the transition period, and the need to consider how the national implementation of the global standards should reflect domestic experiences and circumstances. third is the high priority placed on the pursuit of a balanced and equitable growth through the financial inclusion agenda as a key component of asia ’ s overall strategy for sustaining medium and long - term economic progress. at its core, the financial inclusion agenda seeks to empower all individuals, irrespective of income level, economic activity or geography, to have the means and opportunity to undertake financial transactions, generate income, accumulate assets and to financially protect themselves against unexpected adverse events. countries in this region have been active in pioneering sustainable financial inclusion tools and models. due in large part to a strong public policy focus on promoting an inclusive financial sector, the financial industry in asia is also more attuned to financial inclusion objectives in their business outlook. this can be seen from recent evidence of financial institutions in the region that have successfully adopted “ double bottom line ” strategies that combine enhanced financial access goals with profitability, thus enabling the financial inclusion agenda to be achieved in a responsible and sustainable manner. institutions in several parts of asia have been effective in utilising innovative means of outreach to overcome geographical and cost barriers in delivering essential financial services such as microcredit, affordable insurance, avenues for savings, and accessible payments and remittance services. governments in the region continue with measures to bridge the gap with the necessary financial infrastructure, developing rules for orderly and responsible business conduct, and catalysing the volume of financial transactions by channelling social transfers, wages or pensions through the formal financial system. such advancements by the region in financial inclusion contribute towards eradicating poverty and uplifting living standards. as growth in the region continues, it will become even more important to ensure that such growth does not further widen the social divide and disenfranchise those who remain excluded from its benefits. an inclusive growth process in the region, which draws marginalised segments into the formal financial system and that empowers small businesses and consumers already within the financial system to better utilise financial services, will enhance the contribution of this segment of the population to the economic growth process. fourth, is the greater regional economic and financial integration in asia which has been supported by strengthened institutional frameworks for safeguarding regional financial stability and a deepening of regional cooperation. with greater cross - regional participation in the respective domestic financial systems, efforts have intensified to build a strong foundation that will promote regional stability alongside the

measures implemented to strengthen domestic frameworks. these include wide ranging measures to develop regional financial markets, to improve liquidity management across borders, to strengthen cooperation networks for the supervision of regionally - active financial institutions and to establish regional infrastructure to enhance the efficiency and lower the risks associated with cross - border payments and settlements. regional arrangements between central banks and supervisory authorities have also been significantly strengthened to actively share information on emerging risks to regional stability and where necessary to coordinate regional responses. an important part of this includes the ongoing work to enhance the frameworks for crisis management including the orderly resolution of financial institutions with significant cross - border operations. within the asean region, measures are currently being pursued to promote greater consistency in the adoption of regulatory and supervisory standards in anticipation of a larger role for asean banks in driving regional integration as part of the broader agenda to realise an asean economic community by 2015. collectively, these arrangements aim to ensure that the expansion of bis central bankers ’ speeches cross - border financial linkages takes place within a framework and process that adequately mitigates systemic risk across borders. fifth, central banks and regulatory authorities in most emerging economies in asia have the broader mandate that includes a focus on the development of the financial sector as a means not only to enhance the growth and development potential, but also to reinforce a strong foundation for financial stability. in malaysia, the development and reform of the financial sector in the decade that followed the asian financial crisis has not only developed the financial sector to better serve the malaysian economy, but it has also better positioned financial institutions to withstand the destabilising episodes emanating from external shocks. this has included strengthening financial intermediaries, not only in terms of scale but also in their financial positions, risk management and governance practices. this has contributed to more efficient financial intermediation while improving access to financing, particularly for small and medium scale businesses. efforts to develop a vibrant capital market have meanwhile opened up alternative channels for financing, while mitigating concentration risk in the financial system and enhancing its ability to absorb large and volatile cross - border capital flows. these factors will place asia on a firm foundation to achieve its growth and development goals. while public policy clearly has an important role, it is as important for the financial industry to align itself with the desired outcomes of sustainable growth within a longer term horizon. this will involve a number of important considerations for financial institutions, including the rethinking of business models in the light of a re - assessment of risk and return expectations