Mr Yam: Risks and challenges in coping with international capital flows  Opening address by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, at the Sixth Manila Framework Group Meeting, held in Hong Kong on 20-21 March 2000. *  *  *  Ladies and Gentlemen, On behalf of the Hong Kong Monetary Authority, I would like to extend a very warm welcome to all of you to this Sixth Meeting of the Manila Framework Group.1 As you will no doubt recall, the Manila Framework Group was founded in the deep throes of the Asian financial crisis in November 1997 to develop a concerted approach to restoring financial stability in the region. With the worst clearly behind us, and with signs of a strong economic recovery in the region, the mission of this group has still not ended. This forum embodies a valuable spirit of cooperation, with wide participation of emerging market economies in the dialogue. The value of this forum lies in its quality dialogue on regional surveillance and on reform of the international financial architecture. There is no doubt that economic recovery in the region has gathered considerable momentum. Economic growth for most economies has been better than expected, external balances have improved remarkably, international funds have renewed interest in the region’s asset markets, and yield spreads of Asian sovereign bond issues over the US treasuries have narrowed notably.
Strict inflation targeting of this type would thus have resulted in more pronounced fluctuations in the interest rate and in aggregate demand and production. BIS Review 66/2002  3