This strengthened surveillance framework has allowed us to take pre-emptive macroprudential measures to tackle potential imbalances in specific sectors before they  BIS Review 34/2010  1  develop into significant vulnerabilities. In parallel, our financial sector regulations and supervision have been strengthened significantly, aimed at ensuring that financial institutions and markets take prudent risks and have enough buffer to cope with potential systemic risks. Countries in Asia have progressed on the same path I mentioned after the Asian crisis. In addition to the individual efforts, another important development is the regional efforts on precautionary measures. The latest development of the Chiang Mai Initiative Multilateralization also helps bridge the gap between the IFIs and emerging market economies on the liquidity arrangement and timely disbursement. What is still ongoing is the establishment of a regional surveillance unit for ASEAN+3 that will facilitate the prompt disbursement of these liquidity facilities and provide us with a better understanding of risk and vulnerabilities in the regional context. Global crisis: addressing root causes would be the same as the Asian crisis Looking back at how far Asia has come from the crisis has put into perspective the recent global crisis and policy responses. In my view, this past crisis was also caused by a combination of excessive liquidity, and inadequate surveillance and supervision of both the regulated and shadow banking sectors in advanced countries. Too much trust was placed on the market mechanism, which was proven to have failed.

For Thailand, the share of exports to CLMV countries to total exports volumes has risen steadily to be over 10 percent surpassing our exports to 27 euro-zone countries combined. This reaffirms the shared benefits from trade and investment connectivity. Owing largely to complementarities in various dimensions among CLMVT economies, the integration should continue to further strengthen in the future. Expanding trade and investment has been accompanied and supported by development of domestic service industries and enhanced connectivity in the service sector. A case in point is the burgeoning growth of the airline industry, both low cost and full service. Over the past few years, any frequent traveler would easily notice a marked increase in a number of flights within the region, particularly those operated by low-cost airlines. Prices have been much more affordable, attracting travelers who otherwise would not travel by planes. The development does not only benefit the airline industry itself, but also unlocks potentials of many other industries and serves the citizens of CLMVT. More seamless travel promotes the tourism industry, reduces logistic costs, and overcomes obstacles to transportation, thus allowing closer people-to-people connectivity and opening up opportunities for people to realize their fullest potentials. Ladies and Gentlemen, Improved airline service and connectivity might only be one aspect of enhanced regional connectivity. Nevertheless, it serves us well as a model to develop other domestic service industries and to promote regional connectivity in the service sector.