samchain/econo-pairs-v1 huggingface dataset:
Temporary or provisional financing is better than none, but a clear-cut schedule on how the very large debt should be financed over the next ten or twenty years must be made if investors and trading partners are to have confidence or a clear idea of what they are dealing with, and I think that is essential. How central banking will be done is also important. The Bank of Thailand itself is being revolutionised. The pay system will change, the promotion system will change and career development has been instituted. Risk management supervision will be instituted from the first of January next year. Simple things such as a letter of transmittal of the supervision team to the manager of the bank will be required. This may seem trivial, but it will put responsibility firmly on the supervisors, which was never possible before because supervision missions went whenever they felt like it and did not tell anybody except the banks. It also makes job control of the supervisors impossible and it is very dangerous to allow people with criminal prosecution capabilities to work in this manner. The most important thing about the new central bank though is probably to keep it really independent. Thailand is now quite a complicated place, a large economy with considerable sophistication. The role of the central bank in helping finance development and directing among the sectors of the economy will soon no longer be possible. If the central bank could keep the economy stable, that would be a major achievement.

In my own view, large complicated government units are probably not possible in Thailand unless we get some fantastic new government which is very sophisticated and lasts a very long time, say, 10 or 20 years, a prospect, which presently one should not plan on. In this case, one should then design government units to be small independent units, independently managed, and the governments that come in execute their mandate through budget allocation and legislative changes where necessary. Interestingly, all over the world for a very long time, the concept has been that civil servants have a lot of authority and are not profit-oriented. One should make sure that they have tenure and are well compensated with pensions after they leave, otherwise they might try to stock up some assets for their later life. The philosophy is going in the opposite direction everywhere now. Civil servants are powerful and important and therefore they should not have tenure. For that reason one must make sure that civil servants perform by giving them only limited term contracts, and they will have to perform responsibly and efficiently to get a new contract. I am inclined more towards the latter as one can never make sure of hiring or promoting the right person, and therefore one should plan on an easy change of personnel to get the best results. Let me make a controversial statement on the platforms of the various political parties in terms of spending more and taxing less.
Pricing, underwriting and reserving in wholesale general insurance and reinsurance markets  Our primary prudential concern about current market conditions is that pressure on pricing will lead to weakening of underwriting standards, under-reserving against risks and insurers being tempted to take short 4  cuts on capital. On underwriting and reserving, Anna Sweeney’s ‘Dear CEO’ letter , published a few months ago, set out nine areas where our supervisory review work had suggested weaknesses, including:   Formulating business plans based on loss ratio (and future reserving assumptions) which appear optimistic given current market conditions and historical performance. In particular, we have seen a number of examples of insurers expecting improvements in claims experience due to portfolios changes, leading them to exclude historical years of poor performance from reserving benchmarks without good supporting evidence.   Insufficient use of technical pricing models, even for lines of business where such models are generally considered to be more developed and reliable.   Slow reaction to emerging loss development, with insurers taking false comfort from reserving benchmarks which appear to show business as still profitable despite emerging underwriting results.   Diversifying into new lines of business (for example, casualty classes) despite insufficient underwriting expertise or oversight. Aggregate analysis for a sample of London Market insurers suggests that initial estimates of reserves were inadequate for more recent years of account, with insurers needing to strengthen reserves over the past couple of years.

For the banks, it was a case of heads I win, tails you – the taxpayer – lose. This cheap funding fuelled lending. Banks got bigger. In the UK, their balance sheets rose from around one-half to more than five times our national income in a generation. As the banks got bigger, so did the implicit subsidy – by the time of the crisis it reached many billions of pounds a year. The bigger banks became, the more they were seen as too important to fail, and the surer markets became that the taxpayer would bail them out. But there are only so many good loans and investments to be made. In order to expand, banks made increasingly risky investments. To make matters worse, they started making huge bets with each other on whether loans that had already been made would be repaid. The seeds of the eventual downfall of the financial system had been sown. As loans and investments went bad, those seeds started to sprout. In August 2007 came the moment when financial markets began to realise that the emperor had no clothes. The announcement by the French bank BNP Paribas that it would suspend repayments from two of its investment funds triggered a loss of confidence and a freezing of some capital markets. A month later, the crisis claimed its first victim when Northern Rock failed. In the months that followed, there was a steady procession of banking failures culminating in the collapse of the American bank Lehman Brothers in September 2008.
Contagion might, for example, arise where other institutions are heavily exposed to the troubled institutions or share characteristics that could be interpreted as the origin of its problems. General sentiment could also be a factor, when, for example, there is heightened nervousness about the stability of the banking or monetary systems. But there are many other possible scenarios. Consistency with Currency Board Arrangements A limitation on the HKMA’s exercise of lender of last resort support is the need for consistency with the Currency Board arrangements in Hong Kong. Our Currency Board system requires that the monetary base, which in effect represents the ultimate liquidity of the financial system, can only H[SDQGDORQJZLWKLQFUHDVHVLQIRUHLJQUHVHUYHV RUPRUHSUHFLVHO\ZLWKWKHIRUHLJQUHVHUYHVLQWKH backing portfolio, which has been established to segregate the Currency Board component of the foreign reserves. However, the system would not preclude use of the Exchange Fund’s other assets, including its Hong Kong dollar assets, outside of the Currency Board account, to provide last resort support to a problem institution. Nor would it preclude funding temporary liquidity injections through borrowing from the interbank market or through a sale of foreign currency assets held by the Exchange Fund, again outside of the Currency Board account, not touching those assets earmarked for the Backing Portfolio. A further option would be for the HKMA to operate within the Currency Board account and conduct repos using Exchange Fund paper or US dollar assets.

These are the two “key battle fields”. Regarding climate-related risks, there are two essential levers to win the battle: (i) disclosure of present data and their standardisation; and (ii)  forward looking assessments – the stress tests. The “snapshot” of the risks, and their “video”. Disclosure will help markets to appropriately price climate-related risks and ensure efficient allocation of capital. That is why disclosure should become mandatory, at least as a first step for financial institutions, as it is already in France, and for large corporates. The EU, here too, leads by example, having decided standardised mandatory disclosure from next year on. Because of data gaps and still a lack of clear transition policies, assessing individual or sectoral exposure to climate risks remains nevertheless a thorny issue, as highlighted in the latest NGFS report published last weekiii on bridging data gaps. Hence, setting up an ambitious international reporting framework for climate-related financial disclosure is another key priority. This means achieving a common framework – basic but already significant – for all jurisdictions with the possibility to be more ambitious for those who want to. In addition, we should bring on board the “double materiality” promoted by the European Commission: consider both the risks that affect the reporting entity itself and the impact it has on the environment through its activity, and also encourage a broad coverage of ESG topics, not limited to climate change.
I am also pleased to see that, among other priorities, ADB has put more emphasis to private sector development including promoting the SME sector in recent years. A vibrant SME sector will create jobs, improve productivity and expand opportunities for the poor in developed and developing economies alike. We hope to see the Bank continue with its efforts on this front, along with its other equally important priorities in promoting the development of the region. 2  BIS central bankers’ speeches

that background, the NBR Board decided to successively cut the monetary policy rate, to narrow the symmetrical corridor defined by interest rates on standing facilities around the policy rate, to provide liquidity to credit institutions via repo transactions (repurchase transactions in government securities) for ensuring the smooth functioning of money market and of other financial market segments, to lower the minimum reserve requirement ratio on foreign currencydenominated liabilities of credit institutions, as well as to purchase leu-denominated government securities on the secondary market with a view to consolidating structural liquidity in the banking system that should contribute to the smooth financing of real economy and the public sector. As regards the purchase of leu-denominated government securities on the secondary market, a measure widely resorted to by central banks in the current context, I would like to stress that the NBR decided to launch secondary market purchases only after its position on the market shifted from net debtor to net creditor in relation to commercial banks. From this perspective, in full compliance with the NBR Statute, the measure was carried out with a view to ensuring an adequate level of financial system liquidity and I do not think it qualifies as a quantitative easing measure per se. Finally, the NBR took operational measures to ensure the continuity and smooth functioning of payment and settlement systems underlying payments in domestic currency, as well as to ensure the necessary cash flows for banks to conduct all operations.
When wealth declines in Sweden and abroad, households reduce their consumption in order to compensate for the reduction in wealth, which also contributes to a fall in demand. In addition, the financial turbulence during the summer also increased pessimism among the households and companies. This pessimism has in itself had a dampening effect on consumption and investment. The necessary consolidation of public finances in parts of the euro area and in the United States also means that we can expect monetary policy to continue to be expansionary in these parts of the world. In my view, this in itself has an effect on Swedish monetary policy. I believe that Swedish interest rates cannot deviate too much from foreign interest rates without the exchange rate being affected, and the exchange rate is of major importance in determining the ultimate level of inflation. A central bank that conducts inflation targeting is therefore, in my view, dependent on the monetary policy that is pursued internationally. This applies particularly to a small, open economy like the Swedish economy. However, as always in situations where there is great uncertainty it is difficult to make forecasts about the future at the moment. Today I have presented how I reasoned ahead of the repo rate decision that we made in September. Since then there has been a lot of manoeuvring around the management of the European sovereign debt crisis.

That was not just deeply regrettable for the institutions concerned, but also it damaged a proud and long tradition of sound banking in Scotland. It pained me, in my role as the person responsible for resolving a number of these problems, to see the lack of regard for the basics of a well run bank, the foundations which must be there to be sound and successful. I have spent the last seven years also responsible for the Bank of England’s banking operations, and I know from this experience that unless you really understand your balance sheet and its risks, the systems and control environment that supports the balance sheet, and you have the basics needed well covered – the reconciliations work, the right management information available promptly – you aren’t doing your job. It isn’t sexy or headline grabbing, but it is surely what the good Scottish bankers of the past taught us to do, and what I hope is back with the current generation. The financial crisis has moved on since those earlier days. Over the last twelve months, concerns with both sovereign states and their banking systems have intensified in other parts of Europe. Recently, the IMF and European authorities have moved to put in place a substantial package of support for Ireland.
Mr. George discusses international economic and monetary management and the implications of the present disturbances in Asia Text of the Henry Ford II Lecture delivered by the Governor of the Bank of England, Mr. E.A.J George, at Cranfield University School of Management on 21/4/98. It is a real pleasure to be back here at Cranfield to deliver this Henry Ford II Lecture. The Lecture - as you have just heard - commemorates an award made by the Ford Motor Company, in celebration of Henry Ford II’s 60th birthday, to Cranfield School of Management. It was one of just two such awards to European business schools. And we have just seen evidence - in the presentation of the Henry Ford Award - of the continuing close relationship between the Ford Motor Company and the School of Management. The University has every reason to take pride in the fact that the achievements of the School are recognised by a great multinational company in these ways as I take pride in my own links with Cranfield. Given the nature of the occasion, Mr. Chairman, I thought it might be appropriate if I were to look beyond the narrow perspective of the monetary and economic situation in this country though I will say something about that towards the end of my remarks - and focus on some wider aspects of the international economy.

There are now 14 Asian economies at investment grades, of which, nine are at or above the single A rating. At the same time, the supply side factors are also highly favourable. The huge financing needs of Asia will support a continuous expansion in bond issuance. According to the Asian Development Bank, Asia’ s infrastructure financing needs alone amounted to USD 8 trillion from 2010 to 2020. Equally important is the emergence of new and attractive bond asset classes. The two products that have caught most attention of global investors are the sukuks in Malaysia and the RMB dim sum bonds in Hong Kong. This is rightly so as these products connect the global market with the vast and increasingly prominent financial systems in the Islamic world and China. We have seen very encouraging development of the sukuk market in Malaysia, the symbol of Islamic financing. The amount of outstanding sukuks in Malaysia increased substantially from MYR 146 billion (USD 41.3 billion equivalent) at the end of 2006 to MYR 361 billion (USD 113.9 billion equivalent) at the end of 2011. Meanwhile, the growth of the RMB debt securities market has been phenomenal. In a short space of 5 years, the annual issuance amount lodged with the Central Moneymarkets Unit (CMU) in Hong Kong increased by 16 times from a modest amount of RMB 10 billion (USD 1.4 billion equivalent) in 2007 to RMB 172 billion (USD 27.3 billion equivalent) in 2011.
Charter schools have provided another source of school choice in education. More research into evaluating the effectiveness of voucher programs and charter schools at raising student achievement would be desirable in terms of informing public policy choices.8 The importance of education is not limited to elementary and secondary levels. In fact, there exists convincing evidence from the child development literature that suggests that educational investments early in childhood have especially large rates of returns in terms of lifetime earnings and other outcomes. Take, for example, the Perry Preschool program for low-income African-American children, a two-year preschool program experiment in the mid1960s. Recent research shows that this program had very large beneficial long-term effects, with participants experiencing higher rates of high school graduation, higher salaries, higher homeownership, more stable family structures, fewer arrests and lower welfare dependence. The large positive economic externalities from these investments in children imply that such programs more than pay for themselves over the long term. Estimates indicate that the aggregate benefits over the life of a child exceeded by eightfold the program’s per-pupil  6  Chakrabarti and Roy (2015). 7  Hoxby (2003), Chakrabarti (2008) and Chakrabarti (2013). 8  Dobbie and Fryer (2011), Dobbie and Fryer (2015), Angrist, et al. (2016).

In particular, lower interest rate levels help reduce losses on credit portfolios, thanks to the favourable effect they have on borrowers’ ability to repay their loans, associated both with lower loan costs and with the higher income and lower unemployment levels linked to the positive macroeconomic impact of lower interest rates. These effects have been especially significant in countries such as Spain where the banking system had a high level of non-performing loans and where short-term and variable rate lending predominates, since this means that changes in market yields are rapidly passed through to the cost of outstanding debt. This effect thus explains part of the decline in the NPL ratio in recent years. In addition, lower interest rates help drive up the prices of financial and real assets. This effect is immediate in the case of debt securities, especially long-term ones, as their prices are more sensitive to yield changes. The prices of equities and real assets, such as housing, are also boosted by lower interest rates, owing to their effect on the discount factor, although these prices are also affected by other factors, such as macroeconomic expectations. All this entails capital gains for banks exposed to these financial and real assets. It also increases the value of loan collateral, which enhances the credit quality of loans and, therefore, reduces losses on the credit portfolio. That said, it is true that these capital gains become exhausted once interest rates cease to decline and remain at low levels.
The correction in prices was particularly marked in the case of assets issued by the European banking sector; the above-mentioned global factors were joined by other elements stemming from the euro area, from its banking systems and, indeed, from specific banks. These factors include most notably the following: the low profitability of banking business in Europe, a matter on which I shall focus in view of its significance; the concern over the high volume of non-performing loans in certain European jurisdictions; and the extension and intensification of regulatory requirements, a clear example of which is the new Recovery and Resolution Directive which, ultimately, may translate into an increase in requirements in respect of capital or of the holding of loss-absorbing liabilities. Against this background, it is vital to understand the causes behind the European bank stock market corrections, given that their lower share prices hamper the possibility of tapping the markets for capital to reinforce their solvency levels. In this setting common to European banks, Spanish institutions increased their consolidated assets by 2.5% in 2015, essentially owing to their international activity. As to business in Spain, credit to the resident private sector continued to fall in 2015, albeit at more moderate rates than in 2014, both for households and for non-financial corporations. For the latter the fall in credit progressively eased, with the rate of decline for SMEs (-2.8%) appreciably lower than that for credit to large corporations (-6.4%).

In the opinion of the Banco de España, the standardised operational risk approach that the Basel Committee has submitted to public consultation should be improved in various respects The review of the standardised approach seeks to provide greater sensitivity to credit risk in the calculation of RWAs and, in turn, to prevent the approach from residing excessively and automatically on the ratings given by external rating agencies. The Basel Committee is striving to design a standardised approach that redresses these shortcomings, and is adjusting certain elements and deciding on their calibration. The position of the Banco de España, like that of other national supervisors, is that this review should not give rise to capital increases, or in any event increases that may prove significant for the banking sector. The use of internal models is also under review, with the internal credit and operational risk models pending finalisation this year. The aim is to reduce the excessive variability of RWAs, and in this connection work is under way in several directions, which may be summarised as follows. First, not all risks are deemed subject to modelling. Such is the case of operational risk. The current proposal is to cease to model this risk. Second, under credit risk, not all portfolios will be equally subject to modelling. Specifically, “low-default portfolios” would be a case in point, as would, for instance, that of banks, or certain segments of that of corporations.