times, be steep and sudden, resulting in possible disruption in the real sector and therefore there is a need for containing excess volatility in foreign exchange markets. further, sterilisation costs may have to be often shared between the fisc, the banking sector and the central bank balance sheets. while, to meet the surge in capital inflows, liberal capital outflows are recommended, they do not, in fact, take place at the time when they are liberalised. further deepening of financial markets may help in absorption of large capital inflows in the medium term, but it may not give immediate succour at the current stage of financial sector development in many aemes, particularly when speed and magnitude of flows are very high. second, significant improvements have taken place in developing local currency markets, especially bond markets. however, the operations of large players in financial markets in some asian economies tend to respond more to their global needs than that of host country. further, some multinational non - financial corporates operating in these economies may have large treasury operations, and their operations, could often make the assessment of risks in financial markets somewhat difficult. while supervisory skills in many aemes have been strengthened, new instruments, especially derivatives, new players such as hedge funds, and large otc operations tend to diffuse and relocate risks making their assessment for policy purposes sometime difficult. third, the banking sector has been strengthened and non - banking intermediation expanded providing both stability and efficiency to the financial sector in many aemes. yet, sometimes aligning the operations of large financial conglomerates and foreign institutions with local public policy priorities remains a challenge for domestic financial regulators in many aemes. further, competition in financial sector is somewhat limited in many asian economies. large players in developed economies compete with each other intensely, while it is possible that a few of them dominate in each of asian financial markets. a few of the financial intermediaries could thus wield dominant position in the financial markets of these countries, increasing the concentration risk. performance of the indian economy there is widespread and intense interest in the indian economy, but merely by way of recollecting, it is useful to mention some features of the economic performance. first, the average growth rate of the indian economy over a period of 25 years since 1980 - 81 ( financial year beginning april ) has been about 6. 0 per cent, with the growth rate averaging 9. 1 per cent during the last two years. second, the economy

svante oberg : my views on the riksbank and financial stability speech by mr svante oberg, first deputy governor of the sveriges riksbank, at a meeting with the swedish bankers ’ association, stockholm, 7 june 2011. * * * my term of office as deputy governor of the riksbank is drawing to a close and i have announced that i will not be available for a new period of office. after almost six years on the executive board of the riksbank, it feels natural for me to now reflect on the experiences we have had and what these may mean for the future. earlier in the spring, i presented my view of the riksbank and monetary policy. and now it is the turn of our other important main task, namely financial stability. in particular, there are three issues i would like to argue for : the riksbank and finansinspektionen ( the swedish financial supervisory authority ) should be merged the governor ’ s role should be strengthened the riksbank should have a sufficient foreign currency reserve. i will begin my speech by looking back on the years prior to the most recent financial crisis, the risks we saw – and the ones we didn ’ t see. i will continue by describing the financial crisis and the measures we adopted during the crisis. i will then address the future and the work that is underway as regards reforming the framework of the financial sector. finally, i will take up the three issues i have just mentioned and explain the reasons for my views on these issues. for the sake of clarity, let me also add that the opinions i will be expressing in this speech are my own. they are not necessarily shared by my colleagues in the executive board of the riksbank. the years prior to the financial crisis when i first arrived at the riksbank, i did not suspect that we were about to experience one of the worst international financial crises of our times. i had been through two previous crises. the first of these was the deep recession at the end of the 1970s and start of the 1980s, when, through a series of devaluations, sweden attempted to restore the competitiveness it had lost due to the severe price and wage inflation of the 1970s. the second was the crisis we experienced at the start of the 1990s. this was a fairly typical financial crisis, starting with the deregulation of the credit market and leading to a banking crisis, a deep recession and large public finance deficit