samchain/econo-pairs-v1 huggingface dataset:
Distinguished Guests, Let me first talk about the growth momentum and economic stability. In spite of the political transition over the past year, the Thai economy is expected to turn in a satisfactory growth rate in the range of 4-5 percent in 2007. This year, the main growth driver has continued to be exports. Domestic demand has however been affected by dampened consumer and investor confidence, linked primarily to political uncertainty. In July, private consumption remained close to the level recorded in the first half of the year. I am hopeful that once the general election date is scheduled and the cloud of political uncertainty has lifted, consumer confidence would rebound. Investment has shown signs of improvement during the second quarter of this year. There also appears to be a pent-up appetite for investment in view of the continued high capacity utilization of 75 percent as of July. Moreover, investment promotion applications to the Board of Investment have also pointed to a pick-up in investment once the investment climate becomes more favourable. I also expect investment to play a stronger role as growth driver, in line with the consumption recovery. This will be a welcomed development to promote a more balanced economy. The slower domestic demand has also been mirrored by moderate growth of private credits. Nevertheless, the banking system is strong, with the BIS ratio of 15 percent at end-July 2007, while net NPL amounted to 4.4 percent of total loans.

In reality, however, we all know that the nature of the problem of achieving such an ideal solution is as much political as it is economic. And nowhere is this tension more palpable than it is in the realm of exchange rate  2  BIS Review 107/2007  and capital account regimes. There are strong and vocal constituencies that are averse to currency appreciation and part of them averse to variability in the exchange rate itself. Not unlike today’s political economy in advanced countries, emerging market politics also risks being less favorable to openness, but more partial to protection of selected industries or protectionism in general. In emerging markets, the political economy and policy tension are even more complex because our markets and institutions are still developing. Hence, the struggle between financial integration and financial stability requires from us a deft balancing act. As such, I hope you appreciate that, when it comes to policy, there is risk in change as well as in inertia. I hope that you also appreciate that if advanced countries pursue more protectionist stance, emerging markets would likely follow suit. One might ask: How then has the Bank of Thailand handled this tension and what is our strategy going forward? My answer to you is that we make every effort to get the economic fundamentals right and strengthening them. But as our financial and capital markets are small, thin, and still developing, we have adopted a balanced approach to managing capital flows under flexible exchange rate.
In this regard, I  2  BIS central bankers’ speeches  believe that our Flexible Inflation Targeting framework will continue to serve us well. This conclusion is based not solely on Thailand’s favorable experience with the framework, but also echoes the experiences of many other central banks around the world. Supplementing this framework with macroprudential measures should help to further strengthen our ability to deliver long-term economic and financial stability. While the current monetary framework gives priority to inflation, the BOT gives a balanced consideration to economic growth and financial stability as well. In the face of severe disruption to economic activity from the floods, elevated risks and uncertainties from the global economy, and moderating inflationary pressure, monetary policy has recently shifted toward addressing risks to economic growth. This is reflected in the two consecutive reductions in the policy rate in the last two meetings before yesterday. These actions have helped to shore up confidence and accelerate the return of economic activity to normal levels. At this juncture, upside risks to inflation have begun to increase. Externally, geopolitical problems in the Middle East have pushed global oil prices up strongly. Domestically, postflood pickup in public and private spending is adding to demand pressure. In addition, various government measures, including the reduction in the oil subsidy and a hike in the minimum wage, may also boost prices in the short term. As I understand, the minimum wage increase is one of the chief concerns for many of you here.

As Sir Walter Scott noted, the failure of the Ayr Bank in 1772 “was a terrible [warning], and has been so well attended to in Scotland … forcing a capital on the district could only lead to wild speculation, instead of supporting solid and promising undertakings”. Of the bankers themselves, Scott recognised that, while the majority were “good men”, “there may have been, among so numerous a body, men of a different character, fishers in troubled waters, capitalists who sought gain not by the encouragement of fair trade and honest industry, but by affording temporary fuel to rashness or avarice”. If unsustainable capital flows provided the fuel and an inadequately designed regulatory system ignited the fuel, the past two years have shown how dangerous it is to let bankers play with fire. This is not a question of blame – as Sir Walter rightly said, the majority in the industry are “good men” and women. It is a matter of the incentives they face. To protect our genuinely successful financial centres – of which Edinburgh is clearly one – reform of banking is essential. With that, I am confident that we will have attended to our terrible warning and our varied and internationally competitive financial services industry will thrive. BIS Review 129/2009  5
•  Permanent facilities providing bilateral liquidity insurance should be made available only to commercial banks, as they unavoidably need such insurance given that their liabilities are money and the vital role they play, as monetary institutions, in the economy and the financial system. (Private-sector institutions seeking to offer monetary (deposit) services should be regulated as banks. 13 )  •  Such public facilities should not be available to banks where in the judgment of the Bank there are serious question-marks over their viability or solvency. (That need not exhaust our menu for providing liquidity to individual firms. It is of course open to us to offer that via bespoke support operations. 14 )  13  This suggests, for example, that constant-NAV money market mutual funds should convert into banks or switch to being variable-NAV funds. Arguably, similar principles should apply to other non-bank banks. See Tucker PMWT (2009), “Remarks at the Turner Review Conference by Paul Tucker”, Bank of England. Paul Volker’s recent Group of Thirty report also argues for this. 14  This can be effected under the Tripartite Memorandum of Understanding between the UK’s Tripartite authorities (HMT, FSA and Bank).

There are just 30 or so mentions of COLR on the web. One possible starting point is how we have learned to think about bespoke liquidity-support operations. After explicitly recognising that occasionally liquidity support operations can end up providing de facto risk capital if the recipient deteriorates, the late Eddie George offered some thoughts on this in 1993; 29 “central banks are not in the business of providing public subsidy to private shareholders. If we do provide support, we will try to structure it so that any losses fall first on the shareholders and any benefits come first to us. And any support we provide will be on terms that are as penal as we can make them, without precipitating the collapse we are trying to avoid ……… We look for a clean exit. The company may be required to run down or restructure its operations, under our surveillance, to the point where it can do without our support.
But the result of the wage bargaining rounds was surprisingly negative. The centrally-agreed wage increases for the agreement period 2007 to 2009 were almost 3 per cent per year, which is almost one percentage point higher than during the previous agreement period. Inflation increased and the Riksbank successively raised the repo rate from 3 per cent at the start of 2007 to 4.75 per cent in September 2008. In addition, the financial crisis led the economic conditions to change radically during the agreement period. During the autumn of 2008, it became obvious that the financial crisis would also hit the Swedish economy hard. The Riksbank and other authorities made comprehensive efforts to prevent the Swedish banks from being dragged into the crisis. And, to alleviate the consequences of the crisis, the Riksbank rapidly lowered the repo rate to 0.25 per cent in July 2009. Even so, developments became clearly worse than expected. During 2009, GDP showed the greatest fall since the Second World War, while unemployment rose to almost 9 per cent at the end of 2009. This reaffirmed the conclusion that wage increases had been too high. On average, wages increased by 3.7 per cent during the years 2007 to 2009. The wages agreed for 2010 contributed towards preventing the crisis from being so deep in Sweden In many ways, the wage bargaining rounds in 2010 were the direct opposite of the wage bargaining rounds in 2007.

The potential benefits of a well integrated ICT in agriculture are diverse and include: •  transparent dissemination of information such as weather patterns, seed and fertilizer use, availability and distribution;  •  easy accessibility to suppliers of inputs;  •  common distribution of information on market prices of crops; and  •  generally bringing together of suppliers and buyers of crops. Government has put agriculture at the core of rural development and poverty reduction as well as employment creation. It is therefore important to note that the expansion of ICTs in rural communities is more required now than ever before, as most information is now  4  BIS Review 76/2008  disseminated through internet and cellular phones. These facilities will help uplift the living standards of rural communities. 3.2  Agriculture  Zambia’s agriculture sector has enormous potential to become a major grower and exporter of agricultural and horticultural produce. The country has an abundance of quality land, water (over 40% of fresh water resources in Southern Africa) and ideal climate all suited to a wide range of agricultural products. Only 15% of Zambia’s 60 million hectares of arable land is under cultivation. The recent surge in food prices in the world presents an enormous opportunity for Zambia to become the food basket of the sub region. This can be achieved by re-doubling efforts to boost agricultural productivity coupled with substantial increase in infrastructure investment to ease supply bottlenecks that are pushing up prices.
With both this development and the introduction of negative interest, yields on Confederation bonds declined over the entire spectrum of maturities. However, since midApril, the government bond markets have suffered substantial losses, with yields on ten-year German government bonds, for instance, rising within a very short period from about 0.1% to, most recently, 0.8%. In Switzerland the increase in interest rates was significantly smaller. Yields on ten-year bonds are currently around 0.1%, compared with –0.2% in mid-April. Since the beginning of the year, numerous central banks have adopted more expansionary monetary policy stances. They include, in particular, the European Central Bank, which in January announced an asset purchase programme in excess of market expectations as regards both the amount and duration. In the US, by contrast, monetary policy continues to point in the opposite direction. Thus, most market participants expect that the US Federal Reserve will initiate a reversal in interest rates before the end of the year. For over a year, this monetary policy divergence has been a major factor behind the depreciation of the euro against the US dollar. As chart 2 shows, since mid-2014, the European currency has declined some 18% in value and has also weakened on a trade-weighted basis, by around 9%. The trade-weighted US dollar, by contrast, has gained approximately 15% in this period. Another important issue on financial markets has been the increased uncertainty due to the unresolved debt problem in Greece.

Having become independent in the 1990s, both the Banque de France and the Bank of Japan maintained price stability in the face of adverse pressures, whether inflationary or deflationary, making use of a range of appropriate instruments. Participating in the community of central banks that has gradually been built up, the Banque de France and the Bank of Japan, in parallel, have been regional pivots of the central bank function. After the Second World War in particular, our two institutions favoured co-operation with the central banks of economic regions undergoing reconstruction and newly emerging markets. Finally, during the twentieth century, we carved out a place for ourselves in the world by adapting to the new international functions: the more dynamic the international markets were, like in the 1920s and in stages from the 1960s onwards, the more our two banks’ international functions developed. 2  BIS Review 1/2008  This morning’s session, concerning the history of our economies and institutions, will enable us to shed light on all these aspects. The afternoon’s session will focus on developments in our economies and institutions in an increasingly globalised world. Globalisation is not a new phenomenon. The past 150 years of diplomatic and economic relations between our two countries are proof of this. However, the scope and the speed of the current stage of globalisation have far outstripped anything experienced in the nineteenth and twentieth centuries.
On the banking, as opposed to trading book side of the assets of major banks, the search for yield often took the form of loans which included too much equity-like  2  BIS central bankers’ speeches  risk because the equity stakes of the owners of the companies were too small. This was not equities themselves, but rather equity components embedded in loans. Commercial property lending in the UK is a good example, as it was in Ireland. Commercial property prices in the UK have over time tended to vary more than, say, prime residential house prices and that points to a need for larger equity-like component of funding to absorb losses from that variability. The search for yield however meant that banks were more happy to lend against equity risk of this sort. Since the crisis in the UK we have seen a shift in commercial property finance towards a larger share coming from funds which explicitly take this equity-like risk. This strikes me as a good thing in terms of reducing the exposure to such risks of banks, whose liabilities tend more to be in the form of deposits. I sometimes hear comments that banks are losing the race to new innovations such as peerto-peer lending for the supply of what I would describe as finance with a heavy equity component.

SAMA works side by side in cooperation with relevant authorities, namely, the Ministry of Finance, Ministry of Housing, Ministry of Justice, Ministry of Commerce and Industry to achieve the cherished objectives of the Finance Laws. The Implementing Regulations of the Real Estate Finance Law address criteria and conditions to be observed in the exercise of this activity for the purpose of regulating the finance sector, and protecting the rights of the dealers therein. The Regulations set a maximum limit on real estate financing that should not exceed 70 percent of the house value subject of the real estate finance contract. The Regulations also set up a regulatory framework for real estate refinancing, thereby, establishing a secondary market that contributing to providing the necessary liquidity and reducing the cost of financing to the consumer. The Public Investment Fund will contribute to the ownership of the Saudi Refinancing Company with a capital of five billion Riyals. The Implementing Regulations of the Financial Leasing Law include provisions related to the Financial Leasing contracts. The Regulations identify the basic rights and obligations of both the lessor and lessee, including determining the amount of ownership right and dues of the lessee and lessor in case of the cancellation of the contract. The Regulations provide for the registration process of Financial Leasing contracts in accordance with the best practices in this area through a company incorporated for this purpose.
•  We will conduct liquidity-providing longer-term refinancing operations with a maturity of 12 months. This will further lengthen the maturity at which we provide banks with liquidity at fixed rates and full allotment. This move is consistent with the operations we have undertaken since October 2008 and it recognises the central role played by the banking system in the euro area economy. BIS Review 66/2009  3  •  The European Investment Bank (EIB) will become an eligible counterparty in the Eurosystem’s monetary policy operations. Access to the Eurosystem’s liquidity is a natural complement to the EIB’s financing initiatives and it will facilitate the accommodation by the EIB of additional demand for its lending programme. •  Furthermore, the Governing Council decided in principle that the Eurosystem will purchase euro-denominated covered bonds issued in the euro area. We expect to engage in a programme of around € billion that targets an important segment of the private securities market, which has been particularly affected by the financial market turbulence. Our primary concern when taking these decisions in recent months was to maintain the availability of credit for households and companies at accessible rates. I have described that as “enhanced credit support”. Furthermore, our very flexible liquidity management ensured that solvent banks did not get into difficulties because of liquidity constraints. Our response to the crisis has been carefully calibrated to the financial and economic structures of the euro area.

According to the latest IMF forecasts, world output will shrink by 1.3% and the advanced economies by no less than 3.8%. However, GDP in emerging markets, though lower than in previous years, will still grow by 1.6%. Despite the crisis, the long-run prospects for emerging market economies remain bright. Projections for long-term growth, based on demographic trends and models of capital accumulation and productivity, suggest that the emerging markets are likely to gain in global importance. A number of studies found startling results regarding the growth prospects for emerging markets. According to one study, Brazil, Russia, India and China (the so-called BRIC economies) could account for over half the size of today’s six largest industrialised economies from 2025 onwards. 1 We have to prepare for a very profound structural rebalancing of world output during the next years. The world economy is changing profoundly, as so should its governance. The creation and the recent reinforcement of the G20 and the enlargement to the G20 of the Financial Stability Board are milestones in this respect. The rise of the emerging economies will also be reflected in the reforms of the international financial institutions. What are the specific implications of the growing role of emerging markets for the euro area? The euro area has close links with emerging market economies. In trade terms, the euro area is actually more open than other major economies. Our exports and imports of goods and services account for more than 40% of GDP, significantly more than in the United States or in Japan.
But, as the global pool of non-bank assets has grown, the US share has declined while the share of emerging economies, most notably China has increased. (Chart 1) The growth of market-based finance since the crisis does not, as some have claimed, represent the movement of toxic risks out of the regulated banking sector into less regulated areas. Indeed the opposite, if anything is true, in that we have seen a movement within market-based finance away from the more dangerous forms of ‘shadow banking’ – away from the types of activities that were at the centre of the financial crisis and that amplified and transmitted stress to other parts of the financial system. 2  Much of this shift is the result of the post crisis regulatory reforms. As the Financial Stability Board (FSB) noted in its report to the G20 this year, ‘a series of measures are eliminating toxic forms of shadow banking and transforming the remaining into resilient market-based finance’. 3  In a nutshell, market-based finance has become a bigger part of the global system, more broad based regionally and less engaged in the riskier aspects of shadow banking. From a financial stability perspective, that is generally a good thing. There are a number of aspects of the growth in market-based finance that reduce financial stability risks. Most obviously there is the benefit of diversification. A strong, market-based channel of financial intermediation in the economy avoids over-reliance on the banking system and creates resilience.

That reflects both lower inflation expectations and smaller risk premia to compensate for future inflation uncertainty. The total inflation premium - the sum of expected inflation and the inflation risk premium - is measured by the difference between yields on conventional and index-linked government securities. Chart 2 shows that the total inflation premium fell significantly on the announcement of Bank of England independence and the creation of the MPC. It is highly suggestive of a fall not just in expected inflation but also in the inflation risk premium. In principle, the behaviour of businesses and households depends on real interest rates - nominal interest rates less 2 the expected increase in prices. To the extent that the inflation risk premium falls, then so too does the level of real interest rates. The evidence in Chart 2 suggests that real rates have fallen too, although by less than nominal rates. Chart 1 Annual inflation in the UK  Note: Four-quarter growth rate of the quarterly retail price index (RPI) until 1974, and four-quarter growth rate of the quarterly retail price index excluding mortgage interest payments (RPIX) after 1974. Note that the RPI methodology before 1974 did not include mortgage interest payments, so the RPI series before 1974 is equivalent to RPIX in that sense. Data up to 2002 Q3. Source: ONS. 1  The conclusion reflects statistical tests including first-order auto correlations of consumer price inflation over ten-year rolling windows, and estimated spectral densities for inflation from a random coefficient AR (4) and GARCH (1,1) model.