Crimes also reduce productivity and increase leakages in the economy as resources and manpower need to be channeled towards combating crimes instead of more productive utilization of resources. From the reputational perspective, Malaysia cannot afford to be seen as a weak link in the chain of international efforts to combat money laundering and terrorism financing. Although in the previous Mutual Evaluation in 2007, we received commendable ratings, the coming Mutual Evaluation in November this year will be based on a more holistic methodology where  BIS central bankers’ speeches  1  greater focus will be on the effectiveness of our implementation. If we did not attain good rating, the consequences could be high. We do not want our country to be listed in the FATF Public Statement as country with significant deficiency in AML/CFT. As you are aware, compliance with FATF Standards helps maintain our country’s reputation and the reputation of our businesses, including financial institutions, on the world stage. Globally, a country’s rating on compliance with FATF Standards on AML/CFT is often considered as a key measure of the robustness of the country’s AML/CFT regime. Unfavourable rating would mean that Malaysian businesses, including financial institutions, would face greater scrutiny, higher costs of doing business, delays and other time consuming and unnecessary barriers when doing business with overseas counterparts. The impact of money laundering and terrorism financing risks to the financial institutions and financial system is no less severe. We all understand that financial institutions operate on the basic tenets of public confidence and integrity.

Together, these initiatives benefit both issuers and investors by streamlining and lowering the cost of access to capital and investment, 2/7  BIS central bankers' speeches  and help to recycle capital within the region. 12 Singapore’s capital markets have likewise developed well on the back of Asia’s growth and capital market liberalisation: a. Bonds. The size of the corporate bond market grew 2% year-onyear to reach SGD 315 billion in 2015 comprising SGD 140 billion in Singapore Dollar bonds and SGD 175 billion in non-Singapore Dollar bonds. This represents an annualised growth rate of 12% over the past five years. The market serves a diverse range of issuers, raising funds in various currencies and instruments, including: (i) One, Covered Bonds: DBS issued the first covered bond of USD 1 billion in July 2015. UOB is the first global issuer to publish its Harmonised Transparency Template (HTT)12 which was developed by the European Covered Bond Council, and aims to promote an enhanced level of transparency and comparability for covered bond investors. (ii) Two, Masala Bonds: Following India’s liberalisation, as I mentioned earlier, three Masala bonds were issued in Singapore and listed on SGX this year: Adani Transmission, NTPC Limited and Indiabulls Housing Finance. They also represent the world’s first green corporate Masala bond and first privately-owned enterprise Masala bonds. (iii) Lastly, Green Bonds: To meet the demands of an expanding pool of socially responsible investors, a Singapore property company is set to roll out the first green bond in Singapore. b. Foreign Exchange.