Asia’s young and increasingly urban and increasingly more affluent population, supported with policy initiatives to strengthen social safety nets – including for healthcare and retirement – will further enhance domestic demand in the region. This will further unlock our trade and growth potential. Our diversity also continues to be an important source of strength for the region. The complementarities between the economies in the region provide significant opportunities for greater shared prosperity and mutually reinforcing regional growth. The progressive liberalization of the domestic financial sectors, the development of domestic capital markets and the integration of payments and settlement systems have opened up new channels for regional financial institutions and markets to intermediate funds across borders. These developments have facilitated the recycling of surplus funds from the region for economic development in the region, while also enabling greater diversification of risks. The lessons drawn from the Asian financial crisis more than 15 years ago also continue to shape our financial sector reforms, liberalization and economic and financial integration in the region. The focus is on developing a financial sector that serves the needs of the real economy, and which is built on solid foundations of sound risk management and strong financial buffers. An important precondition for financial liberalization and integration in the region has been ensuring that we build the capacity and financial infrastructure that would enable us to respond to emerging risks while also minimising their contagion effects.
Jean-Pierre Roth: Economic prospects for 2005 in a subdued European environment Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the “Les Rencontres au Château” meeting, Sierre, 22 February 2005. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  Although the Swiss economy expanded by almost 2% in 2004, this was not sufficient to reduce unemployment significantly. Hopes for an improvement in this respect are thus focused on this year. However, they might unfortunately remain unfulfilled once again. At the end of 2004, there were already signs of a slowdown in growth caused by the weak dollar and persistently high oil prices. These factors also played a key role in the National Bank's decision to leave interest rates unchanged. Overall, the international economy developed in line with expectations during the first two months of 2005: the US and Asia saw further growth, while Europe was confronted with increased difficulties. The US economy is burdened with high budget deficits and the current account deficit. In Asia, the Chinese economy is booming, whereas Japan is still struggling to find its way back to the growth path. The monetary situation in Asia, too, appears less than stable. In Europe, the economic environment presents a rather dim picture. Germany, Italy and the Netherlands are expected to see rather modest growth, while the outlook for France is more upbeat.