Behaviour and culture influences operations at almost every levels within an organisation, ranging from decision making, strategic positioning, as well as risk appetite and risk taking. The risk-reward incentive structure has to focus more on long term gains rather than short-term profits, and the design of compensation scheme should fully reflect that aim. The strong culture of risk awareness and good governance should be rigorously instilled such that it becomes organisational culture and natural behaviour of bankers. Culture of transparency along with proper check and balance also contribute towards a solid foundation of banks’ immune system. The other area of immunity that will be key for financial institutions is immunity against cyber security risks. Everyone, every bank, every system must be prepared and ready to both prevent and respond effectively to cyber security risks. Incidents of cyber attacks, no matter how small, can undermine the integrity of the financial system. To boost the immune system, it is imperative that cyber resilience and cyber security be given the highest priority. Ladies and gentlemen, Financial stability could not exist without social stability, which brings me to my third and last point that requires collaboration from financial institutions. The economic benefit of growth has to be inclusive and financial system can play significant roles in promoting inclusive growth, starting with financial inclusion. The people at large must have access to basic financial products including payment, savings, credit, and insurance. The pricing has to be lower, choices wider, and access better.

Furthermore, new flow of credit demand has been sluggish, owing to the low-growth prospect, low private investment, excess capacity in many industries, and low commodity prices. The loan growth prospect has also been hampered by the more attractive funding sources in the capital market. Debt overhangs of both corporates and households in many Asian economies have also undermined investment and consumption, while threatening financial stability in some countries. In addition, the trend towards trade protectionism and growing geopolitical tension in the Northeast Asia and the South China Sea could jeopardise both growth and stability in our region, leading to financial volatility and possibly much higher cost of funds. Along with rapidly changing and increasingly volatile economic and financial environment, technology advancement is fast re-designing financial and business landscape. Sharing economy will soon become the key feature of modern economy and financial system. Crossborder transactions of e-commerce as well as payment and settlement will become more widespread. New fin-tech firms have offered financial products unbundled from the 2  longstanding value chain of banks. Certain banks’ existing business models might be obsolete and they must be agile enough to keep up with customers’ new lifestyle and requirements as well as competitors’ new business practices. In the current world, banks having economies of scale and scope might not gain advantages without agility and economies of speed. And, one should not forget that new forms of technology also bring along new forms of risks. Among others, cyber safety should be in the top priority of all banks.