The first is to make the size of the arrangement larger and more meaningful with respect to possible needs of members. The second is the simplicity of the activation process, especially for the first tranche. This is important for giving assurance to participating members that liquidity will be made available in a timely manner. And the third is the objective of turning CMI into a multilateral facility at a later stage. This last feature, if realized, will provide the region with its own financial arrangement that can help expand the region’s capability in safeguarding financial stability. lt goes without saying that a move to emphasize greater resource commitment by members will entail substantial strengthening in the current regional surveillance process. This is a development that we all should welcome. Strengthening the surveillance process should in fact be a key prior condition for expanding the CMI because it will help make the CMI process credible while reducing the risk of moral hazard. CMI is currently under review. I hope some of the points I have touched upon will be further explored. But whatever the outcome of the review may be, I am confident that it will signify another important step forward for regional financial cooperation. My second thought is on the region’s bond market. Economists in the region have long made known their views that Asia is a region with surplus savings, but the financial surplus of Asia has not been effectively utilize for the benefits of the economies in Asia. This is clearly a missed opportunity.
This is to say that although the economies of East Asia have recovered and are on the path of sustained growth, regional financial cooperation needs to continue and should substantially move forward. The rationale for this is clear: First, financial cooperation will lead to a faster pace and a more comprehensive development of the region’s financial markets. Such development is crucial for sustaining the momentum of intra-regional trade and investment, a factor that has been instrumental for the region’s recent economic success. Going forward, this momentum of intra regional trade and investment has a potential to become a major source of growth for the region, through the promotion the region’s domestic demand. Second, with the globalized flows of finance and capital, maintaining financial markets stability is a key condition for preserving macroeconomic stability. To achieve this, in addition to the pursuance of sound economic and financial policies, the Asian region also needs to have its own financial arrangement. Such an arrangement will help ensure an orderly and stable financial environment such that any emerging vulnerabilities would not pose serious risks to the region’s financial markets and  1/3  economies. Important in this context, I believe, is for the region to have its own financing facility that draws on the region’s own financial strength and resources. With such a facility, there would be greater confidence amongst policy makers in the region that we do have the capability and the capacity to look after our markets and economies if there were to be a major financial distress.