Especially for the AEC that already embarked on Free Trade Area, the increase in trade of goods among member countries needs efficient payment and settlement systems to support their business transactions. The movement of skilled labor also needs payment instruments and products that meet and serve their personal needs. In this part, I would like to highlight key considerations for future development in payment and settlement systems in response to the ASEAN economic region. The first one is Regional Connectivity for which I think many works have been initiated. At the policy level, the ASEAN Central Bank Governors Meeting has endorsed the Working Committee on Payment and Settlement Systems (WC-PSS) since 2010 to promote future enhancement, development and harmonization. The WC-PSS has set a vision to foster integrated, safe, and efficient payment and settlement systems in the region that enable businesses and individuals to make or receive electronic payments with greater convenience. In achieving its goals, the working committee has identified the roadmap for regional connectivity which is divided into three phases. •  In Short Term (2012–13), the roadmap focuses on promoting standardization to enable interoperability and inter-linkage among payment and settlement systems. International standards such as SWIFT message or other message standards are encouraged to be implemented. •  In Mid Term (2014–15), the roadmap focuses on improving existing infrastructure and payment environment. The improvement should meet economic needs, and takes the opportunity to standardize the systems to be ready for long term goal of regional integration.

In Lehman Brothers, the Chief Risk Officer (CRO) was stripped of her role in risk matters after warning against too much risk in the face of growing pressure to compete against other investment banks. Similarly, repeated warnings raised by the business chief underwriter of Citigroup against large purchases of defective loans did not translate into action; instead, he was downgraded in performance reviews and subsequently demoted. Another major component in the governance of finance is how individual incentives are influenced through compensation. The global financial crisis offers a telling display of how  7  Parliamentary Commission on Banking Standards (2013). Changing Banking for Good: First report of session 2013–14. Vol. II, HL Paper 27-II HC 175-II (London: HMSO), paragraph 553. 8  Guerrera, F. and P. T. Larsen. Gone by the board? Why bank directors did not spot credit risks. Financial Times 25 June 2008. 9  Source: https://www.fca.org.uk/static/documents/consultation-papers/cp14–13.pdf, paragraph 7.6. 10  Financial Crisis Inquiry Commission (2011). The Financial Crisis Inquiry Report: Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Washington, D. C.  BIS central bankers’ speeches  7  incentives were misaligned through the widespread adoption of compensation systems that rewarded short-term performance. In the US, loan officers at Washington Mutual were rewarded more for originating higher risk loans, while loan processing personnel were compensated according to the speed and number of loans processed, rather than loan quality.