One only has to quote the yen at 80 per US dollar in April 1995, followed by 147 in mid 1998 to see the problem. We are, in all probability, observing some similar phenomenon in relation to the US dollar and the euro.
20 This reflects the relationship between price stability; low, relatively stable interest rates; and the emergence of exuberant financial states of the world described earlier. However, it also presumes that regulation is not up to the task. It is important to stress again that the first line of defence against these dynamics must lie in improved regulation and market structure.