You are all of course familiar with the global financial shock which hit Asia in 1997 and spread to other emerging market countries and transition economies through 1998 and the early part of last year. This shock impacted the UK economy in two main ways. First, the withdrawal of external finance from the immediately affected countries meant that they had no option but to rein back their domestic economies, resulting in a sudden, sharp, slowdown in world demand - including demand for industrial countries’ exports. That in turn had the effect of dampening aggregate demand in the industrial countries. Had the industrial countries - led by the United States and the United Kingdom and closely followed by the Eurozone and subsequently also by Japan - not acted to stimulate their own domestic demand, we could indeed have seen the serious world downturn which many were anticipating only a year or so ago. In the event, the global slowdown was contained, but at the expense of the build-up of substantial external imbalances within the world economy, and at the expense, too, of substantial imbalance between strong domestic and weak net external demand in a number of industrial countries - most notably in the US and here in the UK. Second, these developments in the world economy had a major impact on the international pattern of exchange rates. In the first place, many of the countries most adversely affected by the interruption of international financial flows saw their currencies fall dramatically in foreign exchange markets.

13.12.2019  Welcome address Conference “Financial integration and inclusive development: A view from the Mediterranean Countries”/Banco de España e Instituto del Mediterráneo (IEMed) Pablo Hernández de Cos Governor  Good morning ladies and gentlemen, It is a great pleasure for me to welcome you all to this Conference on Financial integration and inclusive development: A view from the Mediterranean Countries, hosted by Banco de España and jointly organised with the European Institute of the Mediterranean (IEMed) and the support of the Organization for Economic Co-operation and Development (OECD). Let me start by thanking our colleagues from the European Institute of the Mediterranean and from the OECD for their cooperation in organising this Conference. The European Institute of the Mediterranean (IEMed), created in 1989 with the participation of the Spanish Ministry of Foreign Affairs and Cooperation, the Government of the Autonomous Community of Cataluña, and the Barcelona City Council, incorporates a broad representation of civil society and is a leading institution in the analysis of Euro-Mediterranean relations. In accordance with the principles of the Euro-Mediterranean Partnership's Barcelona Process, and with the objectives of the Union for the Mediterranean, the aim of the IEMed is to contribute to mutual understanding, exchange and cooperation between the different Mediterranean countries. And Banco de España is delighted to collaborate to this objective in the field of economic and financial relationships. Our second partner today, the OECD, is playing an invaluable role in the international arena to shape policies that are decisively contributing to the well-being for all.