##ured deposits, adjusted for the effects of mergers, have expanded at twice the pace of those at the largest banks. throughout the 1990s, small banks'return on equity was well maintained, and the viability of small banks is evidenced further by the fact that more than 1, 350 new banks were chartered over the past decade in the united states, virtually all of them small institutions. with few, if any, benefits, raising the ceiling would risk incurring substantial net costs by expanding the safety net, increasing the government subsidy to banking, encouraging moral hazard, and reducing the incentive for market discipline. supply of credit to small business i now turn to my final topic for today - possible implications of the changing structure of the u. s. banking sector for the supply of credit to small businesses. in the united states and many other countries, consolidation in the banking industry has involved large numbers of small banks. as a net result of mergers, failures, and new entry, the number of commercial banks in the united states with total assets under $ 100 million ( in 1994 dollars ) fell from a little more than 8, 800 in 1990 to not quite 4, 800 at the end of 2001. although, as i have indicated, these small banks have generally been doing quite well, some observers have expressed concern that such changes in the structure of the banking industry may adversely affect the availability of credit to small businesses. given the importance of small businesses to all of our economies, the supply of credit to such firms deserves serious attention. for this reason, the effect of consolidation on small business lending was a focus of the g - 10 study. it has continued to be a topic of research by board staff, and i am pleased to see that it is the subject of papers presented at this conference. concern about the effects of consolidation on the supply of credit to small businesses is predicated on the view that the larger banks resulting from consolidation may restructure their portfolios by discontinuing credit relationships with smaller borrowers and expanding lending to larger borrowers. to the extent that the credit relationship between a bank and a small business is characterized by a relatively high level of specialized knowledge by the bank about its customer, small firms could face difficulties in finding credit from other sources. early statistical studies of the effect of bank consolidation on small business lending provided some support to the concerns i have just summarized, as early studies suggested that banks reduce the percentage of their portfolio invested in small businesses after consolidation. however, subsequent

graduates, with the possibility of longer term employment should they perform well and are keen to further their careers with the firm. 5 / 7 bis - central bankers'speeches i. take for example, blackrock singapore, which took on a group of polytechnic graduates on a year - long apprenticeship programme. two of them, jason lim and charmaine chia, have since been converted into full - time roles. jason, who graduated from temasek polytechnic with a diploma in financial business informatics, had picked up critical skills during his apprenticeship, such as in financial modelling, generating of investment reports and using of investment tools. he will be joining blackrock's fixed income investment team. charmaine, who graduated from nanyang polytechnic with a specialist diploma in information systems development, had undergone her apprenticeship with blackrock's aladdin engineering team. during her apprenticeship, she had the opportunity to be trained in technical skills and acquired relevant certifications, and received exposure to multiple projects where she demonstrated agility and competence. with this, she will be joining the team full - time as an analyst. ii. i am glad that our polytechnic graduates are contributing and bringing their skills and capabilities to the financial sector. i encourage more financial institutions to take a similar skills - based approach to hiring them. c. tonight, we will also see 54 of our young, promising ite students receive the ibf golden jubilee ite scholarship. i. one of them is nicholas soo, a year 2 higher nitec student in accounting, who will be interning with great eastern life and will be involved in developing service excellence for the company's retail channels. nicholas aspires to pursue a career to help individuals and businesses make sound financial decisions. with this internship, he is eager to gain deeper insights into the financial markets and hone his communication skills. his stint with great eastern life will put him in good stead to succeed in the financial sector. d. i encourage more financial institutions to offer opportunities to young talent like jason, charmaine and nicholas, so that we can build a strong pipeline of singaporean talent for the financial sector. conclusion once again, let me congratulate the ibf on its 50th anniversary. a. you have played an instrumental role in the growth of our financial sector. b. the close collaboration that you have forged among tripartite partners has been the secret sauce of our success. i. in fact, many of the initiatives i mentioned tonight were co - created with