One thing becomes clear from the profusion of explanations and theories that continue to appear in the newspapers and journals: we are unlikely to be able to produce a definitive and comprehensive explanation of the causes of the recent financial turmoil in the very near future. The turmoil and its effects on our region are still being played out: indeed, although encouraging signs of recovery continue to appear, the word “recent” in the title of our symposium may well be wishful thinking. We are still on shifting ground when it comes to finding adequate explanations and it will be some time before we can stand back and take a cool and dispassionate look at what has happened. Economic historians, after all, are still debating the causes and consequences of the 1929 Wall Street Crash. BIS Review 2/1999  –2–  The much more complex causality of present turmoil is enough to bewilder even the most talented economist, more especially since it includes a fair measure of irrational behaviour that falls more strictly within the province of the psychologist. The diverse effects of the turmoil are equally perplexing: they present an interesting reflection of the great variety of economic regimes that we have in the region and of their different stages in the economic cycle. The Philippines, for example, though not entirely unaffected, has passed through the turmoil with considerably less damage than many other economies in the region. In contrast, its immediate neighbour, Indonesia, has been set back years, if not decades.
These facts oblige us to realize that challenging the status quo means in the end challenging mentalities, both those of policymakers and of citizens. It is a very complex process, but we see it as an opportunity as well. We can transform education and awareness in very effective policy tools, to everybody’s benefit. We can surpass the objective limits of our policy actions, by making people more aware of these very objective limits. Bridging the knowledge gap can lead to more financial inclusion, to more access to finance, which is good news for banks, companies, citizens and public authorities alike. Ladies and gentlemen, My conclusion and my message for you, distinguished participants to this conference, and I do not want to sound old fashioned, is that we need research and economic analysis that is practical and can fill the real deficits of our society. And if you really want to challenge the status quo, my advice is to have in mind also the way your research will be disseminated and materialized in real life. On the other hand, let’s not forget to preserve what is valuable in the current establishment. As an old word of wisdom is saying, we need courage to change the things which should be changed, serenity to accept the things that cannot be changed, and the wisdom to distinguish the one from the other. I wish you success with the debates! 2/2  BIS central bankers' speeches