•  Asian companies are choosing to stay private for longer and becoming more receptive to venture capital (VC) and private equity (PE) financing. •  Asia is already a major destination for VC and PE investments. • Last year, VC and PE investments into Asia reached $ billion, accounting for 30% of global investments, surpassing Europe for the first time. •  With close to 7,000 start-ups in Southeast Asia alone, there are opportunities abound for private investments in the region. http://www.imas.gov.sg/News-and-Publications/Speeches-and-Monetary-Policy-Statem... 21-07-18  Connecting Global Markets Supporting Asias Growth  Page 3 of 7  The demand for infrastructure financing in Asia is outpacing countries’ funding capacity. •  According to the ADB, Asia will need around $ trillion annually in infrastructure financing between now and 2030 to sustain economic growth. •  Currently, more than 90% of infrastructure investment is financed by governments. •  This is not sustainable if the demand for infrastructure is to be met. The challenge for governments in Asia is this: to make infrastructure more attractive to private capital. •  At their recent meeting in Singapore, ASEAN Finance Ministers agreed to accelerate infrastructure development through mobilising private capital. This means mainstream infrastructure financing as an asset class. •  The prospects are good. There is a strong pipeline of projects in the transport and energy sectors, diversified across the ASEAN countries. •  We have seen some early success.

20, 21 But there are also areas where there has been somewhat less progress and more may be needed to mitigate corporate governance frictions. All involve acting on the structure of incentives at source, to generate higher returns for lower risk for businesses, investors and,  20  Admati and Hellwig (2014). 21  There have also been initiatives aimed at increasing levels of accountability amongst senior individuals in financial institutions. One example is the PRA and FCA’s Senior Managers Regime (SMR) which will come into force in March 2016. The SMR intends to create stronger incentives for senior individuals to run institutions prudently and to take greater responsibility for their actions. The PRA has also recently published a consultation on its expectations of the collective responsibilities shared by board members which will complement the SMR. The PRA published its consultation paper “Corporate Governance: Board Responsibilities” in May 2015, available at: http://www.bankofengland.co.uk/pra/Documents/publications/cp/2015/cp1815.pdf. 12  BIS central bankers’ speeches  ultimately, wider society, helping central banks meet their objectives. Let me mention three areas in particular: executive remuneration and accountability; control rights; and company law. Executive remuneration and accountability Historically, perhaps the most commonly-pursued approach to tackling corporate finance problems has been to adjust managerial compensation practices – for example, the shift to equity-based compensation practices in the 1980s. This shift worsened incentive problems elsewhere within firms. In response, attention more recently has switched to paying executives in debt, rather than equity.