were already in place. we have been alert to dealing with systemic risks, both procyclicality and interconnectedness, at least 4 – 5 years prior to the global crisis. we had also put in place robust otc market infrastructure and central counterparty mechanisms. we were lucky to have put in place some of the regulations, based on our own perception, that have now been designed internationally. the approach to these issues today is, however, much more structured. review of regulatory framework after giving you a background of what caused the crisis, let me now turn to the reforms in regulation put in place globally, drawing lessons from the crisis. every weakness and flaw that i have mentioned has been tried to be corrected. the basel iii regulations stipulate enhanced quality and quantity of capital. the component of tier i capital as part of total capital has been raised to 6 % ( out of total 8 % crar ), requirement of equity capital has been raised very substantially to 7 % ( including 2. 5 % of capital conservation buffer ) from the earlier 2 %. there was no concept of capital conservation buffer earlier, though there is something similar in pillar ii of basel ii. pillar ii deals with two kinds of risks : ( a ) the pillar i risks which are not covered under pillar i such as concentration risk and interest rate risk in the banking book, and ( b ) the impact of a stress situation on banks and estimation of additional capital required for banks to withstand the stress. during the crisis, it was observed that the losses in the trading books of banks were several times the losses as computed by the var models. as regards the counter party credit risk, it was found that most losses arose from the mark to market losses due to deterioration in the credit quality of the counterparties rather than due to outright default. the basel iii regulations have, therefore, expanded the risk coverage, specially, in the trading book and of risks relating to counterparties. as regards liquidity, a global framework has been built for the first time in several years, both in terms of the requirement for banks to have adequate high quality liquid assets to withstand a stress situation over a 30 day horizon and also from the perspective of avoiding asset liability mismatch by requiring banks to fund long term assets with stable funds. in my view, the most important lesson from the crisis is the recognition of systemic risks and the development of a framework to deal with that. i would touch upon these issues briefly, as there is a

eddie yue : asian development bank – working to reduce poverty in asia statement by mr eddie yue, deputy chief executive of the hong kong monetary authority, and head of delegation, hong kong, for the 49th asian development bank annual meeting, frankfurt am main, 3 – 5 may 2016. * * * i would like to thank the government of germany for hosting the 49th annual meeting of the asian development bank ( adb ), and the management and staff of adb for the excellent arrangements of the event. i would also like to congratulate adb for the successful conclusion of the eleventh replenishment of the asian development fund, which would provide critical resources to adb to further its work in poverty reduction in asia. adb is approaching its 50th anniversary this year. over the past fifty years, asia has undergone tremendous development. the economic miracle in asia, together with the important work of the bank, have lifted millions of people out of poverty and substantially improved our standard of living. after decades of rapid growth, however, there have been signs that the trend growth of the region is slowing. this reflects, to a considerable extent, supply - side constraints on potential output. in particular, a number of emerging economies in the region have been held back by infrastructure bottlenecks. as i have noted during the past few annual meetings, to sustain growth and propel the economy to the next stage of development, boosting infrastructure investment is a top priority for many developing members in the region. the infrastructure demand in asia is huge. adb estimates put the overall infrastructure investment needs of asia at us $ 750 billion per annum over the 2010 – 2020 period. in the meantime, there is no lack of investors interested in infrastructure investment or financing. despite a generally longer investment cycle, infrastructure projects can offer relatively stable returns and a hedge to inflation. that is why sovereign wealth funds, insurance funds and institutional investors have shown a growing interest in infrastructure investment in recent years. however, despite this increasing interest in infrastructure investment, there are significant impediments in channeling savings into infrastructure financing in emerging asia. put it in the language of bankers, there is a shortage of “ bankable ” projects, due to lack of a credible public - private partnership ( ppp ) framework ; deficiency in regulatory regime and legal environment for contract enforcement ; lack of transparency for monitoring project implementation ; and political uncertainty. the above impediments call for coordinated efforts to facilitate financial intermediation, lower barriers to investment,