samchain/econo-pairs-v1 huggingface dataset:
Lessons learnt at great cost of human suffering and political upheaval may help us formulate sounder policies for the future. A thorough comparative study would occupy several PhD theses. But a brief review of what happened in each country will be a useful basis for examining some of the major themes for strengthening the global financial system. Asian crisis – what happened Thailand The crisis began in Thailand after a long boom. The establishment of the Bangkok International Banking Facility or BIBF and the implicit guarantee of a fixed exchange rate encouraged unhedged borrowing in foreign currency by Thai companies. This led to a build-up of external debt and an asset bubble. As the Thai economy weakened, the balance of payments deteriorated and the baht came under pressure. Attempts to defend the baht were costly and ultimately unsuccessful. When the baht was finally allowed to weaken, its sharp fall triggered the collapse of many Thai corporations as well as the banking system. The Thai economy contracted sharply. The aftershocks of the Thai problem affected many other Asian economies. Confidence in the whole region was shaken. Both domestic residents and foreign investors alike rushed to hedge or reduce their exposure to the region. Malaysia Malaysia was among the next to be affected. Its economy was fundamentally sound although there were concerns over a property boom and over investment in infrastructure. An acute loss of  1  BIS Review 93/1999  confidence, partially prompted by Thailand’s problems, led to a sell-off of Malaysian shares and the ringgit.

The labour market is also expected to strengthen, with the unemployment situation improving for the rest of the year. Against this backdrop, MAS shifted to a policy of modest and gradual appreciation of the $ in April 2004. This policy stance was assessed to be supportive of economic growth, while ensuring low and stable inflation over the medium term. Let me now turn to other aspects of MAS’ work during the past year. II  Regulation and supervision  First, in the area of regulation and supervision, we issued the “Objectives and Principles of Financial Supervision in Singapore” monograph earlier this year. This will help the financial institutions we regulate and supervise better understand the desired outcomes of our supervision. Let me say a few words specifically on risk-based capital. We issued details of changes to the capital adequacy requirements for Singapore-incorporated banks in May 2004. We believe the new requirements are prudent but competitive, and more sensitive to the banks’ actual risk profiles. These changes will give the banks greater flexibility to manage their capital while maintaining a prudent buffer against future shocks. The Basel Committee on Banking Supervision finalised the New Basel Capital Framework last month. We intend to adopt the New Framework at the same time as the G10 countries. We will continue to work closely with the Singapore-incorporated banks to assess the impact of the New Framework and determine how best to adapt the proposals for Singapore.
Many approaches were tried, some proved their worth, while others were abandoned. The establishment of these monetary institutions was not a constant reinvention of the wheel; rather, progress was evident. The sound institutions that have grown in this way represent valuable capital for our country and have made a significant contribution to Switzerland’s prosperity. I feel that it behoves us to become familiar with the history of our monetary and currency institutions. This is true not just for the employees of the SNB, but in particular for them. In fact, this was the original idea behind Professor Baltensperger’s book, namely to improve employees’ knowledge of Switzerland’s economic history. Or, expressed in a different way: To encourage them to “become familiar with the ground on which we lay our foundations”. On the initiative of the former Chairman of the Board, Jean-Pierre Roth, an internal seminar on the history of the Swiss currency in the 19th and 20th centuries was organised in the autumn of 2008 and in the spring of 2009. It became clear that no work yet existed which covered the entire period of the history of the Swiss franc. It was this realisation that laid the foundation for this book. The book was ultimately written by expanding on the material derived from the internal seminar. As you will be able to conclude for yourself after reading the work, the result can certainly be considered a resounding success. The book by Professor Baltensperger is a beautifully illustrated work with fascinating contents.

And the second is the improved communication between policymakers and market participants, which has allowed the bond market to form its own expectations about policy direction and to respond accordingly. These two qualities, in my view, are positive for the development of the bond market in the longer-term. Outlook and developments in the bond market This year the Thai economy will continue to expand, driven by momentums in domestic demand and export, including the launching of new infrastructural projects. Higher investment will imply higher funding requirement. Given ample liquidity in the system, funding investment expansion domestically should be a preferred option to funding it from abroad. Domestic funding will help make the domestic credit market competitive while helping to avoid the unnecessary pick-up in external debt. It is in this context of domestic resource mobilization that the bond market can have an important role to play. BIS Review 29/2005  1  This is to say that while bank credit will continue to be a major intermediary for investment finance, the need for long-term investment financing will offer considerable opportunity for the bond market. On the supply side, the fixed income market can be an important channel for long-term capital mobilization, while on the demand side, there will be ample demand to invest in fixed income instruments from domestic institutional investors. It is in this context that the current efforts to develop the domestic bond market by the Government are timely, and this priority now ranks high on the Government's agenda.
As I conclude, Ladies and Gentlemen, I would be remiss if I did not acknowledge the support of other institutions during the preparation of this workshop. To this effect, I wish to thank Standard Chartered Bank, PriceWaterhouseCoopers, KPMG, Deloitte and Touché, Grant Thornton, the Zambia Centre for Accountancy Studies and ZICAB Tuition Centre, for having agreed to provide resource persons for this workshop. With these few remarks, it is now my honour and privilege to declare this workshop officially open. I thank you. 2  BIS Review 13/2005

This will mean that in the two-year period 2012–2013 world growth will be slower than foreseen in September. We now anticipate a recession in the Eurozone in 2012, based on the recent indicators of manufacturing output and expectations in the region. In the U.S., recent output indicators have been somewhat better than expected, but not so much as to modify the view that this economy will experience a long period of slow growth, but not a recession. Political difficulties to agree on a gradual fiscal adjustment plan have increased the uncertainty about the performance of the U.S. economy. Emerging economies will grow less than we thought in September, but still outperforming their developed counterparts. China’s GDP growth will slow down in 2012–2013, to 8.2% in 2012 and 8.5% in 2013. These figures, although high, are the lowest since 2001. All these data combined result in a forecast for world growth in 2012 and 2013, 0.5 and 0.4 percentage points less than assumed in September. The terms of trade will also drop from 2011. The scenario assumes a copper price averaging $ and $ in 2012 and 2013, respectively. The prices of oil and fuels will follow a downward trend (table 1). The reduced external impulse assumed in the baseline scenario will translate into slower growth in Chile than forecast in September. The main sources of this revision are the weak external demand affecting domestic activity, stringent international financial conditions and reduced terms of trade.
But we don’t do that: the economic and social costs it imposed would be vast. 8  Our interventions to strengthen the system have to be expected to support the real economy more in the bad times than they hold it back in the good. 3  All speeches are available online at www.bankofengland.co.uk/speeches  3  Such benefits are to be found – as always – where private decisions have failed to internalise the wider costs of their defences being overwhelmed in the bad times and hence, have too little capacity to absorb shocks That is, where there are externalities. It’s well known, for example, that banks would choose to have too little capacity to absorb losses – too little equity capital – because their current shareholders don’t bear the full economic costs of their failure or distress. The economy needs better capitalised banks than the free market would deliver. But it’s also possible that, beyond a point, more loss absorbing capacity actually diminishes the ability of the system to do its job for the real economy, day in, day out. 9  Depositors want to be sure they’ll get their money back, immediately. Equity holders seem to want their equity to be equity-like. That is, to be risky and compensated accordingly. The result is that the cost of banking to the real economy rises as banks substitute debt (deposits) for loss absorbing equity. The famous Modigliani-Miller result does not fully hold in practice.

And yet, if you ask ten economists what precisely macroprudential policy is, you’re likely to get ten different answers. 1  So the time has come to take stock. I want to lay out what I believe to be five guiding principles for macroprudential policy. My aim in doing so is twofold: first, to help to build a common understanding of what it is and how it works; and second, to engage the finest minds – you – in partnership to push the frontiers of knowledge in ways that can make it better. 1) “It’s the real economy, stupid”  2  The first of my five principles is the one that motivates the whole exercise of macroprudential policy. For all that macroprudential policy may seem to be about regulating finance and the financial system, its ultimate objective – borrowing from James Carville’s famous election campaign advice – is: the real economy, stupid. 3  It is captured more precisely by Eric Rosengren (President of the Federal Reserve Bank of Boston) as avoiding circumstances in which “problems (or concerns about potential problems) within institutions, markets, payments systems, or the financial system in general …substantially impact the expected path of real economic activity.”  4  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  These problems typically arise when the financial system is overwhelmed by events in the economy; when it doesn’t have the resilience to absorb them and so amplifies them as:  Credit dries up. Lenders are not matched with borrowers.
The management of the financial crisis at the beginning of the 1990s has led to the Swedish banking system appearing to be better-equipped than those in many other countries. After the economic downturn and the tragic events in the USA last year, it is easy to forget that the Swedish economy is basically sound and therefore has good potential to meet new challenges. The deregulation processes have contributed to the discipline that now makes us stronger than many other countries in the EU and means that we have the possibility to come out of the current downturn in the global economy relatively easily. Unlike many other European countries, Sweden's public finances are in good condition, enabling the use of budget policy to subdue the downturn in economic activity. Both with regard to free trade and deregulation on the capital markets, Sweden chose to take large costs to society in the form of production losses and mass unemployment in order to achieve a development that would be good in the long term. We have been able to reap the benefits of this since 1996, with growth rates in excess of 3 per cent a year up to the present economic slowdown. And so far, we have got off much more lightly than other countries. The financial markets are important A financial sector that functions efficiently is an important part of a country's economic infrastructure just as important as the transport and energy systems.

A market economy is the form of economic activity that has proved superior to all other alternatives, such as a planned economy, in almost all situations. When it comes to small, less well-developed countries, it has often been shown that the countries that opened themselves up to competition, imports and exports have developed much better than the countries that tried import substitution, i.e. tried to build up industries for all their own needs. Economic research indicates that this is the case. South Korea, Singapore and now China are examples of more or less open economies that are seeing much better growth now, while India had poor growth for a long time, as it closed its borders. Other countries that have closed themselves in, such as Nigeria, Ukraine and Pakistan, are suffering degrading poverty. Countries that were previously more open with a high standard of living can sink into crises and misery, as is the case with Argentina and Uruguay. Participating in international exchanges provides investment, access to new technology and spreads knowledge of business life and company management. When managed properly, poor countries that open themselves up to the outside world can achieve more rapid growth than the industrialised nations through what economists call "catching up". Sooner or later even the poorest are raised to a higher standard of living with a more even distribution within the country. One example of this type of development is parts of China, after the country began to turn outwards and liberalised its economy.
The CMU action plan should cater for initiatives promoting private sector solutions, such as a broader use of existing rating tools. Investors need also to access clear, comparable and comprehensive accounting reporting which are currently lacking for most SMEs in Europe. Because accounting rules are the basis of financial information, a Capital Markets Union cannot be effective with 28 different accounting systems. This is all the more relevant in the Banking Union, where banks supervised by the Single Supervisory Mechanism (SSM) are still subject to different accounting systems. In this area, progress is highly desirable and as a first step, I would support an initiative aiming to assess the quality and degree of comparability of national accounting standards and to promote further convergence. (iii) Third, it remains necessary to ensure financial stability in the long run. The shift towards more market-based financing would entail several implications from a financial stability perspective. The development of alternative sources of funding, outside the banking system, brings a necessary diversification. Yet the risks associated with disintermediation are clear, notably a limited assessment 3 of risks by investors or less ability to address difficult situations and gaps in supervision. In parallel, re-intermediation by non-banks raises level-playing field questions linked with uneven regulation and supervision across sectors and countries. The objectives of the Capital Markets Union should serve as a backbone to the regulatory efforts made at the European level. Before adopting new pieces of legislation, it is of utmost importance to thoroughly examine their impact.

Achieving such goals would imply a very complex and politically sensitive process. This is why, as a first and more realistic step, we suggest starting by a stock-taking exercise whereby investors would have a clearer view of divergences and potential discrepancies between the various EU legislations. It is also worth noting that in the field of financial market infrastructures, Eurosystem initiatives have turned out to be powerful catalysts for harmonization. For instance, significant progress has been made in the standardization of corporate actions through the Target2-Securities project without having to adjust the respective legal frameworks. Finally, and I know this is a topic where Olivier will be happy to pick up, more regulatory convergence can be achieved without changing the current institutional architecture but via increased cooperation between European Supervisory Authorities (ESAs) and national authorities. I thank you for your attention. BIS central bankers’ speeches  3
Here I would like to remind you that the Banco de España has opened a public consultation process on the amendment of Circular 2/2016 on supervision and solvency this very week. The aim is to develop certain aspects of the macroprudential toolkit that legislation has made 1/2  BIS central bankers' speeches  available to the Banco de España. Pursuant to this legislation, the Banco de España may set limits and conditions on lending standards and other financial institution transactions, along with sectoral concentration limits. The new Circular defines the procedures for activating, deactivating and changing these measures, including the variables and parameters that the Banco de España may take into consideration to adopt a decision, the sectors that may be affected and the contractual terms or ratios that the measures may apply to. I would like to conclude by thanking the General Council of Economists for this initiative geared to young people, a group that the Banco de España considers a strategic priority in the context of the Financial Education Plan. It is a further example of how the Financial Education Plan partners, in this case the General Council of Economists, play an essential role in meeting the Plan’s objectives. We have continued to move resolutely in this direction: through partnership agreements such as those recently signed with the Ministry of Education and Vocational Training and the Ministry of Consumer Affairs; and by pressing ahead with the work avenues opened with the Ministry of Economic Affairs and Digital Transformation.

Once again, I would like to congratulate the winners, finalists and participants in this competition and, naturally, the organisers. I encourage them to sustain their efforts to boost the expansion of financial education. Thank you very much. 2/2  BIS central bankers' speeches
But I am hopeful that the fiscal plan introduced yesterday marks the first step in the post-pandemic revitalisation of fiscal policy. Monetary policy and fiscal policy will continue to work together effectively. As regards the labour market, the reconciliation agreements of 1990 played a key role in bringing inflation down from 21% in 1989 to 4% by 1993. And nota bene: households' disposable income has trebled in real terms since the reconciliation agreements were made. The tremendous progress made through cooperation and national reconciliation must be one of Iceland's best-kept secrets. At any rate, it is seldom mentioned in public discourse. The truth is always the best tale to tell - and in this case, the truth is that price stability is the prerequisite for the protection of real purchasing power. Any assertions to the contrary are nothing more than cheap demagoguery. The Living Standards Agreements from 2019 were reminiscent of the old reconciliation agreements. They, too, delivered real wage gains - although progress dimmed during the last six months of the agreements. Nevertheless, I have to admit that I am concerned about recent developments in the labour market, and I fear that therein lies Iceland's Achilles heel in the current battle with inflation. The Icelandic Federation of Labour has grown substantially weaker and no longer has the authority to negotiate on behalf of the private sector. This is damaging. There can only be a consensus in the labour market if all parties sit at the same table when negotiations take place.

Indeed, throughout this period of high inflation, one of the bright spots is that various measures of longer-run inflation expectations have remained remarkably well anchored and consistent with our 2 percent target.2  Imbalances Endure Our most important policy tool is the setting of the target range for the federal funds rate, which influences demand for goods and services by affecting borrowing costs. So far, tighter monetary policy from the Federal Reserve and central banks around the world is helping to bring a better balance between supply and demand. Inflation has declined in a number of sectors, particularly for many categories of commodities and goods. In addition, the supply-chain bottlenecks that had constrained the supply of goods have largely dissipated. For example, the New York Fed's Global Supply Chain Pressure Index has declined to a level that indicates supply pressures are now actually somewhat lower than normal.3 I hear the same from business leaders from around the Federal Reserve's Second District, who confirm that supply chains have improved considerably. At the same time, data on rents for new leases provide early signs of slowing inflation for shelter. This is important because shelter inflation had been a significant driver of higher inflation over the past year. However, despite the moderation of inflation, imbalances endure, with overall demand still exceeding supply in the economy. This is seen in the inflation rate for core services excluding housing, which has been running around 4-1/2 percent since last August.