a full range of financing options to entrepreneurs is a key element in the mobilization of the region ’ s rich reservoir of savings to finance regional investments. another contribution that can be made by exchanges is enhanced transparency. in some cases, investors are said to be discouraged from investing in the emerging asian market, partly because transparency is so low. with their transparent trading systems, which i have just mentioned, exchanges may help overcome this problem. finally, exchanges could be linked across borders. such linkages would create additional efficiency. in the context of emerging asia, it is important to strengthen the intra - regional as well as extra - regional linkages between exchanges. listing of overseas assets, cross - listing of products and trading links between exchanges can all be designed to enhance intra - regional capital flows. i hope the distinguished leaders of established exchanges assembled here today would assist their emerging asian colleagues to achieve these goals. concluding remarks central banks operate in the markets to achieve its policy goals. as a result, the effectiveness of monetary policy depends on the sound development of financial markets. in this context, central banks have more than a passing interest in enhancing market infrastructure. exchanges are important building blocks of this infrastructure. i should stress that in a globalizing world supported by information technology, the certainty of transactions is a crucial factor for sound development of the financial system. central banks provide certainty through the finality of payments effected through their accounts. exchanges provide certainty through its settlement arrangements. in light of these common roles, i believe that we can cooperate in many ways to enhance the efficiency and soundness of the financial system. i look forward to working together with you in this regard. thank you for your kind attention, and good evening.

international financial system and the global economy? large imbalances are worrisome, because imbalances cannot grow forever. in fact, the imbalances we saw in the middle of the 1980s led to a rather painful correction of the dollar. as one accumulates more dollars, he or she would begin to worry about the danger of putting all his or her eggs in one basket. alternatives are there. it can be the euro, the yen or any other currency or a physical asset. if sentiment shifts suddenly in such an environment, there would be a rush to convert dollars into alternative assets. with the large accumulation of deficits to start with, the resulting flows could be quite large. they might be of a magnitude that could impair the smooth functioning of the international financial system. though unlikely, that is still a risk we must not ignore. in order to reduce such risks, we must think about how to adjust the imbalances to more comfortable and manageable levels. policy makers cannot adopt benign neglect in this context. i believe many things are best left to the market and the government should keep out of its way. we cannot, however, always say that the market would take care of itself. if left to the market, there is a risk, however remote, of a sudden shift in sentiment over the dollar. policy makers must reassure the market that they are not letting imbalances get out of hand. we need to have a good mix of policies. to begin with, we need to ensure flexibility in the financial system and the economy. in many cases, unleashing market forces is a key to efficient adjustment, and flexibility is essential to the financial system and the economy to withstand shocks arising from adjustments. beyond this, there are basically two routes to reach a level of imbalances that would be more comfortable and manageable in the long run : realigning exchange rates and rethinking policies that influence absorption in economies. adjusting imbalances entirely through exchange rate realignments is neither practical nor desirable. meanwhile, policy choices can influence absorption. if dissavings by the government are resulting in current account deficits, consolidation of fiscal expenditure would be necessary. governments of deficit - running economies might also review any policies that are discouraging private savings or adopt policies that encourage private savings. surplus - running economies can adopt policies to encourage domestic absorption. for example, enhancing confidence in social security systems would persuade households to avoid excessive savings. it is responsibility