Jacqueline Loh: Public-private partnership – the way forward for natural catastrophe risk management in Asia Opening address by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the 5th Institute of Catastrophe Risk Management Symposium, Singapore, 24 April 2014. *  *  *  Professor Bertil Andersson (President, Nanyang Technological University, Singapore), Professor Haresh Shah (Founding Chairman, Institute of Catastrophe Risk Management (“ICRM”)), Professor Pan (Director, ICRM), Distinguished guests, ladies and gentlemen, good morning. Introduction 1. It is my pleasure to join you today at the 5th ICRM Symposium. The theme for this year’s Symposium, “Financing of Natural Catastrophes in Asia – The Role of Private Sectors, Governments and Regulators in Natural Catastrophe Management”, highlights the importance of having both the private and public sectors collectively manage natural catastrophe risks. Management of catastrophe risks spans a spectrum of activities across the entire risk management value chain, from raising risk awareness, to promoting effective risk assessment and pricing, and co-developing ex-ante risk financing solutions. This is a very relevant discussion topic, at a time when Asia is facing increasing vulnerability to natural catastrophes. 2. In keeping with the conference theme, I will be sharing a few observations on how we can strive towards sustainable risk financing using a Public-Private Partnership (“PPP”) approach. Asia is more at risk from natural catastrophes 3. Over the last 30 years, Asia has borne the brunt of natural catastrophe losses, accounting for almost half of the world’s estimated economic losses from natural disasters1.

In the same vein, we also need to monitor very closely the possible adverse impact from fiscal developments on the inflation outlook. All in all, risks to the inflation outlook seem to be tilted to the upside. This notwithstanding, inflation expectations remain firmly anchored in line with our aim of keeping inflation rates below, but close to, 2% over the medium term. Let me turn to the banking sector. Adjustments are continuing in light of a re-focusing on core business and markets, the necessary re-organisation arising from state aid and forthcoming changes to regulatory environment. Although there have been improvements, profitability remains subdued. Further credit-related write-downs are expected throughout this year, and  BIS Review 51/2010  1  the risk of a negative feedback loop emerging between the household and corporate sectors and the banks persists. Banks’ may remain under pressure to continue the process of deleveraging, with possible credit constraints impacting on economic growth in the event of credit demand picking up. Thus, although the response of policy-makers to the crisis has certainly helped to avert an even more dramatic collapse in economic activity in the euro area and elsewhere, challenges abound. Indeed, most advanced economies will continue to face severe macroeconomic imbalances in the years to come. I am particularly concerned about the dramatic deterioration in public finances, which will require very ambitious fiscal consolidation efforts in the years to come.