of regional gdp. international monetary fund, “ where are we headed? perspectives on potential output ”, world economic outlook, washington dc : international monetary fund, april 2015. j e tyson, sub - saharan africa international sovereign bonds : investor and issuer perspectives, overseas development institute, january 2015, available at http : / / www. odi. org / sites / odi. org. uk / files / odi - assets / publications - opinion - files / 9435. pdf. bis central bankers ’ speeches furthermore, development in african capital markets has not been limited to sovereign bonds. global flows into the region ’ s equity markets, while still very small compared to other regions, nonetheless grew in importance relative to the size of the recipient economies. the flow of capital into africa is critical to its ongoing development. access to capital has been greatly enhanced and a more competitively priced supply is currently offered, moving away from a reliance on official - sector financing. however, to ensure that benefits to borrowers are maximised, it is important that financing be transparent and that risk be fairly priced. furthermore, where lending is overly risk - averse, the development of corporate bond, equity or even venture capital markets can facilitate the expansion of a private, mediumsized business sector. finally, over time, as financial markets grow across the continent, one can equally expect to see increased cross - border portfolio and direct investment flows within sub - saharan africa, helping to facilitate regional economic and financial integration. these gains in hand, we need to be mindful of the risks associated with external portfolio financing. a tightening of financial conditions in the developed world can easily prompt international fund managers to reduce their exposure to frontier markets. what is then a small portfolio adjustment for a large us - or europe - based fund, however, can result in significant price action on a small and relatively illiquid sovereign debt market. rising foreigncurrency external liabilities equally expose a sovereign ’ s balance sheet to currency depreciation, limiting the benefits i described earlier of foreign - exchange adjustment as a “ shock absorber ”. in that respect, an increased focus on developing local - currency bond markets and on equity financing may present a solution to the risk of excessive foreign - currency leveraging. in south africa, the existence of a large and liquid domestic government bond market, with long - maturity instruments, has limited the rise in foreign currency - denominated debt, even as our country has experienced large current - account deficits.

seong - tae lee : household debt a€ “ implications for monetary policy and financial stability opening address by mr seong - tae lee, governor and chairman of the bank of korea, at the bank of korea / bank for international settlements seminar, bank of korea, seoul, 28 march 2008. * * * opening remarks ladies and gentlemen, i bid a sincere welcome to central bankers participating in this seminar held jointly by the bis and the bank of korea. let me also express my deep gratitude to our keynote speaker, dr. eric rosengren, president of the federal reserve bank of boston. this seminar, a part of the asian research programme of the bis, is held to allow the exchange of each central bank's experience and opinions concerning major monetary policy issues. the theme of this seminar, " household debt : implications for monetary policy and financial stability ", should be of great interest to us all. it is very closely related to the current international financial market turmoil generated by the us sub - prime mortgage meltdown. background to the increase of household debt as you are all well aware, household debt in many countries has increased quite sharply since the early 2000's. in the us, the ratio of household debt to gdp rose from 75 % in 2000 to 104 % in 2007. this was led largely by an expansion in mortgage lending. according to an analysis by the imf, household debt in some 12 asian countries including korea, japan and china grew by an average 15 % per year between 2002 and 2006. about two - thirds of this growth consisted of increased mortgage debt. the reasons for this rapid buildup of household debt are to be found to a certain extent in demographic changes. the aging of the baby boom generation, together with urbanization, fueled a steady increase in housing demand. to my mind, however, an even greater factor behind the increased household debt was the continuation of low inflation and low interest rates. over the last few years, heightened productivity based on the it revolution and the progress of globalization served to keep prices more stable. in line with this, central banks in every country maintained their policy rates at low levels. this resulted in low lending rates, which subsequently led to even greater demand for household loans. as anticipations of real estate price increases formed owing to the abundant global liquidity, mortgage lending for the purpose of speculative housing purchases also expanded sharply. in the us and other advanced countries, moreover, mortgage securitization and the transfer of credit risk were made easier