- principle agreement was reached to make the lines multilateral rather than bilateral, which would presumably make for more efficient activation in a crisis. ghosh, s. r. ( 2006 ), east asian finance : the road to robust markets, world bank, washington dc, p. 64. see asian development bank ( 2007 ), “ ten years after the crisis : the facts about investment and growth ”, in beyond the crisis : emerging trends and challenges, pp. 1 - 20. currently, the cmi involves a network of 17 bilateral swap arrangements, totalling us $ 83 billion. the swaps are all us - dollar based, except for swaps between japan - china, japan - korea and china - philippines, which are local - currency based. as a result of these developments, i imagine that today few countries in asia would, if they got into trouble, consider an early approach to the international financial institutions for assistance. but while the regional initiatives are all useful, they remain to be tested under less benign conditions in the global financial system. in fact, it is open to doubt whether they would necessarily prove sufficient as a defence mechanism, were really big changes in sentiment about the region to occur in international markets the way they did in 1997 - 98. if most countries in the region were under pressure at the same time, there would surely be questions as to whether regional counterparties could meet all the commitments for support. in any case, few financial crises are confined to one region : even those that start with a regional focus have a habit of spilling over quite quickly, as events after the asian crisis demonstrated. so while everyone has an interest in regional crises being effectively dealt with at the regional level, we surely still need global mechanisms for dealing with crises, and preventing them as far as possible. that prompts the obvious question : what has been done since the asian crisis to improve the global arrangements? what has been done internationally since the crisis? a good deal of effort has gone into crisis prevention. there has been a step - up in national and regional - level surveillance by the international official bodies, and an emphasis on more timely and accurate data being made available by governments. a stronger focus on financial sector soundness is another key element, with a number of countries undergoing financial sector assessment programs, in conjunction with the imf. these and other efforts represent serious attempts to use what was learned from the asian and other crises to reduce susceptibility, or at least to get an early

2006 ), “ effects of the quantitative easing policy : a survey of empirical analyses ”, bank of japan working paper series, no. 06 - e - 10, july. graph 5 the bank of japan ’ s experience also provides some evidence in relation to yield curve measures. its quantitative easing was implemented by buying long - term government bonds and it also gave a commitment to maintain official interest rates at zero for a long time. in effect, therefore, the quantitative easing undertaken by the bank of japan was combined with measures to flatten the yield curve. the evidence suggests that these measures were effective in lowering the yield curve in japan, particularly the medium - term point of the curve. conclusions let me conclude. with central banks doing unconventional things, it is not surprising that there is considerable debate about the effectiveness and consequences of the various measures. on the one hand, some argue that the measures will be ineffective. on the other side of the debate, others argue that they will eventually result in higher inflation. those of the former view point to the experience of japan over the past decade as supporting their case. the conclusion they draw from that experience is that, if the household and corporate sectors are seeking to consolidate their balance sheets, and banks remain risk averse and capital constrained, simply adding to banks ’ reserves at the central bank may not result in any generalised expansion of money and credit. the other side of the debate – that the measures will result in higher inflation – implicitly assumes that the measures will be effective in stimulating the economy, since money does not miraculously transform into inflation without affecting economic and financial activity. rather, their argument is that central banks will be too slow to reverse the various measures. as there are no technical factors that would prevent or slow the reversal of recent measures – they can be reversed simultaneously or in any sequence – the argument must rest on central banks making incorrect policy judgments. this is always a possibility. but, the high state of awareness that currently exists about the risk of being too slow to reverse recent exceptional measures should limit the probability of such a mistake being made.