The ASEAN Banking Integration Framework (ABIF), is now in its final stages of development. The ultimate objective of this initiative is to enable greater presence of ASEAN financial institutions to operate in the region to facilitate greater intra regional trade and investment activities. Businesses will thus stand to gain by having improved access to a larger and a more secure source of financing for such cross border trade and investment activities. Headway has also been made in developing the capital markets in the region and to move towards greater financial integration of the markets. Over the recent decade, the ASEAN bond market has more than tripled in size to USD1.1 trillion. ASEAN Exchanges, a collaboration of seven stock exchanges within the region, was launched in 2011 to drive cross-border collaboration, streamline access, create ASEAN-centric products, and implement targeted promotional initiatives. In addition, the listing of ASEAN indices with the Financial Times and London Stock Exchange (FTSE) in 2005 has also enhanced the market visibility of the ASEAN exchanges, which represent close to 95% of the investable market capitalisation in the region and which has a combined market capitalisation of approximately USD2.9 trillion. This facilitates businesses in cross-listings between the exchanges and in raising funds given this common platform for ASEAN businesses. Finally, ASEAN Central Banks and Monetary Authorities have long been involved in various regional cooperation initiatives to develop efficient, secure and reliable payment and settlement systems.
Beyond this, we will probably continue to raise rates, but we may do so in a more flexible and possibly less rapid manner - "jumbo" rate hikes will not become a new habit. Since July, we have been making decisions on a meeting-by-meeting basis. A favourable condition to interrupt rate hikes would be clear signs of a turnaround in the core inflation trend, i.e. excluding energy and food. One word about the comparison with the US: on both sides of the Atlantic, inflation is too high. But it doesn't have the same nature: the energy component is higher in Europe; the demand one higher in the US, where the labour market is also tighter. Hence we don't need to raise rates at the same pace, nor to the same level. That said, signs of peaking inflation – headline and core – in the US last Thursday are good news for everyone, as the US has been ahead of the global inflation cycle, and the US monetary tightening has had strong spill overs on the rest of the world through the high level of the dollar. Central banks are thus playing their part in the fight against inflation, but let us not forget structural economic measures. "Beefing up" our productive capacity also has the potential to help reduce inflation in the longer term, in addition to increasing potential growth. This holds especially true when it comes to our ecological transformation, in order to decrease our dependency on fossil fuels.