colleagues handled economic forecasting and modelling, foreign exchange reserve management, communication policy and financial stability. and, finally, the bundesbank colleagues – supported by the bank of slovenia, the national bank of austria, the national bank of portugal and the national bank of slovakia – were responsible for accounting, financial consumer protection and it security. a long and impressive list indeed! this list illustrates the comprehensive character of the project and all the hard work that has gone into it. crucially, the commitment, responsibility, professionalism, and deep engagement of our serbian counterparts were key in bringing the project to a successful conclusion. all parties involved were united by their full determination to make the project a success and by the “ corporate spirit ” through which central bankers around the world feel connected. at today ’ s concluding celebration, everyone involved in this joint project can proudly look back : on the months of hard work and in - depth treatment of the subject matter, on the many discussions of different professional and personal perspectives and on the host of valuable personal contacts, and maybe even friendships, that have grown from it. ladies and gentlemen, allow me to close with a few words of thanks to the people behind the project. thank you ms tabakovic, especially for your commitment and strong support throughout the duration of the project. i would also like to thank ms tomicic from the croatian national bank and mr matei from the romanian national bank. your commitment to form a consortium between your institutions 2 / 3 bis central bankers'speeches and the bundesbank and the large - scale support from your staff were indispensable for the success of the project. my thanks also goes to the project leaders, mr savic from the national bank of serbia and mr spicka from the bundesbank – as well as to the junior project leaders, mr loncarek from the croatian national bank and mr copaciu from the national bank of romania. last but not the least, i would like to thank all of you who have made your own personal contribution to the success of the project and whose names i wouldn ’ t be able to mention now without running out of time : the managers of the individual components, the visiting experts and all those who took on the vital administrative work. ladies and gentlemen, the german chancellor angela merkel recently emphasised that “ the western balkan states are also part of a united europe. ” 1 in this spirit, i very much look forward to continuing our cooperation as central banks in the

, the ratio of short - term debt denominated in foreign currencies was quite high compared to central banks ’ foreign reserves. the ratio of short - term debt to total foreign debt of the affected countries exceeded 50 percent. 10 as foreign capital poured into the asian countries, lending booms emerged in all these countries before the crisis. if the capital inflows and lending booms had enhanced the corsetti, giancarlo, paolo pesenti, and nouriel roubini, 1999, “ what caused the asian currency and financial crisis?, ” japan and the world economy, vol. 11, no. 3. productivity and competitiveness of the economies, there might not have been a crisis. however, many of the loans were misallocated and eventually turned sour. before the crisis, nonperforming loans exceeded 10 percent of total bank lending in those countries. the other aspect of capital inflows was the current account deficit. for example, thailand, indonesia, and korea ran current account deficits of 8. 0, 3. 4, and 5. 0 percent of gdp, respectively, in 1996. the crisis started in thailand with the collapse of the thai baht. the crisis spread quickly around the region. indonesia and south korea were particularly hard hit. hong kong, malaysia, laos and the philippines were hurt by the slump, and the rest of the region also suffered from a loss of demand and confidence. the asian financial crisis showed the weakness of an emerging economy against the volatile international capital markets. together with inflows of foreign capital, overconfidence or excessive optimism created credit booms in the economies. ironically, they were “ victims of their own economic success. 11 ” the input - dependent development strategy, which had worked very well up until then, itself contributed to the crisis. after the crisis, asian countries introduced various measures to tackle the weaknesses that had led to the crisis. first of all, they enlarged the scale of their foreign reserve accumulation as the first line of defense. they also shifted to a free floating exchange rate system to contain the excessive capital flows. the other measures included making financial surveillance and regulation efficient ; improving the functioning of the market by breaking the links between businesses, banks and the government ; and enhancing transparency by enforcing the duty of disclosure of key financial or corporate sector information. controversy has raged over the imf prescription for the affected countries. for example, the imf was criticized as acting in