Distinguished Guests, Ladies and Gentlemen: Based on the 2005 experiences in the economy and banking system, we can ask ourselves what lesson is there to be learned? There are four lessons: •  First, in the midst of a highly dynamic global economic, we must be able to recognize problems immediately and make adequate decisions quickly.
Although neither I nor anyone else knows for sure, my suspicion is that bubbles can normally be arrested only by an increase in interest rates sharp enough to materially slow the whole economy. In short, we cannot practice “safe popping,” at least not with the blunt tool of monetary policy.