samchain/econo-pairs-v1 huggingface dataset:
The latest programme – introduced and promoted by Prime Minister Abe – included among its three pillars an ambitious monetary expansion plan which, with official interest rates close to zero, is being implemented through growth of the monetary base. Although the latest data show an incipient return to positive rates of growth and inflation, evidently monetary policy in Japan is still far removed from the threshold marking not only a change of cycle, but also a move towards a less expansionary stance, in contrast to the cases of the Federal Reserve and the Bank of England. The monetary policy of the European Central Bank The specific characteristics of current euro area monetary circumstances stem from the complexity and depth of the crisis and the slow pace at which the euro area is emerging from 2  BIS central bankers’ speeches  the crisis in comparison with other areas. Following the negative data of 2012 and 2013, the projections published by the ECB last June indicate that the euro area will not recoup precrisis levels of GDP until the end of next year. However, the recovery in employment in the euro area as a whole will not be completed in 2015. Since end-2011 the inflation rate has moved on a declining trend. It stands at an all-time low and the available projections indicate that it will remain, for the foreseeable time horizon, far from the benchmark of 2% which, in the medium term, marks the price stability target governing the ECB’s actions.

Luis M Linde: Monetary policy in the advanced economies Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the Nueva Economía Fórum, Madrid, 8 July 2014. *  *  *  Let me first thank the Nueva Economía Fórum for their kind invitation to participate in today’s event. I shall briefly be discussing the monetary policies currently being implemented by the main advanced economies. The similarities and differences between such policies are not always readily understandable and they add complexity to the current economic circumstances. After a brief overview of the role monetary policies are playing in managing the international crisis, I shall specifically refer to the cases of the United States, the United Kingdom and Japan, and then focus in greater detail on the European Central Bank’s approach and on the measures it has recently adopted. The role of monetary policies in managing the international crisis Unlike in the Great Depression, and largely as a result of the lessons learned from it, the economic authorities responded swiftly, robustly and in a relatively coordinated fashion internationally when the crisis in the advanced economies broke. This response took the form of a raft of measures to support financial systems and the application of a series of expansionary demand-side policies. The measures set in train were aimed firstly at heading off a potential global liquidity crisis, which would have seen the functioning of financial systems and, therefore, of economies themselves collapse.
As such, we stand ready to guard against any build up of bubble and imbalance within the system. Let me now share with you what I believe are our priorities, going forward. Amongst these, Basel II implementation, especially adequacy of capital, ICAAP and stress testing practices is on top of our list. The principles stipulated in Pillar II, which came into effect in September this year, are in line with the existing risk-based supervision used by the BOT, but places greater focus on the qualitative aspect of risk management and assessment of capital adequacy. For example, the role of the Board of directors and senior management in the assessment and formulation of strategy on capital management for the current and future periods, has been stressed. In this regard, we hope that banks would ensure they have a good risk management system, with an ICAAP that covers all significant risks, including those stipulated under Pillar I as well  BIS Review 131/2009  3  as other risks. These other risks should at least include credit concentration risk, interest rate risk in banking book, liquidity risk, strategic risk and reputational risk. Moreover, it is desirable that banks maintain capital above the minimum regulatory requirement to withstand future losses both in normal and stress situations. To achieve this, banks should conduct stress tests and formulate capital plan in accordance with the stress test results, in a systematic and continuous manner.

While the current precept of risk-based supervision, as implemented by many, is still a robust and valid concept, there are many weaknesses when it comes to putting the precept into practice, as shown by the lesson of this crisis. These weaknesses include the inability to deal with complexity arising from such mechanism as securtisation, OTC derivatives, as well as the problem of procyclicality and systemic risk associated with valuation and performance management issues. Nevertheless, risk-base principle remains the key anchor to coherent  BIS Review 131/2009  1  risk management and supervision, even more so given the increasing complexity of the financial market. So, we must remain anchored to its principles. What then needs to be done is to strengthen risk measurement, management, and supervision, so that we can truly capture risk of individual institutions, overtime, and risk arising from interconnectedness of key components of the system, to safeguard financial stability. In short, we need to strengthen both micro- and macro-prudential regulations. The shift in policy paradigm from this crisis has been the increasing acceptance of the concept of macroprudential policy, which takes into account the interconnectedness within the financial systems as well as between the financial system and the real economy, that is, the issue of systemic risk and procyclicality. The proposals by G20, the BCBS, as well as international accounting standards are in line with the risk-based principle.
So it seems sensible to link minimum capital requirements to a confidence level. In its work, the Basel Committee's approach has been to set those requirements equivalent to an investment grade rating. It is important that this rating level is maintained. First there is growing evidence that without it a large bank would have insufficient freedom of operation as their counterparties' limits on unsecured exposures stemming from interbank, swap and FX transactions to the bank concerned would be too small. Second, the frequency of banking crises does not suggest that the current minimum level of regulatory capital is too high: four out of the G-10 countries have suffered a banking crisis over the last decade. Another important issue is the possible impact of any new capital requirements on the business cycle. It has been argued that capital requirements can potentially contribute to a credit crunch because in a period of severe downturn, they can become binding should write-offs and loan loss reserves reduce the amount of capital which a bank has available to back new lending. If banks are insufficiently forward-looking in their assessments of risk, more risk-sensitive capital requirements could lead to an added pro-cyclical effect to the extent that capital requirements would increase in recessions as the average riskiness of borrowers rose. It is therefore essential that banks take a longer term view of creditworthiness.

The direction of some of the trends we have seen in the last few weeks is not unwelcome, in particular the stronger euro and weaker dollar, and the reduction in oil prices; and a soft landing looks more likely as a result. But the speed of the adjustment remains a cause for concern. It is important that the irrational exuberance that marked the run-up in equity prices to their peak last year should not give way to irrational despondency. The view among central bank governors meeting recently in Basel was  2  BIS Review 4/2001  that while the next few months may be difficult, for the year as a whole the US economy will continue to grow, by perhaps 2-3%, and the overall world economy - helped by steady growth in the euro area would grow again this year above its long-term average. No doubt this is a slowdown compared to recent rates of growth and a downward revision of earlier expectations of growth for the year, but it is not a downturn in the sense of contracting activity. A soft landing in the US with the associated benefits for the global economy still therefore seems to me the most likely outcome. Implications for the UK Turning to the UK, the need to avoid irrational despondency is even more apparent. While a slowdown in the US will have some impact on the UK, the direct trade affect will be relatively small.
Emerging prudential lessons from the Covid stress Speech given by Victoria Saporta, Executive Director of Prudential Policy  Bank of England Webinar 21 July 2021  Many thanks to Hannah Burnett, Damien Lynch, Katie Low, Aakriti Mathur, Matthew Naylor, David Murphy and Aniruddha Rajan for help in preparing this speech. And thanks also to Andrew Bailey, Sarah Breeden, David Curry, Ronnie Driver, Simon Hall, Paul Hawkins, Simon Khong, Paul Nahai-Williamson, Alison Scott, Gareth Truran and Michelle Uhrick for comments. Errors and opinions are my own. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Good morning ladies and gentlemen. It’s a pleasure to be able to speak to you today on some emerging prudential lessons that I draw from our experience so far in managing the economic consequences of this terrible pandemic. I say “so far” because of course the tragic human consequences of the pandemic are ongoing, as is the economic fallout that followed it. And while we are not out of the woods yet, the progress made to date affords us space for reflection on how the prudential framework we put in place following the 2008 financial crisis has served us. And, to observe if there are parts of it that may not have worked as we expected. As the American philosopher and educational reformer John Dewey said: “We do not learn from experience…we learn from reflecting on experience”. Let me start by recalling the nature of the shock unleashed following the onset of the pandemic.

This gives us a good evidence base to look at whether firms which benefited from a CCyB release lent more than firms not benefitting from such release, after controlling for other firm- and country-specific factors. The short answer, as the Basel Committee’s work found, is that they did. A regression analysis found a positive and statistically significant coefficient between buffer release and loan growth.13 The effect of the countercyclical buffer release in the UK: using pass-through rates What about the UK evidence? In the UK, the FPC cut the UK CCyB rate to zero in March 2020. It had been increased from 1 percent to 2 percent in December 2019 with firms having one year to implement the increase.14 All firms in the UK got some relief in capital requirements – but the amount of relief varies across firms, driven by their relative exposure to UK credit risk-weighted assets (RWAs).15 By exploiting this cross-sectional variation across firms, colleagues in the Bank16 have examined whether firms that got more benefit from the release maintained lower capital ratios and lent more following the cut to the CCyB, as compared to their peers. The findings, reported in Table 1, support this hypothesis. Firms with higher exposure to the UK CCyB ratecut increased CET1 ratios by less during the pandemic as compared to their peers, and this result is statistically significant.
Data has been weighted to the known offline population proportions for age, gender, government office region, working status and social grade. Respondents were asked, “as a result of the coronavirus pandemic, would you say that your household savings have increased, decreased, or stayed the same?”  Chart 13: Sterling deposits held by households and PNFCs (monthly flows into M4ex) Households  £ billion  PNFCs  60 50 40 30 20 10 0 -10  Jan - 19  Apr - 19  Jul - 19  Oct - 19  Jan - 20  Apr - 20  Sources: Bank of England and Bank calculations. Note: Chart does not include flows into non-intermediate OFCs’ M4. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  Which of these two paths will play out in practice? Back in May, the MPC observed that the balance of risks to the outlook was skewed to the downside. Subsequent positive news on demand has, in my opinion, more than counterbalanced the rise in downside risks to employment. To my mind, this leaves risks to the outlook slightly more evenly balanced than in May, if still with a downside skew. “The Fourth Quarter”  Looking beyond 2020, there is plainly a high degree of uncertainty about the economy. That in part reflects uncertainty about the virus and the policy responses to it. But it also reflects uncertainties about the path of the economy itself.

The letter says: “The rise in the cost of living in the past three years has been larger than has been seen in many other countries that compete with us in foreign markets. When the cost of living rises, so wages should also rise and consequently so too production costs, with the result that our competitiveness declines. Do we not have to fear this?” Unfortunately we do not know what advice Nurkse gave to Jaakson, and within only a couple of years the question was no longer of any great relevance for Eesti Pank. During the second world war, Ragnar Nurkse focused in his work on inflation and exchange rates. The research that he published on these topics has led many writers to call Nurkse one of the main architects of the Bretton Woods system. After the war Nurkse taught for thirteen years in the prestigious Columbia University in New York. There he mainly focused on development economics, earning a great reputation as an international advisor on the subject. He died unexpectedly and still relatively young at only 51. The view of Ragnar Nurkse of the time notes his thorough knowledge of economic theory and practice, his original ideas, and his clear vision. He was the sort of man who is clearly needed in the world today. When Estonia regained its independence it chose the path of reform, with a unique combination of conservatism, innovation and a recognition of its own limitations. Estonia chose once again the road to Europe.
Norman T L Chan: Universal banking – Hong Kong’s perspective Keynote address by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, at the opening session of the Asian Banker Summit 2011, Hong Kong, 7 April 2011. *  *  *  Distinguished guests, ladies and gentlemen, 1. I am very pleased to address this important conference this morning as it provides a timely occasion for us to take stock of what is happening to our banking industry at a time when the international financial markets are recovering from the Global Financial Crisis. Indeed, the landscape of banking has undergone very significant changes since the eruption of the crisis in 2008. And more changes are in store. Some might even argue that banking will evolve beyond recognition when compared with what we knew previously. Of course the international banking reform package, ranging from the new capital, liquidity and leverage regime under Basel III, the treatment of Global Systemically Important Financial Institutions to the use of macro-prudential tools etc, will have different implications for different banks and different jurisdictions. It is not my intention to discuss today the new international standards that have been and are about to be adopted as these standards have been talked about very frequently amongst bankers and regulators.

I am hopeful for two-days of productive workshop interactions. I invite you to join the panels of presentations and become part of the fruitful comments and discussions! 2/2  BIS central bankers' speeches
The Central Bank as the banker to the Government maintains accounts of the General Treasury and Government institutions and agencies. The Treasury Account, known as DST Account, is the main transaction account to handle public debt flows. In terms of the MLA, Government or Government institutions and agencies must obtain the advice of the Monetary Board on the implications if any borrowing on the monetary conditions before raising such debts. This is to ensure that Government borrowing is made with the concurrence of the Monetary Board in line with the monetary policy. Two other important agency functions are the management of Employees’ Provident Fund and administration of Exchange Control Act, both of which have evolved controversy. In the case of Employees’ Provident Fund, the Monetary Board is empowered to manage the fund including investment of surplus funds in securities the Monetary Board considers fit. I know you have heard enough on some of the EPF investments made in the recent past. Given the nature of the EPF and responsibilities of the Government, EPF funds are, I would submit meant only for safer investments. BIS central bankers’ speeches  5  The Exchange Control Act is to regulate and manage foreign exchange flows of the country which is essentially a part of macroeconomic management. In economics, exchange controls are about the regulation of the quantity or volume in the foreign exchange market. Conversely, the Central Bank regulates the price or exchange rate in the market under the MLA.

Therefore, provisions of the Exchange Control Act strengthen the macro-economic policy hand of the Central Bank. In nutshell, implementation of the Exchange Control Act is focused nowadays to facilitate financing investment – savings gap of the country through foreign resources which is essential for the development of the country. At present, foreign exchange transactions involving trade, services, travel and most of foreigners’ investments are largely free capital transactions of residents are subject to controls. You will appreciate that, if not for the exchange control liberalization since 1977, the country’s economic development and living standard would not have achieved at present level. Consequences from previous regulatory interventions There are both success stories and consequences from previous regulatory interventions in the market. This is common to any central bank. I wish to brief you few issues and challenges confronted in the past and the way forward. The Central Bank’s intervention in 1988/89 finance companies crisis could bailout depositors to some extent and get new laws passed to regulate finance companies. However, the Central Bank lost public funds amounting to Rs. 6 billion (need to check.) and the COPE is still complaining about the Central Bank not being able to recover money. Again after 10 years, finance company crisis hit in another form where depositors have lost their savings in the failed companies and the Central Bank has been unable to resolve the crisis even after six years.
The Bank of Thailand is closely monitoring the situation and assessing the impact on Thailand’s financial and economic stability. Given the pickup in domestic growth momentum and various risks the Thai economy is likely to confront, the Monetary Policy Committee expected Thailand’s GDP to expand by 4.5-6 per cent this year while inflation excluding raw food and energy should remain within target of 0-3.5 per cent for the next 8 quarters. In the face of rising food and energy prices, headline inflation is expected to hover between 2.8-4 per cent in 2008, but is expected to come down next year. I want to note however that the Monetary Policy Committee’s new forecast will be given in April along with the latest Inflation Report. Ladies and Gentlemen, I have talked at length about the economic outlook and risks going forward. What then is the appropriate course for monetary and exchange rate policy that I think can help cushion the economy along the bumpy road ahead? Monetary policy is aimed to ensure price stability so that the economy can continue to expand at its full potential. The definition of price stability that the Monetary Policy Committee uses is in alignment with that of the public; that is, we want to see low and stable inflation over time. At the moment, when our policy interest rate is the lowest in the region, monetary policy continues to be supportive of domestic demand growth. In the periods ahead, the challenge to monetary policy is likely to come from increased price pressure.

Consumer goods price inflation hovered around zero for most of the last ten years, until the recent rise in oil prices. As a result, the purchasing power of UK consumers has risen with higher real wages achieved without any cost to employers. In other words, for a period the beneficial tailwind allowed the economy to run at a higher level of activity than would otherwise have been the case, without generating additional inflationary pressures. But the economic environment overseas has taken a turn for the worse. In many ways it is a tale of two cycles. The financial cycle The first cycle has been in the financial sector in the West. A banking cycle is not a new phenomenon but the scale of the expansion of cheap credit for some years and speed of the downswing in the last year has been exceptional. It started in the US with a real downturn in the housing market and rising default rates on sub-prime mortgages in particular. That led to a freeze in the structured credit markets built on those loans as investors lost confidence in the credit ratings they depend on. In finance at least, it is still true that when America sneezes the rest of the world catches a cold and the sub-prime crisis swiftly spread to financial institutions across the world. They became uncertain about the value of the financial positions they held, let alone what their counterparties held.