This can sorely test the coordination of the exchange of information and the decision making. The Swedish bank’s substantial activities abroad have therefore meant that the Riksbank has entered into a number of agreements on cooperation in the event of financial crises with the central banks in the other Nordic countries and in the Baltic states. There is now also an overall agreement on crisis management at EU level – a Memorandum of Understanding, MoU. This covers central banks, supervisory authorities and finance ministries in all of the member states. Agreements of this nature are valuable because they create orderly forms for cooperation. They create necessary contact networks and not least a common parlance, which can be of great importance when managing a crisis. But these MoUs also have shortcomings. They are often worded in a vague and general manner and are not usually legally binding; more a declaration of intent. But the most serious deficiency is that they do not take into account the conflicts between national interests which may arise in a crisis situation. These should be added to all of the other conflicts which may arise between different interested parties and authorities with different objectives. Conflicts between national interests can be particularly prominent if the socioeconomic costs of a crisis in a cross-border institution are unevenly or unreasonably distributed between different countries. This could in some situations affect the willingness to contribute constructively to an overall solution of the crisis.
Tharman Shanmugaratnam: Update on the Singaporean economy Statement by Mr Tharman Shanmugaratnam, Managing Director of the Monetary Authority of Singapore, delivered at the MAS Annual Report 2000/2001 media conference in Singapore on 12 July 2001. * 1  *  *  Introduction  MAS has had an eventful year, shaping monetary policy in a challenging and uncertain environment and continuing to liberalise and enhance standards in the financial sector. 2  Monetary policy  In January this year, MAS decided to maintain the existing exchange rate policy stance of allowing a modest appreciation of the trade-weighted Singapore dollar within an unchanged policy band. This policy was aimed at capping medium-term inflationary pressures, while continuing to be supportive of economic activity as growth came off its cyclical high and moderated to a slower pace. Economic activity slowed much more in the first half of 2001 than was expected, causing market sentiment to shift against the Singapore dollar. Strong demand for US dollars to fund merger and acquisition activities by domestic corporates, and a strengthening of the US dollar against the major currencies, exerted further downward pressure on the Singapore dollar. The $ weakened over the period, from the top of the policy band at the start of the year to the lower half of the band at end June. This trend was consistent with the change in underlying economic and market conditions.