In sum, in times of stress, "enough" capital or liquidity is never enough. Even explicit contracyclical requirements may provide little or no relief. One possible solution is to offer – or impose – ex ante liquidity and capital insurance. Over the last two centuries liquidity insurance in times of stress has been provided through the lender of last resort. Proposals have been made to explicitly price that insurance which would better internalize its cost. Capital insurance, has also been suggested, among others, by Kashyap, Rajan and Stein and can be seen as a new – and potentially powerful – way to provide contingent support. •  Looking beyond individual institutions, the robustness of the system as a whole depends on the solidity of some of its key components (the "nodes" in the language of networks). This is to day perfectly understood and it is widely expected that "systematically important institutions" will, in the future, be subject to more stringent regulatory requirements and closer supervision. This may, or not, be related to their size. "Too big to fail" certainly warrants special treatment. But, the position and role of even smaller or medium size actors may also put them in a situation to have a strong influence on the system's dynamics. •  Ultimately, however, robustness in complex financial systems may be best addressed by shaping the structure itself of those systems.
The exchange rate has, in fact, tended gradually to soften since last spring when the decision to go ahead with the euro was finally confirmed; but increasingly since the autumn the internationally-exposed sectors of the economy have been dealt a further massive blow as a result of global economic turbulence. This started, in fact, with the financial disturbances in Asia in the latter half of 1997, but even as late as the beginning of last summer it seemed as if it might have only limited impact on the overall world economy. The IMF, for example, was then still projecting 3-3¾% world growth in 1998 and 1999 respectively, which was certainly a setback compared with their forecast of over 4% just six months before, but it was hardly catastrophic. Since last summer it has become increasingly clear that things are likely to be significantly worse than that. The financial collapse in Russia, deepening recession in Japan, the long battle – then sudden defeat – in Brazil to hold its exchange rate, and fluctuating fears of possible knock-on effects on the major countries’ financial markets, all contributed to an increased sense of financial fragility, which has not been easy to contain, though I am now hopeful that we will be able to stop the financial rot.