Indeed there have been many comparisons to the Great Depression. Yet, compared to the 1930s, an importance difference today is that news spread across the globe far more rapidly. Even rural households in China and India can now access this stream of bad news, real-time, through satellite televisions and the internet. The hyperefficiency of information flows has in itself introduced new uncertainties as sentiment shifts rapidly and abrupt loss of confidence becomes self-reinforcing. Crisis response: decisive action needed How do we deal with this crisis? Despite its scale and unprecedented nature, it may be instructive to study the pattern of responses in previous crises. In past crises, the responses typically go through several overlapping phases. Initially, there is a lack of appreciation of the scale and severity of the problem. This then gives way to fear and panic as the problem becomes stark. Next, anger sets in, and a hunt for culprits begins. As the financial and  2  BIS Review 30/2009  economic stresses take root, pessimism sets in. If remedial actions are seen to be tentative and lacking in conviction, recovery is delayed and interrupted by bouts of renewed panic. It may take some time before the hard realities are accepted, and a level-headed search for viable solutions sets the path for recovery. Elements of these have been played out in the current crisis. Initially, the "subprime" issue was regarded as a manageable problem, confined to a small segment of the US housing market. Then it triggered seizure in the wider credit markets.

These are all very positive developments and you will be joining a vibrant community of financial institutions here in Singapore. Japan and the region’s recovery and growth Daiwa’s increased focus in South Asia attests to the dynamism of the region. Not only has the region shown resilience, it is now powering ahead. Led by ASEAN economies such as Vietnam, which is surging ahead strongly, India, Pakistan and the Middle East too are beckoning out to investors with their growth prospects. Trade and investments within the Asian region, and between Asia and the Middle East continues to grow. Notably, Japanese foreign direct investments into ASEAN has been increasing steadily again since 2003. In fact, it has reached more than $ billion1 which even outpaced that into China in 2006. The Japanese economy too, continues to impress. Economic conditions in Japan have improved remarkably and the data released suggests a continued and sustained growth. Japanese corporates are raking in record profits and capital investments too are surging ahead. They have once again begun to spread their wings overseas. Supporting these corporates, financial institutions like Daiwa too have benefited from this increased business activities. 1  Sources: Prepared by JETRO from Ministry of Finance Balance of Payments Statistics and Bank of Japan foreign exchange rates. BIS Review 72/2007  1  Partner to growth Where does Singapore fit into this climate of abundant growth opportunities? Located right at the confluence of trade links and business opportunities, Singapore has become a valuable partner to corporates and financial institutions like Daiwa.