Some signs of this can be discerned; the latest figures suggest a minor blow to households’ expectations of Sweden’s economy, though this has not yet affected their personal economic expectations. There has been some fall in the growth of business credits. Another channel for effects on the real economy is the banking system. A more cautious supply of bank credits could dampen economic activity. In this respect the international turbulence gives cause for concern. The tendency in the late summer for investors to move to assets that were regarded as generally secure - a flight to quality - has developed into a general aversion to holding risk, with investors fleeing instead to assets that are more liquid. The economic fundamentals in particular countries are currently playing little part in investment decisions. This has hit some Third World countries very hard. The financial system in Sweden is monitored very closely by the Riksbank. The available statistics suggest that, compared with many international banks, Swedish banks are in a better position, with lower exposures to countries hit by the crisis. The picture also seems to be relatively good as regards exposures to hedge funds. This low exposure is probably a consequence of the bank crisis in Sweden in the early 1990s. So the risk of a domestically generated credit crunch should be small. Weak currency Besides increased uncertainty and greater risks of weaker economic activity, developments since the September Report was written have involved downward pressure on the Swedish krona.
Joseph Yam: Competition and cooperation among global and regional financial centres Congratulatory remarks by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the ACI Asia – The Financial Markets Association, Hong Kong, 11 July 2008. *  *  *  Mr Wiebogen, Mr Tan, Ladies and Gentlemen, It is with great pleasure that I join you this evening to mark the inauguration of ACI Asia – The Financial Markets Association. On behalf of the Hong Kong Monetary Authority and the Hong Kong Special Administrative Region Government, I would like first to offer my congratulations to all those who have worked hard over the last couple of months on the establishment of ACI Asia. Special congratulations are also appropriate to Mr Wiebogen and Mr Tan for the foresight and leadership they have demonstrated in this initiative. Financial markets in the developed economies have been experiencing considerable stress. At the risk of oversimplifying it, the current financial turmoil can be attributed to financial innovation creating distortions in the financial system, including the compensation schemes for the innovative lot, to such an extent as to lead to a serious erosion of credit standards. It is at a time like this that everybody should be reminded of the importance of professionalism in finance, at all stages of financial intermediation.