I hesitate to put precise numbers on costs, because they do vary quite considerably. However, as Bank of England research which is to be presented later to this conference indicates, both the fiscal and welfare costs on all the measures used are very significant indeed. On some measures, in fact, the output costs of banking crises in developed countries tend to be higher than in emerging markets, largely because the length of crises is longer in developed countries. Overall, therefore, in the light of past experience, I think we would be taking an unjustified risk if we deliberately set out to lower the existing regulatory demand for capital. Crisis management and payments Standstills: I want to turn now from crisis prevention to crisis resolution and from domestic banking to more general international liquidity crises. While the banking system was a source of instability in many countries during the Asian crisis, a more immediate problem was the liquidity crisis triggered by the sudden outflow of capital from the region. It is the free movement of capital that I would like to discuss and, in such a regime, the need for arrangements that would deal with a liquidity crisis where developing countries get into payment difficulties. The international capital market Global capital flows have exploded since the 1970s. Between 1970 and 1996, real GDP in the G7 economies more than doubled. Over the same period, world trade volumes rose by roughly twice this amount.
But the official sector could possibly mitigate their cost by establishing a coherent framework for crisis management, with payment suspensions as one of the tools. None of this is at all to suggest that the issue of standstills - in or outside the Bank of England - is fully articulated and concluded. It is a difficult area requiring contributions from all sides and the  BIS Review 70/2000  8  intellectual argument is ongoing. Finding the right balance between rules and discretion, in this area as in so many, remains a key issue for policymakers. There is work to be done on the modalities of how standstills might operate in different crisis cases. What is the role of the IMF in the standstill process? Does the process need to be underpinned by statute or would non-statutory principles suffice? And when might a standstill require capital controls to guard against leakage? The Bank is currently working on some of these issues, practical and conceptual. I would encourage those among you with an interest in international public policy to help us in addressing them, joining the growing number of, in particular, US academics who are exploring this topic. It is very much a live debate and I have no doubt these issue will be discussed at length, at and around the World Bank and IMF Annual Meetings in Prague later this month. Conclusion I have now talked myself - quite literally - to a standstill.