rate, and independent monetary policy. global financial systems were adopted under the constraints of this trilemma. when an adopted system became unsustainable, the result was a financial crisis, leading to the adoption of a new global financial system. this cycle was repeated many times over. let me briefly turn to a few historical examples. at the end of world war ii, the bretton woods system was introduced to solve several problems that had occurred during the interwar period, including competitive devaluations. with controls over capital mobility, this system allowed the simultaneous pursuit of independent monetary policy and the peg to the u. s. dollar, which was exchangeable with gold at a fixed rate. in the 1960s, against a background of deteriorating u. s. balance of payments, there were changes in the international financial environment : the amount of u. s. dollars held by non - residents increased and the eurodollar market came into being and popper, karl, “ science : conjectures and refutations, ” conjectures and refutations, routledge and kegan paul, 1963. bis central bankers ’ speeches expanded. under such circumstances, the u. s. gold reserves continued to flow out and as the world became more uneasy with the convertibility of the u. s. dollar, the bretton woods system was abandoned. consequently, advanced economies maintained independent monetary policy, while adopting the floating exchange rate system and further liberalizing capital mobility. a few decades on, in the 1990s, currency crises hit a number of emerging economies, such as mexico, thailand, indonesia, south korea, russia, and brazil. against a background of increasingly liberal capital mobility and the accompanying growth of capital account transactions, the principal driver of the crises was the unsustainable current account deficits in many of those economies with de facto u. s. dollar - pegged exchange rates. after the crises, the economies have pursued independent monetary policy and have increased the flexibility of their exchange rates, while upholding capital mobility. moreover, taking into account the lessons of the currency crises, asian emerging countries have significantly increased their foreign exchange reserves and have promoted regional financial cooperation, such as the cheng mai initiative. in sum, the evolution of the global financial system to date is heavily influenced by the episodes of past financial crises, at the same time constrained by the trilemma of international finance. iii. issues for the rebuilding of a global financial system after the recent global financial crisis the recent financial crisis

##sion between firms. paul conway challenges us all, including policymakers : assist small, remote, firms into the global economy ; improve the matching of jobs and skills ; use immigration wisely to lift human capital ; make investment easier and more effective ; moderate the pace of population growth to encourage capital - deepening ; improve competition in the services sector ; and strengthen the economic returns from science and innovation. so with problem identification and solutions outlined, wouldn ’ t we just move on to resolution? short - termism challenges us always and everywhere. paul conway, ( 2018 ), ‘ can the kiwi fly? achieving productivity lift - off in new zealand ’, international productivity monitor, no. 34, spring 2018. why do we run into roadblocks to long - termism? capitalism is necessary, and a marvel, driving human welfare in a strongly positive direction for a few centuries now. but we all know – even adam smith, the godfather of free markets knew – that capitalism is not perfect. markets can, and do, fail for a variety of well researched and understood reasons. otherwise, why would we need government, regulators, and a central bank? a significant challenge is human myopia, the inability and / or unwillingness to think about the long - term. after all, ‘ she ’ ll be right ’. myopia is actually incentivised in many of our contracts – the drive to shorter deadlines and frequent reporting for rapid personal gratification. this shorter horizon is a perverse outcome. annual bonuses for example can lead to excessive risk taking, lack of concern for unintended consequences, and a desire for short - term cost cutting and lack of reinvestment. however, the bonus was implemented with the intent of ‘ buying the employee in ’ to the business for long - term gain. the myopia challenge is further enforced by what is known as the ‘ principal - agent problem ’. the advent of the remarkable limited - liability company structure has liberated economic activity. these legal structures allow people to take risks with their and others capital, but with more limited personal financial consequences. the limited liability structures do, however, mean that responsibility for all of the outcomes of business activity can be compromised. hence the list of rules, regulations, and company directorship codes that exist. the line between the owner of the capital ( the principal ) and the manager of the capital ( the agent ) is lengthened. ‘ who owns a company? ’ is a