The recovery in global economic activity that started on the back of the historically large fiscal stimulus packages launched by advanced economies contributed to the improvement of global risk perceptions and normalization of financial markets. Readings on economic activity and global financial system in the first quarter of 2010 point out that the recovery is ongoing. However, soaring budget deficits – especially in advanced economies – reach levels of concern, problems across credit markets linger, and unemployment rates continue to remain elevated, all suggesting that it would take a long time for the global economic problems to be resolved permanently. Moreover, ongoing uncertainties regarding the exit strategies from unconventional monetary and fiscal measures continue to pose risks on the sustainability of the recovery. 5. It is observed that advanced and emerging market economies started to recover as of the second quarter of 2009, mainly on the back of expansionary monetary and fiscal policies implemented worldwide and on inventory accumulation mostly in advanced economies. Despite positive signs of recovery in the global economy, high unemployment rates in advanced countries, primarily in the USA and Euro Area, still persist. With global economic growth mainly based on expansionary monetary and fiscal policies temporary in nature and the fact that unemployment rates remain currently high and oil prices re-started rallying, the global economic recovery will likely to be slow and protracted.
It is my pleasure to welcome you to Malaysia for this 13th Annual Conference that is being organised by the Fixed Income, Money Market and Derivatives Association of India and the Primary Dealers Association of India. We are most pleased to host this conference here in Kuala Lumpur. The theme of this conference, “Asian Money, Bonds and Derivatives in the New Global Economy”, is a relevant topic to be discussed in this period of transition to an increasingly multipolar world, in which Asia together with other emerging regions will have an increasingly more important role. Asia’s potential and regional integration While this recent global financial crisis has provided us with challenges, it has also seen the resilience of Asia in weathering a number of major shocks in the international financial markets. Asian financial systems have demonstrated the capacity to continue to function and to meet the demands of its significant investment requirements. Moreover, the trend towards greater regional financial integration will provide for a more effective and efficient channeling of the sizeable surplus funds to such activities within the region. This increased intra-regional economic and financial activities is already taking place. The economic integration is supported by the strong demand from the growing middle class Asian population, which is projected to reach 3.3 billion by 2030. The intra-regional trade in Asia now represents more than 50 percent of total trade in the region, increasing from 32 percent in 1995. Intra-regional investment activities have also been on a rising trend.