accountability, personalities, as well as check and balance mechanisms, or lack thereof, within the organization. more recently, the manipulation of the london interbank offered rate ( libor ) which has done serious reputational damage to the banking industry and reduced public trust was an example of misbehaviour fostered by inappropriate cultures. while events such as the financial crisis, and other scandals have continuously triggered waves of regulatory reforms, those are not enough and our work is far from over. today, there are still examples of poor corporate governance and misconduct resulting from the root - cause of inappropriate behaviour and culture within banks. recently, fraudulent practices in a large global bank were exposed where bank accounts were opened without customers ’ consent or knowledge. banks themselves need to create culture that encourages management and employees to have the right values and behaviour. this behaviour and culture cannot be detected quantitatively and similarly to the way we assess financial data, or risk - taking investment. let me demonstrate by using an iceberg to paint a clearer picture. the tip of an iceberg above the water is what we observe through banking performance, financial information, and investment portfolios. although the tip may show good performance records, the larger portion of the iceberg under water is what determines its strength or fragility. unawareness of small cracks in the iceberg could result in its unforeseeable disintegration. corporate culture and behaviour is a part of this portion under water and is an influencer of decisions within the organization. building corporate culture and behaviour that fosters good governance, soundness, and sustainability therefore has to be instilled into the organization. for asean banks, we have learnt our lesson from the asian financial crisis and bankers who had endured through that period are fully aware of the associated risks and their consequences. going forward, however, with new and younger generations of bankers, these lessons may not be as fully appreciated. newer generations may be less aware of the costs associated with excessive risk - taking behaviours and the aggressive search for higher yields may be prevalent. in this transitional period, it is therefore even more imperative that the proper culture and behaviour be embedded into every level of the organization, starting from the highest level at the board and cascading down to every level of management and staff. fourthly, financial institutions need to embrace sustainable banking to ensure sustainable success. the concept of sustainability plays an increasingly important role in our global and regional development. global warming, growing inequality of wealth and opportunity

real estate market. as a result, this prompted the bank of thailand to step up our macro - prudential regulations on mortgage lending. 3 / 7 overall, these are just a few examples of how financial institutions ’ own actions can contribute to the worsening of social and environmental problems, impair their credibility, and result in unintended financial losses. if there had been proper internal controls and incentives aligned, wells fargo ’ s customers would not have been subject to fraud. had financial institutions assessed the potential environmental impacts of companies they were financing, credit decisions may have had a different outcome, limiting the extent of damage on surrounding environment and on public ’ s air quality in singapore. with better credit culture and internal controls, thai financial institutions could help limit the worsening of household debt and lower exposure to credit risks of their mortgage portfolios. while in some adverse incidents financial institutions managed to avoid large financial losses or were able to take swift actions to address them, it is clear that these incidents, if left unattended by financial institutions themselves or regulators, would have resulted in continued deterioration of public trust and in the long - term potentially large financial losses. ultimately, these incidents highlight that not properly taking sustainability risks into consideration could result in serious risks, both financial and non - financial risks, that are large enough to impact the viability of the financial institutions themselves. in other words, sustainability risks have been underpriced or underestimated in business practices of financial institutions. ladies and gentlemen, let me highlight on risks, especially credit risks, that financial institutions could face from different esg dimensions. 4 / 7 on - going global warming can seriously impact future outputs, productivity, or the business continuity of borrowers, reducing their capabilities to generate income and repay debt. persistent social issues like widening social gaps can fuel social distrust and trigger public unrest and demonstrations, resulting in economic losses. malpractices by borrowers that have negative implications on environment and society may result in potential business failures, especially in today ’ s society where information can be quickly disseminated through online and social media channels. meanwhile, poor governance by financial institutions themselves can result in misallocation of funds and concentration of risks. all of these are examples of how different esg dimensions can heighten credit risks for financial institutions. moreover, financial institutions may be subject to credit and reputational risks coming from their corporate clients if their clients fail to adapt business models to meet heightened standards and changing environment. fast changes in