have agreed to promote investment in green bonds through the asian bond fund, such as revising the bond index rules. a common issue we have encountered in our work is the lack of data. this is being addressed at the global level by the international monetary fund ( imf ) and the ngfs. another issue is that stress testing and scenario analysis can be methodologically difficult because of the long time horizons associated with climate risks. but at the same time, climate change is having near - term implications in a number of our economies. while these exercises are challenging, we all agree that there is benefit in conducting them. it is important that the perfect doesn't get in the way of the good. fintech emeap has been discussing a number of different aspects of fintech in our recent meetings. one particular area of focus has been in cross - border payments. many emeap members have initiatives underway to improve cross - border payments, including collaborations with other emeap members. we have been discussing how emeap could best contribute to the g20 roadmap on enhancing cross - border payments. while traditional services for cross - border payments have been costly, slow and non - transparent, we are seeing the emergence of some new technology - enabled providers of cross - border payments, which are bringing much needed innovation and competition to this market. but there are still some key challenges to improving cross - border payments. these include : ( i ) systems integration difficulties where countries are at very different stages of payments system development, and ( ii ) the cost of meeting regulatory compliance requirements, for example those relating to anti - money laundering and counter - terrorism financing ( aml / ctf ), as rules can vary greatly between payment originating and receiving jurisdictions. the latter is a particular issue when it comes to remittances. this poses challenges to some emeap economies and particularly some smaller nations in the pacific area. we are working individually and collectively to try to address this challenging situation. one other noteworthy development is that several emeap members are collaborating with the bank for international settlements ( bis ) innovation hub and each other to develop bilateral and multilateral linking of real - time retail payments systems. this will reduce the reliance on existing cross - border banking arrangements. there are a number of examples of this : project nexus provides a blueprint for scalable connectivity of countries'domestic fast payment systems, which will make cross - border payments faster, cheaper, easier to access and more transparent

such as this one. but while we publish much more detailed analysis, the substance of the core issues has not changed substantially. the global financial environment was considered in the 1999 assessment as was credit, household balance sheets, property prices, and the resilience of the banks. so how, if at all, has the gfc changed the way we look at financial stability? it hasn ’ t fundamentally changed the way think about financial system stability, though we now have a deeper understanding of the nature of the risks and the potential channels of contagion. we have also built significant capacity to better monitor risks both in the banking and non - bank sectors. overall, i would say that policymakers around the world have become more alert to system - wide risks. prior to the gfc, there was a common, but not universal, view that the system was fairly stable. while there were some concerns about growth in credit and asset prices, there were a number of plausible explanations suggesting that the stability of the global financial system would continue. among these were the long period of global macroeconomic stability and low inflation that was expected to continue and that low yields were a natural consequence of the flow of savings from asian economies. there were alternative, more pessimistic views centred around the view that investors were seriously underestimating risk and taking on too much leverage. but the more prevalent view seemed to be that the diversification of risk made possible by financial innovation, and the relative strength of capital and liquidity levels, would stand the system in good stead. you could say it had a ‘ this time is different ’ flavour. while recognising these arguments, policymakers in australia never entirely bought into this. the experience with losses in commercial property in the late 1980s, the collapse of hih in 2001 and the housing boom in the early 2000s perhaps made australian regulators a little more circumspect. apra had therefore maintained a strong supervisory focus on the australian financial institutions. but we were also fortunate in australia that the boom in commodity prices and substantial rise in the terms of trade through the 2000s produced a very favourable economic environment at a time when many of the major economies moved into recession. it was probably also fortuitous that there had been a bit of a shake - out in the housing market in australia in 2004 / 05 so we were not in a boom phase when the gfc hit. all of these factors resulted in the australian financial system coming out of the gfc