. currency crashes amplified the adverse effects as capital fled the region in a drove. the asian miracle went bust. the capital flows that had once fertilised the impressive growth eventually caused a capsize when the asian financial crisis hit us in 1997 – a lesson that we all still vividly remember. 4. the asian financial crisis gave us a much - needed wakeup call at a dear price. yet, looking back, the crisis also has its silver linings : the painful adjustments that followed prompted governments to strengthen economic fundamentals, enhance banking systems, deepen local bond markets, and build up foreign reserves to cope with potential external shocks. because of these developments, the region has been able to emerge from the recent global financial crisis relatively unscathed and is now one of the key driving forces supporting the global economic recovery. 5. but we cannot afford to be complacent, as we are now confronted with a new round of challenges in uncharted waters. the unprecedented monetary easing in the advanced economies has led to global excess liquidity. and with the robust recovery of the emerging bis central bankers ’ speeches markets, there are powerful push and pull factors driving investors to search for yields in developing economies including asia. from q3 2009 to q4 2010, the net capital inflows to emerging asia1 amounted to us $ 541 bn, the largest inflows in recent years. 6. the strong capital inflows and resultant abundant liquidity have led to exchange rate appreciation, fuelled credit growth and driven up asset prices in the region. with output gaps closing, inflationary pressures are accelerating in a number of asian economies. capital flows also complicate the macroeconomic policy responses. while exchange rate appreciation and monetary tightening could theoretically cool down the economy, in practice, they may attract even more speculative inflows to profit from interest rate arbitrage and currency appreciation. 7. so how should we cope with these challenges presented by the unprecedented scale of global excess liquidity? given the global nature of fund flows and the increasing interconnectedness of the global financial system, it is obvious that national policies alone are insufficient to tackle the challenges. we need greater international and regional cooperation to manage risks posed by volatile capital flows to global financial stability. i believe there are three main areas for cooperation. 8. first is enhancing the resilience of the global and regional financial systems through financial regulatory reforms. a large amount of work in this area is under way at the

francois villeroy de galhau : new year wishes 2023 new year wishes to the paris financial centre by mr francois villeroy de galhau, governor of the bank of france and chairman of the autorite de controle prudentiel et de resolution ( acpr ), paris, 5 january 2023. * * * allow me to extend my warmest wishes for 2023 on behalf of the banque de france and the acpr. i don't know if i dare wish you, or wish us, a year free of shocks after those of 2020, 2021 and 2022. this past year has been marked by a climate of uncertainty, exacerbated by russia's war in ukraine and the energy crisis. it has also seen increased financial market volatility, compounded by the turmoil in the cryptoasset universe. in this unstable environment, i would like to make two double wishes for 2023 : 1 ) less inflation and more stabilisation. activity has, until now, proved more resilient than expected, which is good news ; however, inflation must not become entrenched. it is the number one concern for french people, and defeating it is our number one mission. it fell in december to 6. 7 %, which is encouraging but still not enough. it should peak in the first half, before declining towards 4 % by the end of this year. but our forecast, and our commitment, is that inflation should be brought down towards 2 % by end - 2024 to end - 2025. to achieve this, after raising interest rates to close to the " neutral interest rate " of 2 % in december, we are now embarking on the second phase towards monetary stabilisation : ideally, it would be good to reach the right " terminal rate " by next summer, but it is still too early to say what that level will be. we need to remain pragmatic and to be guided by observed data, including on core inflation, without getting fixated on overly mechanical rate hikes. we will then be prepared to remain at this terminal rate for as long as necessary : the sprint to raise interest rates in 2022 is now becoming more of a long - distance race, and the duration will count at least as much as the level. in parallel, we shall continue to focus on maintaining financial stability, helped by the strong resilience of french banks and insurers. in europe, 2023