forward guidance provides considerable leeway to adapt to economic changes thanks to its self-stabilising endogenous component. However, it would lose its effectiveness if it appeared to be too volatile or too arbitrary and for this reason cannot be considered a flexible adjustment instrument. Our new instruments to cope with the crisis This is why the ECB introduced new instruments in addition to those already available, which are more flexible in dealing with an unprecedented and multifaceted crisis. The supply of liquidity to banks has been reinforced in terms of quantity and, above all, through an incentivising price structure. Interest rates on TLTROIII operations were cut dramatically on 12 March and again on 30 April and are now, at –1%, 50 basis points below the deposit facility rate for any bank that maintains the outstanding amount of its lending to the economy. This is a radical – and yet largely unheralded – innovation that represents several billion euro in support to the European banking sector each year. Above all, we have created the EUR 750 billion Pandemic Emergency Purchase Programme (PEPP). While it was its size that impressed, its greatest innovation lies 4/5  BIS central bankers' speeches  in its exceptional flexibility in terms of time, volume and allocation between countries and asset classes.

Finding solutions to this problem is not going to be easy. But this is where efforts to revive the domestic economy will need to focus on. New lending is perceived as risky given the current negative factors on the macro fronts and external factors, while NPL overhang preoccupied bankers’ attention and kept them from renewing their client relationship. To address this problem, the authorities have chosen to approach the problem in three ways:  BIS Review 70/2001  3  ·  First, to further accelerate corporate debt restructuring by improving the legal frameworks and by setting up a national asset management corporation to deal with the remaining unresolved problem loans. Progress on this front is most visible. The law establishing the Thai Asset Management Corporation, or TAMC, was passed and operations set to begin soon with all asset transfer to be completed by September. A key benefit of TAMC is the advantage of being a single creditor of the transferred asset. This would allow TAMC to deal effectively and speedily with the unresolved debts that involve multiple creditors. Also, the vast executive powers given to TAMC by law would make it easier for TAMC to take a comprehensive approach to debt restructuring, and have the ability to deal with cases that might warrant corporate restructuring and change of management. ·  Second, to introduce a scheme of credit guarantees which would provide a facility of risksharing between corporate borrowers, the Government, and banks based on market mechanism.
2 See Draghi (2015), “Monetary Policy: Past, Present and Future”, speech at the Frankfurt European Banking  Congress, 20 November 2015. 3 Using the Phillips curve approach presented in Box 2 of the ECB Economic Bulletin, Issue 3 / 2016. 6/6  BIS central bankers' speeches

What this entails is that if the inflation rate 1-2 years ahead is expected to be below the 2 per cent target, the repo rate will usually be lowered, and vice versa. However, it is important to point out that this rule cannot be applied mechanically and nor has this been the case earlier. It is also important to emphasise that openness regarding our forecasts is a vital part of the monetary policy reasoning, as it enables discussion and assessment of our decisions. I will return to this issue later. Monetary policy therefore focuses on expected future inflation and not the most recent CPI outcome. However, new results can of course affect the assessment of future events. The current economic situation is very important in that it comprises the foundation for our forecasting work and therefore affects the conclusions we will reach regarding future inflation. Nevertheless, we cannot use monetary policy measures to influence economic conditions in the very short term, unless we are prepared to make drastic changes in the interest rate. The Riksbank’s views on inflation prospects are described in detail four times a year in our Inflation Reports. In connection with the publication of two of these reports there is also a public hearing of the Riksbank Governor in parliament by the Riksdag Committee on Finance. The initiative to these meetings came from the Riksbank, as a way of creating further clarity and transparency with regard to monetary policy.