In the more recent period, this trend has been reinforced with increased overseas investments by Korea and Malaysia. Eight, engaging the emergence of large new markets in the region. Overall, as a high level of integration exists at the regional level in terms of trade and FDI, shifts in trading and investment patterns both from external sources into the region and within the region itself have been a dynamic process. Hence, given the emergence of large new markets in the region, the opportunities present in these markets show complementarities in the region. Countries in the region need to therefore focus on these complementarities in new potential areas of growth. In an  BIS Review 43/2003  3  increasingly competitive environment, economic progress in the region is benefiting from the strategic specialisations which are supported by the leverage on comparative advantages. Nine, regional cooperation gathers momentum Given the existing mutual interest amongst countries in the region, regional cooperation efforts are gathering momentum in East Asia, notably in the context of ASEAN+3 and EMEAP. To-date, the focus of such cooperation by Governments has been on regional surveillance, developing institutional arrangements and according high priority to co-operation in trade and investment. The drive toward regional cooperation will continue to increasingly focus on enhancing regional trade and investment linkages to maximise the comparative advantage of each member country. Toward this end, studies have already been commissioned to explore the feasibility and identify the preconditions for the creation of an Asian common market, a logical long-term objective of regional cooperation.

4/5  BIS central bankers' speeches  34 Another field of research work can be around central bank digital currencies, or to use the buzz word, CBDC. Globally, there has been some discussion on the potential implications of CBDCs, but this is still relatively green field thinking. I will not delve more into it as the subject can be a seminar theme in and of itself. Conclusion 35 As you will have realised, I have flagged more questions than answers this evening. I think the post-crisis financial landscape is an exciting time to be an economist, analyst or researcher in support of financial market development, as well as to help shape policy reviews and thinking. Many of the developments I have touched on are rapidly evolving, and are also not mutually exclusive from one another. 36 There is a view that we should accept a more central role incorporating beliefs and expectations to both understand and shape financial market developments. New advances in behavioural economics can provide for tractable and psychologically-founded models of beliefs to be integrated into the standard analytical frameworks in finance and macroeconomics. 37 It is important that policymakers and regulators have a firm grasp of these interactions and develop new techniques to calibrate policies and mitigate risks. 38 The MAS therefore welcomes the opportunity to further engage the research community, hopefully with many of you, so that with your knowledge, expertise and research rigour, we can deepen our collective learning and understanding.