increased intra - regional economic and financial activities is already taking place. the economic integration is supported by the strong demand from the growing middle class asian population, which is projected to reach 3. 3 billion by 2030. the intra - regional trade in asia now represents more than 50 percent of total trade in the region, increasing from 32 percent in 1995. intra - regional investment activities have also been on a rising trend. with the strong economic fundamentals and the positive growth prospects of asia, international and regional financial institutions are also now shifting their focus into the region. with the high savings rate in asia, and of its massive requirement for infrastructure development, the region would benefit significantly from more effective and efficient intermediation of asia ’ s surplus funds. indeed, intra - regional cross - border portfolio investments have already increased to 28 percent of total assets holdings in 2011 compared with 21 percent in 2001. the gains from greater regional financial integration will be farreaching as it will not only bring about a more efficient allocation of resources in the region but it will act as a catalyst for greater regional economic growth. over the coming years, as bis central bankers ’ speeches growth experienced in the developed economies is expected to remain slow in the aftermath of the financial and debt crisis, the growth performance of asia is expected to continue resulting in the region becoming a more important component of the global economy. asian funding markets have also remained highly accessible during this period with asian names enjoying strong demand and attractive funding costs at a time when the developed countries funding markets have tightened. during this more challenging time, asian sovereigns such as indonesia, philippines, thailand, sri lanka, vietnam and malaysia continue to successfully tap the market and to issue bonds with tenure up to 30 - years. in addition, as financial markets in asia become more developed, the markets now have the capacity to transact large quantities with cost effective pricing. in 2011, malaysia issued the first 10 year global sovereign usd sukuk, with the issuance size of 2 billion, under an innovative shariah principle of wakala which recorded the lowest absolute yields achieved by an asian sovereign for a new usd issuance. another recent landmark issuance on the domestic front is by plus berhad, the largest toll operator in malaysia, with the issuance of a record size of rm30. 6 billion programme, equivalent to usd9. 7 billion, with maturities ranging from 5 years to 27 years. the depth and breadth of asian capital markets have drawn investors to expand

and standards can be expected to exist. our main task will be to find areas where convergence can be accelerated. there may also be room for greater mutual recognition of supervisory assessments among fellow supervisors that could avoid duplication of efforts and resources that could contribute towards reducing compliance costs to the banking institutions. while we deliberate on the complex issues relating to cross - border implementation of basel ii, supervisors and banking institutions operating in emerging markets also need to take into account the broader implications of basel ii on the economy as well as the access to financing for specific economic sub - sectors, such as the small and medium size enterprises ( smes ). the highly risk sensitive framework could indeed have a potential adverse impact on bank lending behaviour. there has to be continuing discussion between supervisors and the banking institutions on the broader supervisory issues and the effectiveness of regulatory and supervisory framework that could mitigate such potential adverse implications. basel ii is only one component of prudential regulation, and hence must not be viewed in isolation. in this context, the suitability of other rules such as the provisioning framework and the stress testing practices must also be discussed with a view for future enhancements. ladies and gentlemen, while we engage in the intricacies of implementing basel ii we should not loose sight of the ultimate objective of maintaining financial stability. this dialogue is most important in providing a forum for the exchange of views and the sharing of experiences. indeed, the outcome of the discussions should be escalated to a higher level of policy deliberation so as to further accelerate the progress in detailing the issues relating to the cross - border implementation of basel ii. on that note, i wish all of you for a stimulating and productive discussion. thank you.