The SCAP clearly helped to restore public confidence in the banking system. Through its demonstration of the importance of individual assessments of firms' capital needs, improved management information systems in complex firms, and horizontal reviews of large institutions, SCAP will also have longer-lasting effects on the supervision of large institutions.
First, we are about to find out the extent to which slowing domestic demand growth in the G-7 will affect growth in emerging Asia. Second, the stance of monetary policy in emerging markets will be an important determinant of prices in the short term. Monetary policy remains highly accommodative in a number of fast-growing economies that are major marginal consumers of commodities.