regional financial centres will continue to play a complementary role. competition among financial centres will not be a zero - sum game of winner takes all. smaller centres can coexist with the mega centres, focusing on different niches and serving different regions. there are thus collective gains to be shared through co - operation. linkages between key financial centres, both across and within time zones, can help the centres to reap the benefits of integration while at the same time preserving close access to local communities. similarly, there is an important role for closer regulatory co - operation and, where appropriate, harmonisation of standards, particularly in cross - border listing requirements, ongoing supervision, and accounting and disclosure. for the regions they serve, international financial centres make good economic sense. they provide easy access to funding and hedging opportunities, links to other key centres, and markets with liquidity and reach, especially for emerging economies. financial centres tend to prosper when their hinterlands are buoyant. when the hinterland is in difficulty, the financial centre will be adversely affected, but it still plays an important role in facilitating the process of recovery. as confidence recovers and investor interest returns, the financial centre will be an important conduit for the funds required for rehabilitation and growth. thus as asian economies make progress in putting themselves in order, they will need access to global capital for corporate restructuring and new investments. singapore's financial centre will be ready to play that role, whether the capital is to be raised through loan syndication, debt securitisation, private equity, or bond issuance. financial centres in asia looking ahead, the trend towards concentration of financial institutions and activities in fewer major centres is likely to persist. however, it is not easy to predict which specific cities will emerge as leading centres. this will depend not only on the static comparative advantage of the different cities, but also on the dynamic competitive advantages created by their policies and strategies. incumbents will always have an advantage, but no lead is totally unassailable, as london found to its dismay in 1998 when within a few months frankfurt snatched away the trading of german bund futures. london and new york will continue to be key global players. in asia, while tokyo will always be big and significant, the role of the other centres is still unclear. hong kong, singapore, sydney, and in the longer term shanghai are in play. each has its advantages and limitations, stemming from differences in their geographic and

political situations, and their regulatory and corporate environments. they will surely compete amongst themselves to gain market share and critical mass, and anchor in asia some of business which presently goes to london and new york. but in my view they also have considerable scope for co - operation, as each will occupy a distinct market niche and none can dominate in all aspects of finance. singapore will never have the advantage of tokyo's large economic base. nor do we have hong kong's physical proximity to china. but we seek to provide a world - class regulatory environment that responds to the needs of global markets and global institutions, and the most efficient infrastructure for businesses to use as a platform for all of asia. singapore plays host to some 6, 000 multinational corporations and the financial institutions that are their global advisers, many of which use singapore as their regional headquarters. and our strategic location at the heart of southeast asia and within 7 hours of key markets in northeast asia, south asia, and australia positions us well to serve as a financial centre for all of asia. singapore while the external environment is not within singapore's control, our strategies and policies are. we believe that the right strategies and policies will help us to capitalise on opportunities and overcome disadvantages arising from our size. there are no secrets to the strategies, because the factors for success are not unique to singapore. the challenge is in their execution and implementation. here are five things that we have set out to do in order to excel as a financial centre in the new economy. enhance business environment first, we are seeking to further enhance our conducive pro - business environment. economic and political stability, an efficient and impartial legal system, comprehensive and up - to - date market infrastructure, and fiscal discipline that allows low taxes are key preconditions, more important than special incentives for the financial sector. singapore has established a reputation for delivering these preconditions, which we will maintain and improve upon in future. build talent pool second, we are building up our talent pool. in a knowledge - intensive industry like financial services, singapore will not get anywhere without world - class talent. we are making a concerted effort to attract foreign talent who can make a contribution to singapore, and to integrate them into our economy and society. we are also nurturing home talent to its full potential through a good education system for the young and ongoing training opportunities for those in the workforce. as asian companies begin to use more complex strategies and products