the cohesiveness, the sense of purpose and urgency of the g20 did indeed contribute to restoring confidence in the global financial system and the coordinated policy stimulus was an important catalyst for the economic recovery. in recent months, however, the momentum for this coordinated actions have dissipated and there have been differing positions on several important issues. at the same time, a number of the major crisis affected countries have implemented their own financial reform plans. in view of the far reaching implications of any reform agenda, it is an important global responsibility to ensure that the reforms achieve their intended results and that this new phase of globalisation will result in a more inclusive international financial system that will allow for the effective participation in the global economy and international financial system regardless of size or stage of developments. on the specific regulatory reforms to address the issues and problems that caused the crisis, of importance, is that the goal of such regulatory reform should not be overlooked – promoting financial stability is a means to an end and the ultimate goal is to achieve sustainable growth and development. many have already highlighted the potential increased regulatory costs on intermediation and hence on economic activity. this is even more relevant in asia where there is greater reliance on the banking sector for financing. the efforts undertaken to comprehensively assess the macroeconomic impact including by the iif is highly relevant and will be important to the reform process. a further concern and one that is less discussed is on the implementation of the regulatory reform. with greater capital mobility across borders, the stricter regulations could result in the migration of financial business to less regulated market segments, institutions or financial centres. important to this is the need for the development of the framework for cross border policy coordination and resolution. in asia, efforts are underway to address these specific issues recognising that in this interconnected environment, the execution of remedial and containment measures will be highly complex and challenging. focus is also being given to having enhanced surveillance and oversight that is complemented by a robust framework for governance, transparency and accountability. given the strong presence of international institutions in the asian region, we have strong interest in the establishment of an effective cross border resolution mechanism so that any failure of such large and systemically important institutions with cross border representations can be dealt with effectively in an orderly manner. this will require cooperation and coordination across countries, taking into consideration their differing regulatory and legal systems. a further priority in emerging asia is the promotion of responsible market practices and consumer protection given the stage of development and level of financial

driver of growth. while the export sector continues to be important, the pattern of trade has changed significantly with the growing importance of trade with emerging economies, in general, and with asia, in particular. perhaps the most important factor that has for several decades sustained the economic success of the emerging asian economies is its economic flexibility to adjust to the changing conditions in the global environment. this economic flexibility is supported by the high degree of labour and capital mobility within the national economies and the significant investment accorded to education and to infrastructure development. the region has also adopted a pragmatic approach to policy that is not constrained by rigid ideology. in this more recent decade, institutional development, extensive financial reforms, and the adoption of new business models have been an important part of this transformation process. several of the economies in emerging asia ’ s have transformed their production capacity in the manufacturing and services sector to meet the changing demands of the global economy and the growing consumer market in asia. given the different stages of development and endowment of natural resources in the region, the emerging economies in asia have also leveraged on their respective distinct comparative advantages. this has resulted in intraregional division of labour and specialisation, and the capacity to undertake the entire spectrum of the supply chain for a wide range of products and services. part of the economic restructuring has also involved the greater emphasis on domestic demand as an important source of growth. this has involved significant increases in domestic private consumption and investment activities. rising income levels and the presence of a young demographic structure with a high propensity to consume has resulted in a huge consumer market and the development of an extensive modern retail sector across the region. the potential sustainability of this trend is supported by the absence of inflationary trends, of large scale unemployment, or of high levels of indebtedness. the second fundamental trend is the intensification of regional economic and financial integration. this has been facilitated by the ability to leverage on complementarities in the region arising from diversity and differences in comparative advantage. intra - regional trade has been a major contributor to the recent recovery in asia. intra - regional investment flows have also gained momentum. businesses in the region are increasingly leveraging on regional complementarities and taking advantage of the growing markets in the region through regional trade agreements to achieve the aspiration for asean to become an economic community by 2015. as high saving economies, it is recognized that there is an important need for a more efficient intermediation of the surplus funds in the region.