Fifthly, monetary policy loses much of its effectiveness in dealing with a recession if banks, badly overexposed as a result of the preceding boom, are unable to lend. I hardly need to belabour this point to an Asian audience. A well-functioning financial system is essential for successful monetary policy because of its pivotal role in the transmission of monetary policy measures.
This was considerably higher than the corresponding share of the sum of all legacy currencies at the end of 1998, which accounted for about 18%. Overall, the evolution has been gradual: the share of the euro increased during the first five years following the introduction of the euro and has since remained relatively stable.