as cross - border resolution of globally active financial institutions. indeed, this issue is a quite big challenge for policymakers now. third, it is also important to further promote mutual understanding of different national economies and financial structures. as i already mentioned, the resilience of asian economy played a key role in preventing global economy from falling into a deep and prolonged slump. as this fact illustrates, global economy would be more vulnerable to shock when it consists of homogeneous countries in terms of economic structure and policy framework than when it is a hybrid system embracing diversity. in spite of the development of information technology and strengthened linkages among global economy, various “ differences ” among countries and regions are likely to continue existing at least for a foreseeable but substantially - long period of time. nonetheless, creative concepts, innovations and sources of growth will emerge from new linkages between such economic diversity. since we are living in a world of diversified economies, there should also be various forms of linkages, ranging from an ultimate form of currency union to much looser ties. thus, it is important for policymakers to seek the most appropriate form and combination of linkages, taking differences in economic structures and nations ’ development stage fully into account. in addition, at the occasion of international discussions, constructive dialogue is needed to foster a mutual understanding of such differences and to learn from one another. the economies of advanced countries tend to be affected by common economic cycles, and thus, their policy discussions inevitably tend to focus on similar themes such as the “ great moderation ”. in this regard, the developments in asian and other emerging countries are adding diversity to the world economy, and their fresh viewpoints will enable policymakers to explore new frontiers of policy debates. 5. conclusion in my speech today, i have sought to explain my current thinking given the deepening linkage among asia and across the pacific. before concluding my speech, i would like to refer to one issue to which we might need to pay attention as financial linkages within this economic area continue to deepen. that is, the issue of time zone differences. bis central bankers ’ speeches you are now watching me live, with only a slight time lag as video signals are transmitted from tokyo to san francisco. that said, it is the 12th of june for me, which is tomorrow for you, and i am actually talking to you from “ the island of the day after ” over the international date line. for you, my speech is being delivered on the 11th

the development of capital markets, especially the corporate bond markets. in emerging asia, there would be huge financing needs for building social infrastructure such as public transportation, energy supply and communication networks. in view of the length of financing needs for building infrastructure as well as the risks associated with possible maturity mismatches, a well - functioning capital market, as well as credit intermediation through banks, should play an important role in such long - term domestic financing. moreover, the co - existence of different financing tools such as bank borrowing and corporate bonds could enhance the resilience of the financial systems. in this regard, asia has already taken various steps including the introduction of asian bond fund. japan ’ s possible contribution toward financial developments in asia on this front, i firmly believe that japan is able to contribute to asian financial stability as well as to the development of financial infrastructure in asia, for two reasons. first, japan ’ s financial system, on the whole, is being stable and resilient. given that japan experienced a financial crisis in 1990s, various measures have already been taken to strengthen its financial system. partly due to such efforts, japan ’ s financial system have remained mostly stable, surviving successive events such as the failures of lehman brothers and other financial institutions, the great east japan earthquake and the european debt problem. to date, internationally active japanese banks have generally set aside sufficient capital, and are in a position to contribute, as financial intermediaries, to satisfying asian needs for various financial services. second, not only for internationally active japanese banks but also for japanese non - financial firms, establishing linkages with other asian economies is now at the core of their overseas business strategies. internationally active japanese financial institutions are now allocating their resources to asian businesses as a part of their global strategies and increasing their lending in asia. they are also exploring various businesses such as m & a financing in asia. for example, japanese “ mega ” banks ’ loans to asia as a share of their total overseas loans is continuously increasing, and has now reached around 30 percent ( chart 12 ). recently, some european banks are streamlining their exposures to emerging economies, and japanese banks are filling a part of the void created by such “ deleveraging ” of european banks ( chart 13 ). such japanese banks ’ activities would certainly contribute to stable financial intermediation in asia. bis central bankers ’ speeches also for japanese non - financial firms, economic developments in asia also provide a new growth frontier. in view