the bond market should also be looked at to ensure a balanced development of financial infrastructure in asia. the first is human resource : that is the need to build a steady supply of high quality financial personnel to serve the asian financial markets. in the short term, this issue can be partly addressed by promoting a greater role of asian financial institutions in cross - border transactions or businesses within the asian market. the expanded role of asian financial institutions will enhance the experience of asian financial firms in cross - border transactions and help transfer financial skills and technology among market participants in the region. for the long term, we should be thinking of establishing a regional finance institute that aims specifically to train and develop financial personnel for the asian market. to me, this type of initiative looks practical and is economically feasible because asia ’ s large domestic market will always call for substantial demand for trained financial personnel. such an institute will also play an important role in 2 / 3 supporting the development of financial markets in asia, as well as producing the next generation of asian financiers. the second area that should also be considered is the harmonization and streamlining of the existing rules and regulations. this is especially important for cross - - border capital movements so that the region ’ s financial resources can flow more smoothly between economies in the region. streamlining rules and regulations will help reduce unnecessary barriers, and through lower transaction costs, will allow a more efficient allocation of resources. for example, measures to protect domestic markets from outside competition may need to be relaxed. along the same line, there is room to harmonize taxes on capital market transactions so that tax implications are neutral and do not act as a constraint to efficient resource allocation. ladies and gentlemen, my last thought for today is on ways we should proceed to expedite the pace of regional financial cooperation. at this juncture, there is no disagreement that we all would like to see more and faster progress on regional financial cooperation. and, to ensure its progress, we have seen policy makers in asia ready and prepared to take bold and important policy actions. my view is also the same. i also want to see a faster pace of development rather than a slow one. but one also needs to underscore that, to achieve long term sustainability and continuity, the process of development needs to be market driven rather than policy driven. this is important for ensuring that resources would be allocated efficiently and that the direction of development would be in line with the needs of markets, which reflect private sector ’ s

awareness and the determination of the authorities concerned to make them happen. but notwithstanding the progress made, more can definitely be done to bring regional financial cooperation to a level that is on par with the region ’ s economic and financial potentials. this is to say that although the economies of east asia have recovered and are on the path of sustained growth, regional financial cooperation needs to continue and should substantially move forward. the rationale for this is clear : first, financial cooperation will lead to a faster pace and a more comprehensive development of the region ’ s financial markets. such development is crucial for sustaining the momentum of intra - regional trade and investment, a factor that has been instrumental for the region ’ s recent economic success. going forward, this momentum of intra regional trade and investment has a potential to become a major source of growth for the region, through the promotion the region ’ s domestic demand. second, with the globalized flows of finance and capital, maintaining financial markets stability is a key condition for preserving macroeconomic stability. to achieve this, in addition to the pursuance of sound economic and financial policies, the asian region also needs to have its own financial arrangement. such an arrangement will help ensure an orderly and stable financial environment such that any emerging vulnerabilities would not pose serious risks to the region ’ s financial markets and 1 / 3 economies. important in this context, i believe, is for the region to have its own financing facility that draws on the region ’ s own financial strength and resources. with such a facility, there would be greater confidence amongst policy makers in the region that we do have the capability and the capacity to look after our markets and economies if there were to be a major financial distress. on the basis of this rationale, it is my view that regional financial cooperation should move progressively forward, with the process being further strengthened and the work becoming more focused, aimed at producing more tangible results. let me now spare with you my thoughts on the way forward. on this issue, i should say at the outset that the points i am going to make here are not new, and some of them are probably already familiar to you. the first is the chiang mai initiative or cmi. cmi was created conceptually as a short - term financing facility to help participating members manage their balance of payments shortfalls at a time of financial distress. although the economies of east asia are now much stronger than five years ago, cmi should continue to remain a key pillar of