strongly encourages all banking institutions and users to participate in the fpx to exploit its full potential, a process that would contribute towards the competitive positioning of the malaysian economy. ladies and gentlemen, economic expansion hinges on the effective intermediation function of the financial system, and the efficiency of funds flow is integral to the overall functioning of the system. to gain significance as a trading nation, the strengthening of commercial facilities, including e - commerce, is pivotal to the process. while the reality of the internet boom in the nineties brought many e - commerce proponents to revalidate their expectations, the internet provides us with an outreach, other than wireless technology, that surpasses any other known media. as a result e - commerce through the internet has been gaining significance and its potential should not be discounted. in meeting this trend, the fpx is indeed a welcome development as a payment system that leverages on banking institutions ’ internet banking services to provide on - line assurance of payments, enables payment references to accompany payments to facilitate reconciliation of transactions, and provides an efficient and cost - effective settlement mechanism. the system is intended to support the various initiatives of the private sector and the government in e - commerce, through the use of an industry - wide payment platform that would have a more comprehensive out - reach to users, compared to the existing bank - centric models. it is our hope that the fpx would facilitate e - commerce transactions and encourage businesses to undertake process re - engineering to reach out to wider markets, facilitate end - to - end e - commerce transaction flows and reduce operating costs through the use of modern day technology. ladies and gentlemen, the payment system landscape is continuing to evolve - shaped for the most part by the availability of various electronic payment infrastructures and the consumers ’ adoption pattern. it is noted, however, that while a vast array of electronic payment systems and instruments have been introduced against a background of more flexible regulatory policies and advancements in technology, the use of cheques remains pervasive in malaysia. more than 90 % of the non - cash retail payments in malaysia are made by way of issuing cheques, albeit at a slower average annual growth rate of 2 % in the recent two years, compared to the use of the inter - bank giro which has increased at the rate of 197 %. in most developed countries, the use of cheques has declined to negligible levels compared to electronic payments. these trends underpin the need for the banking institutions

abss ) in summer 2003, and the total amount of abss purchased to date has reached around 1. 5 trillion yen. in addition, in may 2004, with a view to enhancing the liquidity of japanese government securities ( jgs ) markets, the bank introduced a facility which temporarily provides the markets, as a secondary source, with jgss held by the bank when market participants experience difficulties in securing specific issues. the bank has been making a wide range of efforts to improve the infrastructure of financial markets and will continue to do so. iii. purchases of stocks held by commercial banks the bank had been purchasing stocks held by commercial banks since november 2002 to reduce the risk that stock price fluctuations might impact negatively upon the business management of individual financial institutions, potentially resulting in instability of the financial system as a whole. this program was wound up at the end of september 2004. the accumulated total of stocks purchased by the bank amounted to 2, 018. 0 billion yen. conclusion japan ’ s economy is expected to continue recovering with the ongoing expansion of overseas economies. to ensure that this recovery will become sustainable and to overcome deflation, the bank considers it essential that a wide range of economic entities continue to make efforts to revitalize the economy. the bank is determined to firmly support japan ’ s economy from the financial side by maintaining monetary easing with the commitment based on the cpi even in a situation where the economy continues to recover.