Against this background, no alternative solutions – sometimes advocated by advisers referring to the Latin American previous crisis – were suitable options for the Euro area. In fact, the Euro area is not only built with a single currency ; it has also developed into a highly integrated economic and financial area. In this context, debt restructuring would hammer the banking sector impair financial markets and destabilize the real economy. 17. In addition, an EU stress test exercise was instrumental in alleviating pressures as we have observed significant spread reduction in the wake of the release of their results. Tensions on sovereign spreads have indeed abated somewhat as a result of an unprecedented transparency effort leading 91 European banks to disclose their detailed exposures to EU sovereigns. The severity of the stress scenario, which beyond assumed adverse macroeconomic conditions also incorporated assumption of losses due to renewed and persistent tensions in sovereign long term interest rates, revealed that even under extremely adverse conditions, European banks capital would still be maintained well above minimum regulatory requirements. III. Financial stability is contingent on sound international regulation and robust domestic supervisory management  18. The financial crisis has taught us some clear lessons which force us to review in depth the way the financial system is regulated and effectively supervised. The crisis has revealed weaknesses in the international regulatory framework. 19. The main flaws fall into three broad categories. BIS Review 113/2010  3  20. The first relates to the scope of the regulatory framework.

Foreigners investing in Malaysia are also free to hedge with onshore banks their committed flow of funds such as the repatriation of investment proceeds, dividends and profits from Malaysia as well as the purchase of ringgit assets in Malaysia. There is free mobility of inward and outward movement of funds relating to both foreign direct investment and portfolio capital investments. Multilateral development banks and multinational corporations may also issue ringgit or non-ringgit denominated instruments in the domestic bond market. To enhance the delivery system, an executive committee of key government officials, financial regulators and industry players has been has been set up for the implementation of the initiatives to support the operations in the Islamic financial system. Among others, an "executive green lane" has been accorded to expedite applications by expatriates for long-term employment passes with multiple entry visas. The Foreign Investment Committee rules will also be relaxed further to allow 100 percent foreign equity ownership in these financial institutions. Moreover, the Islamic financial system will also adopt a conducive stance on Shariah interpretations and practices, consistent with its international dimensions. It will mutually recognise and accommodate the various juristic reasoning that has been approved by recognised Shariah advisers. In conclusion, I wish the Malaysia Country showcase a success. I invite the business and financial communities from this region and the Malaysian delegation to capitalise on this event to arrange for business meetings on the sideline of this Summit. Thank you. 2  BIS Review 48/2007