. central banks face important challenges in several areas, such as determining the timing and extent of reversing policy easing, coordinating with fiscal authorities and other central banks, and communicating their strategies to the public. a disciplined analysis of the data will test the science of central banking, whereas a good assessment of the operating environment and judgement will put the spotlight on the art of central banking. finally, i would like to congratulate all the nominees for this year ’ s spire awards. whether you or your team walk away with a prize or not, the fact that you were nominated is indeed already a great recognition by your clients and your peers for the contribution you have made to the south african bond market. i thank you all for your attention.

s “ global savings glut ”. whatever the reason, it was not long before the greenspan conundrum turned into a disaster. risks of the housing bubble bursting indeed materialised and the rest of the story you all know very well. needless to say, the conundrum that existed is no longer. as central bankers began to ease monetary policy, investors began to worry about inflation, boosting long - term interest rates and in the process mitigating the action that policymakers thought was necessary. unconventional forms of expansionary monetary policy were instituted, for fear that long - term interest rates would not remain low and therefore would dull any possible improvement in economic activity. the combined impact of quantitative and credit easing on central bank balance sheets has been extremely large. 4. the rise of emerging economies it is said that the crisis did not derail but rather accelerated the rise of emerging economies. 2 it is now just more than two years since the onset of the sub - prime crisis and it appears that the global economy is finally emerging from recession, even if significant risks remain. the imf ’ s latest world economic outlook shows improved prospects for global growth in 2009 and 2010 compared to previous forecasts, with a strong performance by asian economies supporting the global recovery. emerging markets, accounting for one third of global output, play an increasingly important part, and it is for this reason that the g20 has assumed a leading role as a forum for global co - ordination. after losing approximately 60 per cent of value since the collapse of lehman brothers until the low point reached in march 2009, the morgan stanley capital international index ( msci ) gained more that the 60 per cent until the end of october, led by an almost 90 per cent improvement in the msci for emerging markets. the embi plus yield had increased antoine van agtmael, ft. com. by almost 600 basis points between january 2007 and october 2008, and has since declined by a similar magnitude. emerging market currencies have also appreciated significantly, the rand being no exception. a currency remaining at non - competitive levels for too long might have adverse consequences for the real economy. some countries opted to deal with currencies perceived to be too strong through a combination of verbal and actual market intervention. brazil, in addition to previous measures, also recently imposed a 2 per cent tax on capital inflows into both equity and bond markets to contain short - term capital flows and to reduce any further upward pressure on the currency