of regional conditions and a natural home bias, would also be a stabilizing factor during severe market stress. a stronger and broader regional institutional investor will also provide opportunities for diversification as well as alternative saving vehicle that would serve the changing demographic trends. throughout asia, we are seeing increasing demand for more sophisticated wealth management services. as regulators we also need to continue to collectively enhance our infrastructure and further harmonize regulatory regimes to support greater cross border activities. standardized market conventions help promote cross border issuance in our respective markets. but harmonization takes time as the devil is in the details. and harmonization may go beyond regulations on the trade or issuance of bonds. as cross border initiatives, they inevitably involve regulations over international capital flows which we need to also respect both host country and home country authorities. for instance, the home country may allow their savers to invest abroad, but the recipient countries still maintain controls on inflows. other regulators may permit non residents to make use of tools such as repo, as liquidity enhancing mechanism, but others may look at this measure as way to engage currency speculation. these are all delicate balancing acts which we would need to tackle as we strive to integrate our financial markets further. and while we pursue development and liberalization objectives we also need to strengthen our regional safety net. today our regional cooperation has multilayer safety net consisting of cross border collateral arrangement ( cbca ) for our banks to avail themselves of liquidity from the host central bank using collaterals at their home or head office, bilateral foreign exchange swap line, and the chiang mai initiative multilateralisation ( cmim ) serves as second line of defense and should continue to be enhanced to counter possible market turbulence. as you have heard from the minister of strategy and finance of korea, mr. bahk jaewan, the asean + 3 finance ministers and central bank governors have made progress on important features of the cmim. we have announced the doubling of the total size of the cmim from $ 120 billion to $ 240 billion. we have also lengthened the supporting period and increased the imf delinked portion, from 20 % to 30 % this year with a view to increasing it to 40 % in 2014, subject to review should conditions warrant. in serving as a regional safety net, such arrangements contribute to further development of the regional financial markets by providing a credible liquidity firewall, both for crisis resolution and crisis prevention, to anchor investors ’ confidence. it is only with bis

declined, especially in response to growing international competition. the failure of our society to enhance the skills of a significant segment of our workforce has left a disproportionate share with lesser skills. the effect, of course, is to widen the wage gap between the skilled and the lesser skilled. in a democratic society, such a stark bifurcation of wealth and income trends among large segments of the population can fuel resentment and political polarization. these social developments can lead to political clashes and misguided economic policies that work to the detriment of the economy and society as a whole. as i have noted on previous occasions, strengthening elementary and secondary schooling in the united states - especially in the core disciplines of math, science, and written and verbal communications - is one crucial element in avoiding such outcomes. we need to reduce the relative excess of lesser - skilled workers and enhance the number of skilled workers by expediting the acquisition of skills by all students, both through formal education and on - the - job training. although the long - run challenges confronting the u. s. economy are significant, i fully anticipate that they will ultimately be met and resolved. in recent decades our nation has demonstrated remarkable resilience and flexibility when tested by events, and we have every reason to be confident that it will weather future challenges as well. for our part, the federal reserve will pursue its statutory objectives of price stability and maximum sustainable employment - the latter of which we have learned can best be achieved in the long run by maintaining price stability. this is the surest contribution that the federal reserve can make in fostering the economic prosperity and well - being of our nation and its people.