together, increased competition and rapid technological developments led to a fall in prices with regard to both telephony and internet connection. the lower prices for users have probably contributed to the widespread use of the internet in sweden. the new technology was perhaps available in all essentials to all developed countries, but the views on deregulation varied. only eight of the 25 member countries, today 30, of the oecd allowed competition in the telecommunications market, while the remaining countries retained a monopoly. there is also a clear connection between use of the internet and competition. competition is allowed in the telecommunications markets of six of the nine countries with the highest internet usage. these countries have also experiences an increase in access to the internet six times as fast as countries that have a monopoly market. another reason for the rapid development in internet usage in sweden could be connected to the structure of the swedish banking system. the banking sector in sweden is dominated by a small number of large operators, all listed on the stock market and with a strong incentive to rationalise their operations. they have also had the resources to rapidly implement new technology. the same applies in the netherlands, which has a similar bank structure. the more internet services a bank can offer its customers, and the better they are, the more customers will use the internet bank and the cheaper the administration costs will be for the bank. if we compare this with the usa, which has a bank market consisting of a large number of small operators, developments there have not been anything like as rapid. only a few us banks offer advanced internet services. the range of services is also much smaller than in sweden. there is a lot to be gained by making payments via the internet, both for the banks and for their customers. sweden, like the other nordic countries, has a giro - based payment system. giro payments corresponded to more than 95 per cent of the total value of payments made in 2000 and to over 70 per cent of the number of transactions. giro instruments are traditionally paper - based. however, the internet enables the paper - based giro system to be speeded up by making it paperless. preliminary figures indicate that approximately 130 million giro payments were made over the internet during 2001. between 1998 and 2000 the number of giro payments initiated over the internet increased by a good 890 per cent. today all swedish banks offer internet banks with rapidly growing range of services. studies also indicate that sweden is way ahead with regard to utilisation of internet services. at the end

ourselves in the unenviable position of holding a substantial part of our savings in the financial liabilities of an economy that does not save, fearing that a diversification of a small part of such holdings might lead to a sharp fall in the value of the rest, thus shooting ourselves in the foot. we also find ourselves somewhat stuck with recycling a large part of our savings through the developed markets back into the region in a much more volatile form, occasionally creating havoc in our monetary and financial systems. 1 the challenge for asia then, according to its own financial leaders, is to develop a financial system which can allocate local savings to local needs more directly, can be resilient to the risks associated with international capital flows, and be somewhat less dependent on banks as a funding channel. this is no small task. thus far, apart from managing the fall - out from the crisis, efforts have been made to strengthen banking systems. a good deal of work has also occurred to improve capital markets, particularly bond markets. one of the key breakthroughs will be when asian governments and corporates can borrow as needed in open markets, in their own currency and at an acceptable price, leaving any currency risk to others willing to bear it – like foreign investors. australian borrowers have been in this happy position for a long time now, like their counterparts in other advanced economies. for emerging market countries to enjoy the same opportunity would be a major improvement on the past. for this to occur, there needs to be a confluence of high - quality issuers, informed investors, and wellfunctioning markets to allow hedging and swaps. as asian authorities seek to facilitate the remarks made at the recent global bond summit, hong kong. available at http : / / www. info. gov. hk / hkma / eng / speeches / speechs / joseph / 20051115e1. htm development of these markets by removing impediments, and the occasional modest official transaction, opportunities will presumably exist for capable market players in australasia to play a role. opportunities might also lie, perhaps over a longer horizon, in the area of household finance, since the number of middle - income asian households is rising quickly, and their income growth is rapid. it could be anticipated that their demand for more sophisticated asset and liability products will correspondingly grow. one would think that australasian institutions would be well placed, given the skills acquired in their home markets, to take part in