not have sufficient funding sources. in this regard, financial institutions can cooperate with fintech firms by providing funding. this helps financial institutions ensure new growth opportunities by finding new clients with whom no business deal was previously made because of the profitability of the deal. these initiatives also bring opportunities for startups and small and medium - sized enterprises ( smes ) with insufficient collateral and guarantee capacity to expand their businesses. if fintech firms and financial institutions - - which have a comparative advantage in information production and fund provision respectively - - work together to play the role of the " banker, " that could result in better financial services. this would be a good example of new growth opportunities within the context of financial intermediation. conclusion the bank of japan established the fintech center to facilitate the development of fintech in 2016, the year when the fin / sum first took place. the topic of corporate payments and commercial data utilization, for example, has been discussed with a wide range of experts at our fintech forum as well and we have released the insights and perspectives gained from the discussion on our website. the bank will continue to make efforts so that better financial services and the creation of new businesses will lead to economic growth. in this year's fin / sum, we welcome a rich variety of participants, including those from the financial and technology sectors. i sincerely hope that interactions between the participants will lead to " new sources of growth " - - which is the theme of this year's fin / sum. thank you for your attention.

these financial innovations, the objectives of the investors and the users of funds were therefore seemingly “ happily married ”. but alas, the party has abruptly ended and the music has stopped playing. in the flurry of these financial innovations, the value of transparency seemed to have been understated or even casually brushed aside. and as the market in the us was largely deregulated, the market grew larger and larger. some are predicting that what we may see, as an aftermath of this turmoil, is a highly concentrated and increasingly regulated financial system in the major economies. policy makers and regulators in emerging markets, including in the philippines, will then have to evaluate their own market structures to see how they can best position themselves in this changing environment. ii. the philippine banking system against the backdrop of recent events, how have our banks fared? you have heard me say that our banks ’ collective exposure to the failed lehman brothers was 0. 3 - 0. 4 percent of the banking system ’ s total assets. we hope that there will be no other lehman ’ s type problems down the road, and this seems to be a fair hope given that us and even european authorities have now boldly stepped in to rescue the other large and potentially systemic financial institutions in their jurisdictions. nonetheless, our latest survey of banks shows the exposure of philippine banks to potentially “ at risk ” international financial institutions is only around 1 percent of total assets at most. and this level of exposure by a few banks is definitely well within the ability of these banks to absorb should they become actual losses given their strong capital base and liquidity. our monitoring of banks ’ activities continues to reveal no abnormal actions by or against banks. in addition, the interbank market continues to function in an orderly manner given fairly stressed global conditions. where we have seen some “ friction ” is in the swap market, possibly in step with tightness in global dollar liquidity. but as i understand it, that has abated in the last couple of trading days. ladies and gentlemen, our banking system remains fundamentally sound. capital is still well above both the bsp 10 % minimum prudential requirement and the bis standard of 8 %. asset quality is as close to the lowest level seen since the asian crisis as it has ever been. return on equity has also been improving. and there is ample liquidity system - wide. this stable banking system has been critical in underpinning a stable macroeconomic environment. and sustained stability in our macroeconomic