The presence of active bond markets will help to buffer financial systems from future shocks associated with over reliance on short-term capital flows and bank lending, and enables better diversification of risks. Many Asian countries have already recognised these benefits and are vigorously working towards the development of their bond markets in the wake of the recent turmoil. In Malaysia, we have taken active steps to set up the National Bond Market Committee and in July, the Act had been amended to make the Securities Commission the sole regulator of the bond market. Capital markets also provide a valuable source of external finance as countries mature and begin their transition to the New Economy. Technology-related firms, for instance, often lack the required collateral and earnings streams to secure financing through traditional means.
Capital markets offer the best alternative.
Again, Asian capital markets have progressed significantly in this area by establishing specialist stock exchanges to cater for technology and other high growth companies. These exchanges have been, for the most part, successful in attracting significant investor interest. On another front, the crisis has also highlighted serious deficiencies in the quality, reliability and timeliness of corporate disclosures stemming from a lack of good governance, transparency and accountability. This has contributed to a loss of investor confidence in the region, and the perception that these issues have not yet been properly addressed continues to have a lingering effect on investor sentiment. Capital Markets and the Accounting Profession Ladies and Gentlemen, before I speak on the role of the profession in the capital market, allow me to briefly touch on the challenges facing capital markets today.