A significant step forward came last month when our respective Trade Ministers announced a target for bilateral trade of USD30 billion in the coming years. This is a doubling of USD13.8 billion recorded in 2016. I strongly believe that this target is very much achievable and with the closer banking relationship our trade will further flourish. Reflecting on our journey towards ASEAN integration Our partnership in ASEAN marks another integral part of our long standing and deep relationship. There is always the risk that many may take ASEAN integration for granted. If we reflect closely on our journey and how far we have come, is not by mere coincidence. It is a culmination of the collective vision, commitment and conviction to realise the benefits from deeper integration. Where we stand today is the true embodiment of the spirit of ASEAN of mutual trust and close cooperation. We continue to believe that this is the path forward for our region, and one that requires us to further deepen our strong ties to meet the challenges of the future. This occasion is also a testament to the leadership of Indonesia and Malaysia and the excellent working relationship between the two countries. It gives me great pleasure and satisfaction to see many familiar faces today who have been instrumental in realising this efforts, especially Pak Muliaman and Pak Wimboh. For those who are not aware, we go back a long way.
At the aggregate level, most observers – including the Banque de France – would point to a prolonged period of excessive risk taking in credit markets fueled by liquidity expansion at the world level. This was most apparent in the strong developments of LBOs, mostly financed through leveraged (i.e. with weak covenants) loans. According to this interpretation, we may be witnessing the burst of a credit bubble. But there is also a deeper, more structural, element to the current turmoil. This crisis is the first in a disintermediated credit world. While, previously, loans were originated by banks, kept on their balance-sheet and monitored for the entire life of the loan, the process is to a large extent dissociated today: the loan is originated by a first entity, then bundled together with other loans as a structured product by another entity, then sold to final investors.