Thanks, it's great to have the opportunity to wrap up the Symposium. I think there's been a lot of really good discussion about how we can work together in the region to deepen our financial links. You're all here because you know there are huge opportunities for our region to unleash the flow of capital across Asian borders. Boosting cross-border financing is critical to helping our region fund productive investment and support sustainable long-term growth. This is more important now than ever when you consider that our region is driving a greater and greater share of growth in the global economy. In fact, the expansion and integration of our regional markets was one of the key priorities in our Australia in the Asian Century White Paper. Opening up our regional capital markets will help create new and innovative funding channels for investments in our economies. We know that developing economies in particular can make huge economic gains from investments in education, skills and infrastructure as the next drivers of productivity and economic growth. Of course, it's the responsibility of governments in the region to put in place the right policy framework to help deepen our financial links. But it will take the combined efforts of both government and business to really make the most of our opportunities. It's not just about government‑to‑government links, it's also about business-to-business and people-to-people links. And that's why forums like this are so important.
As you all know, we've seen greater integration between Asian financial markets since the Asian Financial Crisis. As Asia's economies have grown larger and more complex, we've also become more integrated. The rising importance of institutional investors has also meant that financial sophistication is increasing. But I think we all agree there's still much more we need to do to develop Asia's financial markets. Most Asian funds are still intermediated through other regions despite our region's growing savings and investment opportunities. The lack of liquid and well-functioning bond markets limits the availability of long-term local currency funding for viable investment projects. A lack of diversified funding alternatives also reduces the efficiency of capital allocation, which, in turn, weighs on economic growth. There's no doubt that the region has made some good progress in liberalising domestic capital markets and market infrastructure. But it's also hard to escape the conclusion that Asia's savings are still not being invested as productively as they could be, while critical investment goes unfunded, particularly in infrastructure. Greater financial integration in Asia would not only bolster the region's economic growth, it would also reduce the region's vulnerability to global shocks. And building up our regional resilience is all the more important as spotfires continue to burn in Europe and the United States.
So what does Australia bring to the table? For starters, we've already developed one of the strongest, safest and most dynamic financial systems in the world. We have a well-funded, highly capitalised banking system and a massive superannuation savings pool that's still growing. We've worked hard to get here and the hard work continues. We got ahead of the curve before the global financial crisis by putting in place financial sector policies we needed to keep our system strong. Together with our regulators' vigilance and our decisive action in the darkest days of the GFC, this saw our $3 trillion banking system come through its biggest stress-test in 80 years with flying colours. Australia is now well on-track to implement its global reform obligations through the G20, the Basel Committee and the Financial Stability Board. A critical part of this has been the introduction of a legislative framework for the clearing and settlement for sophisticated OTC derivatives. The government welcomes competition in this market, including a strong domestic solution.
Our banks, among only a handful in the world to have credit ratings in the AA band, are well-placed to meet the Basel III requirements:
- they are even better capitalised, with more high-quality capital;
- they've got longer-term funding profiles and more stable deposits;
- and they're well-funded for a long period ahead, without material exposures to troubled European nations or lenders.
The resilience of our economy against a backdrop of global volatility has seen Australia become part of many diversified investment portfolios. At 4.3 per cent of GDP, Australia's in-flow of foreign direct investment is more than twice the OECD average. Our massive super savings pool is also one of our greatest strength. It's already the fourth-largest superannuation savings pool in the world: at nearly $1.5 trillion, it's around the same size as our economy. To build on that, we're boosting superannuation contributions from 9 to 12 per cent, which will add another $500 billion to Australia's national superannuation saving pool by 2037. By that time, Australia's superannuation savings will have grown to around $6 trillion. We're doing the hard yards to secure our status as one of the most attractive investment destinations in the world. But there is more to do to boost investment right across our region.
Because we know that making the right investments now will mean huge pay-offs for long-term growth and job creation. It starts with creating the right investment conditions. But it also means picking the right projects. That's why, a few years ago, we established Infrastructure Australia:to coordinate and prioritise a pipeline of critical infrastructure projects based on serious cost-benefit analyses. We are already seeing real dividends through investment in the 'right projects', as well as better infrastructure planning and decision-making across all levels of government. Most importantly, the global investment community is seeing greater transparency around investment opportunities in Australia. I think Infrastructure Australia is a great model for rigorous analysis of investment opportunities in the region. I know you've also been talking about the Asia Region Funds Passport – which Australia is a big supporter of - as another important step towards addressing one of the region's barriers to the flow of funds. By allowing cross-border marketing of funds between countries that agree to a common framework, the passport will also, over time, lead to greater integration of capital markets in the region. I think we all agree the Passport is not only a great opportunity for the whole region to enhance its funds management industries, but also to provide greater choice and diversity for investors across the region. Here in Australia, we're also big supporters of China's efforts to internationalise the RMB. We've taken a range of steps to support China's efforts on this front, which we see as an important part of its progress towards a freely-floating exchange rate and full capital account convertibility. Our Reserve Bank established an RMB swap line of up to A$30 billion with the People's Bank of China to in 2012, the fourth largest bilateral currency swap signed by China since 2009. And customers of Australian and foreign banks can already access RMB-denominated products and services in the Australian market. On top of all this, a few days ago the Prime Minister and I announced direct, on-shore trading between the Australian dollar and the RMB. This is a great example of the role governments can play in creating the right conditions to foster business and investment opportunities.
But, as I've said, what governments are doing is only part of the story. We can build the infrastructure and get the settings right, but it is up to business to make the changes to embrace the opportunities. That's why it's so critically important that we collaborate. And that's why today's Symposium is so important. Because we all share a common goal, which is to support stronger, balanced growth and job creation at home and across the region. Greater integration in our financial markets is right at the centre of this. So thank you all for the efforts and thought you've put into these discussions over the past two days. I look forward to seeing your proposals in Bali in September. Thank you.