credit spreads have narrowed for both investment - grade and high - yield bonds, markets are functioning in an orderly manner, and credit provision to the economy has held up. however, the covid event is not behind us yet. many households and businesses remain under pressure. according to the latest international monetary fund forecast, the global economy is projected to contract sharply by 4. 9 percent in 2020, a much worse outcome than during the 2007 – 08 financial crisis. while some indicators suggest a rebound in activity, the path of recovery remains highly uncertain. banks entered the current crisis in a much stronger position than they did the global financial crisis. they are much better capitalized and more liquid than back in 2008. this is a direct outcome of the g20 regulatory reforms adopted in the aftermath of that crisis and measures taken by the banking industry, which have improved the resilience of the core of the financial system. this has allowed the banking system to absorb rather than amplify the current macroeconomic shock. it has also enabled banks to play a central role in measures to support the flow of credit to the economy. a number of stress tests carried out recently in fsb jurisdictions have confirmed that banks are able to continue lending even in the face of this 1 / 4 bis central bankers'speeches extreme shock. less than two weeks ago, we at the federal reserve concluded that our banks would generally remain well capitalized under a range of extremely harsh hypothetical downside scenarios stemming from the covid event. even with that demonstrated strength, however — given the high levels of uncertainty — we took a number of prudent steps to help conserve the capital in the banking system. we know that the financial system will face more challenges. the corporate sector entered the crisis with high levels of debt and has necessarily borrowed more during the event. and many households are facing bleak employment prospects. the next phase will inevitably involve an increase in non - performing loans and provisions as demand falls and some borrowers fail. the official sector is providing a rapid and coordinated response to support the real economy, maintain financial stability, and minimize the risk of market fragmentation. the fsb is overseeing international cooperation and coordination of the responses of financial authorities to the covid event. too - big - to - fail reforms have made banks more resilient and able to support the economy this brings us to the fsb ’ s evaluation of too - big - to fail reforms. i should note at the outset that the analysis was conducted before the onset of

are critical to the future of the banking system : i. human capital investment ; and ii. forward looking leadership. human capital investment requires a new model : learning that adapts and is continuous the approach towards talent development and career learning is rapidly shifting. traditional learning systems are no longer sufficient. data from a recent study revealed that the “ ability to learn and progress ” is the principal driver of a company ’ s employment brand among millennials today. yet, only one - third of millennials believe employees are using their skills well, and 42 % say they are likely to leave because they are not learning fast enough. we must reinvent and modernise the existing model of human capital investment if we are to recruit, develop and retain 1 / 3 bis central bankers'speeches the very best of talent. prioritising and channelling greater resources to the talent development function are important first steps. currently, the average annual training expenditure for the banking industry is around 3 % of employee payroll, in contrast with international comparisons of around 4 % to 4. 5 %. the malaysian banking industry ’ s allocation for training and development is still below global benchmarks. it is, however, not enough to solely focus on outright spending. equally important is the quality of training investments. in my mind, this begins with transforming existing corporate learning systems to enable continuous lifelong learning and ongoing skill acquisition. the banking sector ought to have an “ on demand, ever ready ” learning system that empowers talent to take ownership of selfdevelopment. this means diversifying from the traditional form of structured learning that only takes place at rigid fixed intervals. aspiring talent ought to be empowered to personalise learning content according to individual preference and pace. indeed, knowledge should be accessible to all who seek learning. learning should take place at any time. learning should be democratised. the rise of innovative digital content providers such as coursera, codecademy and edx has further increased the viability and attractiveness of an “ on demand, ever ready ” learning system. edx, for example, includes over 130 economics and finance courses offered by prestigious providers such as harvard, mit and imf. in short, both the quantity and quality of human capital investment matter. agility is also a key aspect. human capital investment must adapt and evolve with its operating environment. the fintech wave has taught us an important lesson ; opportunity favours the bold and the wellprepared. more so in times of change. experience has