Ladies and Gentlemen, The theme for this year’s SEACEN Governors’ Conference is indeed timely. The theme acknowledges that in the integrated global economy the strategies of central banks are affected by the external economy where formulation of domestic policies has to be made in an environment of greater cross-border financial linkages.
There is another obligation to establish institutions and instruments that preserve the stability of the system taken as a whole. This is an implicit social contract which, before the crisis, was believed to be largely self-enforcing – if not by countries themselves, then by the discipline of financial markets. That this assumption was misplaced is now part of history.