. regulators globally are pursuing a wholly new approach. it goes by the name of macro - prudential policy. and here in the uk, it is the responsibility of the bank ’ s new financial policy committee ( fpc ). among the fpc ’ s tasks is to lean against pro - cyclicality in the financial system. that means smoothing out the stomach - churning highs and lows in the credit and asset price cycle, which have characterised the past. as evidence of this approach, consider the fpc ’ s recent actions in the uk residential property market. this market has defrosted at pace over the past twelve months. the financial stability risks from this re - heating may not be immediate, but nor are they hypothetical. take the position of uk households. despite some post - crisis deleveraging households ’ debt burden, relative to income, remains high at around 140 % – almost three times its level in 1980. as long as house prices rise faster than wages, as they have during the course of this year, this upward creep in households ’ debt burden will continue. and the higher this debt burden, the more sensitive will household spending be to any eventual upwards adjustment in mortgage rates. in some ways more important from a financial stability perspective is the distribution of mortgage debt. households representing almost 20 % of this debt have a debt - to - income multiple above 5 – that is, around 1 million households. around a third of debt, or around 1. 6 million households, is owed by those with a debt - to - income multiple above 4. just over a quarter of this debt is owed by households with £300 or less in monthly disposable income after essential expenditure is taken into account. and just over a half of all uk households say they would need to take corrective action ( cutting spending, working longer hours etc ) if mortgage rates were to rise by as little as 2. 5 percentage points, if income were unchanged. none of this is to suggest an immediate problem, especially with interest rates so low. but financial stability is about protecting against future tail risks. it was against this backdrop that the authorities recently decided to reduce some of the stimulus being provided to mortgage lending – for example, stimulus provided by regulatory capital relief and the bank ’ s funding for lending scheme. as importantly, however, the fpc also set out its stall on what other bis central bankers ’ speeches macro - prudential measures could be taken to slow the accumulation of credit and debt

needs have traditionally been financed largely by government debt, asian governments are increasingly recognising that their own balance sheets cannot support the required scale of infrastructure development. thus, private sector participation is welcome in the region. 33. but public - private partnerships ( “ ppp ” ) in asia face not insignificant risks. ppp policies are not always well - defined, regulatory and legal systems are sometimes weak, and there are varying restrictions on foreign ownership. 34. robust legal frameworks and clear ppp policies need to be put in place. singapore has been supporting such efforts in partnership with multilateral agencies such as the world bank. 35. in 2009, we established the world bank - singapore urban hub to bring together singapore ’ s public agencies, research institutes, and private sector players to share experiences with developing countries, especially in areas such as water and waste management, land use planning, and urban development. to expand the urban hub ’ s infrastructure finance advisory work, an infrastructure finance centre of excellence ( ifcoe ) was launched last year. 36. the urban hub has also partnered the singapore cooperation enterprise – a platform that leverages on the public sector expertise of singapore. together, they have implemented six projects in indonesia, vietnam, china and mongolia. this includes helping these governments develop a regulatory and financing framework to prepare ppp projects for private sector investment. bis central bankers ’ speeches 37. regional governments have also introduced schemes to encourage private sector investment. for example, the indonesian ministry of finance has worked with the world bank to set up the indonesia infrastructure guarantee fund. this fund provides guarantees to the private sector against risks arising from government actions, so as to improve the creditworthiness and quality of ppp infrastructure projects. 38. a critical success factor for achieving asia ’ s infrastructure investment potential is a well - developed financial sector. asia needs financial markets that are deep enough to effectively intermediate its considerable savings pool and broad enough to provide a range of suitable instruments for risk mitigation. although asean has made progress on these fronts since the 1997 crisis, more needs to be done. these include strengthening legal and regulatory frameworks, increasing market access, harmonising cross border regulations, and raising the level of corporate governance. 39. asean has set in motion several initiatives. it has drawn up a scorecard to identify gaps in the development of bond markets. its capital markets regulators are working on initiatives to harmonise domestic laws, regulations, and practices. it has introduced the asean plus standards, which are disclosure