unemployment rises, more households will have difficulty continuing to service their housing loans. on the other hand, the very large reduction in interest rates has greatly reduced the debt servicing burden of households. on an average - sized mortgage, loan repayments are now $ 7, 000 a year less than they were six months ago. this is a very large reduction, equal to about 8 per cent of average household income. the majority of households have chosen not to spend the money that has been freed up. rather, they have maintained high repayments and are therefore moving ahead of schedule in repaying their loans. this will give them breathing space if they do subsequently find themselves in circumstances where their repayments are interrupted. conclusion let me sum up by saying that the past six months have been a very difficult time for the world economy. there are some tentative signs of improvement, but in reality it is going to take quite some time for the world to recover from the financial shock that has occurred. while the australian economy has also weakened, it has held up better than most during this difficult period, helped by earlier disciplined policies and prudent financial behaviour. however, there are limits on how much we can insulate ourselves from what is happening abroad, and therefore there are probably still some difficult times ahead. nonetheless, the underpinnings of the australian economy are sound so we are well placed to benefit from the global economic recovery when it comes.

g20, the financial stability board ( fsb ) and various standard setting bodies – including but not limited to strengthening banks ’ capital and liquidity requirements, reducing moral hazard posed by systemically important financial institutions, and reforming the otc derivatives markets. recently, the fsb decided to set up regional consultative groups, including one for asia, to bring together central banks, finance ministries and regulators in different regions. these groups are expected to serve as a platform for us to discuss and cooperate on issues of interest to regional financial stability, and to reflect the region ’ s collective views to the fsb in the international standard setting process. 9. the second area is enhancing the global and regional financial safety nets. we welcome the recent significant augmentation of imf ’ s resources and lending facilities. these enhancements will allow the imf to respond more effectively and speedily to member countries in need. regionally, the establishment of the chiang mai initiative multilateralisation ( cmim ) further enhances the regional capacity to cope with capital flows and safeguard financial stability of the region. the hkma fully supports this important regional initiative, and indeed we have played an active role in its development and participated directly in the arrangement. 10. the third area is enhancing the capacity of regional capital markets to absorb capital inflows and channel them to productive uses. in this regard, the hkma took the lead in developing the asian bond funds ( abf ) under the aegis of the executives ’ meeting of east asia pacific central banks ( emeap ). the abf, as a pioneer product, aimed to provide a convenient low - cost local - currency instrument for investment, and at the same time help identify and remove the impediments to bond market development. in parallel, with the strong support from the adb, asean + 3 members have undertaken a range of projects under the asian bond markets initiative to promote the development of the local currency bond markets. notwithstanding these regional efforts, we still have a long way to go in developing a regional bond market that is broad and deep enough to channel the region ’ s abundant savings to meet its huge investment needs. continued national and regional efforts in this regard are much needed. emerging asia includes china, hong kong, india, indonesia, korea, malaysia, the philippines, singapore and thailand. bis central bankers ’ speeches 11. at the domestic level, there has been growing recognition that there is no one - sizefits - all approach to capital flows