supply chain processes can produce efficiencies in terms of time and labour saved. it also enhances the traceability and security of cross - border trade in goods and services, by enabling real - time visibility into all stages of the supply chain from production to delivery. for economies, digital trade transformation offers substantial productivity gains through, for example, rapid growth of e - commerce. it also offers better prospects of helping to distribute the gains generated from trade more widely and equitably among the various stakeholders. indeed, digitally delivered services already account for a little over half of total services trade1. they are increasingly facilitating trade flow across borders, in support of raising 2 / 3 bis - central bankers'speeches the market share of developing economies, which has increased from about 20 percent to 30 percent of global service trade between 2005 and 2023. meanwhile, digital technologies can be leveraged to enhance cross - border trade settlement and financing, where there is plenty of scope for coordinated solutions to existing pain points. for example, project mbridge has been exploring the use of wholesale central bank digital currencies of hong kong and a number of other participating central banks as a way to speed up cross - border payments at reduced cost, faster settlement, and with better transparency. equally exciting is the use of innovative technologies in trade finance – from blockchain, ai to digital signatures – and greater cooperation around cross - border interoperability that will help close the widening global trade finance gap, estimated by the asian development bank last year to have reached a record us $ 2. 5 trillion. another area of opportunity and cooperation is around green technologies. the consequences of climate change, in the form of higher frequency of extreme weather events, have only become more visible these last few years, and asia is particularly exposed. we need open and predictable trade to enable scale economies and direct low - carbon technologies and services to where they are most needed. in this respect, major regional trade networks can serve as key platforms that facilitate sustainable trade and investment, support climate - resilient economic developments, and enhance the ecosystem of green finance. let me close by noting that the global trading system as we know has brought mutual benefits and shared prosperity to the world economy. granted, there's always scope to make the system work better and fairer. let's focus not just on the challenges, but more on the solutions and the opportunities. there are excellent research papers to be presented at the conference, covering many of the topics

. this allowed the companies concerned to become over - leveraged ( and thus vulnerable to economic downturn ) and directed resources into unprofitable investments. the banks concerned had little incentive to develop proper lending skills. concentration risks and connected lending 8. moreover, banks in some economies were over - exposed to single borrowers, often those connected with the lending institution. such lending is usually of poor quality, not having been made at arm ’ s length, and means that the shareholders have no real capital at stake in the bank ( because it has effectively been lent back to them ). failure to recognize bad debts 9. having landed themselves with bad debts, banks failed to face up to the problem. in particular, systems for loan classification and provisioning have been inadequate. as a result, capital ratios have been overstated, and insolvent or near - insolvent banks have been allowed to continue in business and to build up further losses. banks have been allowed to accrue income on non - performing loans, thus overstating revenue and capital. lack of transparency paul krugman, “ what happened to asia? ”, january 1998 [UNK] 10. all this has been made worse by a lack of transparency in regional banking systems. failure to disclose the true scale of bad debt problems has weakened market discipline on bank management and reduced the need for them to face up to the problems. public confidence in banking systems has been undermined because, with no credible information, depositors and investors assume the worse in even relatively sound banks and rush to take their money out. moral hazard 11. the final ingredient has been the perception that many banks in the region are effectively government - guaranteed. this has created a problem of moral hazard whereby bank management can afford to indulge in reckless lending behaviour because they believe that government will bail them out if they fail. similarly, depositors have less incentive to check the creditworthiness of the banks with which they place funds. weakness in supervision 12. how did asian banks get into this state of fragility? inadequate regulation and supervision, coupled with an explicit or implicit government guarantee, have attracted much of the blame, leading paul krugman to describe asian banks as “ over - guaranteed and under - regulated ”. inadequate supervision cannot be the whole story since a number of the weaknesses arise from circumstances which are not the direct responsibility of banking supervisors. there were some flaws in macroeconomic policy, in particular the maintenance of unsustainable exchange rates