In particular, infrastructure financing is likely to be a major driver of demand for investments. The Asian Development Bank estimated that $ trillion worth of infrastructure spending is needed in the 10 years leading up to 2020 to support Asia’s growth. The demand for capital investments driven by the growth in Asia’s real economy will support the development of the region’s capital markets. As investors continue to invest in Asia, the depth, accessibility and efficiency of Asia’s capital markets will continue to improve. BIS central bankers’ speeches  1  With proper balance, the continuing inflows of funds, improvements in capital markets and growth in the real economy will create a self-reinforcing virtuous circle. 7. Along with the rise of Asia, Singapore will continue to enhance our position as a Global-Asia financial and business hub. As a well-connected international financial centre, Singapore can be the base for global players to tap into opportunities offered by a rising Asia. To do that, we will build on our strengths in areas such as trading, asset management and infrastructure financing. We will also continue to emphasise the importance of strengthening risk management, enhancing transparency, as well as build depth and diversity in the offering of financial products and services. Let me cover these areas in turn. 8. First, in the area of strengthening risk management. In the context of the capital markets, we have been building the necessary infrastructure to help market participants better manage their risks. There has been greater concern over counterparty risks since the financial crisis.

This fear of counterparty default dented global trading and interbank lending activities. To allow market participants to better manage their counterparty risks, the Singapore Exchange launched a new clearing service for OTC financial derivatives in 2010. This is the first such service in Asia. 10 international and local banks have since signed up with SGX to clear their OTC financial derivatives, and there are intentions to expand the product suite going forward. This initiative also enhances our role as a regional risk management centre. 9. In May last year, MAS published a consultation paper on amendments to the Code on Collective Investment Scheme. Among other things, there are proposals to introduce a number of measures to address counterparty risks. For instance, MAS has proposed that managers may only enter into OTC financial derivative transactions with counterparties subject to prudential supervision. If the financial derivative transaction is performed on an exchange where the clearing house performs a central counterparty role, the counterparty risk can be taken as zero. MAS will be publishing its response to the consultation paper in due course. 10. Singapore is also a key risk management hub for the commodities business. We are Asia’s leading OTC commodity derivatives trading hub, accounting for more than 50% of Asia’s volume. There is also a confluence of users and suppliers of commodities risk management solutions in Singapore. Apart from the critical mass of global commodities traders, many global banks have also based their Asian commodities business in Singapore.