financial markets, excellent digital connectivity, a skilled talent pool, and extensive trade and investment linkages with asean. we cannot predict the future. but as the french philosopher henri bergson puts it : “ the future is not what will happen to us, but what we will do. ” i hope this conference will give you ideas on what to do and how to do it. thank you. [ 1 ] imf, world economic outlook update, july 2023 and imf “ regional economic outlook, asia and pacific, may 2023 ” [ 2 ] google, temasek and bain & company, “ e - conomy sea 2022 – through the waves, towards a sea of opportunity ” [ 3 ] ibid [ 4 ] asean investment report 2022 [ 5 ] ibid [ 6 ] nanyang technological university and university of glasgow, “ adaptation and resilience in asean : managing disaster risks from natural hazards ”, 2021 [ 7 ] international energy agency ( iea ), “ southeast asia energy outlook 2022 ” [ 8 ] the straits times, “ south - east asia takes the leap with ai ”, 11 september 2023 [ 9 ] finance asia, “ setting sights on southeast asia ”, 18 august 2023 [ 10 ] tech in asia, “ digging into southeast asia ’ s generative ai excitement ”, 2 june 2023

the financial sector i am struck by the conflicting forces at work in reshaping the structure of the financial sector. in one direction, economies of scale and scope may result in a higher degree of consolidation across financial services providers. for the banking sector, this would reverse the retreat to domestic markets that followed the onset of the financial crisis in 2007 / 2008. in addition to the scalability of successful new technologies, another factor that supports consolidation are the significant fixed costs in meeting contemporary international regulatory requirements. whether the next wave of consolidation requires cross - border m & a activity is bis central bankers ’ speeches questionable, since the need to acquire national franchises to operate on a cross - border basis has been significantly reduced by freedom of services legislation, the move to a single supervisory mechanism for banks in the euro area and the increasing harmonisation of regulations for non - bank financial firms. in the other direction, there are other forces that may lead to increasing fragmentation of in the provision of financial services, with specialist providers increasing the level of competition in individual market segments and threatening the integrated model of universal banking. in particular, it is possible to envisage an increasing role for specialist firms that target particular niche services and cherry pick higher - margin business lines. a third pathway is the development of partnerships between larger incumbents and newer financial technology providers, with such partnerships focusing on complementing existing service offerings and developing entirely new categories of financial services. it is possible for all of these outcomes to occur simultaneously. consolidation may be driven by the bigger players across europe seeking to drive down costs in a continued low - interest environment, moving to a more fee - based business model and competing across borders through freedom of services. at the same time, new entrants may grow by offering niche service offerings, through different and newly - conceived delivery channels. whatever the outcomes, resolution planning is thrown into sharp relief, in view of the potential financial stability risks associated with the failure of larger, established firms and the elevated likelihood of failure for smaller, newly - formed, mono - line enterprises. orderly resolution regimes enable the financial system to absorb the failure of individual firms : especially in a period of innovation, a “ zero failures ” objective is not appropriate. 3. risks this brings me to the myriad associated risks. i will start from a financial stability perspective, where we need to consider the risks to incumbents. an increase in competition in or across these sectors may result in reduced income ( for example, through squeezed margins or reduced fee income )