Lorenzo Bini Smaghi: Eurozone, European crisis and policy responses
Speech by Mr Lorenzo Bini Smaghi, Member of the Executive Board of the European Central
Bank, at the Goldman Sachs Global Macro Conference - Asia 2011, Hong Kong,
22 February 2011.
* * *
I wish to thank Huw Pill and Isabel Vansteenkiste for their contributions to this speech. I remain solely responsible
for the opinions contained herein.
1. Introduction
Ladies and Gentlemen,
It is a pleasure to have the opportunity to speak at this distinguished gathering here today.
We are certainly living in "interesting times", as the Chinese say. Slightly "too interesting, for
too long" I would add. Over the past few years, we have all witnessed a global financial
crisis, which has caused profound changes in the outlook for the global financial system and
global economy.
This morning, I will focus on one manifestation of the broader financial turmoil: the sovereign
debt crisis experienced by some euro area countries. In my remarks, I will first discuss the
origins of this crisis, and then draw some comparisons with the emerging market experience
- particularly in Asia. After reviewing how the European authorities have responded to the
crisis, I will conclude with some remarks on the outlook for the euro area. While we certainly
face considerable challenges at present, I am confident that Europe will emerge stronger
from the current episode, not least because some of the existing gaps in the institutional
framework for Economic and Monetary Union (EMU) will be filled. In the end, this will make
the whole structure more stable and robust.
2. Origins of the sovereign debt crisis in Europe
It is striking that those countries which experienced the European sovereign debt crisis in
2010 - notably Greece and Ireland - were among the best performers in terms of growth in
economic activity within the European Union (EU) over the decade preceding the crisis
(charts 1 and 2). Indeed, Ireland was called the "Celtic Tiger", drawing a parallel with the
fastgrowing "Asian Tigers" in earlier decades.
While prima facie a paradox, the relationship between strong pre-crisis growth and the
severity of the crisis itself reveals much about the origins of the underlying economic,
structural and institutional weaknesses that lie at the heart of recent events.
The introduction of the euro in 1999 led to a sharp fall in real interest rates especially in the
so-called peripheral countries of the euro area, as nominal interest rates converged to low
German levels (Chart 3). In addition, the credibility of monetary policy's commitment to
maintain price stability was bolstered by the institutional changes associated with Monetary
Union (Chart 4). The resulting improvements to the growth outlook were further supported by
the completion and deepening of the EU Single Market and the prospect of structural reforms
underpinning national competitiveness in this integrated market.
In this context, the outlook for income growth in the peripheral countries was widely believed
to have been transformed for the better. As a consequence, demand for credit expanded
rapidly: households and firms in the periphery sought to borrow, so as to reap the available
growth opportunities via investment and enjoy the benefits of prospective wealth gains
immediately.
This surge in the demand for borrowing was met with a relaxation of the credit supply
(Chart 5). Financing conditions eased significantly as real rates fell. Country risk premia
diminished, as peripheral countries adopted a credible and stable currency. Spreads
between government bond yields of euro area countries narrowed to very low levels.
Financial institutions could borrow more easily abroad, as currency risk diminished. Deeper
and more integrated capital markets facilitated greater opportunities for cross-country
diversification. And greater competition spurred rapid adoption of financial innovations, with
securitisation and risk transfer markets playing an important catalytic role in expanding the
loan supply.1
Credit growth surged dramatically. No doubt part of the rapid expansion of credit was justified
on fundamental grounds. After all, studies by the European Commission during the 1980s
and 1990s had promised a sizable growth dividend from the Single Market and Monetary
Union.2 But, in an environment of large-scale structural change in peripheral economies and
their financial systems, distinguishing the impact of improved fundamentals from that of
"bubble-like" behaviour proved a formidable challenge.
Indeed, with the considerable benefit of hindsight, there can be little doubt that a significant
component of credit growth served to create and nourish financial and economic imbalances
that have ultimately proved unsustainable, most notably in the housing market. Where
mortgages had once been scarce or expensive, they became cheap and readily available.
House prices boomed (Chart 6). Institutional and psychological factors fuelled an asset price
bubble in real estate.
Supported by the dynamism of the real estate market, the peripheral economies grew
rapidly. But the growth achieved was not balanced: sectors of the economy associated with
the housing boom - construction and financial services - grew disproportionately (Chart 7),
drawing resources away from other activities, raising concentrations in loan books and
increasing macroeconomic vulnerability to sector-specific shocks. Rapid economic growth led
to increased demand for imports, while strong wage growth put pressure on the price
competitiveness of the tradable sector. Large deficits on the current account of the balance
of payments therefore emerged (Chart 8). Inflows of financial capital from abroad - the
proverbial "hot money" - were needed to finance the current account deficit.
Such unbalanced growth also had important consequences for the fiscal accounts (Chart 9).
The housing boom (and its positive impact on broader economic activity and spending)
increased tax revenues, dramatically in some cases. These "windfall" increases in tax
revenue were treated as structural rather than cyclical in nature, as the housing boom was
prolonged and appeared to survive the cyclical weakness in activity in mid-decade.3 In
Greece, tax windfalls allowed successive governments to obscure a fundamental weakness
in the fiscal system, which was only later revealed when the public accounts statistics were
improved. In Ireland, the windfalls supported the implementation of a pro-cyclical fiscal
policy, as governments used revenue strength to justify tax reductions and higher public
spending. Massive implicit liabilities towards the financial sector were accumulated as
banking sectors grew rapidly.
Ultimately, the real and financial imbalances created by these dynamics proved to be
unsustainable. The global financial crisis in 2007-08 was the crucial triggering event
(Chart 10). First, the onset of global recession led to a deterioration in growth performance,
rendering the fiscal and financial burdens imposed by past behaviour unsupportable.
Second, the financial tensions led to a disruption of domestic financial intermediation, with
severe consequences for both private and public financing.
In Greece, the banks - which were reasonably strong in a "stand-alone" sense - were
undone by revelations about the weakness of public finances. In Ireland, causation ran in the
opposite direction: the bloated and failing domestic banking system imposed an intolerable
burden on what, prior to the crisis, had been a superficially strong fiscal position. Regardless
of the causation, the consequences were the same: as confidence eroded, the inflow of
foreign capital dried up. Subject to a "sudden stop" in external financing,4 the European
sovereign debt crisis - itself inextricably linked with problems in the financial sector -
erupted, forcing Greece and Ireland to seek financial assistance from the European Union
and IMF.
3. What can we learn from the emerging market crises of the past thirty years?
The developments I have just described might give those of you living in emerging
economies a sense of déjà vu. And indeed it has become commonplace to draw
comparisons between recent events in Europe and the periodic financial crises seen in
emerging market economies (EMEs) over the past three decades: Latin America's debt crisis
in the 1980s; the Mexican tequila crisis of 1994; the Asian financial crisis in the second half
of the 1990s; and the Argentine crisis of 2001.
Extensive economic literature has analysed these events and identified important roles for
many of the phenomena I have just described.5 It is therefore useful to explore parallels
between the emerging market experience and what we are currently seeing in Europe. Here
in Hong Kong, it is natural to focus on the Asian experience in the mid- to late-1990s,
although events in Latin America are also useful to bear in mind.
To set the stage for a discussion of policy responses, allow me first to set out what I see as
the key similarities and key differences between these episodes.
Similarities between euro area and EME experiences
The accumulation of financial imbalances and vulnerabilities prior to the crisis is an important
feature of both the European and Asian experience. Over-optimistic expectations of
longerterm growth performance stimulated a surge in credit expansion and economic activity,
associated with massive inflows of capital from abroad (Chart 11).6 The risks associated with
these capital inflows were under-appreciated by investors and therefore under-priced by
markets, in part because the aggregate and systemic consequences of a "sudden stop" in
such flows were neglected in the decisions made by individual investors (Chart 12). Rating
agencies acted in a pro-cyclical manner, also failing to adequately assess systemic risk
(Chart 13).
The inflationary consequences of strong growth led to a loss of competitiveness, as the real
exchange rate appreciated (Chart 14). The current account of the balance of payments
shifted into deficit, creating a dependency on the inflow of foreign capital (Chart 15).7 And the
rapid pace of economic growth obscured the underlying weakness of public finances, in
some cases abetted by creative accounting practices, such as shifting government liabilities
off the balance sheet.
The case of Ireland seems particularly close to Asia's experience in the 1990s: while public
finances appeared relatively strong, a vast external debt was being accumulated by the
banking system. The implicit government liabilities towards the financial sector arising from
deposit insurance schemes and the need to manage systemic risks were neither fully
recognised nor appropriately priced (Chart 16).
By contrast, the Greek experience appears closer to that of Latin America. In these cases,
fiscal indiscipline, in part initially obscured by creative accounting practices, lies at the heart
of the accumulation of financial imbalances, rather than a build-up of external debt on bank
balance sheets. Argentina's crisis in 2001 is a case in point, although the experience was
shared by many Latin American countries in the 1980s (Chart 17).
A further important similarity between the emerging market experience and that of the
peripheral euro area countries is that the external debt is denominated in a currency which
the national authorities do not completely control. In emerging markets, so-called "original
sin" - that is, a lack of credibility created by poor macroeconomic discipline in the past -
implied that external debt was overwhelmingly denominated in US dollars.8 In the euro area,
debt is denominated in euros. Although this is obviously the currency of euro area countries,
the single monetary policy aims at price stability across the euro area and thus cannot take
account of national priorities deriving from fiscal or financial weaknesses in peripheral
countries.
By implication, neither in the emerging markets nor in the euro area periphery can the real
value of the external debt burden be eroded by inflation or devaluation. Any attempt to
devalue would simply raise the domestic burden of the external debt. Of course, this was
precisely the point: by issuing debt in a currency which they could not control, the national
authorities in the euro area "tied their own hands". Before the crisis, they obtained a
credibility gain that would lower overall funding costs and thus reduced the probability of a
crisis. But when a crisis occurs, the external value of the debt burden cannot be reduced by
devaluation.
Differences between euro area and EME experiences
While many of the experiences of the euro area periphery and the EMEs are similar, there
are also important differences.
First, in general terms, Europe is more advanced both economically and institutionally than
Asia (even if there are notable exceptions, such as Singapore, Hong Kong and Korea).9
Advanced economies have higher "debt tolerance," because of their stronger institutions, a
more favourable composition of debt and a more stable fiscal revenue base (less dependent
on a small set of goods, such as commodities).
Thus while the dynamics of financial crises may be similar, the level of debt at which they
occur may be different. Of course, this can be a mixed blessing. The ability to accumulate
more exposures may permit the pre-crisis boom to last longer. But it may also mean that the
subsequent downfall is deeper.
The second difference is that, by having a national currency, even if it is rigidly pegged to an
external anchor, as in the case of Argentina's dollar currency board prior to 2001, the EMEs
retain scope to devalue. By contrast, the European periphery countries have adopted the
euro; they no longer have a national currency and therefore can no longer devalue, at least
against their main trading partners within the euro area. Ruling out devaluation has pros and
cons.
On the one hand, the eradication of devaluation risk eliminates one element of financing
costs that may rise rapidly in a financial crisis, even if the currency risk simply morphs into a
credit risk. Moreover, ruling out devaluation avoids "beggar-thy-neighbour" competitive
devaluations that can trigger trade wars and protectionism, and weaken the growth outlook
(Chart 18). And, without a devaluation option, peripheral euro area countries cannot fall into
a vicious debt-devaluation spiral. Devaluation increases the real value of the outstanding
foreign currency-denominated debt burden in domestic currency terms and may thus worsen
the economic and fiscal outlook of a country under stress. Any resulting loss of market
confidence may trigger further weakening of the domestic currency, thereby exacerbating the
problem and creating a steady downward spiral of devaluation and rising debt burden.
On the other hand, devaluation offers some scope to improve external price competitiveness
and thus boost growth via better export performance. The benefits of any such devaluation
will be greater for countries that have an export-based model of economic growth, relying on
price competitiveness to build market share. This is typical of the "Asian Tigers", but may be
less relevant for mature European economies where export performance is driven by other
factors, such as quality or branding. For peripheral euro area countries, which cannot
devalue, the way to improve competitiveness is via domestic wage restraint and structural
reforms to boost productivity. In an environment where domestic debt overhangs are large,
the former approach runs the risk of creating a debt-deflation spiral: domestic nominal
incomes are driven down, while the nominal debt remains unchanged, thereby increasing the
real burden of previously accumulated financial imbalances.10 Yet Europe's sovereign crises
have erupted in the context of a worldwide recovery, led by strong growth and a potential for
inflationary pressure in the emerging markets. Such a situation contrasts with the global
disinflationary environment of the Latin American crisis in the early 1980s, and the cyclical
slowdown affecting Asia in the mid-1990s. Because of the inflationary pressure in some of
their many export markets in the emerging world, euro area countries are more likely to
regain price competitiveness now than other crisis-hit countries were in the past.
The third difference between the euro area and the EMEs is that European countries
generally have more sophisticated domestic financial markets than was the case during the
Asian financial crisis. In particular, government debt plays several important roles: sovereign
yields are the basis for the pricing of many other instruments; government bonds are widely
used as collateral in private repo markets; and public debt is an important asset in the
balance sheets of domestic banks and the wealth holdings of the private sector. As a result,
euro area countries cannot afford to implement a sovereign default without suffering as a
consequence of such a default a major breakdown of their financial, economic and social
structure. There is no post-war example of a government in an industrialised economy
restructuring its debt. For a euro area sovereign to seek to restructure its debt would be a
huge leap into the unknown. This aspect is frequently omitted by financial analysts in their
newsletters or by commentators or academics in their short op-eds. And this is the reason
why they do not get the point right when they state that default and restructuring is
unavoidable in the euro area.
The fourth difference is that, given the much greater depth and intensity of financial and
economic integration in Europe, the strength of contagion across financial institutions and
markets is potentially more significant within the euro area today than was the case in Asia in
the 1990s. That is not to say that there was no contagion in the 1990s. But the cross-border
exposures within the euro area are an order of magnitude greater than was the case for such
intra-regional cross-holdings in Asian EMEs. This means that the potential for spillovers and
a systemic area-wide crisis is much higher and has to be factored into the policy responses.
Of course, greater economic integration in Europe has been accompanied by greater
institutional cooperation. Although now supplemented by the (still untested) Chiang Mai
Initiative, the framework for economic policy cooperation in Asia involves less deep and
intense collaboration than in the European Union. The single monetary policy in the euro
area is the acme of Europe's economic integration. And the situation in the 1990s in Asia
was much less developed than now. Several Asian countries (notably Malaysia at an early
stage) introduced capital controls in the face of the financial crisis, something which cannot
be done in Europe given the depth of financial integration and the commitments made to the
free movement of capital within the Single Market in the EU Treaties.
4. Policy responses to the crises
The much deeper set of economic and institutional linkages within the EU and euro area
today compared with those that existed in Asia in the mid-1990s has important implications
for the policy responses.
In particular, the lack of a regional framework in Asia placed the responsibility for addressing
the financial crisis in the 1990s immediately and squarely on the international financial
institutions, notably the IMF. By contrast, the close cooperation between EU countries has
meant that the IMF has played a less prominent role in the recent crisis, even though it
makes a significant contribution to the design and implementation of the adjustment
programmes implemented in Greece and Ireland.
I am sure that the density of the EU framework of integration and cooperation has played a
very positive part in tackling the crisis. Via both inter-governmental mechanisms (such as the
European Financial Stability Facility, EFSF) and supranational initiatives (such as the
European Financial Stabilisation Mechanism, EFSM), the EU and its Member States have
created an important source of external financial support for the domestic adjustment
programmes introduced by Greece and Ireland. The availability of this support has also
bolstered and underwritten consolidation measures implemented at national level.
The financing programmes have imposed strict conditionality on the recipient countries. They
insist upon the implementation of essential measures, namely fiscal consolidation, financial
sector restructuring and broader structural reform. While the EU is an equal partner with the
IMF in imposing such conditionality, the EU countries that have provided financial support to
countries in distress have insisted on IMF involvement because of the credibility this lends to
the conditionality of the programme. Its involvement in Asia would be much more difficult.
Note that the EU component of the financial support does not enjoy preferred creditor status
- a situation unthinkable in other parts of the world. Given the depth of economic ties and
trust between countries within the euro area, a sense of "common destiny" is felt by all,
leading to this exceptional level of support. As a result, creditors, in particular official
creditors, are therefore more closely bound into the success of the programme and have a
strong incentive to ensure that the programme's conditions are fulfilled, thereby underpinning
its success.
Aside from their role in fiscal consolidation, the European authorities have also offered
support to the financial systems of the most adversely affected countries in the euro area.
This has been done via EU/IMF programmes to support restructuring and recapitalisation of
crisis-hit banks; and through ECB measures, notably its framework for "enhanced credit
support".11 By introducing a variety of operational facilities, the Eurosystem has ensured that
liquidity continues to flow to the peripheral countries, preventing a seizing-up of financing
flows in those hardest hit and a significant disruption to the European financial system as a
whole.
Indeed, one of the most important contributions made by the EU framework has been to
ensure that the policy responses to the financial crisis have taken a sufficiently Europe-wide
- or at least euro area-wide - perspective. Given that the responsibility for financial
supervision and fiscal sovereignty remains at national level in the EU, at the peak of the
financial crisis there was a natural tendency for Member States to resort to national solutions.
A number of countries succumbed to this temptation, in the process imposing costly
externalities on other Member States. For example, providing government guarantees for all
bank liabilities in one jurisdiction prompted outflows of deposits from other jurisdictions,
requiring similar guarantees to be offered elsewhere. This may have resulted in an overall
level of intervention that was unnecessarily intrusive and undesirable in terms of the
incentives created in the financial sector. In short, the existence of considerable externalities
and scope for significant spillovers within a financially integrated region like the euro area
may have led to individually reasonable actions resulting in a collectively inferior outcome.
Recognising these concerns, the EU institutions have stepped in to ensure that an area-wide
perspective, internalising these externalities, is adopted. As we have seen, coordinating both
public and private behaviour to achieve a favourable outcome in a multiple equilibrium setting
requires both clear and credible programmes at national level, and support and coordination
at EU level. After a somewhat hesitant start, the European Union is now moving towards a
stronger institutional framework to support this approach.
Looking beyond the horizon of existing programmes, the crucial longer-term macroeconomic
and financial discipline requires further institutional change and integration, notably an
enhanced Stability and Growth Pact, and the introduction of a new and more effective
system of macroeconomic surveillance across EU Member States. The creation of the
European Systemic Risk Board to conduct macro-prudential surveillance and the three new
European Supervisory Agencies for the financial sector also aims to improve the quality and
coordination of financial regulation and supervision.
Having said that, the main responsibility for dealing with the weaknesses underlying the
sovereign debt and associated banking crises remains at national level. It is important to
recognise that the relevant EU Member States now fully understand and accept this. In
contrast to the experience in Asia in the 1990s or Latin America in the 1980s, there is little
attempt to blame the sovereign crisis on foreign investors. Responsibility cannot be shifted
offshore: the countries most immediately affected know that they have to act.
With the support of the EU and IMF, these countries have embarked on ambitious
programmes of consolidation and structural reform to correct their domestic financial and
economic imbalances. As I have already said, the origins of the intertwined financial and
sovereign crises lay in institutional and economic frailties in the most afflicted countries. It is
mainly up to these countries to correct these weaknesses and cure the problem.
A key element of the resolution of the Asian crisis in the mid- to late-1990s was a deep and
fundamental restructuring of the domestic financial sectors. This was implemented in what, at
that time, was seen as a relatively abrupt manner. The conditionality imposed on IMF
financial support was associated with the application of "shock therapy" to Asian countries'
financial sectors: losses had to be written down immediately, banks were closed or sharply
restructured and many institutions were sold to foreigners, arguably at "fire sale" prices.
Within the euro area, various buffers - not least, the Eurosystem's provision of liquidity
support - have tempered the stresses in the financial system. This reflects the recognition
that, within such a deeply economically and financially integrated region, "shock therapy"
adjustments may, through spillovers, weaken the financial system in other parts of the euro
area. However, we must also ensure that such liquidity support to the banking sector does
not delay or hinder the fundamental reforms required to address the underlying weaknesses
the financial crisis has revealed.
In the end, the crisis-hit countries have no alternative: they have to make fundamental
reforms to their banking systems, involving substantial restructuring and, in some cases, very
significant downsizing. Liquidity support can help to reduce adjustment costs by smoothing
the transition. But those costs should not be used as a pretext for delay.
5. Concluding remarks
Financial markets are testing the strength and resilience of the euro area and the willingness
and ability of the euro area authorities to preserve the integrity and stability of the euro as a
currency.
The institutional response to their challenge has been swift, strong and resolute. As regards
monetary policy, the Eurosystem has implemented a set of measures that ensure the
provision of liquidity to the euro area financial system, including to the banks of those
peripheral countries that are currently subject to the greatest market scrutiny.
With respect to fiscal and macroeconomic imbalances, euro area governments are now
strengthening the rules for fiscal and broader economic policy coordination. They have
created and are refining facilities that can provide external financial support to those Member
States facing the most intense pressures in sovereign debt markets. These developments
aim to correct the deficiencies in the institutional architecture of Economic and Monetary
Union exposed by the financial crisis. These facilities need to have sufficient resources as
well as the flexibility to contain market pressures and coordinate the public and private
sectors so as to achieve a sustainable and mutually beneficial outcome in an environment
where several equilibria may be possible.
The Asian experience in the mid- to late-1990s demonstrates that radical reform can lead to
a sustained recovery - one achieved largely without restructuring public debts. Indeed, one
can argue that Asia has emerged from its financial crisis stronger than before: the
institutional weaknesses which contributed to the build-up of financial fragilities, but were
masked by high growth rates during the pre-crisis boom have been addressed.
Similarly, Europe will emerge from its current travails stronger if the weaknesses revealed by
the recent financial crisis are properly identified and corrected through institutional innovation
and reform. I am confident that this will be the case.
Seen from this continent, the recent crisis in European sovereign debt markets may be
interpreted as a failure of the euro. But in Europe, the crisis is viewed differently. The
problems we face today are the result of a flawed implementation of a fundamentally good
idea. The bumpy ride of Economic and Monetary Union is largely the fault of the driver, not
the vehicle. He has to learn from his mistakes and get some more practice - then he'll be a
better driver. As for the vehicle, it needs better brakes, for even the best of drivers can
occasionally make mistakes.
Thank you for your attention.
Chart 1
Real GDP per capita growth between 1997-2007
Note: Growth rate shown in the chart is the percentage increase between 1997 and
2007.
Sources: Eurostat and Haver Analytics.
Chart 2
Real GDP developments since 1996
Note: Quarterly; 2000Q1=100.
Source: Haver Analytics and Eurostat.
Chart 3
Ex-post real interest rates
Note: Series calculated as ten year benchmark bonds minus annual HICP inflation.
Annual averages.
Source: ECB staff calculations.
Chart 4
Break-even inflation rates
Note: Last observation refers to 14 February 2011. Daily.
Source: ECB staff calculations.
Chart 5
MFI loans
MFI loans to households - MFI loans to non-financial corporations
Note: Last observation refers to 2010Q4. Quarterly; year-on-year % change; not adjusted
for securitisation.
Source: European Central Bank.
Chart 6
Real residential property prices in selected euro area countries
Note: Quarterly; 1998Q1=100.
Source: Hiebert and Vansteenkiste (2010).
Chart 7
Growth in real housing construction works between 2000-2007
Note: Growth rate shown in the chart is the percentage increase between 2000 and 2007.
Sources: Haver Analytics and Eurostat.
Chart 8
Current account balances in selected euro area countries
Note: 2009; % of GDP.
Source: Haver Analytics.
Chart 9
General government budget balance in selected years
Note: % of GDP.
Sources: Haver Analytics; European Commission.
Chart 10
Consequences of the global financial crisis
Household credit growth (annual % ) - General government budget balance (% of GDP)
Source: Haver Analytics, European Central Bank and Eurostat.
Credit growth to the private sector
Note: annual averages of monthly growth rates.
Sources: Haver Analytics and IMF.
Chart 12
EMBIG spreads in the run-up to the Asian crisis
Philippines - Malaysia
Note: in bp.
Source: Haver Analytics and JP Morgan.
Sovereign credit ratings of selected East Asian countries
Sources: Moody's based on a linear conversion of the ratings (with Aaa equal to 100 and
Caa equal to 5).
Chart 14
Average estimated real effective exchange rate
overvaluation as of late 1996
Note: in percentage.
Source: Average values by estimates of Chinn (1998), Goldstein (1998), Tornell (1998) and
Berg and Pattillo (1998).
Current account balances in East Asia and the euro area
East Asia (1996) - Euro area (1999)
Note: % of GDP.
Source: Haver Analytics.
Chart 16
Fiscal costs of recapitalisation as % of GDP
Note: high scenario.
Source: IMF (1999).
Argentina public sector debt as % of GDP
Share of foreign currency denominated debt in 2001: 97.59%
Source: Haver Analytics.
Chart 18
Exchange rates vis-à-vis the USD for selected
emerging Asia countries
Note: 02/01/1997=100.
Source: Federal Reserve Board of Governors.