While affected by the crisis, the effects on the domestic economies and financial systems have been relatively contained. Importantly, financial  2  BIS central bankers’ speeches  intermediation has not been disrupted, and the financial systems have continued the supply of credit to support the real economy. Following the Asian financial crisis, wide-ranging financial reforms were undertaken to strengthen the financial systems of the region. The building of sufficient capital and liquidity buffers during good times provided the ability to support the continued credit intermediation process. Improved regulatory and supervisory approaches, underpinned by enhanced governance and risk management practices, have enhanced financial stability in the region. Enhanced surveillance arrangements and a wider range of policy tools have placed policymakers in better state of readiness to deal with problems in the financial system pre-emptively. Macroprudential policies have also been extensively relied upon to mitigate the risks from excesses and imbalances in the financial system. Continued efforts were also made to further advance financial sector development in the region. In particular, the development of the domestic bond market has served to reinforce the foundations for financial stability in Asia. Financial activities have also remained generally anchored by productive real economic activities. In addition to the region’s strong external position, high international reserves and more flexible exchange rates have also enabled Asia to absorb and adjust to changing external conditions. The increasing cohesiveness of Asia is also a core strength and source of stability for the region.

If we instead look at use, Sweden has a relatively large share of IT capital in the total capital stock, compared with other countries. The use of IT means that one can simplify and automate the work so that those who work can carry out more tasks in a shorter time, that is, productivity increases. Cyclical factors have also contributed But the economic cycle has also played a role in productivity developments over the past fifteen years. At the beginning of the 1990s Sweden underwent the deepest crisis since the Depression of the 1930s. After the crisis, companies had unusually large scope to increase production using the existing resources. In addition, the substantial weakening of the krona contributed in autumn 1992 to a rapid increase in exports. When production and resource utilisation rose, this led to an upswing in productivity. The fact that productivity has increased so rapidly in recent years is therefore partly due to the economic cycle. This is because the beginning of an economic upturn is normally associated with high productivity growth. The explanation for this is that, at the beginning of an upturn, companies have the capacity to increase their production using existing resources. With time, in response to the increasing need for more resources, companies start hiring staff. This implies a decline in the rate of increase in productivity. When the economic cycle enters a downturn phase, productivity develops even more slowly. Growth accounting provides a systematic description I am sure you recognise the explanations I have mentioned.