in the face of uncertainty. ii ) diversification by regional central banks and institutional investors central banks reserves continue to serve as an important safety buffer for the country and reflect the strength of the economy. nevertheless, the issue of diversification continues to strike a chord among regional central banks and major institutional investors, driven by the accelerated pace of reserves accumulation in the past decade, low - yield environment in the g7 economies and changing trends in trade pattern and currency regimes. this necessitates a rethinking on how reserves should be invested. the fast pace of reserves accumulation and low yields on g7 assets remained the most compelling reasons for diversification in the quest to seek better risk - adjusted returns in alternative asset classes, such as emerging market debt, commodities and equities. intra - regional trade in asia has surged from 32 % of total exports in 1995 to an average of 50 % in 2008, while the use of regional currencies for trade settlement has started. furthermore, most asian economies have gradually shifted from a us dollar focus to a more flexible exchange regime against broad basket of currencies, a trend which underlies the rationale of diversifying away from us dollar. in tandem with the rising savings and reserves accumulation by regional central banks, these reinforce the argument for more intra - regional investments which will contribute to the goals envisioned by the asian bond fund ( abf ) initiatives. the abf was a fund launched by emeap, comprising foreign reserves held by regional central banks for investments in regional bonds with the aim of contributing to the development of regional bond markets. today, we are near the juncture of achieving a key milestone, where formal setting is no longer required to mobilise intra - region fund flows such as in the case of abf1 and abf2. instead the intra - regional investments are becoming more self - reinforcing. as a proof of this, we now have more anecdotal evidence on the rising proportion of the regional central banks ’ reserves invested in asian local currency debt. iii ) credit risk assessment approach as we tread into uncharted territories of new asset classes, there is a growing need to enhance analytical capabilities, resources and risk controls. for example, many central banks and institutional investors have gradually moved away from over - reliance on credit rating agencies to an internally - based credit rating assessment practice in portfolio management. in the wake of the us financial crisis and recent european sovereign issue, one would question the credibility of credit

in crisis management strongly suggest that each crisis at any given time requires a tailor - made solution, given the specificity of each economy ’ s social, economic and political landscape. the world is changing so rapidly that many countries are forced to retool their nations to embrace new opportunities and unlock this growth potential. previous successful solutions and policies do not guarantee success and relevance. throughout episodes of crises, a key lesson policymakers learnt was to have flexibility and courage to explore and implement all available policy tools in preserving macroeconomic and financial stability. at one time, unorthodox and unprecedented policies were considered heresy. now, they are considered necessary. i thus welcome the recognition within the imf for a more progressive view on macroprudential and capital flows measures. i also welcome the imf ’ s continuous engagement and responsiveness to the experiences of countries in this region, that have been using these policy tools for many decades. and i hope the imf will continue to fine - tune the institutional view on capital flows and its interaction with macroprudential policy. to my mind, this will provide the 3 / 5 bis central bankers'speeches impetus to a deeper partnership between members and the imf as a trusted policy advisor. the second area relates to our policy approaches. they must be clear, coherent and complementary to ensure a more human - centered approach. experience shows that for globalisation to make sense to the man on the street, they must ‘ feel ’ and be ‘ touched ’ by its benefits, and be satisfied that their lives are better than before. public engagement is important to address specific concerns. domestic policy programs and implementation must be coherent, comprehensively explained and easily understood, and complemented by policy measures consistent with the intended outcomes of international arrangements. robust communication and transparent assessments can contribute to deeper levels of public understanding and acceptance. with information now easily accessible to all and sundry, authorities are no longer the sole arbiter of knowledge. authorities, therefore, cannot maintain a one - dimensional communication strategy to explain the multi - dimensional policies and the consequent impact of those policies that we implemented. finally, we must fully embrace the explosion of technology to keep pace with the altered global economic landscape. come 2020, more than 24 billion internet - connected devices will be installed. as technology continues to reshape our world, we must balance improvements in efficiency and customer experience with the concomitant risks. today, the trade - offs are still not well understood because while