may be conducting “ asymmetric ” bis central bankers ’ speeches monetary policy to mitigate the volatility of exchange rates – that is, the conduct of accommodative monetary policy during a period of capital inflows and high economic growth on the one hand, and that of tight monetary policy during a period of capital outflows and sluggish economic growth on the other. such asymmetric monetary policy is likely to amplify the boom - bust cycle in emerging economies and contribute to a rapid increase in global commodity prices. there is no consensus among central banks as to whether the major factor contributing to capital flows and related problems arises mainly from the side of advanced economies or the side of emerging economies. nor is there a consensus with respect to appropriate prescriptions in such circumstances. in this situation, efforts have been made to cope with the rapidly changing global economic environment. among advanced economies, for example, the six central banks – the bank of canada, the boe, the boj, the ecb, the federal reserve, and the swiss national bank announced in october 2013 that the existing temporary bilateral liquidity swap arrangements ( established in 2007 and due to expire in february 2014 ) will be converted to standing arrangements and remain in place until further notice. the arrangements allow for the provision of liquidity in each jurisdiction in any of the five currencies foreign to that jurisdiction, should the two central banks in a particular bilateral swap arrangement judge that market conditions warrant such action in one of their currencies. the arrangements have helped to ease strains in financial markets, especially in the euro area. in the asian region, meanwhile, the chiang mai initiative multilateralization ( cmim ) has been established from the viewpoint of monitoring capital flow movements and improving crisis prevention and management capacity. in may 2012, the decision was reached to amend the cmim agreement in order to ( 1 ) double the size of the cmim from 120 billion to 240 billion u. s. dollars, ( 2 ) introduce a crisis prevention facility of the precautionary line, and ( 3 ) minimize the imf - linked portion from 80 percent to 70 percent ( and further to 60 percent in 2014 upon the review of certain conditions ). the asean + 3 macroeconomic research office ( amro ) was established in singapore in april 2011 as an independent regional surveillance unit to monitor and analyze regional economies and support cmim decisionmaking. lastly, i would like to stress that the global financial crisis

among countries, and between advanced and emerging economies, in terms of real gdp growth rates ( chart 1 ). this high correlation reflected the result of the global financial crisis triggered by the largest economy in the world, the united states, from which the contagion spread to the largest economic region, the euro area, mainly through financial linkages. at the same time, the synchronization – together with the collective worldwide efforts to inject monetary and fiscal stimulus – reflects how the global economy overcame a severe recession by the end of 2009. second stage of the economic adjustment process : 2010 – 12 subsequently, the global economy entered a second stage in which a divergence emerged between the growth paths of advanced economies and emerging economies. this is shown by a sharp drop in the correlation of real gdp growth rates between those economies ( chart 1 ). advanced economies remained relatively weak during this recovery, and the bis central bankers ’ speeches peripheral economies in the euro area began to face severe fiscal austerity and recession with the occurrence of the debt crisis from 2010 ( chart 2 ). nonetheless, advanced economies coped with large negative output gaps through unprecedented aggressive monetary easing, thereby preventing these economies as a whole from falling into a double dip recession. in contrast, emerging economies posted relatively high growth, and those in the asian region in particular gained growth momentum and became the main driving force for global economic growth. the favorable growth performance in emerging economies helped advanced economies by encouraging an increase in external demand, mainly through trade and foreign direct investment ( fdi ) channels, and this supported activities of multinational firms in advanced economies. the strong growth dynamics of emerging economies are partly attributable to steady improvement in economic fundamentals achieved after the asian currency crisis of 1997 – 98. this is evidenced by, for example, relatively strong fiscal and government debt positions, reduced external debt positions, an accumulation of foreign reserves as buffers, and a relatively resilient financial sector with better prudential regulation and surveillance. moreover, the emergence of the middle class strengthened these economies ’ domestic demand for goods and services, offsetting weak external demand deriving from sluggish advanced economies. in addition, china ’ s strong growth – mainly driven by the large - scale fiscal stimulus package implemented in 2009 – 10 and the accommodative monetary policy – supported other emerging economies through greater intra - regional trade and production linkages, as well as fdi activities in the asian region. the resilient domestic demand and growing