BIS central bankers’ speeches  3  The Nordic-Baltic constituency has pushed for the IMF, alongside its surveillance of individual countries, to also regularly conduct the regional surveillance of countries with closely interlinked economies and financial systems. This is of course particularly relevant for Sweden as our banks have such large commitments in the other Nordic countries and in the Baltic countries. Although, as I mentioned above, our countries have increased their cooperation in the field of financial stability, a recurring and comprehensive regional analysis and examination of these issues would be of great value. Important steps have been taken in this direction and we are looking forward to an even sharper regional focus in the Fund’s ongoing financial surveillance. Capital flows require more analysis… The question of whether capital flows should be deregulated or not was the subject of lively discussion in the 1990s before the outbreak of the Asian crisis. After the crisis, some countries believed that one of its causes was that certain countries were asked to liberalise capital flows too early. The issue has therefore been very sensitive since then. Today, however, most countries agree on the positive effects of free capital flows – that is that they contribute to increased economic growth by enabling resources to be used more efficiently. The issue of free capital flows has now appeared on the IMF’s agenda once again.
BIS Review 22/2008  7  Chart 5: Commodity price developments  US $ per barrel  Index, 2000=100  100 90  Economist food price index (right hand axis)  80  Chart 6: GDP growth probabilities from February 2008 Inflation Report  250  200  70 60  150  50 40  100  30 20  50  10 Brent dollar oil price (left hand axis) 0  1990  0 1993  1996  1999  2002  2005  2008  Chart 7: CPI inflation probabilities from February 2008 Inflation Report  8  BIS Review 22/2008