The Reserve Bank of Australia has long enjoyed a strong relationship with the Bank of Thailand. In 1997, the RBA was among those central banks to enter a swap agreement with the Bank of Thailand shortly after the crisis broke. This was the first part of Australian assistance to the regional partners who were under pressure, which later extended to Korea and Indonesia.
As many have pointed out, the damage to households' credit and the financial disruption have been a drag on the U.S. economy, which has led to a slowing of economic growth and a recent decline in employment. In my remarks today, I would like to return to the issue of how we should respond to possible asset price bubbles.