The true question is how to strike the right balance between the diversification benefits that arise from multiple businesses financing the real economy and the potential weaknesses in risk management caused by this increased complexity. This morning, I will start by quickly reminding you of some key features of the complexity of the global banking system before the financial crisis. Then, I will give a short overview of the strong regulatory and supervisory actions undertaken to reduce inefficient levels of complexity. Lastly, I will mention two important challenges we face today in shaping the global European banking system. A – Some stylised facts from the pre-financial crisis period: organisational complexities and complex activities Before the Great Financial Crisis, we observed a steady increase in the number of foreign banks, from 784 in 1995 to 1,301 in 2007, according to Claessens and Van Horen (2014). 1 At the same time, the number of domestic banks decreased and, as a result, the relative importance of foreign banks increased substantially, from a share of 19% in 1995 to 32% in 2007. This rise might be attributable to structural factors such as technological advancements, capital market liberalisations and economic integration.2 It was accompanied by the growing importance of wholesale funding markets in financing banking activities and it resulted in a high degree of interconnectedness between financial institutions. Beyond the potential complexity of global banking’s organisational structures, the financial crisis was also preceded by increasing complexity in banking activities and financial products.

For this purpose, all participants, faculty members and facilitators of ICLIF programmes will automatically be accredited as members of the Alumni Association. With the rapid changes taking place in the financial and corporate landscape in the country and the greater integration in the region and the world, networking among leaders and captains of industries is most valuable in contributing towards greater understanding and in increasing the potential for collaborative efforts that are of mutual interest. The establishment of the Alumni Association represents an important part of ICLIF’s commitment to provide a platform for members to maintain active networking and productive collaborative alliances. It is also in line with our philosophy that leadership development is a continuous journey. The Alumni Association would thus provide a forum for continuous sharing among its members. Alumni members will also receive automatic notification and invitations to all ICLIF programmes and activities that will be organized in the future. As the members of the Alumni are spread across the region, ICLIF will leverage on Information and Communication Technology to help members stay connected. To facilitate networking opportunities, a special section has been created on ICLIF’s website to cater for the activities of the Alumni Association. This would include the facility to disseminate information among its membership, including the publication of an alumni directory, highlights of important events and latest developments that may be of interest to its members. The Centre will serve as the secretariat to support all activities undertaken by the Alumni Association.