picture. the downbeat portion is the lack of any appreciable improvement in the labor market. although aggregate demand appears to have grown rapidly in the third quarter, nonfarm payrolls continued to fall through august and increased only a bit in september - the result of ongoing efforts by businesses to restructure their operations and boost efficiency. based on recent economic research at the federal reserve and on many anecdotal reports, i suspect that a large part of these net job losses - particularly in manufacturing, airlines, and telecommunications - are permanent and will not be reversed as the economy gains steam. instead, new jobs will need to be created in other sectors of the economy to replace them. this process will take time. but if history is a guide, in an expanding economy job creation will eventually outstrip job destruction, and lower the unemployment rate. the increase in payrolls in september was a start, and i hope will be followed by larger gains in future months. i will be watching conditions in the labor market closely because an expansion that is sustainable in the long run will require solid growth in employment. the flip side of this so - called jobless recovery is that labor productivity has been increasing very rapidly. output per hour in the nonfarm business sector rose almost 7 percent in the second quarter, bringing the four - quarter change to more than 4 percent. that pace is quite high by historical standards and suggests to me that the productivity gains of recent years are not cyclical developments that will disappear as labor demand strengthens but are permanent gains in efficiency. that is good news because growth in labor productivity generates growth in real wages of workers and thus raises our nation ’ s overall standard of living. strong growth in productivity also has been an element in the low rates of core consumer price inflation in recent years. the personal consumption expenditure price index excluding food and energy increased only 1. 3 percent over the twelve months ending in august - about 1 / 2 percentage point less than in the year - earlier period. in the current environment of excess capacity and intense global competition, most businesses simply do not have the ability to raise prices. as a result, i do not see a large risk of a pickup in the underlying pace of price inflation anytime soon. pension obligations before concluding, i would like to discuss an element of corporate financial statements that has attracted a good deal of negative attention lately - namely company pension obligations. as you know, pension plans come in two varieties, with very different effects on corporate

+ 3 and emeap have recently stepped up their cooperation in promoting regional financial market development and stability, by drawing up joint response plans, such as the launch of the cmim, to tackle such financial crises, and by seeking ways to foster regional financial market development and improve macroprudential frameworks. to my mind, the best way for asian economies, which are vulnerable to external shocks, to expand their mutual economic interests is to strengthen their collective response by making integration of their real economies, by way for example of ftas and the setting up of regional financial safety nets. meanwhile, the establishment of policies within the asian region and within individual regional countries should be in line with the reforms underway in the international financial architecture. amid the increased possibility of systemic risk, where shocks arising from certain financial institutions or markets spread rapidly due to the heightened financial interconnectedness, financial stability cannot be achieved based solely on policies of individual countries, unless accompanied by international cooperation. above all, in order to regulate the financial market, where globalization has progressed the most, we should participate energetically in networking among central banks around the world, thereby strengthening international cooperation in regard to macro - prudential policies. closing remarks while undergoing the bitter experience of previous financial crises, asian countries at least profited from them in drawing lessons that, i believe, greatly helped them see off the global financial crisis successfully. although we are not at the epicenter of the ongoing global financial crisis and euro area sovereign debt crisis, we should also take them as object lessons. above all, i hope that we can look to a brighter future as the dark shadows shrouding the world economy fade this year, blown away by the energy of the black dragon which is believed to rule the dark. i wish the best of luck throughout this year to all of our seacen member economies and our partners around the world. thank you very much for listening! bis central bankers ’ speeches