can afford a certain amount of very long - term infrastructure projects which may not offer attractive financial returns. in indonesia, abdurrahman wahid has just been elected as the fourth president, with megawati as vice - president, in indonesia ’ s first truly democratic presidential election in over thirty years. it is a good outcome, after two traumatic years of upheaval and chaos. but the road ahead for indonesia is not easy. the new government faces many urgent priorities. it must work out a new political balance, redefine the role of the military, lay the basis of a civil society, and strengthen the rule of law. then confidence will return and the economy will revive. in this arduous task of national reconstruction and reconciliation, indonesia has the good wishes and support of its neighbours, including singapore. north east asia in north east asia, japan is finally recovering from its prolonged recession. public investment, private consumption and housing investments are all improving. we are also starting to see real financial and corporate restructuring in japan. sony, nissan and ntt have recently announced sizeable cuts in their workforces2 – a significant departure from the lifetime employment system. and following the big bang measures, japanese banks are merging, even across different keiretsu groups, forming two of the world ’ s largest banking groups. 3 there has also been a wave of strategic alliances between japanese and foreign financial institutions. 4 the government has nationalised three commercial banks and absorbed three others into the state - owned krung thai bank. four commercial banks have been sold to foreign investors thus far. sony, nissan and ntt have planned to slash 17, 000, 21, 000 and 20, 000 jobs, respectively. other japanese corporations such as nec and hitachi have also announced large layoff plans. the daiichi - kangyo, fuji and ibj group, and the sumitomo - sakura group. including travellers group and nikko securities, daiichi kangyo bank and j p morgan, and goldman sachs and socgen with ibj and nomura. in korea, financial sector restructuring is generally on track. korea took a hands - on approach. the government aggressively bought and disposed of the non - performing loans in the financial system. it pushed for bank recapitalisation. forced closures, mergers and acquisitions have removed many weak institutions from the financial sector. korea is also pressing for reform and restructuring of the chaebols. this will take time, effort and political will,

. consider, for example, dennis levine, the drexel burnham lambert investment banker who was convicted of insider trading in one of wall street ’ s biggest scandals. according to him, it was just so easy. in seven years he multiplied a paltry $ 40, 000 into $ 12 million, and all it took was a 20 - second phone call to an offshore bank a couple of times a month – may be 200 calls in total. he was confident that the elaborate veils of secrecy plus overseas bank privacy laws would protect him. closer home there is the recent case of satyam which allegedly window dressed the company accounts for over ten years, betraying the trust of all its stakeholders. john stuart mill said that if we make men honest, good and decent, then they will make themselves honest, good and decent engineers, doctors and teachers, and may i add, financial sector professionals. the financial sector is, after all, a reflection of the society in which it operates. so, the approach to bringing ethical values into finance has to begin not by special efforts to enforce or regulate ethical standards in finance, but by fostering a value system in society at large. ethical issues thrown up by the financial crisis this global financial crisis has been the deepest, broadest and most hurting financial crisis since 1929. all of a sudden, it seems like an entire super structure was built on sand instead of rock as it was believed. we are too close to the crisis to really grasp how this crisis might, as they say, turn out to be game changing. what the crisis has done is to cause a massive break down of trust : trust in the financial system, trust in bankers, trust in business, trust in business leaders, trust in investment advisers, trust in credit rating agencies, in politicians, in the media and in the process of globalization. when you break down the complex gamut of the causes of the crisis, several skeletons tumble out of the cupboard. almost all of these relate to how the financial system operated. in a phrase that has now become daily staple, sub - prime borrowers were given loans at teaser rates. and these borrowers were led to believe that they would never lose as the price of the house they were buying will only keep going up. the loans were sliced and diced, built into complex products and rated by rating agencies. dazzled by these ratings, gullible investors lapped up the mortgage based assets ( mba ) not realizing the risk they were taking