##cyclical capital buffer if warranted. in addition, macroprudential policies have become integral to many central banks ’ policy toolkits. various jurisdictions in asia such as singapore, hong kong, and indonesia have used macroprudential measures to reduce risks to their domestic financial systems and to dampen the impact of economic shocks, such as the application of loan - to - value limits for mortgage borrowings. however, the detailed impact of macroprudential policies is arguably less well understood. there are research challenges in this regard. for example, the bank for international settlements ( bis ) highlighted that the impact of tools are likely to vary across jurisdictions based on their domestic circumstances and phase of the financial cycle. a key focus area is how best to study the spillover impact across jurisdictions from a macroprudential policy decision point of view. another challenge relates to effectiveness. macroprudential tools have largely been employed in more recent years, and isolating their effectiveness from other measures will require further studies. 23 in this context, it may be remiss of me not to mention the apparent artificial divide that has existed between the analysis of the financial vis - a - vis the real sides of the economy. during the gfc, i recall some criticism that economists used mathematical models that did not sufficiently factor the critical roles that banks and other financial institutions play in the economy. since then, important strides have been made, including in the workhorse dynamic stochastic general equilibrium ( dsge ) models used at central banks, to better capture the key interactions between the financial sector and the rest of the economy. this is most pertinent for regulators and for central banks ’ work in economy - wide forecasting, policy analysis and scenario simulation. i would also encourage further research in this area, including developing empiricallyvalidated feedback relationships that can be embedded into models for stress testing purposes. evaluating the impact of fintech 25 turning now to a recent pet topic of interest – fintech. much has been written and reported on technology innovations that have and will continue to disrupt business models. there are also many views around disruptions to jobs and on socio - economic relationships. 3 / 5 bis central bankers'speeches let me make some brief comments on mas ’ regulatory stance towards innovation in financial services. for any innovation or a new technology - based business model to take off, it must be purposeful and value creating. for example, there are fintech entities that have entered the financial

ong chong tee : the post - crisis financial landscape - what next? remarks by mr ong chong tee, deputy managing director ( financial supervision ) of the monetary authority of singapore, at the society for financial studies cavalcade asia - pacific conference's gala dinner, singapore, 13 december 2018. * * * professor laura starks – president, society for financial studies professor ron masulis – program chair professor jun - koo kang – associate chair, nanyang technological university professor bernard yeung – dean and stephen riady distinguished professor, national university of singapore, president, asian bureau of financial & economic research professor massimo massa – the rothschild chaired professor of banking, insead associate professor johan sulaeman – dean ’ s chair, department of finance, nus business school ladies and gentlemen, a very good evening. thank you for inviting a few of my mas colleagues and i to be here tonight. introduction the sfs cavalcade conference is a distinguished forum that brings together some of the sharpest minds in the world of finance and research. 2 this evening, i thought i could share some perspectives of a financial regulator. my hope is to flag a few pertinent issues that could do well with more research insights and discussion. as the great hungarian scientist albert szent - gyorgyi once said : “ research is four things : brains with which to think, eyes with which to see, machines with which to measure and fourth, money ”. i am sure that each of you will adequately deal with the money bit, but our collective minds and tools in financial studies that all of you have can do much to raise the understanding of the prospects and challenges for the financial system. one decade ago, we had the global financial crisis ( gfc ). as samuelson described it starkly : “ what we know about the global financial crisis is that we do not know very much ”. with the benefit of hindsight, vulnerabilities had indeed built up from : ( a ) highly leveraged financial institutions ; ( b ) severe liquidity mismatches ; ( c ) fairly opaque over - the - counter derivatives markets that transmitted risks rapidly when liquidity suddenly dried up ; as well as ( d ) moral hazards associated with financial institutions that were deemed “ too big to fail ”. ten years on, a number of key regulatory reforms are being implemented in stages to address these vulnerabilities. 5 take for example, the basel iii reforms after the