of responsibilities between parent and host supervisory authorities for banking institutions. but with the advent of the internet, and more generally globalised banking, it has become harder to pinpoint exactly where financial transactions are being carried out, and which supervisor has responsibility over them. in this environment, supervisors need to cooperate more closely with each other to ensure effective consolidated supervision of the institutions under their charge. the second element of improvement is the harmonisation of practices and standards across jurisdictions. this will lower compliance costs for financial institutions, arising from having to satisfy different regulatory and legal regimes in different countries. unfortunately such harmonisation is extremely difficult, even if we confine ourselves to a small subset of countries. the issues are far too intricate and complex to be resolved in a multilateral setting. institutional structures, market practices and philosophical approaches differ from country to country. and each country guards its regulatory powers jealously, and wants the freedom to set and enforce its own rules. the multiple national regulators that exist in the european union are a good example. short of complete harmonisation of regulations, one practical approach to pursue is mutual recognition of regulatory regimes. mutual recognition need not be all or nothing. it can be applied to specific areas, starting from cross - border offerings of financial products such as collective investment schemes and suitable initial public offerings. institutions can save half or more of their compliance costs, if they only have to comply with one set of regulations recognised by both regulators. this benefits both markets by deepening liquidity and broadening product offerings. singapore has participated actively in international efforts to harmonise regulations and policies across jurisdictions. as a small country, our ability to push the envelope on regulatory practices is limited. but we have conscientiously kept abreast of global regulatory initiatives, and adopted the best international standards and practices for regulating and supervising our financial institutions and capital markets, taking into account the specific circumstances of our financial industry. in some instances, we have found it possible to adopt standards and practices of international bodies and foreign regulators wholesale. for instance, the committee on disclosure and accounting standards, a private sector led body formed to review disclosure and accounting standards in singapore, has recommended that singapore should adopt international accounting standards ( ias ) as the accounting standards for singapore. in terms of mutual recognition, we are currently exploring with australia an agreement for the mutual recognition of our regulatory regimes in certain activities of the securities market. we are ready to conclude similar arrangements with other like - minded regulators. consolidation of financial centres the third

to the question how monetary policy challenges from spillovers can be met. better - anchored inflation expectations based on clear and credible communications by a central bank would be one way to deal with the spillover of external shocks. of course, i understand more challenging situations faced by central banks in emerging economies that are relatively vulnerable to volatile capital flows and exchange rate fluctuations. however, as shown in the imf's world economic outlook, published earlier this month, 5 the anchoring of inflation expectations in emerging economies has improved significantly over the past two decades. it has also been demonstrated that further improvement in the extent of anchoring could strengthen economic resilience to external shocks, by reducing inflation persistence and limiting the pass - through of currency depreciations to domestic prices. here i would like to briefly mention the case of thailand, which was at the epicenter of the asian financial crisis. after the crisis, thailand moved to a floating exchange rate regime with a flexible inflation targeting framework. it then established the legal framework of monetary policy conducted by the bank of thailand in an independent manner. overall, it has recorded excellent performance in price stability over the past two decades, and in recent years, the bank of thailand has been tackling low inflation rather than high inflation. finally, i would like to come back to the issue of regional cooperation, which is another way for central banks to deal with the spillover of external shocks. in the east asia and pacific region, we have many opportunities to discuss regional economic and financial market developments. close communication and cooperation among central banks through these opportunities would be crucial, especially in crisis times when huge external shocks could affect domestic price and financial stability. more specifically, a number of initiatives have already been established through regional cooperation to enhance the resilience of regional economies against external shocks. the chiang - mai initiative multilateralization has been established as a regional financial safety net for crisis prevention and resolution. in addition, 5 international monetary fund ( 2018 ) " challenges for monetary policy in emerging economies as global financial conditions normalize, " chapter 3, world economic outlook, october 2018. efforts have been made to develop local currency bond markets, which are important to eliminate the double mismatches of currency and maturity which exacerbated the debt burden at the time of the asian financial crisis. in one such initiative, the executives'meeting of east asia - pacific central banks ( emeap ) set up the asian bond fund ( abf ) in 2003, and since then