ABSTRACT
These remarks will focus on ASEM (the Asia-Europe Meeting) and its relevance to current issues in the international financial system. I well recall speaking at an ASEM meeting in London eight years ago. In early 1998, the Asian financial crisis was still acute, while Europe was occupied by preparations for the introduction of the euro in 1999. Since then, we have seen major developments in the two regions:
● Despite the skeptics, there has been no euro crisis. Even the euro exchange rate, whose weakness in 1999-2001 was inexplicably regarded as some negative indicator of the validity and viability of the single European currency, is now somewhat higher against the dollar than it was in January 1999. We have seen a major success: the historically unique, technically difficult creation of a single currency replacing twelve national currencies; and monetary union has played the key role in creating large, deep capital markets in the euro area.
