These changes are speculated to lead to a marked decline in U.S. influence throughout the world and as a result the much talk about subject of the “new world order”. In our view, however, it might be more fruitful to discuss about the new global framework as a check on global imbalances rather than a new world order. This is because the ultimate winners or losers from globalization are yet to be decided. A long historical perspective is, therefore, needed in order to put the net social cost and benefit of globalization into a proper context. A new wisdom from financial globalization, however, is emerging. As Professor Rodrik will probably agree, reaping the benefits from globalization is by no means automatic. Globalization, financial or trade liberalization, all need supporting institutions for their gains to materialize. Furthermore, past experiences according to Professor Michael Bordo of Rutgers University, also indicate that although the globalization winners appear to outnumber losers in an increasingly integrated world, it is still possible that the losers (even temporary ones) can create a backlash that will once again cause a retreat in the globalization process. Ladies and Gentlemen, It is obvious that a global financial crisis will need a global solution. This symposium on financial globalization is thus very timely and come at a time when policy makers and market participants are in dire need of a better solution. And this year, we are honored to have with us many distinguished speakers from well-regarded institutions to discuss this important topic.
So this is an extraordinary time for the world financial market and probably most suitable for an international symposium on the subject of financial globalization. Ladies and Gentlemen, Financial globalization has certainly made the international financial landscape look very different today compared to just a decade ago. And almost every day, new events continue to re-shape it even further. One aspect among these changes, however, remains constant. That is, despite the complexity and sophistication of today's financial institutions as well as instruments that are developed to manage all kinds of risks, the remarkable degree of global financial linkage still makes financial turmoil transmit from one country to another at an ever faster pace than we have previously anticipated. Like all financial crises of the recent past, several weaknesses and excesses were initially submerged and only later found to be much larger than the initial estimates, contributing to the permanent boom-bust cycle that seems to always accompany modern business and finance. Understanding the various causes of the crises is only the initial step towards resolving its short-term impacts and preventing its recurrence, if entirely possible, in the longer-term. In the meantime, we will probably continue to have to witness an intensification of the financial crisis. As mortgage-related assets deteriorate further, economic growth will inevitably slow down even more, along with the downside risks of financial and the economic outlook.