. but growing fiscal pressure means that public balance sheets will not be able to sustain the current or even higher level of spending that is needed. bank lending has been the other main source of infrastructure financing, but this is increasingly constrained by macroeconomic factors and potentially regulatory developments. the global project finance bank loan market registered a 7 % fall y - o - y in 2012. the eurozone bis central bankers ’ speeches crisis saw many prominent project financing banks deleverage and become more selective with clients and transactions, while basel iii may lower the volume and raise the costs of project finance loans. hence the balance of financing sources will eventually have to shift. policy makers have recognised the need for broader private sector participation. long - term investors such as insurance companies, pension funds and sovereign wealth funds can be alternative sources of financing, as the life cycles of infrastructure assets match their long - term liabilities. however, these investors are not participating actively enough in the infrastructure space, especially in debt financing. i am sure we all recognise that there are many reasons including a lack of familiarity with the asset class and bespoke nature of infrastructure projects. some see higher perceived political risks in asia, and a limited range of investment instruments relating to infrastructure. to catalyse broader private sector participation to complement the traditional bank lending space, a few things could be considered. firstly, we recognise that investors have varying risk appetites, and that the expertise to evaluate and undertake greenfield project risks still resides mainly with banks. banks should therefore consider bringing in different types of capital at different stages as the risk profile of a project changes over time. for instance, transactions could be structured such that banks finance the construction stage of projects using their balance sheets, and the bank loan is then refinanced in the bond market post - construction. this way, institutional investors gain exposure to a steady stream of cash flows from operating projects, while banks can recycle capital to lend to new greenfield projects. there have been precedents in other parts of the world. last year, the topaz solar farm project in california was structured with a us $ 1. 2b debt package featuring us $ 850m of bonds. banks took the construction risks, and the loans were subsequently refinanced via bond issuances. in the asian context, there may be additional considerations in refinancing bank loans via the capital markets, given the greater reliance on bank lending in this region. project sponsors need to get more comfortable accessing the

tharman shanmugaratnam : update on the singaporean economy statement by mr tharman shanmugaratnam, managing director of the monetary authority of singapore, delivered at the mas annual report 2000 / 2001 media conference in singapore on 12 july 2001. * * * introduction mas has had an eventful year, shaping monetary policy in a challenging and uncertain environment and continuing to liberalise and enhance standards in the financial sector. monetary policy in january this year, mas decided to maintain the existing exchange rate policy stance of allowing a modest appreciation of the trade - weighted singapore dollar within an unchanged policy band. this policy was aimed at capping medium - term inflationary pressures, while continuing to be supportive of economic activity as growth came off its cyclical high and moderated to a slower pace. economic activity slowed much more in the first half of 2001 than was expected, causing market sentiment to shift against the singapore dollar. strong demand for us dollars to fund merger and acquisition activities by domestic corporates, and a strengthening of the us dollar against the major currencies, exerted further downward pressure on the singapore dollar. the s $ neer weakened over the period, from the top of the policy band at the start of the year to the lower half of the band at end june. this trend was consistent with the change in underlying economic and market conditions. against the backdrop of a weaker external economic environment and a more protracted global electronics downturn, near term growth prospects for the singapore economy have turned significantly weaker while inflationary pressures are subsiding. the slowdown reflects a decline in demand, not an erosion of competitiveness. there is no reason for any persistent weakening of the singapore dollar. mas has therefore shifted to a neutral exchange rate policy stance, with a policy band centred on a zero percent appreciation of the s $ neer. mas will continue to guide the s $ neer within this exchange rate band, and stands ready to intervene to dampen excessive volatility should this become necessary. financial sector supervision and development mas'financial sector policies seek to promote a sound and resilient financial system while facilitating innovation, dynamism and competition. recent and ongoing initiatives by the mas have focused on : · harmonising regulation across the financial sector ; · liberalising access to the domestic industry ; · promoting corporate governance and market discipline ; · implementing a risk - focused supervisory framework ; and · developing talent in the financial sector. harmonising regulation convergence of financial activities and consolidation of financial