mr. greenspan gives a testimony on the global financial system testimony of the chairman of the board of governors of the us federal reserve system, mr. alan greenspan, before the subcommittee on foreign operations of the committee on appropriations of the us senate on 3 / 3 / 98. the global financial system has been evolving rapidly in recent years. new technology has radically reduced the costs of borrowing and lending across traditional national borders, facilitating the development of new instruments and drawing in new players. information is transmitted instantaneously around the world, and huge shifts in the supply and demand for funds naturally follow, resulting in a massive increase in capital flows. this burgeoning global system has been demonstrated to be a highly efficient structure that has significantly facilitated cross - border trade in goods and services and, accordingly, has made a substantial contribution to standards of living worldwide. its efficiency exposes and punishes underlying economic imprudence swiftly and decisively. regrettably, it also appears to have facilitated the transmission of financial disturbances far more effectively than ever before. three years ago, the mexican crisis was the first such episode associated with our new high - tech international financial system. the current asian crisis is the second. we do not as yet fully understand the new system ’ s dynamics. we are learning fast, and need to update and modify our institutions and practices to reduce the risks inherent in the new regime. meanwhile, we have to confront the current crisis with the institutions and techniques we have. many argue that the current crisis should be allowed to run its course without support from the international monetary fund or the bilateral financial backing of other nations. they assert that allowing this crisis to play out, while doubtless having additional negative effects on growth in asia, and engendering greater spill - overs onto the rest of the world, is not likely to have a large or lasting impact on the united states and the world economy. they may well be correct in their judgment. there is, however, a small but not negligible probability that the upset in east asia could have unexpectedly large negative effects on japan, latin america, and eastern and central europe that, in turn, could have repercussions elsewhere, including the united states. thus, while the probability of such an outcome may be small, its consequences, in my judgment, should not be left solely to chance. we have observed that global financial markets, as currently organized, do not always achieve an appropriate equilibrium, or at least require time to stabilize.

yves mersch : reflections on monetary policy in the euro area speaking points by mr yves mersch, member of the executive board of the european central bank, at the eurofi conference, sofia, 27 april 2018. * * * while the recent flow of data points towards some moderation in the on - going economic expansion, growth is still expected to remain solid and broad based. monetary policy measures introduced since 2014 have been instrumental in supporting euro area growth and employment. underlying inflation continues to be subdued and have yet to show convincing signs of a sustained upward trend. at the same time, wages continue to edge higher and should contribute to price pressures. overall, the underlying strength in the euro area economy continues to support our confidence that inflation will converge towards our aim over the medium term. yet, inflation convergence will likely proceed only gradually, and remains contingent on a highly accommodative monetary policy stance. looking ahead, the evolution of monetary policy will be firmly guided by the outlook for price stability. the transition towards policy normalisation will begin once the governing council assesses there has been sustained adjustment in the path of inflation. this assessment will be based on three criteria : convergence, confidence, and resilience convergence : looking into the medium term, headline inflation should be well on track toward reaching levels below, but close to, 2 % confidence : governing council will need to have confidence that the convergence path is likely to materialise sustainably resilience : sustained adjustment in the path of inflation will be maintained even without additional net asset purchases there is growing confidence that these criteria will be attained, yet patience, persistence and prudence are necessary : patience : as it takes time for underlying price pressures to build up persistence : the pick - up in inflation still needs support from the monetary policy stance prudence : global and domestic uncertainties counsel prudence in the adjustment of the monetary policy parameters once the governing council decides that sustained adjustment is taking place, net asset purchases will end in line with our forward guidance. thereafter, monetary support for inflation convergence will be provided by reinvestments continuing for an extended period of time policy rates remaining at present levels well past the end of our net asset purchases the path of policy normalisation will remain conditional on the outlook for price stability. 1 / 1 bis central bankers'speeches