investment funds ) have enlarged their market share. disintermediation will be enhanced by the need for pension systems to rely more on funded retirement schemes. since capital markets are more integrated than the banking sector, disintermediation will foster the integration of the entire financial system in europe. changes for the banking sector are in prospect once the new basle accord is applied. in general, we welcome the new accord if it helps to improve the allocation of capital. however, two special features of the german economy should be considered : 1. the german economy is largely dominated by small and medium - sized enterprises, known as the „ mittelstand “. 2. our financial systems rely to a large extent on long - term financing. this long - termism of financing has contributed successfully to the stability and prosperity of our economy, as well as the financial system. that is why the bundesbank argues that banking regulation should not discriminate against long - term financial relations. small and medium - sized enterprises with a revenue of up to f 5 million make up more than 95 percent of all enterprises in germany. this „ mittelstand “ forms the backbone of the german economy. however, their share of outside capital is significantly higher than with larger firms. a lower rating is therefore to be expected, unless other collateral or risk - lowering factors are taken into account. here again, we favour a differentiated approach that does not put banks with a large exposure to medium and small sized enterprises at a disadvantage. ix banking regulation and supervision in europe have become ever - more integrated, in keeping with the development of the single market. the introduction of the common currency in 1999 was therefore an additional factor contributing to the further harmonization of the regulatory and supervisory framework, accelerating the integration of financial systems. currently, we have a system of home - country supervision and extensive cooperation among european regulators and supervisors. this tried and tested framework is serving us well. especially in the banking sector, integration is not yet so advanced as to justify pan - european supervision. furthermore, tax systems, accounting standards and also banking systems vary to a degree that does not warrant unified banking supervision. as financial integration advances further, however, this situation may change in the future. if, in future, once we have a truly european financial system, we will take steps towards a single supervisory structure. those steps could probably start with the large, internationally operating, european banks. in germany, the government has recently drafted a bill on a new

opening ceremony of asian financial cooperation association ( afca ) keynote speech by dr. veerathai santiprabhob, governor of the bank of thailand beijing, july 24, 2017 vice president mr. ma kai, vice premier of china mr. guo shuqing, chairman of the china banking regulatory commission ( cbrc ) mr. chen yuan, vice chairman of the chinese people's political consultative conference mr. jin liqun, president of the asian infrastructure investment bank ( aiib ) mr. norman chan, chief executive of the hong kong monetary authority ( hkma ) mr. tian guoli, chairman of afca excellencies, executives of financial institutions, ladies and gentlemen. a very good afternoon to you all, today ’ s opening ceremony of the asian financial cooperation association ( afca ) is a very auspicious occasion, and i am honoured to be a part of this historical event. i would like to congratulate the chinese government for successfully establishing afca – a new forum, which i am certain, will play a significant role in enhancing financial connectivity and cooperation within asia. i would therefore like to take this opportunity to share with you my thoughts on how we can further enhance financial connectivity to ensure sustained shared benefits – as stated in afca ’ s mission1. ladies and gentlemen, people have long been connected by trade along the ancient silk road dating back more than 2, 000 years ago. today in modern times, many trade and investment agreements between china and other asian countries have promoted close economic ties in the region. thanks to the chinese leadership, the spirit of connectivity and cooperation is further enhanced through the one belt one road initiative. the asian infrastructure investment bank ( aiib ) is an added funding impetus to ensure that there will be physical infrastructure connectivity, laying the strong foundation for shared economic prosperity. china ’ s growing economic ties with thailand and asean have become stronger in many aspects. china has been the largest trading partner of thailand since 2013. thanks to the china - asean fta, china has been asean ’ s largest trading partner since 20092, while asean has been the third - largest trading partner of china since 20113. china has been one of thailand ’ s top foreign investors for the past nine years4. and in terms of tourism, almost afca follows the philosophy of openness and inclusiveness as well as the mission of “ connectivity, cooperation, joint governance, and shared benefits ” asean secretariat : asean trade balance ( in us $ million