Conclusion In a short span of just fifty years, Asia, with its vast diversity in population, ethnicity, social structure and political regime, has made remarkable progress throughout the region. Despite broad and different challenges from urbanisation and rising income inequality to economic crises and social instabilities, Asia has time and time again risen to the occasion and resumed the economic progress. The “Asian miracle” was achieved not by chance, but by pragmatic policies, ensuring sound economic fundamentals and strong institutions. Today, a global shift, triggered by a severe global economic and financial crisis is resulting in an increasingly multi-polar world. In this new phase of globalisation, the concentration of economic power in the global economy will become more dispersed. Asia will very much be a part of this new emerging future. With growth in the advanced economies expected to remain slow and with the emerging economies increasingly becoming the growth centres in the global economy, Asia must review and accordingly change its existing development in this new environment. Of significance, strengthening of the domestic Asian economies supported by the necessary institutions, the further development of the financial markets, and greater regional financial integration that is reinforced with overall regional cooperation. As these trends become more pronounced, it will not only contribute towards unlocking Asia's full potential, but it will also contribute towards a more balanced growth in the global economy. References Asian Development Bank (ADB), 2008, "Emerging Asian Regionalism: A Partnership for Shared Prosperity".

However, at their origin, these institutions were created precisely to deal with the financial instability caused by frequent bank runs in the late 19th and early 20th century. Furthermore, the concern for price stability was even institutionalized later on around the world, with the inflation-targeting regime being the latest stage of its development. It is important to review jointly the issues of price stability and financial stability, because here the well-known Tinbergen principle is clearly present. This principle indicates that, to achieve a certain number of objectives, at least an equal number of instruments are needed. We often have used this argument when asked to achieve inflationary, output and exchange rate objectives with only one instrument, that is, the interest rate. Although several objectives can and do coincide with an instrument fairly frequently, there is no reason why they should. For instance, during a period of declining inflation, an expansionary monetary policy could be justified, which could trigger an excessive credit expansion, asset price bubbles and, hence, introduce vulnerabilities into the financial system. If the monetary authority decides to fight the credit expansion with a high interest rate, it may end up reducing inflation excessively incurring in unnecessary costs in terms of employment. Here a new instrument is in order, namely, financial regulation. About these issues I want to talk today. Price stability: inflation targets The regime adopted in Chile and in a number of other countries with low and stable inflation to pursue the price stability objective, is that of flexible inflation targeting.