It will be a more broad-based financial partnership that will provide deeper support to China’s growing connectivity with Southeast Asia. Let me cite four concrete areas of partnership. •  Capital management  •  Risk management  •  Infrastructure financing  •  Asset management  Capital management Chinese enterprises have mostly relied on domestic sources of funds such as bank lending to finance their international expansion. Many Chinese companies have also listed in equity markets in the US, Hong Kong and Singapore. But as Chinese companies grow their global presence, they will have to think harder about how best to raise capital and how best to make use of their capital by tapping into offshore markets. First, bond markets offer a useful alternative to bank lending, especially for long-term funding. Deep capital markets, anchored by a large institutional investor base can help well-rated businesses to achieve efficient cost of funding. Chinese companies are becoming more active in Singapore’s bond market. •  For instance, China Oilfields Services Limited successfully raised $ billion in Singapore last year, including a 10-year medium-term note of $ million. Second, Chinese corporates with income-producing real estate and infrastructure assets could recycle their capital by securitising these assets through a trust vehicle. BIS central bankers’ speeches  3  •  SGX saw its first China real estate investment trust or REIT last year, with Beijing Hualian Group raising close to $ through a REIT.

The international standards require supervisors to appropriately supervise, monitor and regulate financial institutions for compliance with AML/CFT requirements commensurate with their risks. As such, to effectively implement the above, a country’s AML/CFT supervision has to be embedded in the broader framework of prudential and business conduct supervision. This is to leverage on and optimise the synergies, expertise and resources to ensure effectiveness of both overall supervision of financial institutions and specific AML/CFT supervision. Supervisors are required to ensure effective management of ML/TF risk and compliance with AML/CFT requirements by the financial institutions by assessing institution’s policies, procedures and processes for identifying and managing ML/TF risk and in complying with regulatory requirements. This integration also ensure that supervisors are coherent and apply high standards in fulfilling their responsibilities for both AML/CFT and prudential supervision. As for AML/CFT, supervisors have to include AML/CFT risk in their risk based approach to supervisions and to be fully aware of consequences and implications of theirs supervised institutions’ failures to adequately identify and manage all risks including ML/TF risk. This is because the issue is no longer just about technical compliance but more importantly, whether the supervisory framework has been effective in mitigating and in ensuring adequate enforcement against ML/TF. Therefore, to equip supervisors in fulfilling their duties to conduct AML/CFT supervision, courses such as this is important to provide all of you with an understanding of the importance of reviewing the operational, legal, and reputational risks associated with ML/TF and their impact on the overall bank assessment.