- banking activities are exposed not just to credit and market risks which are the primary risks of their business, and which the banks should assess and manage as part of their core competence. these banks will also be taking on the business risks of their non - financial activities. if their non - financial activities run into trouble, the banks may feel compelled to support them beyond normal commercial considerations, to protect their own reputation. in so doing the banks may undermine their own soundness ; yet if they did not extend the rescue, the problems of the affiliates may trigger a loss of confidence in the bank itself because of the close association. secondly, with banking and non - banking activities inter - meshed within a conglomerate, there will be a strong tendency to stretch any safety net intended for the banking system also to cover non - bank operations in the group. if failure of an associated non - bank threatens the bank and systemic stability, the regulator or government may be forced to rescue both. we have seen this happen in the recent asian crisis. an implicit safety net for the banking system may be a necessary evil ; but extending it to non - banks compounds the problem of moral hazard. it also tilts the playing field against non - bank competitors who are not associated with banks. thirdly, separation minimises the risk of non arms - length transactions between banks and their nonbank affiliates. when a bank lends to a related entity at more favourable terms than market, or invests in an affiliate in order to control it even though the investment does not perform, minority shareholders of the bank are disadvantaged, and so are depositors. some economists have argued that in less - developed financial markets, it is in fact a rational and practical strategy for a group of companies sharing common ownership or cross - shareholdings to lend to and invest in one another. information about companies is often less than complete, and company accounts and business plans are hard to interpret. family networks or guanxi are then efficient ways to establish a basis of trust for doing business, and to avoid the high costs of obtaining reliable knowledge about the other party ’ s activities and finances. but the non - transparency of this approach can lead to serious difficulties and abuses. cross - shareholdings diminish the influence of minority shareholders, dilute market pressure on the companies in the group, and weaken the internal discipline to appraise rigorously the risk of each investment. the ongoing reforms in many asian countries are as much about tightening corporate governance

gan kim yong : keynote speech - ibf golden jubilee ite scholarship keynote speech by mr gan kim yong, deputy prime minister and minister for finance, and deputy chairman of the monetary authority of singapore, at the launch of institute of banking and finance ( ibf ) golden jubilee ite scholarship, singapore, 14 may 2024. * * * ms low khah gek, chief executive officer, ite, ms carolyn neo, chief executive officer, ibf, financial industry partners, distinguished guests, students, ladies and gentlemen, introduction 1. good morning to all of you. it gives me great pleasure to join you today to launch the ibf golden jubilee scholarship for ite students. 2. the institute of banking and finance, or ibf, was established in 1974 to develop the professional competencies of the financial industry. over the last 50 years, it has dedicated itself to growing a skilled and resilient financial sector workforce a€ “ a cornerstone of singapore's position as a vibrant and trusted global financial centre. as ibf celebrates its golden jubilee, it is timely and meaningful to launch this scholarship. expanding the talent pipeline for the financial sector 3. since its founding in 1992, ite has served as a key provider of technical and vocational training to equip our students with relevant skills and to support singapore's economic growth. over the years, the government has expended significant resources to develop ite and invest in its students. it has a strong focus on practical skills and industry partnerships, to equip its students with industry - relevant skills. ite also offers work - study diplomas to its graduates, so that they can continue to upgrade and upskill. this has helped our ite graduates to have successful careers. 4. the financial sector has created well - paying jobs, offering the highest median gross income amongst employed residents. a ) and it continues to offer promising employment opportunities. over the past five years, the sector's workforce has grown by 16 % to 194, 000. of this 16 % increase, more than 9 out of 10 were residents. 5. we expect the sector to continue to grow, and we want to see more singaporeans from diverse backgrounds pursue fulfilling careers in the financial sector. ite graduates are part of this talent pipeline, and this scholarship will allow them to gain industry exposure and explore career opportunities in the financial sector. 1 / 3 bis - central bankers'speeches expanding possibilities, catalysing partnerships,