That is what has been happening - commodity prices are now 9 per cent lower than at their March 1997 high in SDR terms. Thus, from Australia’s perspective, the Asian slowdown may have its biggest effect not through lower export volumes, but through a fall in commodity prices, some (or, conceivably, a lot) of which has already happened because these markets are forward looking.
We must avoid that any easing of tensions in the markets leads to a slackening in the pace of reform. Banking Union, shifting supervision of banks to the European level, combined with a single resolution regime and a common system for deposit protection will reassure citizens and markets that a common, high level of prudential regulation is being consistently applied.