its market size and the abundance of natural resources. asean ’ s proximity to major markets such as china and india reinforces its status as an important global value chain player and a preferred production base for many multinational corporations. in 2010, foreign direct investments into the region registered an impressive growth of more than 100 % from the preceding year. the strong ties between the asean economies are also underpinned by the continued growth of intra - regional trade, which now accounts for 25 % of asean ’ s total trade. going forward, this trend is set to continue. the growing consumer market and the expansion of production networks in asia will continue to be a major driving force in promoting this increased intraregional trade. in addition, the measures taken to boost investment, as well as infrastructure development will reinforce this trend. regional integration : the asean model we stand today on the brink of very exciting times for asean as we draw closer to the vision of an asean economic community in 2015. if the aec vision was aspirational when it was first conceived, it is now clearly an imperative. this has prompted an increased momentum in efforts to realise an integrated asean economic community, notably by achieving increased financial integration, higher levels of intra - regional trade and greater two - way cross - border investment flows. like most regional blocs, the integration process for asean seeks to promote greater regional connectivity which will in turn expand and reinforce the region ’ s growth potential. the region ’ s integration process however, has followed its own path. given the diverse nature of our economies within asean, the integration model adopted for asean has been one that focuses on ( i ) strengthening preconditions through collective capacity building to promote more open market access among the economies in asean ; ( ii ) progressively reducing barriers to facilitate cross - border trade ; ( iii ) developing the market infrastructure and enabling environment to promote efficient and effective intermediation of cross - border financial flows ; and ( iv ) establishing the appropriate safeguards for financial system stability. progressive financial integration through this asean model has been a strategy that has augured well for the region, allowing for the greater integration at a pace that is based on readiness and strength of the financial sector. since 2007, asean has achieved considerable progress in its efforts to deepen financial integration. asean has undertaken gradual and sequenced liberalisation of identified financial services sub - sectors through the asean framework agreement on services ( afas ). five rounds of negotiations have been concluded, with the sixth round of negotiations expected to

tangible link to the people – making it a key branding tool. trust and confidence in the central bank are crucial for us to effectively deliver our mandate. this dynamic is augmented in jurisdictions like malaysia, where the central bank is responsible for promoting both monetary and financial stability. if we were to go completely cashless, central banks might lose this traditional means of maintaining a strong brand. the policy calibration in malaysia at present, malaysians still transact mostly via cash. while malaysia endeavours to accelerate the migration to e - payments, we see that cash is necessary and will always be in demand. although e - payments per capita nearly doubled in the past five years, the ratio of cash in circulation to gdp rose by 17 %. we are therefore committed to ongoing enhancements in the way we manage cash and its circulation. to this end, we have invested in a new automated cash centre, which most of you will be visiting as part of this conference. we are also in the process of building a new modern mint. 3 / 4 bis central bankers'speeches the next page for physical currency as we consider the future of physical currency, it is crucial that we bear in mind the sensitivities of the users of cash. we live in an increasingly aware and empowered generation. for this reason, issues of environmental footprint cannot be an afterthought. similarly, banknote production must carefully consider the public interest and legitimate ethical concerns across society – including special interest groups. in addition, the industry must be run with manifest integrity. the banknote ethics initiative is a welcome step forward in this regard. the industry will also benefit from continued and candid engagement with central banks, who understand the nuances of their respective populations. we also cannot ignore the fact that the idea of a cashless utopia is becoming more popular. this will be a real challenge for us – as we hope to see physical currency remain relevant. the sustainability and competitiveness of this industry depends on being able to deliver on the three considerations i mentioned earlier – namely, ensuring that cash continues to be secure, socially and economically cost - effective, and enabling for the promotion of monetary and financial stability. with that, i would like to wish all of you a productive conference as you discuss these important issues in the coming days. have a pleasant stay in malaysia, enjoy yourselves, and please do not hesitate to indulge in some shopping – we do accept cash! 4 / 4 bis central bankers'speeches