samchain/econo-pairs-v1 huggingface dataset:
We have high prudential standards and rigorous supervision that give market players confidence. And we are at the crossroads of Asia, which is growing significantly faster than the Western economies. 2010 was a good year for Singapore’s financial centre. The financial services sector grew by 12% last year. Several specific factors in Asia underpin the demand for financial services provided by Singapore: increase in trade, demand for infrastructure investments, rise of Asian corporates, and growth of individual wealth. As a well regulated and diversified international financial centre, Singapore plays a natural role in facilitating trade and  4  BIS central bankers’ speeches  investments in the region. High regulatory standards and a conducive business environment will continue to support stable growth in financial services. Conclusion Before I conclude, I want to highlight one more significant theme. This year marks MAS’ 40th anniversary. MAS is where it is today because of the outstanding contributions of its staff – both past and present. The economic and financial stability that Singapore has enjoyed is the result of tireless efforts of generations of MAS officers. They have helped to secure for Singaporeans a low rate of inflation, preserve the purchasing power of our official foreign reserves, keep our financial sector safe and sound amidst crisis and change, and grow Singapore as a vibrant and trusted financial centre. But MAS could not have done this alone. I would like to thank the financial services industry and all our partners for working alongside MAS to meet its objectives.

Beyond current uncertainties, significant risks remain in the global economy and financial system that could derail growth. In Emerging Asia, there are upside risks to inflation. If central banks are forced to tighten monetary policy more, growth could be jeopardized. In the  BIS central bankers’ speeches  1  US, there are concerns about fiscal sustainability. If these lead to volatility in the financial markets against the backdrop of a still-weak labour market, then GDP could decelerate sharper than expected. But the chief global risk is the ongoing sovereign debt crisis in peripheral Europe. If there is contagion and banks in core Europe are affected, there could be a severe credit squeeze and pullback in economic activity. MAS is closely monitoring the developments in Europe. Let me now go on to recent developments on the inflation front. Headline inflation is now expected to be 4–5%, but forecast for core inflation is unchanged. I mentioned two months ago in a speech that headline CPI inflation had probably peaked. This remains technically correct but less clearly so in substance. Inflation has indeed eased from 5.5% in January to 4.5% in April and May. But inflation is expected to creep back up to slightly above 5% for the next couple of months before slowly trending down towards the end of the year. Therefore, for 2011 as a whole, we are revising CPI inflation forecast to 4–5%, from the current 3–4%. This upward revision and renewed volatility reflect two factors. First, accommodation costs.
In the case of Thailand, the economic growth which slowed down to 1.8% last year has picked up significantly to 3.9% in the first quarter of this year. Unemployment rate has also declined, helping to strengthen consumer confidence. Our growth was driven by private consumption and government stimulus. For the remainder of the year and the next, contribution from fiscal pump priming will be less, but we are confident that the recovery of exports will take up the slack. We think that our exports will recover because we believe the improvement in the US economy will continue, even though at a more moderate pace than originally forecasted. The bottoming of the electronic cycle will also revive growth of many of our neighbours, who are our most important export customers. The only point of disappointment is in business investment growth which has been slow due to the still high excess capacity in many industries in Thailand. These are the industries that cater for the domestic market, although the capacity utilization rate is rising quickly in recent months. However, I am optimistic that the buoyant consumer demand will soon make it more and more attractive for some businesses to start thinking about expansion or diversification. I believe similar development is also being seen in varying degrees throughout South East Asia. The rate of inflation was only 1.6% last year, allowing the central bank to conduct an accommodative monetary policy. The reduction of external debt has been steady.

The minimum is a system that allows the sharing of negative information or some kind of black lists. But one should quickly migrate towards pooling and sharing positive information as well. A well functioning credit information system is not harmful to the consumers. Instead it enables the borrowers on the margin to obtain credit, those who would have been refused in its absence. In Thailand we already have two credit bureaus operating, and the Credit Bureau Act will soon be enacted to govern their businesses. Third, the need to protect the consumers. The charges and expenses levied against them should be made clear and easy to compare between various issuers. Interest rates should be declared as effective annual rates and sufficient lead time should be allowed and communicated to consumers before changes in terms and conditions come into effect. In Thailand, we are planning to set a uniform standard for the whole industry regarding such things as interest free periods, the setting of due dates and calculation methods for past due balances. Finally, if internet transactions become prevalent or poised for rapid growth, there is the need to define its proper legal framework. On this issue, we have just passed the relevant laws and are in the process of drafting the subsidiary regulations at ministerial level. At the micro level, and this is your direct responsibilities, card issuers have to put in place a good system of risk management.
After provoking an exceptional increase in liquidity in August, on 6 September 2011 the SNB announced that it would no longer tolerate a EUR/CHF exchange rate below CHF 1.20. This measure remains the focal point of Swiss monetary policy. In the current global context, Switzerland’s economic situation does not justify any strengthening of monetary conditions and this should remain the case for the foreseeable future. The SNB continues to enforce this minimum rate with the utmost determination and remains prepared to buy foreign currency in unlimited quantities for this purpose. From a conceptual perspective, the minimum exchange rate is not a quantitative easing measure and most of my generic comments do not strictly apply to the Swiss case. Nevertheless, the risks associated with this measure do, to a certain extent, resemble those I just described. The first of these risks is that the minimum exchange rate may superficially seem like a simple or straight-forward measure, which may in turn give the impression that monetary policy is a catch-all problem-solver, i.e. that it is almighty. This is clearly not the case. Monetary policy has neither the capacity nor the mandate to protect the Swiss economy from all the shocks to which it is subjected. The aim of the minimum exchange rate is to avert the worst possible developments in zero interest rate environment. It is not a response to each and every challenge with which the Swiss economy is faced, nor can it be implemented at any desired level, free of any risk.

Jean-Pierre Danthine: Monetary policy is not almighty Speech by Mr Jean-Pierre Danthine, Vice Chairman of the Governing Board of the Swiss National Bank, at the Journée Solutions Bancaires, Geneva, 31 May 2012. *  *  *  Ladies and gentlemen, It is a great pleasure for me to be here with you all today. At the outset, please allow me to thank the organisers at Unicore for having invited me to speak at the 14th Journée Solutions Bancaires to be held here in Geneva. Today, I will reflect on what monetary policy can and cannot do. I would like to emphasise where central banks’ powers and responsibilities end and where those of fiscal policy and the private sector begin. “Why is he focusing on this now?” I hear you ask. “We are in the midst of a crisis. Shouldn’t he be emphasising what central banks can do, instead of what they cannot?” My answer to you is this: while the monetary policy measures taken in recent years have had a stabilising effect, today, monetary policy has acquired a degree of prominence that could lead to its powers and its reach being overestimated. Central banks are far from almighty and, in efforts to emphasise this, I will review the various policy options at the zero lower bound and the risks associated with the measures currently in place. I will first examine the issue in universal terms, before concentrating on the very unusual case of Switzerland.
So it is no good for Hong Kong to sit on its laurels and just hope or pray that other financial centres do not or cannot catch up. 3. The main reason why I decided to set up the TMA back in 2005 was precisely the desire to enhance the “soft powers” of Hong Kong’s financial services industry. As many founding members of the TMA who are here today may recall, the predecessor of the TMA was the ACIHK, the Hong Kong branch of the international ACI headquartered in Paris. The ACIHK played a useful role in supporting the treasury markets in Hong Kong, but there were limitations on its remit and resources. I can still remember vividly how I worked with the founding members (some of them are here today), such as Horace Fan, Andrew Fung, Benny Luk and Peter Pao to transform the ACIHK into the TMA as we now know. I would like to take this opportunity to thank all the founding members for their efforts and contributions to help bring this important piece of soft infrastructure into fruition. 4. The TMA’s work through the years is commendable. In the past year alone, the TMA has, in collaboration with the HKMA and other stakeholders, made many contributions to enhance Hong Kong’s soft powers.

I would like to highlight today three important pieces of work of the TMA: (a) the TMA has conducted a thorough review of the Hong Kong Interbank Offered Rate (HIBOR) fixing mechanism and presented to the Hong Kong Association of Banks (HKAB) recommendations to enhance the transparency, robustness and governance of the HIBOR fixing mechanism. These recommendations were subsequently accepted by the HKAB and endorsed by the HKMA in February 2013 for implementation. Under the new regime, the TMA has taken over from HKAB as the administrator of the HIBOR fixing mechanism with Hong Kong Interbank Clearing Limited serving as the calculating agent. (b) Another landmark achievement was the launch of CNH HIBOR. Having undertaken more than one year of pilot trials, the TMA officially launched in June 2013 the CNH HIBOR fixing, which is the first offshore RMB interest rate benchmark in the world. This is a very important piece of market infrastructure which will facilitate the development of a whole array of offshore RMB credit and interest rates contracts and products; and  BIS central bankers’ speeches  1  (c) The TMA is also an important player in professional training. In close collaboration with the HKMA, the Hong Kong Institute of Bankers and the Hong Kong Securities and Investment Institute, the TMA has participated and contributed to the design of a new professional competency framework for practitioners in the private wealth management industry.
In early 2009, the effect of the global crisis on world economies deepened, world trade volume fell to historic lows, almost all countries suffered economic contraction, unemployment rates soared; in brief, the world had faced the possibility of an economic depression of such dimensions for the first time since 1929 – as a result of which the fears of a global and prolonged depression peaked. 2  BIS Review 79/2010  In order to recoup the significant contraction in demand that emerged due to the decrease in the private sector’s total investment and consumption expenditures, governments and central banks have prepared historically extensive and comprehensive stimulus packages. The scope of the crisis and the economic contraction became worldwide in a short while, which necessitated the timely implementation of measures in coordination with other countries. Public resources that were allocated to the financial sector and the stimulus packages that were put into effect during the crisis have brought significant burden on public budgets. Research conducted by the International Monetary Fund indicates that the total amount of capital transferred to the financial sector was USD 4 trillion; state purchases to prop up securities markets amounted to USD 6 trillion; state guarantees to financial institutions and the corporate sector became USD 14 trillion; and fiscal measures such as tax rebates and new public spending reached USD 6 trillion. As of the second half of 2009, we entered the fourth and last stage of the crisis.

This issue matters considering that, compared to our September 2019 estimates, the damaged caused by the social crisis and the Covid-19 crisis combined will add up to a loss of almost 10% of GDP by 2022 (Figure 14). This is complemented with the fact that these two crises combined have caused dismay among the economic agents, whose equity position has worsened as they have used up their slack and reserves. Thus, from September 2019 and through this year to date, companies increased their indebtedness by 16 points of GDP; the capitalization of the stock market fell by nearly 25 points of GDP; the government has used its sovereign wealth funds and issued new debt to raise it in net terms by almost 8 points of GDP, and households will have reduced their pension savings by about 10 points of GDP when the second withdrawal of funds is completed. All of this makes these agents more vulnerable to future stressful scenarios. The impact of these factors is already apparent in our economy. Our currency, for example, recovered only partially the parity and stability of before the social outbreak, reducing some of its capacity to cushion our capital market from external shocks. The long-term rates, which used to be more stable than those of comparable countries, are now more volatile, bringing home the changes in external financial conditions (Figure 15).
If economists speak about the advantages and disadvantages of joining a common currency area, they ultimately end up comparing the costs and benefits of accession. This is also the way I would like to proceed. However, bearing in mind that what is known, has already been described in several voluminous reports (NBP 2004 for Poland, Csajbok, Csemerly 2002 for Hungary, HM Treasury 2003 for the UK), I will try to focus on issues which are less familiar to the general public or which are potential risk factors. The nature of these issues is that they are mainly concentrated on the cost side of the analysis. Thus, it might seem from my lecture, that I mainly care about the costs or that costs outweigh benefits. Let me, in the very beginning, stress that this is by no means the case. As stated by the President of the National Bank of Poland, Mr Sławomir Skrzypek, an in-depth assessment of the costs and benefits of the euro adoption in Poland needs to be periodically repeated in order to make sure that we take into account all important factors of the fast changing global economy. The National Bank of Poland is willing to play a key role in stimulating the public debate about the costs and benefits of the euro adoption. Today’s panel is a good opportunity to contribute to this debate, and I would like to thank the American Chamber of Commerce for offering this opportunity. Let me begin with the benefit side.

Iceland’s economic imbalances are waning and the inflation rate and current account deficit are coming down, the latter from a record level in 2006. The financial sector is on a firmer footing than a year ago. The headline of the Central Bank’s Financial Stability report for 2007 was The commercial banks are more resilient. However, the battle is not over and risks may still be present. The current account deficit is still large. Tighter conditions for funding it could undermine the exchange rate and rekindle higher inflation and instability. While the banks have strengthened their liquidity and have a larger share of deposits on the liabilities side of their balance sheets and fewer challenges in their refinancing, they still rely on easy access to international credit markets. A shift in investor sentiment about the banks, or in general risk assessment in the markets, could tighten liquidity and lead to less favourable borrowing terms. Thus prudence is called for, along with contingencies for facing tighter conditions and awareness that changes can take place very suddenly. Iceland’s currency is the smallest in the world with an inflation targeting framework and a floating currency. The króna probably tends to be more volatile than currencies of larger countries, which will cause sharper fluctuations in yields on króna-denominated investments. While major currencies are certainly prone to volatility, the crucial consideration is that exchange rate movements have a much greater impact on small, open economies than on larger ones.
The G20 summit in Brisbane will, I hope, mark the end of a major phase in this work with proposals to help end “too big to fail”, including ensuring that banks hold debt that can absorb losses – i.e. be “bailed in” – if the bank fails, and a private sector agreement to provide for stays on derivative contracts during resolutions of failed banks. This stronger international framework has not been an accident. The crisis brutally underlined the degree to which countries were connected to each other through the operation of a global capital market and banking system – and the dangers of regulatory arbitrage between jurisdictions. The FSB and the international standards that have been developed are, it is true, only “soft law”. They are not legally binding. They constrain neither the powers of national regulators to set the rules for their jurisdictions nor the accountability of national regulators to national legislatures. But this soft law is powerful because it is grounded in the recognition by the major jurisdictions that we can only have a globally integrated capital market – and the benefits that brings – if we can agree and implement key common minimum standards. That impulse to work together, internationally, to provide stronger governance of the global financial sector will inevitably wane somewhat the further in time we get from the crisis in which this was born. I don’t think the more powerful, more comprehensive international machinery that has been built since the crisis will disappear. But the challenges will change.

And that they represent only a fifth or less of the credit markets in the U.S. And yet as I speak, depository institutions, including foreign banks doing business in the United States, have $ trillion in excess reserves on the books of the 12 Federal Reserve Banks. So one would be hard pressed to say that ending our asset purchases, which the depository institutions from which we buy them deposit back with us as excess reserves, would deny the economy needed liquidity. “Normalizing” policy The focus of our discussions now is when and how to “normalize” monetary policy. Given that we work directly with only 20 percent or less of the highly developed U.S. credit intermediation system, this becomes a complicated matter. It raises questions, for example, about whether we should focus on the federal funds rate, which has been our traditional fulcrum, or some other measure, such as the rate we pay on excess reserves or that we pay on overnight reverse repos or some mix thereof. You can expect to hear more about this as  BIS central bankers’ speeches  3  time passes. Today, I am going to focus on another aspect of “normalization,” and that is: Once we have wound down QE3, when are we likely to raise the short-term rate that anchors the yield curve? In the parlance of the trade, market operators and bankers alike are seeking “forward guidance” about our intentions.
Most central banks therefore now use the quantity of money as one indicator of inflation among others. However, there are considerable differences between the assessments made by different central banks of the importance of the quantity of money as an indicator of price trends. The European Central Bank – the ECB – notifies, for instance, a reference value for the increase in the quantity of money that is considered to be compatible with their price stability objectives. The influence of monetary policy on the output gap The difficulty of using the quantity of money as an intermediate target for an ultimate price stability objective has contributed to an increasing number of central banks moving over to direct control through an inflation target. Put simply, they use the mechanisms that enable the inflation target to be described as follows: A change in the instrumental rate affects GDP which in turn has an effect on inflation. If GDP increases at a rate that makes full use of production resources, inflation is not changed although if demand is so high that production resources are under pressure, then inflation will increase. When resources are under pressure, it is said that there is a positive output gap and vice versa when there are free resources in the economy. When growth is balanced, it is said that GDP increases in accordance with its potential growth path. According to this simple model, the central bank is able to affect inflation through its ability to affect the output gap.

Based on my experience as a central banker for more than 30 years, it requires a deep understanding of the economy and the financial system to make the right policy decisions. Such policy formulations needs to be based on rigorous assessments that provides the insights that will guide the decision making process. This is aided by relevant statistics, and complemented by sound judgement. Central banks are therefore not only major consumers of statistics, but also producers and disseminators of monetary and financial data. More importantly, central banks, have placed much importance on providing sufficient analysis and assessment in conjunction with the release of statistics. This aims to provide context, avoid misinterpretation and reduce uncertainty for the economic agents. BIS central bankers’ speeches  1  Key global trends shaping the universe of statistics As the world evolves, two key trends have emerged and in turn, created new and diverse demands, challenges, and opportunities in the field of statistics. First, the steady liberalisation and deregulation of economies and financial markets have resulted in intricate interlinkages within domestic financial systems and spanning across borders. While financial markets have become more interconnected globally, capital and labour mobility across borders have also intensified while trade and investment barriers have been dismantled. This has resulted in closer proximity to growing markets and facilitated the creation of globalised supply chains by corporations. These developments have had wide ranging benefits, including better risk diversification, improved efficiency and greater economies of scale.