But the fundamental solution does not lie in diluting regulatory requirements. Policymakers should also focus on ways to develop sustainable alternative sources of long-term finance. At the same time, we must recognise that the immediate constraint on infrastructure development in Asia is not financing per se but the supply of bankable projects with an acceptable risk-return profile to attract banks or investors. We need integrated solutions that involve risk-sharing arrangements and bring together bank and non-bank capital. In Singapore, we are working in partnership with a diverse group of stakeholders, to help build such an ecosystem to support long-term financing and unlock the supply of bankable projects. •  Multilateral agencies and well-rated public sector entities could provide guarantees or credit wraps that would allow banks to reduce their risk exposures to such longterm projects, thereby encouraging them to originate such loans. •  Bank loans could be structured in ways that facilitate their seamless migration from banks to capital markets. •  Institutional investors such as pension funds, insurance companies, and sovereign wealth funds could invest in project bonds, infrastructure debt funds, and securitised project loans, taking the risks off banks’ balance sheets. Conclusion Let me conclude. We have made reasonable progress in making global finance safer. The regulatory reforms since the crisis have helped to strengthen the resilience of the financial system. But the work is far from complete. We must not forget that regulation must be complemented by rigorous supervision and sound risk management.

BIS central bankers’ speeches  1  Singapore was among the first jurisdictions in Asia to introduce a risk-based capital (“RBC”) framework for insurers, in 2005. In 2012, MAS embarked on a review to enhance the framework, known as “RBC 2”, to take into account the new IAIS standards and best practices, including relevant aspects of Solvency II. MAS will be conducting a quantitative study to assess the impact on the insurance industry of the proposals under RBC 2. There are no global capital standards for capital markets services providers. The International Organisation of Securities Commission (“IOSCO”) has, however, set out principles for the solvency of securities market intermediaries. Based on these principles, MAS has implemented a risk-based capital framework for capital markets services licensees. Strengthening liquidity buffers The second important area of reform is setting – for the first time – international standards for bank liquidity. Banks are in the business of transforming short-term liabilities (mainly deposits) into long-term assets (mainly loans). This fundamental mis-match in maturity opens banks to the risk that they may not be able to finance short-term liabilities as they fall due. Even solvent banks with lots of capital can fail if liquidity risks are not well-managed. The new Liquidity Coverage Ratio (“LCR”) sets the global minimum standard for bank liquidity. Essentially, the LCR framework requires banks to have an adequate stock of high quality liquid assets that can be converted into cash to survive a 30-day period of stress. In Singapore we have had liquidity rules for a long time.