Muhammad bin Ibrahim: Forces of change profoundly influencing the Asia-Pacific region Speech by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia, at the Asian-Pacific Association of Banking Institutes Conference 2013, hosted by the Institute of Bankers Malaysia, Kuala Lumpur, 7 October 2013. *  *  *  It is with great pleasure that I welcome you to the 2013 Asian-Pacific Association of Banking Institutes conference hosted by Institute of Bankers Malaysia. I would also like extend a special welcome to all overseas delegates, Selamat Datang, as we say in our national language. Given the greater economic and financial integration that is taking place today, it is indeed timely for institutions of learning that focus on the financial sector to come together to deliberate on contemporary issues and trends affecting the region, and its implication on talent needs and development going forward. My remarks today will focus on the forces of change that are profoundly influencing the economies of the Asia Pacific region, and by extension, our financial systems, as well as some thoughts on the implications of these changes to the banking industry, with a particular focus on human capital development. I want to touch on three forces that are reshaping the banking industry across Asia and the Pacific. The first is on emerging markets’ and in particular Asia’s emergence as a dynamic centre for the global economy.
These forecasts also highlight that much of the financing needed to support investment in infrastructure that supports environmentally sustainable growth is likely to be generated not in advanced economies but in emerging economies such as China. The Bank’s response  So, how, as a central bank, are we responding to the financial risks which climate change presents? Viewed through the prism of our objectives, the Bank’s response has two core elements. The first relates to our micro-prudential objectives to promote the safety and soundness of the financial institutions for which we are responsible – banks and insurance firms - and involves our engaging with these firms on climate-related risks through prudential supervision. Our work initially started by examining the impact of climate change on the UK insurance industry. General insurers in particular are at the front line of managing the physical risks from climate change, such as those from storms and floods. The impact of these physical risks was the focus of the report the PRA published in 2  2015, alongside the Governor’s speech at Lloyd’s of London . We continue to deepen our activities in insurance - including in ensuring that the thinking that underpins the understanding of climate risk on the liability side of insurers’ balance sheets is reflected also in thinking about the transition risks that might arise on the asset side of those balance sheets, something which we expect to share more of over the course of this year.