 The World War II period, the frequency of financial crisis has basically doubled since the early 1970s. The first decades because of the regulation partly there were relatively few crisis and now there are many more. So here are and second thing is that prices have a very long history. So here are some well-known crisis over the centuries and they seem to come. But notice again that this is sort of the big crisis by actually Kinderberg and Alibur. But if you look at, again, more than half are here. There are some old ones, then there was a period of several decades when not that much happened, except that's the Great Depression and the bubble before that. But then things are really since the 1970s, the big crisis. So that's something worth keeping in mind that this has happened now. And let me start by looking at, as I said, I promised to give you an overview of the current crisis, some aspects of it. So let me start the current crisis view with the advanced economies. This current crisis clearly started from the advanced economies. And so what can I do, I'm going to look at the US and the Euro area and compare it to the something that's called the big five crisis in advanced economies before the current one. And that's the Nordics, three Nordic countries in the 90s, Spain in the 1980s and Japan in the 1990s. And then I'm going to put these in the same figure where there's a period T, which is the start year of the crisis. So here's the GDP, and this actually even separates the Nordics out of the rest, but the other figures do not. And so you see that if you look at the Euro area and the US, the blue and the orange, it's pretty much like the qualitative, the same thing. You have a big decline after that, it's a variable length, and then it's an upswing again, and the upswings can be different. I mean, if you look at the orange one, US has already recovered after four years, the GDP level was higher than the previous peak, but Euro area not. We of course know that by now the Euro area has just not that long ago reached the previous peak. So the recoveries can be also very different on this, but there's actually actual declines in GDP and significant declines in GDP in this. And then some other features of the crisis. Here's again the Euro area, I'm sorry, USA and Big Five. One feature is that they've been typically Euro area a little less so, but in the US there's a permanent, permanent being a current account deficit. In the Big Five there was a deficit before the crisis, current account deficit, and then it turned into surplus. So here the count is quite variable. Let me skip the public debt that's less interesting. In stock prices you see again qualitatively same kind of features. That at the peak, basically the US area, big declines in stock prices. If you look at the numbers, for example the Euro area stock price index, I mean this is a particular index, from index number of 180 to a little over 100. Incredibly big decline in stock prices, but they were big also in the US from 150 to about 100. And also in the Big Five, similarly from below 100 actually, somewhat. And similarly house prices, where the decline is much longer than in the stock prices. After four years, after the start of the crisis, house prices were still declining in these situations. So that's sort of pictures that you get. So let me out of this and let me then go into the emerging countries. So this is actually the pre-crisis period. Let me just show you one picture, which is, you know, there are a lot of regions here. Let me not go into details, but you can see this upward trend. So there was a growth was getting better and better here. There were also running current conserplacies in most cases, the emerging countries. And getting into quite fast growth, which of course was very helpful. This is a period when many people got out of poverty situations. Then came the global financial crisis, which as I said originated in the advanced countries. And what it meant here is if you look at it, there's the Asian countries separately. There's just a little bit. They didn't get into negative growth. These are growth rates now, not levels. If you look at the regions, there is some more, but the biggest decline here is the Commonwealth of Independent States. So that's Russia, effectively. And they had, as we know, had a big crisis. 2008-2009 period was very difficult for them. And then there were a couple of others, but they were not that big. But as you remember, the Western world often had crisis from 4% to 7% declines in GDP. What this did, this crisis though, is that it turned the current accounts. The current accounts were mostly in surplus. And now we start to see more deficits and actually increasing deficits or declining surpluses in the most recent years, which is also an important aspect to notice here. And this period after the crisis with the deficit, of course, it was in fact associated with capital inflows, increasing capital inflows. So here are a couple of pictures about that. So here are some various regions about debt securities. You see the crisis there. But then even more, the growth rate in most cases got even higher. And here is an interesting feature. If you break it down to short-term long-term debt and then equities, or roughly FDI, you notice that equities being the blue one, that didn't increase. But if you look at especially the long-term debt to some extent to short-term, which is a smaller numbers, they got higher. So what we saw after the 2008-2009 great recession in the advanced economies was that the funds started to flow into the emerging countries, but not into FDI, more like debt investments. Debt investments, which was the feature. So the structure of foreign liabilities is different here now than what it was before, more in debt. And that Lawrence already mentioned this is a risk situation, clearly because it means that these debt instruments can reverse more easily than foreign direct investments. And therefore there's a possibility of volatility and problems which might be oncoming. So that's a quick overview of it. Let me then just in a fairly bird's-eye view discuss the recent crisis and something, what has been done, mentioned a little bit, what has been done here. And what the situation in my view is in terms of trying to manage financial crisis. So first of all, one has to, and this is something where the profession is not unanimous, I think, is the question is that how fragile are the financial systems in general? I mean there are good reasons also economic, even from economic theory, why there is fragility. There's something that the financial decisions are often complementary, between agents are complementary. So you tend to go one way and then the other way in most. The other one, of course, is the basic feature is the mismatches in asset and liabilities, liabilities which is creating difficulties for. And so these are, I think, features of financial systems. And then there are also amplifying factors. If you really go into practice, one is that economic theory is usually about equilibrium, practice of course. And there is also more recent work now about the fact that yes, in fact the systems, how do they behave if it's not quite into equilibrium? They may be herding, they may be learning aspects so forth. And so these are limitations in human reasoning. And they will add additional reasons for at least volatility and possibly even amplifying and leading to crisis once something happens. The other feature which we saw, which is worrisome in general in the literature on financial crisis, but which was particularly important in this 2008-2009 crisis, is the high leverage. The fact that in the preceding period, I mean, there are various papers in the preceding period, in fact, for example, banks get along with less and less capital, serious own capital. And there was a deregulation going on. And there was also what was important is financial innovation. This was a period where there were, which started in the 1990s, where a lot of new ideas about finance were made, and also ways of even increasing the leverage. So first of all these instruments were opaque, not necessarily transparent, but sometimes there were legal loopholes which allowed for more leverage to build. These are the investment vehicles that banks had and so forth. So this was a feature, the innovation and associated leverage. And so when the asset price collapse started to happen, asset price decline started to happen, this was a big amplifying mechanism and led to the financial crisis. So the financial system is very challenging for policy makers, because of the fact that it has these inherent fragilities about it. There are these amplifying mechanisms to it, and then there is this innovation which has been with the development of IT and improving that innovation phase, and then other aspects of the financial innovation. Men means that, and we saw it in the financial crisis, that this is tricky. How to regulate this kind of financial system is difficult. In the past there were failures, now there is quite a lot of new regulation, but we don't quite know how well it's going to work. But certainly the trend has to be reversed from less regulation to more increasing regulation. That has certainly happened. And so the question really is what do you do with this? How do you prevent financial crisis? And there are two, obviously one is the prevent. How do you diagnose the coming crisis? There is now something what's called also macro prudential regulation going on. That's a new phenomenon. That is a very untested territory so far. But the idea is to try to create advanced indicators and get an advanced view of the situation. Is there of increasing risks and then measures to try to mitigate the risks and try to avoid, at least, diminish the probability of a new financial crisis. So that's certainly something which is going on. But this diagnosing of a coming financial crisis is a big challenge. It continues to be a very big challenge. We, for example, in the central banks, we discussed this all the time now that it's become a big subject. And we try to do our best, but it's a new subject. And untested area to a large extent. Then the other one, of course, is the question, you know, is what about the crisis management? There, I think, some basic principles we more or less know now. We've handled quite a many, and there will be quite a many financial crisis. And we have some basic ideas what to do in that sort of situations. The starting point of this is really this first bullet here, which is that you have to try to maintain confidence in the banking system or more generally in the financial system. Because if you don't have, you know, if the private agents start, you know, consumers and firms start to lose confidence in the financial system, then things really go back bad. So that's the starting point. That's the starting point. That is, you know, and in particular providing liquidity to the banks and financial institutions, making sure that the financial markets work so that funds are being intermediated is the starting point. And then, of course, we've seen that financial crisis lead to significant real consequences. So macroeconomic policy also has an important role to play. It's both fiscal policy and monetary policy. Central banks, of course, in the current crisis, in the ongoing crisis, did react rather quickly in 2008. And I don't know, this is a point being debated, but our view, I think, on the whole is that we managed to, you know, it was a great recession, but we managed to stop the Great Depression, second day Great Depression in 2008. But there was real worries about it. I mean, I remember spending a few weekends also, where we discussed that we are just a small player in this, but this was happening, I think, in all central banks, in the autumn of 2008 in particular. So we know something a little bit better, the idea of making sure that the financial system function and there is confidence of that, and that, of course, is liquidity provision from the central banks and reduction of the interest rates, making monetary policy much easier. That, more or less, is known now. Even though, obviously, it was still a great recession and you couldn't prevent a decline in real GDP and in real activities, but at least we managed to, I think it was managed to make it not quite as bad as it was in the 1930s. Then, of course, the second important thing here is, then once this crisis period is over and the macroeconomic policy has perhaps mitigated the recession, real effect to some extent, then, of course, comes the more difficult and time-consuming part, which is that in many cases, if there's been a banking crisis, you have to restructure the banking system. And there, again, I think the practices over the years have gotten better in time. So you know the principles are there. The question is that sometimes there is not the political possibilities. I mean, in some cases, the countries have big political feuds but I think the basic principles are there. You have to inject capital to fund banks. You have to improve the efficiency of the banking system in many cases. Often the crisis is because the efficiency is not that good in the banking system. And the government has to direct this restructuring process. I think those ideas I think are fairly commonly understood nowadays. So I have to stop here. Thank you.