asian economies. co - operation has been in the area of enhanced regional surveillance, standardisation of systems and documentation, regional capacity building programmes and regional swap facilities. this strengthened co - operation enhances the foundations for realising the potential that the region possesses. ladies and gentlemen, in a world where uncertainty has become a permanent feature of the environment, the challenge before us is to be able to increase our tolerance level to the shocks and changes that may occur. building tolerance levels involves enhancing our capacity, strength and resilience to cope with the changed environment. precautionary measures can be taken to reduce the risks and vulnerabilities. despite uncertainties and unstable conditions, initiatives can be taken to achieve sustainable performance. in the current environment, the pressure is for greater market orientation and liberalisation on the premise that competition would lead to pricing that would facilitate a more efficient allocation of resources. this, however, is not the only objective that is to be achieved. consideration needs to be given to the objective of promoting growth, financial stability and social stability. some of these objectives are conflicting and need to be carefully balanced, taking into account the trade offs. increasing the tolerance level amidst a volatile environment the pursuit of efficiency and competition has to be balanced with the objective of attaining soundness and preserving stability. given the unique characteristics and peculiarities of emerging economies, the transition to a more liberalised environment would demand appropriate sequencing of measures to be taken. factors commonly ascribed as key in achieving and safeguarding financial stability include sound macro - economic management, effective regulatory and supervisory framework, greater transparency and disclosure of information, increased market discipline, dynamic accounting and auditing standards as well as the existence of strong corporate governance. for emerging economies, the requirements extend beyond these factors to include other areas, namely the development of the necessary financial infrastructure that supports a strong foundation that is able to provide depth and breadth to the financial system and economy as a whole. of equal importance, is the need to develop alternative sources of funding, such as the equity and bond markets, not simply to ensure a more balanced allocation of financial and economic resources within an economy but more importantly to attain greater diversification within the financial system, hence ensuring the efficient distribution of risks within the system. in addition, the integrity and credibility of the payments system and effectiveness of regulation and supervision would require the support of a comprehensive set of legislations, one that would need to evolve in tandem with the developments that are taking place in the financial landscape. it is

zeti akhtar aziz : emerging trends in asia and their implications for malaysia keynote address by dr zeti akhtar aziz, governor of the central bank of malaysia, at the the asian banker summit 2003, “ post - asian financial crisis : securing financial stability ”, kuala lumpur, 16 september 2003. * * * ladies and gentlemen as we advance into the 21st century, sustainable performance demands resilience to the economic cycle, resilience to unstable market conditions and overall resilience in an environment of rapid change. to prosper in this new environment, we need to have the capacity to withstand the entire business cycle, to survive the increased volatility in the financial markets and to have the capacity and agility to adjust to the changes taking place. sustainable performance is key in achieving long - term relevance and success. to achieve this, it is important to look beyond the short - term perspective and build the capacity and the resilience to meet the new challenges that are emerging in this new environment. it is my honour and pleasure to be invited to this asian banker ’ s summit 2003. let me join the organisers in welcoming you to kuala lumpur. it was exactly five years since the countries in east asia have emerged from the financial crisis, when stability in the financial markets was restored and the economic recovery resumed. asia has now emerged as the fastest growing region. despite a more difficult external environment, the asian region has demonstrated resilience. the new trends emerging in asia point to significant transformation taking place in the economies in asia. these trends have contributed toward increasing the growth prospects for the region. today, my remarks will focus on these fundamental trends that have emerged in asia and the promise that they hold for the prospects for this region. i would also like to take this opportunity to share with you the implications of these trends for malaysia and the strategies and responses that we have adopted in addressing the challenges that we are faced with in this more difficult environment. emerging trends in asia : economic transformation in asia asia ’ s resilience can be traced to several important trends which have contributed to the economic and financial transformation of the region. the dynamic transformations taking place in our region are significant and varied. the region accounts for more than half the world ’ s population and 23 % of the world economy. the growth for the region as a whole is forecast to be one and half times higher than the global average. of significance, is the trend towards greater integration in the region on several fronts