23 trillion and from 85 to 102 % of the area ’ s gdp. these intermediaries manage portfolios that tend to be global and take on technically complex risks. they can modify the composition of their assets extremely rapidly even for the sake of making small gains ; they exploit the arbitrage opportunities stemming from fiscal segmentation or price differences between different financial centres. 2. efficiency and stability savings are now freer to flow towards what investors consider the most profitable investment opportunities. this results in a more efficient allocation of the resources available, support for capital formation and better growth prospects, especially for backward economies. the increase in lending to the developing countries, where the return on capital is higher, is certainly evidence of the markets ’ efficiency ; on the other hand it brings with it the problem of the sustainability of these countries ’ foreign debt and the associated risks for stability, including that of the international financial system. the mexico crisis and that still open in south - east asia, like the debt crisis of the early 1980s in latin america, have shown that a large inflow of funds can temporarily prop up unsustainable economic conditions. anchoring the national currency to strong currencies when economic policies are inadequate causes the real exchange rate to rise, creating the conditions for a crisis. insufficient supervision of banks and markets is a contributory factor. the liquidity of markets, the belief that securities can be sold without incurring substantial losses can lead to an erroneous perception of the risk. widespread expectations that the international organisations will intervene can accentuate behaviour on the part of intermediaries that is not consistent with the riskiness of investments. it is becoming increasingly important to ensure sound and orderly economic conditions and at the same time to strengthen and enhance the effectiveness of the supervision of intermediaries and markets at the supranational as well as the national level, with the aim of forestalling systemic crises. the restrictive monetary policies adopted in the industrial countries brought annual inflation down from 10 % in the 1970s to 5. 8 % in the 1980s. in the 1990s the objectives have become more ambitious ; inflation has fallen further, to an average of 3. 1 %. prices have also slowed down considerably in the last three years in the countries of eastern europe and above all in latin america. real interest rates rose substantially in the industrial countries in the 1980s and 1990s. they increased by around 6 percentage points in the early 1980s in response to the change in the focus of us monetary policy.

be improved in various ways, but it should be emphasised that this entails much more than security cases and bullet - proof glass. cash transport robberies are a major problem in our society and this serious crime must be combated with a number of measures by both the government and private sectors. this goes beyond the riksbank ’ s area of responsibility, but we are happy to take part in discussing issues that affect our field of operations and where we can contribute constructively. the establishment of this cash management advisory board – which is the reason we have gathered here today – should, among other things, be regarded as such. it is important that we continue to have a dialogue on these issues and contribute to greater breadth and depth in the discussions of cash management. thank you for listening, and let us now open the debate!