This focusses on ensuring the robustness and solvency of banks individually without evaluating their potential interconnectedness with other banks and markets, and their exposure to common economic factors of risk. Something particularly worrying is the fact that banks fully complied with solvency rules during the build-up of our real estate bubble. Although the rules have changed so as to correct and avoid specific incentives, it cannot be ruled out that structural imbalances may accumulate again on bank balance sheets, just as they did during the pre-crisis phase. Nor can it be ruled out that assets located in segments or geographical areas may be overvalued. If we look, for example, at real estate credit, we can see that we are far from the pre-crisis situation, since new real estate credit shows much healthier loan-to-value and affordability ratios. Nor are house prices overvalued if we look at Spain as a whole. However, and I believe here that Madrid and Barcelona are similar markets, in some places prices are reaching pre-crisis levels. Consequently, and as a complement to the micro view, so-called macroprudential policy has emerged. Its aim is to boost financial stability by preventing and mitigating systemic 8/13  risks and vulnerabilities, while also assessing potential imbalances or overvaluations that may affect a specific sector in our country. In this respect, it is not only individual risks that are considered; these are assessed in an aggregate fashion. In sum, macroprudential policy complements microprudential supervision.
However, trade flows among the 13 countries, only amount to 10% of global trade, hence there’s much room for further growth especially as our countries are increasingly inter-connected. 13. We from the public sector have created financial highways to link up our vibrant economies and have found ways to finance physical roads and highways. To recapitulate my message: •  2  Financial integration within ASEAN is targeted to support the large markets of goods, services and financial products in the region. Financing economic activities of ASEAN needs not only strong but also interlinked banks and  BIS central bankers’ speeches  financial institutions. Financing opportunities grow significantly when expanding these linkages to the Plus Three countries. Firms can tap on to various modes of financing in equities and bond markets to expand their businesses to match the growing trade and investment flows. •  The other area is on infrastructure development: While the barriers of tariffs have fallen, trade among us cannot flourish if we are constantly facing infrastructural bottlenecks. The ADB has estimated that Asia has a demand for infrastructure to the tune of $ 8 trillion over ten years. This is where the Asian Infrastructure Fund and the Asian Infrastructure Investment Bank come into play to address these bottlenecks and open up vast potentials for development and trade beyond the AEC to Plus Three. Through this, a new regional logistics-based sector is about to take shape. 14.