have the right risk mindset. 15. we should put once - neglected risks, such as counterparty credit risk, model risk, liquidity risk and technology risks, at the forefront of risk considerations. we have to be bis central bankers ’ speeches mindful that falling back on historical experience may not necessarily provide the guidance especially when developments are unprecedented. in this regard, boards of financial institutions play a vital role in driving the level of risk consciousness in their institutions and exercising effective risk management oversight. mas will mandate all local banks and significant insurers, following their annual general meetings this year, to have a dedicated risk management committee, and for members of this committee to have the appropriate balance of skills and expertise to discharge their responsibilities. starting this year, we will also be requiring mandatory training for all members of the boards of local banks. at the management level, mas expects risk management units have to be sufficiently empowered and adequately plugged in to the risk - taking activities of the firm. enhancing collaborative partnerships 16. underlying these specific measures is a basic emphasis on having the requisite knowledge, skills and expertise throughout the organisation ’ s hierarchy in managing risks. in this regard, research and executive education programmes help to increase the body of knowledge and critical understanding of risks in the asian financial industry. 17. one function of research is to explore unchartered territory and break new frontiers. many in academia do this important blue sky research. another significant role of research is in bridging the gap between theory and application. this form of research accelerates market practices in a more immediate and direct way. many research institutes here in singapore, including edhec - risk, is focused on direct application. mas welcomes this. research institutes can use their presence in asia to work with the financial industry in the region and help the region navigate the challenges ahead. conclusion 18. edhec - risk is setting up its base in singapore at a time of great transformation of the economic and financial landscape in asia. a deep understanding of risks provides the foundation for stability and growth. the research and educational activities of edhec - risk institute will help enhance our understanding of risks, and the development of talent. we welcome edhec - risk institute to our research and financial community in asia. your presence adds to another important strand in the deepening relationship between france and singapore. i congratulate edhec - risk institute on the opening of its asian centre, and wish professor amenc, professor

than $ 62 trillion within 8 years. in 2004, outstanding mortgages held in non - agency mbs in the us were just us $ 670 billion. it tripled to over us $ 2 trillion within 2 years. it is a similar story with the origination of subprime mortgages. in the same period, global cdo issuance more than tripled from us $ 157 billion to about us $ 550 billion. these assets were held in banks and non - banks globally. when the financial crisis struck, the world was shocked not only by its severity, but also by the speed in the transmission of shocks throughout financial markets. there is no better illustration of how new sources of systemic risk can build up rapidly. 6. in a similar vein, the sharp deterioration of the fiscal positions of many governments has also led to a re - assessment of sovereign risks. about 10 years ago, investors were concerned that the strong budget surplus of the us federal government might lead to a severe reduction in the supply of us treasuries. today, bond vigilantes are focusing attention on not just the short term fiscal health of governments, but on the impact of demographic changes, large entitlement benefits and unfunded pension liabilities on the longer - term fiscal health of these governments. 7. my third observation is the speed of structural changes in emerging economies and transformation in the patterns of global trade and investment. as these are superimposed on cyclical changes, it is often difficult to disentangle the two. emerging markets, especially asia, have weathered the crisis relatively well, and recovered quickly. this year, the imf expects emerging asia to grow by nearly 7 %, almost double the rate forecast for the global economy as a whole. many analysts expect the differential in growth rate to persist in the coming decade. the global economy went through stagflation in the 1970s, disinflation in the 1980s, and a roaring decade in the 1990s. in 2000s, we had the dotcom bubble, and a severe financial crisis. how the coming decade will turn out, especially for emerging economies, will change many of the risks and return assumptions on a wide range of asset classes. dealing with the implications 8. the growing complexity and interconnectedness in financial and economic systems, the increasing speed of change, as well as the ongoing structural changes in emerging markets will have profound impacts on all sectors of the global financial industry. these driving forces will shape the evolution of the financial