tharman shanmugaratnam : promoting innovation in finance in singapore speech by mr tharman shanmugaratnam, chairman of the monetary authority of singapore, at the launch of the singapore fintech festival, at the asia society, new york city, 12 april 2016. * * * i ’ d like to thank the asia society for hosting us this evening, for the launch of the singapore fintech festival. the festival will take place over 5 days in november this year in singapore, bringing together technology players, financial institutions, fintech players and regulators. we are launching the festival in new york city, and that is not as surprising as it may first seem. it says something about how we view innovation in finance. it is an inherently open system. innovation is about ideas and enterprise flowing between cities, and connections between players everywhere. we can ’ t predict how those connections will unfold, but we know that there ’ s no neat geography that will define financial innovation. it ’ s also why we shouldn ’ t focus too much on the rankings of different financial centres at this stage of the game. you know what they say about the rankings of colleges and universities. if you rank very well, the rank is extremely important. and if you are not ranked well, they are unimportant, irrelevant, and they don ’ t get to the heart of what you are really trying to do. well, we are nicely on both sides of that. singapore does rank well in the fintech stakes, but i have to tell you that it ’ s a distraction at this stage and it really doesn ’ t get to the heart of what we are doing. our aim is not to see if we can be above other financial centres, but to push the envelope and transform finance : to encourage players to find new ways of doing the business, and in a way that makes more sense to the customer – the borrower, the lender, the middle - class investor, or someone who makes payments or receives them. transforming finance to be more tailored to their needs, something that ’ s if possible cheaper, or more convenient and accessible to the customer. that ’ s our aim. but we are at an early stage in fintech. we are at the cusp of the new wave of innovation. there ’ s no assurance that it will succeed, and no telling who will succeed. but it shows much promise – promise of delivering better value to the customer. there ’ s a second

in an economic environment such as the present one, would prove excessively procyclical. the regulation of systemic banks the second key aspect of the regulatory reform promoted by the fsb has been the creation of a new framework for the treatment of “ systemically important ” banks. systemically important banks are those whose bankruptcy might trigger serious problems in the global financial system owing to their size, complexity and interconnectedness. the problem they pose arises from the fact that, in the absence of an appropriate legislative framework, the threat of their bankruptcy often leaves no other option to the authorities than to bail them out, which may involve major costs for taxpayers. in response to this problem, the fsb designed a framework for the treatment of these banks. its starting point was the definition of a methodology to identify them and the publication in november 2011 of a list drawn up in accordance with this methodology. this was followed by regulatory capital requirements additional to those applicable to the rest of the sector. the latest fsb list, which includes two spanish banks ( santander and bbva ), establishes different tranches, depending on the capital surcharges they must meet, which range between 1 % and 2. 5 %. under the basel iii framework, these additional requirements will begin to be applied in 2016 and full implementation must be attained by 2019. the need for effective resolution frameworks another key ingredient of the new framework for the treatment of systemic banks is the obligation for them to draw up effective recovery and resolution plans, and the introduction of legislative arrangements that allow their effective application. in 2011 the fsb published a set of so - called key attributes with which the resolution regimes of each jurisdiction must comply. bis central bankers ’ speeches in spain, law 9 / 2012 of 14 november 2012 on the restructuring and resolution of credit institutions introduced a regime which brings forward several of the resolution - related elements required by the fsb. more recently, just some days back, the ecofin reached agreement on the draft directive on the resolution of credit institutions, which marks a crucial advance towards the implementation across europe of the fsb ’ s resolutions. this draft directive, which is still pending approval by the european parliament, seeks to give national authorities the powers and instruments for heading off banking crises and for the orderly resolution of any credit institution. the draft directive establishes an array of instruments with which to tackle banking crises in three phases or stages : in the preventive stage, in the case of early intervention and in the case of resolution