##apitalize banks, liquidate troubled assets and further lubricate financial institutions have been offered. global struggle to stabilize financial markets continues but has already changed the emerging financial landscape and has intensified exciting debates regarding the financial regulatory and supervisory architecture. the global scene has shaken confidence across economies and markets. amidst all this, there are several reviews on how asia fared and withstood the global financial shocks. generally, asia has been impacted but the impact has been steeper in countries with weaker macroeconomic fundamentals and low foreign exchange reserves and those with high exposure to cdos and related products. as events have unfolded, myths regarding decoupling of asia have evaporated. abstracting from the larger debate of emerging complications for asia, i propose to now concentrate on pakistan. but before i dwell upon the domestic market, it is important to offer a qualifier that in the present environment there is a strong risk that analysis gets detracted by the global financial crisis and its diagnosis, and there is a tendency to draw parallelism between those developments and events and what has been happening in smaller developing countries. there is need for extreme caution and prudence in one ’ s analysis to ensure that we offer correct diagnosis of the highly impacted countries. what is happening in advanced countries is a financial market turmoil which manifested itself into a liquidity crisis that has now turned into an insolvency problem. the options and solutions being adopted are highly controversial, and unless accompanied by appropriate actions, could carry moral hazard and loss of tax payer ’ s money. in the context of pakistan, the diagnosis is different. so rather than facing a financial crisis, pakistan is caught in a complex macroeconomic problem as twin deficits rose to unprecedented proportion in fiscal year 2007 / 2008 which remained unattended for some period. being an open and highly import dependent economy, pakistan has been hit aggressively by the surge in global commodity prices whose impact magnified as the oil and other strategic import prices rose. as a result, the origins of economic ailments lie in the sharp growth in the domestic fiscal deficit and the external current deficit. among others, a principal factor for growth in macro - economic imbalance is the continuous rise in import oil prices. on domestic account, subsidies on oil rose to rs175 billion and on external account side oil import bill was equivalent to 6. 9 % of gdp or almost 80 % of external current account deficit, as the price per barrel of oil touched its heights. during fy

peter praet : recent monetary policy measures supporting the euro area recovery speech by mr peter praet, member of the executive board of the european central bank, at the iif annual membership meeting, washington dc, 10 october 2014. * * * i would like to thank s. andreopoulos and f. holm - hadulla for their contribution in the preparation of this speech. ladies and gentlemen, it ’ s a great pleasure to speak to you at this year ’ s iif annual membership meeting. today, i will discuss the latest monetary policy measures by the ecb and explain how they will contribute to supporting the euro area recovery. i would also like to expound how our measures, as they work their way through to the economy, will contribute to bringing inflation in the euro area back to levels closer to 2 %, which is where we want to see it over the medium term. the last twelve months were eventful : we have cut our key policy rates all the way down to the lower bound – including by taking the deposit facility rate into negative territory ; we have launched an important programme of targeted lending operations, the tltros ; and we have announced two distinct purchase programmes, one of which targets asset - backed securities whilst the other targets covered bonds. in my remarks today, i want to focus in particular on these asset purchase programmes and explain a novel element to our communication that came with their announcement – that is, our emphasis on the impact of these measures on the ecb ’ s balance sheet. but first i will briefly review the economic situation in the euro area to provide you with some context for our decisions. macroeconomic context following a flat reading for real gdp in the second quarter, the euro area economy is likely to resume its recovery path in the third quarter, but only at a modest pace. in fact, the latest data point to a loss in the cyclical growth momentum, with the outlook surrounded by elevated uncertainty and downside risks. geopolitical tensions remain severe and the growth drivers appear rather anaemic, with macroeconomic adjustments, high unemployment and sluggish investment behaviour acting as a drag on economic dynamism. inflation developments continue to surprise on the downside and recent weakness in wage growth casts doubt on the expected strengthening of domestic price pressures. inflation in the euro area has declined from a high of more than 3 % at the end of 2011 to a low of 0. 3 % in september. and the volatility we have seen