samchain/econo-pairs-v1 huggingface dataset:
These measures are complementary to the actions of the ECB and play a crucial role in improving the financing of the economy and fostering its recovery. To give an idea of the scale of the governments’ banks support measures, let me mention a few figures: until early May, banks in the euro area had received just over EUR 113 billion of capital injections from governments and around EUR 300 billion of government guarantees. However, only one third of the commitments for capital injections had been used until the end of April and a smaller fraction, less than 18%, of the commitments to guarantee new bank debt have been called for. The use of government credit guarantees varies considerably across countries for several reasons. For example, banks’ needs for such guarantees depend on the time profile of the maturity of their debt, but they also reflect the relatively retrained demand for loans by the private sector. Moreover, the unlimited financing provided by the ECB also explains the subdued demand in most countries for guarantees on shortterm debt with maturity less than one year. Finally, certain factors might have discouraged the use of government guarantees, such as the associated “stigma effect” and the pricing, which may appear high in current market conditions. Overall, the use of government guarantees on bank debt is considered satisfactory in most countries.

3  This figure measures the estimated foregone aggregate output compared to a counterfactual non-crisis scenario under which euro area GDP would have expanded at an average rate equal to its long term growth potential. 2  BIS Review 65/2009  These propositions are useful in order to better understand the rationale and the nature of the policies that have been pursued by the ECB in managing the current crisis. In particular, when assessing the role of the ECB in supporting financial stability, it is important to distinguish between actions that involve a change in the monetary policy stance – that is, a change in the policy rate and/or an expansion of central bank money – and the management of liquidity that aims to mitigate the impact of shocks on the interbank money market so as to ensure its orderly functioning and the efficient transmission of monetary policy impulses to the economy. Since the financial turbulence erupted in summer 2007, financial and economic developments as well as central bank policy responses can be usefully examined and assessed over two time periods. During the first period, from early August 2007 until early October 2008, the ECB did not ease the stance of monetary policy – as defined by its key policy rates – to address financial market tensions. On the contrary, in July 2008, it raised its key policy rates by 25 basis points to counter increasing inflationary pressures and mediumterm inflation risks.
Inflation in the coming years In the course of 1996 CPI inflation decreased markedly and the annual level was somewhat below the lower limit of the tolerance interval. Transitory factors partly explain the drop. Falling house mortgage interest costs, occasioned in part by the Riksbank’s own interest rate cuts, played a large part in the low inflation figures. The trend has now turned and the rate of inflation is beginning to move up. But the main reason for this is that the transient downward factors are no longer at work to the same degree; the increase in underlying inflation is therefore more subdued. In the light of the assessments of economic activity and other factors that affect inflation (e.g. inflation expectations), in the inflation report the Riksbank forecast that annual CPI inflation would be around 1 per cent in 1997 and around 2 per cent in both 1998 and 1999. Some acceleration was envisaged in the latter two years. The assessment carried some reservations. Matters discussed in the report included the risks associated with rising activity, the difficulties in knowing how the supply side would react and the BIS Review 96/1997  -4coming round of wage negotiations. There may be reasons for elaborating on that discussion in some respects. Output gap closing by degrees In the inflation report the Riksbank considers that Sweden’s gross domestic product will grow by around 2 per cent in 1997 and around 3 per cent in 1998.

Economic activity and inflation expectations Now for the assessment in our latest inflation report. First let me say something about the Riksbank’s appraisal of the economic situation. Demand and supply The statistics from recent months clearly point to an upswing in the greater part of the economy. This largely confirms the Riksbank’s assessments last spring. Developments to date in 1997 have been more balanced than before. Demand growth is now coming not only from exports and investment, but to an increasing extent from private consumption as well. The growth of household income has been held back for some years by the programme for fiscal consolidation. Activity has been further depressed by the need to cut spending on public activities. The fiscal withdrawal of household purchasing power is continuing both this year and next, so disposable income is largely unchanged in 1997, but will rise in 1998. After that, when the consolidation programme has been completed, fiscal policy is not expected to be as restrictive on households. Some increase in public activities can also be expected in the coming two years. After rising for some years at a rather modest rate, private consumption has picked up in the past year. Households’ expectations concerning their own as well as the national economy improved in September after a minor setback in August. Households are also more optimistic about the outlook in the labour market.
Central bank experts have adjusted the figures based on the assumption that actual demand accounts should see a growth similar to that of currency in circulation, as it was the case in previous years. Hence, it would appear that quasi-money rose over 80% December 2004 through August 2008 versus only 40% as indicated by statistical data. In other words, both household and corporate savings in domestic currency expanded at a pace much faster than that of time deposits. These statistics led the media to comment on a would-be stalemate in RON-denominated savings. The NBR specialists will make sure these developments are explained in further detail. This is how a fiscal policy slippage entails both a contraction in budget revenues and potential errors in assessing monetary developments. Given the heightened turbulences on the international financial markets in the last few weeks and the fact that the NBR is vigilantly monitoring these developments, I believe we should refer to their potential impact on the domestic financial system and on the Romanian economy as a whole. The Romanian banking sector is still affected mainly by increased external financing costs. The limited impact is due to domestic financial environment characteristics, as well as to the prudential monetary policy and financial stability strengthening measures adopted by the central bank over the years. Let me highlight the most important of these measures. First and foremost, credit institutions in Romania do not have exposures to subprime instruments, which lie at the root of the turmoil.

In this vein, I must specify that, once Romania joined the European Union and the National Bank of Romania became a member of the European System of Central Banks, we are not only entitled, but also bound to present our viewpoint where we see that fundamental equilibria of the economy may be jeopardised by a particular development. Hence, I will refer to the NBR’s objective to ensure and maintain price stability and bring inflation rate down to a level compatible with its capacity as a member of the Eurosystem. Generally, a lower inflation rate is associated with a slower economic growth and even with recession. However, this phenomenon occurs only when there is a contradiction in the economic policy mix and when subdued inflation is not the primary objective of other policies, particularly fiscal and income policies. When the policy mix is balanced, inflation rate may be curbed while maintaining a sustained growth pace. Behind this development stand mainly foreign direct investment inflows which enhance the productive capacity of the economy and ensure the sustainable financing of a relatively high external deficit. In Romania’s case, the experts working with the central bank as well as the independent analysts estimated that the national economy may further rise at a fast clip amid alleviating inflationary pressures, even in the context of a current account deficit of 8-10% of GDP. Nevertheless, in order for capital inflows to continue, Romania’s economy must stay attractive.
Together, these resulted in a financial network: •  Which was at the same time both robust and fragile – a property exhibited by other complex adaptive networks, such as tropical rainforests;  •  Whose feedback effects under stress (hoarding of liabilities and fire-sales of assets) added to these fragilities – as has been found to be the case in the spread of certain diseases;  •  Whose dimensionality and hence complexity amplified materially Knightian uncertainties in the pricing of assets – causing seizures in certain financial markets;  •  Where financial innovation, in the form of structured products, increased further network dimensionality, complexity and uncertainty; and  •  Whose diversity was gradually eroded by institutions’ business and risk management strategies, making the whole system less resistant to disturbance – mirroring the fortunes of marine eco-systems whose diversity has been steadily eroded and whose susceptibility to collapse has thereby increased. This evolution in the topology of the network meant that sharp discontinuities in the financial system were an accident waiting to happen. The present crisis is the materialisation of that accident. Given that diagnosis, Part 2 of the paper provides some tentative policy prescriptions. The experience of other network disciplines suggests a rather different approach to managing the financial network than has been the case in the past, if future systemic dislocations are to be averted.

The single currency will also minimize the need for maintaining separate cash floats, a widespread practice in the local tourist sector. BIS Review 61/2004  1  At the level of the individual firm, the single currency should also translate into a reduction in the risks and costs associated with managing exchange rate fluctuations. When Malta adopts the euro, currency risks will be hedged automatically for a large volume of transactions, allowing businesses to focus their resources on those activities which generate real value. For locally-oriented SMEs in particular, the potential reduction in currency mismatches, and in the volatility in cash flows and profitability associated with them, can be substantial for whatever their dependence on foreign markets in terms of exports, they are all, in varying degrees, consumers of imports. The end result should be lower operating costs, higher levels of efficiency, improved profitability and healthier balance sheets, all of which should result in access to credit on more favourable terms. Some of these benefits will indeed materialise ahead of entry in the euro area. You will recall that in ERM II the Maltese lira will be fully pegged to the euro, so that the variability, albeit limited, in the lira/euro exchange rate associated with the fact that the euro has a weight of 70% in the Maltese lira currency basket will disappear. On the other hand, some variability could nevertheless manifest itself to the extent that the currency fluctuates within the ERM II band.
That is all about maintaining the resilience of firms as and when the environment proves more threatening than catered for in the standard, static regulatory requirements. There is also the possibility, argued by Governor Carney of the Bank of Canada, that maintaining appropriate minimum margining requirements across the cycle would help to prevent liquidity spirals in key funding markets.9 The Basel Committee of the Global Financial System, when under the chair of my new colleague Don Kohn, has published a review of this important area.10 The interim FPC will have to advise HMG over the next year or so on which instruments in particular we think we should be granted by Parliament. In their different ways, as well as making the system more resilient, they would have the effect of intervening in the (real) credit cycle. And so, in some degree, this endeavour recovers something of the spirit of the Real-Bills Doctrine disciples of a century ago. In consequence, this part of the macroprudential scene has, naturally, posed questions about how it will interact with the setting of monetary policy. Not that the nominal business cycle and the credit cycle are the same thing or always perfectly aligned. In the years during which the latest crisis was brewed, credit conditions were plainly too loose, but the UK did not obviously experience burgeoning nominal demand growth or upward pressures on underlying inflation. Nevertheless, influences will obviously flow in both directions.

More than once, they brought on political tension, between those in the government who believed in it and those in the opposition, or even the military, who thought otherwise. In one incident, it even caused a change in the central bank governor. Finally, we had to float our currency in 1997. Since then, we have adopted Inflation Targeting as our monetary policy framework. A core inflation target was announced at between 0 and 3.5 % per annum. The central bank will regularly monitor economic changes and make forecasts. If we see that the rate of inflation has a tendency to exceed the range, we will adopt a tighter monetary policy stance by increasing the policy interest rate, and vice versa if we see it going under the range. The policy rate that we use is the 14 day repurchase rate. BIS Review 48/2002  1  This is completely different, of course, compared to the days of fixed currency regime when interest rates in Thailand would move mostly in tandem with the US rates. The change in the monetary policy framework therefore affects the financial environment and your businesses a great deal. Development of the bond market What other change also happened? One very important change that has occurred in Thailand is the rapid development of the bond market, which took off after the 1997 crisis. The bond market is an important tool for safety and soundness of the financial institution system.
For my purpose tonight is to explain what it is that the Bank through the MPC is trying to do in its conduct of monetary policy, to say something about where we are and to explain some of the risks and uncertainties that we are facing as we look forward. What then are we trying to do? The MPC’s mandate from the Government is to maintain price stability (currently defined as an inflation rate of 2½% - on a specific measure of retail price inflation) and subject to that to support the Government’s economic policies, including its objectives for growth and employment. Now no-one can reasonably suppose that inflation could be held precisely at 2½% consistently over time. But we are consistently to aim at that target. Now what that involves essentially is trying to keep aggregate nominal demand in the economy more or less continuously in line with the overall supply-side capacity of the economy – as a whole – to meet that demand. In fact, although our objective is defined narrowly in terms of price stability – the 2½% target – we can only hope to achieve it by maintaining stability in a much broader sense – that is by consistently maintaining a balance between overall demand and supply. That, essentially, is how best we can contribute to the Government’s objectives for growth and employment. It is in fact a necessary condition for maintaining the steady economic progress that we have seen in recent years.

Here the issue is that, with ongoing global financial integration, the interest rate channel of monetary transmission weakens in SOFIEs, as longer domestic rates increasingly co-move with longer rates in the big countries. Inflation targets could still be reached through the exchange rate channel, but exchange rates are not necessarily smooth reflections of underlying fundamentals. Instead they tend to be excessively volatile and are sometimes misaligned for protracted periods. UIP does not hold, except at long horizons, and even then, often through sharp and disorderly corrections. This, in turn, gives rise to two concerns: first, regarding detrimental effects on the traded goods sector (for example, New Zealand and Iceland prior to the crisis), and second, regarding financial stability, where volatile capital flows, currency mismatches, and rollover risk of foreign currency debt are among the key players. Adverse effects on financial stability can be particularly severe when a blocked interest rate channel and an erratic exchange rate channel interact badly with other economic and financial risks that can face SOFIEs – such as the global credit cycle, domestic financial vulnerabilities, policy conflicts, and asymmetric shocks. This was the case in Iceland. This is a more difficult problem to solve than the one of international banks in small countries. There are problems with completely free capital movements, but there are substantial potential efficiency gains as well. You can enter a monetary union, of course, and thus stop being small in a monetary sense, but that has its own pros and cons, which I will not discuss here.
As recent research shows, this surge in inflation has affected some of the most vulnerable groups in our society, like low-income individuals.2 So, where do we stand in terms of inflation developments in the euro area? Recent inflation developments and outlook Inflation started rising in early 2021, after a brief spell in negative territory at the onset of the pandemic. Energy prices have been the main driver behind this sharp rise, due to large increases in gas and oil prices. Other important contributors have been an increase in food commodity prices, and bottlenecks in global supply chains caused by demand-supply imbalances as economies around the world relaxed their pandemic-related containment measures. The outbreak of the war in Ukraine, the economic sanctions on Russia, and the retaliation in terms of gas supply reductions, have aggravated these developments. Ukraine and Russia are also major cereal exporters.3 Roughly two thirds of the current inflation are due to energy and food. Looking forward, ECB staff projections published this month expect euro area inflation to decline from an average of 8.1% in 2022 to 5.5% in 2023 and 2.3% in 2024, owing largely to downward base effects in the energy component, predominantly arising from the fuels component. From the beginning of 2023 electricity prices and, in particular, gas prices are expected to contribute to the moderation in inflation. 1  I am grateful to Irma Alonso, Pablo Aguilar, Samuel Hurtado, Peter Paz, and Pedro del Río for their contributions to the analytical material in this speech.

Singapore can offer a platform for Indian firms to build up their global exposure and branding. India is also a promising investment destination for Singapore firms. Under CECA, our domestic banks are allowed to open up to 15 branches in India, and they are in the process of preparing for expansion into this market. To deepen the linkage, MAS will allow Indian banks that meet our prudential standards to expand their presence in Singapore. We have approved the entry of two Indian banks which do not yet have a presence in Singapore. 18. The Japan-Singapore Economic Agreement for a New Age Partnership (JSEPA) has brought a new era of closer economic cooperation. Investments by Japan and Singapore in each other s markets have increased. Japanese companies which are looking to diversify some of their business operations into Southeast Asia can use Singapore as the gateway. Singapore-based companies can take advantage of not just the JSEPA but bilateral Free Trade Agreements (FTAs) Singapore has signed with other countries to expand into the region and beyond. When I was in Tokyo, I suggested that the JSEPA should be reviewed to see where it could be further broadened and deepened. The Japanese leaders were receptive. 19. The Middle East is another promising region. Middle Eastern investors are looking for suitable investment destinations and products both in their own countries and outside. Singapore has a good brand name in the Middle East and awareness about us is increasing. There are many opportunities for our businesses there. 20.
A key development that could play a significant part in shaping banks’ balance sheet management policies is the forthcoming introduction of the minimum requirements for lossabsorbing capacity in the event of resolution of banks. These requirements, which are being analysed at a global level by the Financial Stability Board and, at the European level, by the  2  See the Financial Stability Report, May 2015. BIS central bankers’ speeches  5  European Banking Authority, aim to make it possible to handle the failure of credit institutions while minimising the need for public support. This legislation will foreseeably prompt important changes in the composition of banks’ liabilities which, in addition to a minimum volume of instruments eligible as regulatory capital, will have to include other instruments that may be converted into capital in the event of failure. These requirements could be especially demanding for institutions with lower levels of own funds and greater objective difficulties for issuing debt instruments on the markets that meet the new convertibility requirements. Accordingly, despite their indisputable achievements, Spanish banks as well as other European peers must continue to strengthen their own funds and, where appropriate, to make the transformations necessary to allow them to raise on the market the funds needed to comply with the new regulatory conditions, both in the prudential sphere and in that of resolution. ii)  Profitability  The second key challenge for credit institutions is to restore acceptable profitability levels.

However, as the former president of the European Monetary Institute suggests, the crisis has changed the world for ever, bringing about significant changes in the economic, regulatory and institutional environment in which the banking industry operates. In particular, Spanish banks, similarly to their European peers, now face challenges that will require them to adapt their business models in a new environment characterised by a structural decline in profitability, a significant increase in regulatory requirements, the harmonisation of supervisory rules and practices in the framework of the banking union and the introduction of new demands by the resolution authorities. As Lamfalussy said, there are no grounds for pessimism, but this view is based essentially on the expectation that banks will be able to successfully complete the work they have started to fully restore investor, customer and general public confidence. Thank you very much. 3  Taken from the keynote speech made at the Ninth BIS Annual Conference on “The future of central banking under post-crisis mandates”, 24–25 June 2010. 8  BIS central bankers’ speeches