link between banks and sovereigns by bringing banking supervision and crisis management to the federal level. with the banking union, banks will be considered as euro area institutions over and above their nationality ; it will ensure that credit conditions in the euro area will not depend on where you are but on who you are, which is what should be expected of an efficient financial market. • it allows re - integration of the european banking system. a supra - national supervisor is in fact better placed to assess the risks of cross - border activities and therefore to protect and encourage such activities ; it is not subject to national biases that can lead to the temptation of economic introversion. it is therefore more credible and strengthens stability and confidence in the area ; • moreover, it restores the full efficacy of monetary policy. if our monetary policy impulses are not transmitted uniformly to all of the area ’ s countries because of the bank - sovereign link, it undermines the very foundation of europe ’ s monetary union ; remember that three quarters of the financing of the euro area ’ s economy consists of bank loans. by breaking this link, a banking union would restore the federal dimension of monetary policy. today the first pillar of the banking union is being constructed : the single supervisory mechanism. we are currently working on legal issues, on identifying systemically important banks within the euro area, on the supervisory model, on the future data reporting and, of course, on the asset quality review that will be undertaken before we take on the responsibility of supervision. the governance structure we have adopted will guarantee that, while the governing council will keep the decision power, there will be no conflict of interest between monetary policy and banking supervision. on the contrary, more consistent supervision across the euro area should allow for the early detection of potential risks and imbalances and, ultimately, improve the transmission of monetary policy. this is a fundamental first step and its rapid implementation will be a major success for the euro area. but, alone, it cannot achieve the objectives of a banking union. that is why we must rapidly construct its two other pillars : a supranational bank resolution authority and a unified deposit insurance system. the banking union will deliver a higher level of structural coherence to the euro area ’ s financial system, which has already been considerably strengthened since 2008 : banks ’ capital levels have been substantially consolidated, certain activities have been streamlined and the most stressed banks have been restructured. recent numbers show major advances for european banks in

facilitated the trade in goods from the east to the west, we can now envisage the new silk road that facilitates financial flows across borders between the east and west. as regional financial integration intensifies, it will be a route that will facilitate this process. the previous trade linkages between the middle east and asian regions also has potential to strengthen, being the two of the fastest growing regions in the global economy. while the world trade has on the average expanded by 9 percent over the period 2002 - 2006, asia's trade with the middle east has increased on the average by 30 percent. in 2006 alone, mega transactions involving corporate acquisitions and real estate purchases from the gulf to asia, are estimated to total more than usd18 billion. going forward, the value of such investments are expected to increase. over the next five years, it is estimated that asia will need usd1 trillion in terms of infrastructure investment and is in search of new partnerships and strategic investors to co - invest in these undertakings. this trend would benefit the economic regions with high savings and surpluses such as asia and the middle east because it would promote intermediation of a part of the surplus funds in the region to be channelled to productive investments in the region. several financial centres in the west, middle east and asia are now introducing islamic finance as an integral part of their financial markets to offer the wide range of financial products and services. this trend is envisaged to stretch the new silk road from east asia and middle east and extend to europe and the rest of the world. indeed, we are already seeing the participation of global investors and the international financial community. the malaysian experience let me share with you malaysia's experience in developing on islamic financial system in a highly liberalised environment. malaysia has developed a comprehensive islamic financial system that includes the banking and takaful industries, and the islamic money and capital markets a€ “ a matrix which mutually reinforces the integrity and stability of the islamic financial system. significant progress has in particular, been achieved, in the development of the malaysian sukuk, or islamic bond market. the malaysian sukuk market has now evolved into the world's largest islamic bond market. in 2007, malaysia accounted for about two third of the global sukuk outstanding amounting to about usd47 billion. in 2002, the government of malaysia issued the first global sovereign sukuk. with this issuance, it became an international benchmark for the issuance of global