, one better prepared to hold our own against formidable competitors, and deliver a high and rising standard of living for our population. on capital account liberalisation, countries are now acutely aware that sound macroeconomic management is a key prerequisite, without which no regime of exchange controls can deliver stability. they also realise that they must sequence liberalization judiciously, and strengthen financial supervision and prudential safeguards as they liberalize. in the aftermath of the crisis, no asian country imposed capital controls, apart from malaysia. but several tightened safeguards to reduce the risks of destabilising capital flows, and to shield domestic foreign exchange and money markets from speculative pressures emanating from abroad. they improved monitoring, and discouraged trading in currencies that was not related to the real economy. a few countries went further, and sought to curb transactions in home currencies in offshore markets. at the same time, there has been an ongoing effort to develop bond markets in asia. issuance of domestic government bonds has increased sharply in most asian countries. certainly, a large part of the increase reflected the spike in fiscal deficits resulting from the debt restructuring operations in the financial sector during the asian crisis. nonetheless, corporate bonds have also grown. there is a trade off between tightening up the capital account, and developing the bond markets. measures to restrict offshore foreign currency trading have been effective, in so far as reducing or eliminating offshore markets is concerned. but these safeguards come at a cost – they also hinder the development of capital markets, especially the bond markets. size and liquidity are essential attributes for a market to attract international interest. already in size and liquidity, we clearly lag behind our counterparts in the west. if asian markets are fragmented and unable to grow, they risk being ignored by global investors. in the immediate aftermath of the asian crisis, countries that have suffered at the hands of the markets are understandably disinclined to err on the side of fewer restrictions, especially as the benefits from bond market development are not likely to be large given structural problems in the economy. however, over time as the asian countries make progress in restructuring their economies and strengthening their institutions, they will reassess the balance of risks, and perhaps modify some of these restrictions. liberalisation of s $ policy in singapore, we are subject to the same trade - offs. but our circumstances are somewhat different as we were less severely affected by the crisis. our financial services sector

’ s share of global asia - pacific originated reinsurance premiums has also risen from 3 % in 2013, to close to 10 % in 2016. 1 / 4 bis central bankers'speeches vision 2025 : global capital for asian risk transfer 6 so what next after this? 7 the global reinsurance industry continues to face structural challenges, in a few forms : alternative capital, which gives rise to excess capacity and softening rates, is expected to persist. insurance underwriting is not keeping pace with the rate of emergence of new risks, such as cyber, supply chain, and reputation risks. companies are increasingly demanding comprehensive risk management solutions that encompass both traditional and alternative risk transfer arrangements : for example, overlaying a standard reinsurance policy with a catastrophe bond to cover low - frequency and high - severity risks. new technologies and digital innovations are threatening to disrupt the insurance value chain, such as the underwriting and claims processes potentially being automated with the use of artificial intelligence. 8 in addition, as asia continues to grow in economic importance – fuelled by rapid urbanisation, infrastructure development and trade growth – insurance penetration continues to be low, and the growing protection gap in the region remains a challenge. the low penetration arises from of a lack of risk awareness and data paucity, making it difficult for risks to be well - modelled and priced. as a result, less than 5 % of disaster losses in asia were insured over the past decades. in other words, more than 95 % of asia is not receiving the protection it needs. 9 asia needs to close that protection gap soon, and singapore is pursuing three strategies in parallel to help with that : first, to develop alternative risk transfer mechanisms like insurance - linked securities and government pools in our repertoire of insurance offerings, so that we are in a position to provide financing quickly and effectively in the aftermath of loss events. second, to incubate insurance solutions for new and emerging risks, such as cyber, reputation and environmental liabilities. third, to transform the insurance market through technology and innovation. 10 today, let me focus on the first strategy of developing singapore ’ s alternative risk transfer market through insurance - linked securities and public - private partnerships. insurance - linked securities ( ils ) 11 let me begin with insurance - linked securities, or ils. 12 we know that alternative capital has been growing more rapidly than traditional capacity over the years, a clear demonstration of greater acceptance of ils instruments by both investors and issuers. in particular, iss