in the conduct of monetary policy but it should also pave the way for the full development of the domestic money market that is the anchor of real price discovery and better liquidity management for the broader market. final thoughts as you can see, ladies and gentlemen, the issues that confront our capital market are not new. neither are we at the nascent stages of reforms. in fact, we have made significant strides towards a more organized market. but to take us forward and further, we need to take key reforms to their logical conclusion. i would not say that this is the last mile because there will always be more reforms as markets evolve. but we are at the cusp of critical change. as important as these reforms are, we can never underestimate the value of governance. what makes this industry so unique is not just the blocks of funds that move from stakeholder to stakeholder. instead, it is the fact that we are able to serve the interests of those stakeholders even if their interests may be competing. the anchor is governance so that risks are fully priced to generate reasonable returns to the risk - taker. we need established governance principles too so that we can manage conflicts of interest which are inherent in financial markets. we need those same governance standards as a guide for executing the reforms that we have lined up for our market. ladies and gentlemen, we have always pursued the development of our capital market as a policy agenda. we are yet at another cusp where we can make significant change. anchored on good governance and a clear vision of what we desire of the capital market, it would be quite an achievement for all stakeholders if we see the changes come to fruition. wouldn ’ t it be such a feat for us to stop talking of pursuing capital market development and instead talk of sustaining a developed capital market? thank you and good afternoon. bis central bankers ’ speeches

comes their way. in other words, in building their portfolios, banks must not sacrifice their credit underwriting standards. for users of funds, therefore, the capital market should present a real alternative. second, bank balance sheets have been under intense global scrutiny. as a result, the global reform agenda is calibrated to “ making more resilient financial institutions ”. that simply means that the prudential bar has been raised, both for capital adequacy and the quality of risk management. the single borrowers limit on banks will be an increasingly binding constraint as bigger projects are put into play. but the remedy is not in relaxing established prudential standards that help us manage excessive credit risk concentration and protect financial stability. the constructive response is for the capital market to step up and seize the opportunity. this brings me to the third point. there is now a perceptible shift from banking to capital markets. regulatory authorities are actively discussing this evolving phenomenon. not that it is a negative development, but more to dimension its potential implications. to be sure, low global rates have encouraged this shift but i would think that the fundamental drivers precisely relate to the strategic allocation of risk capital and the new mindfulness to the interrelatedness of risks in banking. these three drivers i just mentioned augur well for the capital market. the real question however is : are we ready to take full advantage of them? getting to a better and desired state everyone in this venue appreciates that we could better tap these opportunities if critical reforms can be addressed. and these issues are precisely the object of the regulatory bis central bankers ’ speeches reforms we have been pursuing, essentially to enhance price discovery, promote responsible market conduct and enable product innovation. our market infrastructure – from pre to post - trade activities, for both payments and transfers – is yet another area which regulators have been focusing on. while there are ongoing crossborder initiatives, the main policy driver is still efficiency within an integrated market. thus, we look to harmonize applicable processes across products and define standards, as may be warranted. developing the proper market infrastructure is now high on the priority of the financial sector forum and the financial stability coordination council. the bsp is also set to consider a major reform of how we conduct monetary policy. we are developing new approaches to enhance open market operations and start to move away from a high reserve requirement regime in the context of establishing an interest rate corridor system. the objective is to achieve greater efficiency