Structural shifts are also taking place at the national level in most of the emerging economies. These include the demographic shifts which are transforming the workforce. The demographic structure has an increasing component that comprises a young population and a growing middle income segment. This trend is exemplified by consumers that have become more discerning, with higher expectations. This is also reinforced by increased longevity. The workforce is also progressively affected by the growing urbanisation which is becoming an important feature in most emerging economies. The international, regional and national financial landscape also continues to be significantly transformed. At the international level a growing number of new financial centres will emerge. BIS central bankers’ speeches  1  There will also possibly be new international reserve currencies and a greater network of financial institutions that originate from an increasing number of emerging economies from different parts of the world. This will facilitate greater inter-linkages between financial systems, especially among the emerging economies. These evolving developments will result in an increased interconnectedness of financial markets with the consequence of increased contagion and interdependence. Increasingly financial systems have also become prone to crisis. The recent global financial crisis has prompted the international community to respond with wide-ranging fundamental reforms that is also transforming the international financial system. At the regional level, the Asian region has become more cohesive with regional financial integration intensifying to facilitate a more efficient allocation of financial resources in our region.

Even in countries that are not contemplating new compensation regulations, financial institutions need to carefully consider the higher expectations of regulators for compensation and incentive systems to be more closely aligned with prudent risk-taking. Talent strategies must reinforce a strong and enduring ethical foundation of the organization, while developing the individual and organisational agility to deal with external forces of change, including changes induced by economic and financial cycles. And an increased emphasis on leadership effectiveness and succession planning will be key to sustaining long-term value and confidence in financial institutions going forward. The issue before us is then, how can the talent be prepared for this new environment? And how can the changing nature and character of the new generation of talent be effectively managed to produce the best results for the organisation. Let me venture to elaborate some thoughts on the preparation of talent for increasingly complex positions in organisations. The best universities, in particular, the business schools from around the world have come under great scrutiny regarding their ability to produce the right kind of talent that organisations now require in this changing environment . The reviews have not only been on the curriculum to reflect the new demands of organisations but also on the balance between theory based education and the education  BIS central bankers’ speeches  3  that actually produce high performing practitioners. This included not only the development of new skills and capabilities but also the values and attitudes.