sustainable economic growth. thirdly, price stability cannot by itself guarantee financial stability. where the economy maintains low prices and rapid growth for a lengthy period of time, an accumulation of financial imbalances threatening financial system stability can even perhaps be overlooked. last but not least, in a world economy of great mutual dependency between the financial and real sectors of the economy, to counter global financial crises we have no option but international cooperation. fortunately, in the early stages of this last crisis, it proved possible to achieve successful international policy cooperation through the g20, the premium forum leading the international debate on world economic stability. under the aegis of the g20, moreover, the financial stability board and the basel committee on banking supervision efficiently headed up international cooperation in the sphere of financial regulation. macroprudential policy tasks in the wake of the global financial crisis, the dangers of systemic risk propagation must be recognized and the macroprudential soundness of the economy as a whole enhanced so as to counter them. prior to the global financial crisis there was insufficient understanding of financial systemic risk in countries around the world, and we cannot deny that the significance of such risk was underestimated. similarly, in seeking to reduce the severe damage to the real economy arising from systemic risk, we need to move away from an emphasis on microprudential regulation, to an approach that also incorporates macroeconomic policy dimension. based on the aforementioned lessons from the global financial crisis that i mentioned above, countries around the world are now involved in drawing up various plans for underpinning sustainable and balanced growth, in a process centering around the g20. and at the last g20 summit in seoul, substantial outcomes were achieved in the move toward introduction of macroprudential policy - based financial regulation. this being said, a large number of issues remain unresolved, as the introduction of macroprudential regulation is still in its infancy. let me cite some examples. how should financial stability, which is the goal of macroprudential policy, be defined? and again, how can we reconcile macroprudential policy tools with our instruments of microprudential regulation? further, how should we pursue financial stability jointly with monetary policy, which emphasizes price stability, and what institutional arrangements must be put into place to facilitate macroprudential policy cooperation with the supervisory authorities? on these and other issues, proposals either upon experience or upon concrete theoretical grounds have yet to be presented. meanwhile, correcting the di

crisis, i set up a course there on “ economic crisis management ”, which was to my knowledge the first and only course of its kind in korea, thinking that economic crisis management would become a buzzword in the global market in the future. i taught this graduate - level course for five years, with my students including mid - level career government officials from many developing economies. the course turned out to be very popular, and i was asked by many universities around the world to send them the syllabus. in a similar vein, in carrying out my duties as governor i have felt great academic curiosity about the character of the recent global financial crisis. and my conclusion has been that the recent crisis has been a composite one, in that it has involved all facets of past crises, including excessive financial liberalization policies such as financial engineering for example of derivatives, contagion to neighboring economies, large amounts of public debt, rigid exchange rate regimes, the generation of innocent bystander victims, and inefficient financial surveillance and regulation. one notable difference this time, however, which has distinguished the recent crisis from past ones, is that our central banks have taken bold monetary and financial regulatory measures in response, through which collapse of the global financial system has been prevented. yes, this time has indeed been different in that way. and we are all very well aware that the bis has been of great help in this process. i am relieved that the global financial crisis has now cooled down somewhat, at this time of my departure from my post as a governor. however, considering the saying that “ it ’ s not over until it ’ s over ”, one of my favorite yogi berra quotes, i hope that the global economy does not let its guard down until the crisis has been completely overcome. in particular, fundamental solutions such as the establishment of a global jurisdiction are still necessary. and as there are multiple disequilibria at present, i expect the bis to play a certain role in solving this problem as well. bis central bankers ’ speeches meanwhile, i believe strongly that all of our central banks will respond adequately to the many difficulties we face, while broadening our mutual understandings of each other through the bis meetings. before concluding my speech, i would like to leave the following message to you all, hoping that you will find it food for further thought. i think that we live in an economy in which prices including foreign exchange rates overshoot, markets then overrea