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.

An especially difficult decision is whether to close accounts for respondent banks with a demonstrable record of mismanaging their risks of money laundering and other financial crime. I suspect that many firms will say that they already do this. But they may not do it enough, frankly. Or at the least, they may not ask enough questions when confronted with serious red flags about a respondent bank’s activities. It is a process that requires careful attention. If a particular bank, or other financial services provider, is unwilling, or even truly unable, to do their part to protect the payment system, then perhaps they should not be part of it. To be crystal clear: I do not support the large-scale, regionally focused reduction of the availability of correspondent banking services, sometimes referred to as “de-risking.” The industry has been criticized for “de-risking” with a broad sword. I am recommending a scalpel. My concern is how correspondent banks protect themselves and the payment system from specific institutions that have a demonstrated, and unremediated, history of unfairly exposing others to their risks. Client-facing roles are critical to identifying customers that do not play by the rules. The Federal Financial Institutions Examination Council—or “FFIEC”—publishes examples of red flags in its interagency exam manual.15 Many of these examples require an understanding of ordinary customer behavior in order to spot unusual behavior. Moreover, reasons for suspicion may not be apparent from transmittal records, and can be outside the lens of automated compliance filters, despite their technological sophistication.