The Federal Reserve Bank of San Francisco recently hosted the Conference on Asian Banking And Finance. One of the keynote speakers was Masaaki Shirakawa, a Bank of Japan Governor, who gave this awesome presentation titled The Era of Linkages among Asia and across the Pacific Ocean.
Basically, he argues that the links between Pacific economies are quite young. And understanding this is one way of better understanding the incredible economic opportunities that remain in Asia.
“Since the voyage of Christopher Columbus in 1492, there have been economic, cultural and political exchanges between the two sides of the Atlantic Ocean for more than five centuries,” said Shirakawa.
“Compared to this long history of trans-Atlantic linkages, the history of trans-Pacific linkages is quite brief.”
He broke down the brief economic history of Asia’s economy in this post trans-Pacific linkage world.
However, it wasn't until just a few decades ago that the west saw the Asia-Pacific region as a major economic bloc
The disruption in U.S. auto production in the wake of last year's tragic Japan earthquake reminded us of the strong linkage between Asia and the rest of the world
Thanks to growth in Asia, the global economy did not experience the prolonged slump experienced in the wake of the Great Depression
However, Asia's working age population is on the decline. How each country responds to this could have major implications for their economic fundamentals
Foreign exchange risk have been mitigated by continuous linked settlement (CLS) systems. However, many emerging market currencies are not availabel for CLS settlement
Addressing issues like the foreign exchange risk in the prior slide will help make the global economy more seemless
'Through solving these practical problems one by one the world will become closer to a seamless economy and the global economy including Asia-Pacific region will become able to realise its full potential. In this regard, I sincerely hope that the discussions held in this conference will constitute another step in the right direction.'
Source: Masaaki Shirakawa, Bank of Japan