because by international standards the regional equity and bond markets are small and fragmented. we made some headway four years ago with the chiang mai initiative ( cmi ), which saw the expansion of existing multilateral currency swap arrangements to include all 10 asean members, as well as the conclusion of 16 bilateral swap arrangements, totalling us $ 36. 5b in combined facility. when the cmi was launched in may 2001, it was agreed that finance ministers should review the initiative 3 years after implementation. so it would be timely this year, for asean finance ministers together with our “ plus - 3 ” counterparts to consider what and how the review of the cmi could be done. we should also explore further avenues of cooperation. for example, we may develop greater linkages between stock exchanges in the region, or harmonise standards and conventions so as to make it easier for investors to operate across the capital markets in the region. in such initiatives, we do not have to wait for all asean members to be ready. once two or more asean members are ready to make the move, they can work together as pathfinders for the whole region. conclusion globalisation has presented many challenges to asean, but it has also created many opportunities. integrating our economies requires hard work, political will and often, tough decisions. asean is determined to overcome the challenges, and embrace globalisation to benefit the lives of our people. governments will need to lead the way, by implementing sound policies that foster development and growth. foreign investors too will play a key role, by supporting good policies and exploiting the full potential of our markets. once the people of asean are aware of the larger challenges that the region is facing, i believe they will support the agenda for economic cooperation which will improve their lives. on this note, let me now declare the 8th asean finance ministers meeting open. i wish you meaningful and fruitful discussions.

and will take time for the demand - supply equilibrium to be established. on the asia pacific front, the asian development bank has recently announced us $ 500 million of immediate budgetary support to help countries that have been worst hit by rising food prices. with increasing food prices and high oil prices, mitigating the impact of strong inflationary pressures will remain a key priority for many asian governments. in such an environment, companies too will have to carefully manage the higher input and other costs and how much of that to pass on to consumers, to preserve your margins without losing either competitiveness or affordability. subprime crisis and asia ’ s continued push to deepen capital markets the second issue is the turmoil in global financial markets. the transmission of the crisis is a good illustration of how inter - connected financial markets are today. the problem started with us subprime mortgages, in fact a relatively small part of the us mortgage market, but it rapidly escalated into other securitized markets, to more generic debt capital instruments and eventually into the wholesale or libor money markets. from there, as central bank surveys have shown, there is now a general tightening of lending conditions to end - borrowers, which are exerting a drag on the us and western european economies. asia has felt some of the tremors of this crisis, but as yet we have been relatively unscathed. in the banking sector, a number of banks in the region wrote off losses on their us sub - prime mortgage related assets. compared to their peers in the us and europe, the impact on their balance sheets and profitability has been less severe. this can be attributed to a combination of factors. following the asian financial crisis, banks here had taken active steps to improve their credit standing by enhancing their capital base. we are also aided by the fact that we are more reliant on traditional banking rather than the capital markets for our debt financing. beyond the direct impact on banks, the general reduction in risk capital and financial deleveraging will be felt in asia, through higher costs of capital. this is the downside that many companies and investors will have to confront. on the upside, this should further spur the efforts of asian countries to make their own financial intermediation process more efficient. this can be done through a lowering of barriers to global capital and the building of channels to facilitate the growth of this capital. global investors will increasingly look to asia for investments as asia remains an attractive area for growth