In Australia, the Hayne Royal Commission has detailed a litany of wrong-doing in the country’s banking industry, including forging loan documents and pushing customers into bad investments to meet bonus targets. I take some comfort that financial institutions in Singapore have generally been better behaved and are better regarded. But we have had our problems too: the mis-selling of Minibonds and other structured products; the manipulation by traders of financial benchmarks; and more recently the laundering of 1MDB-related funds through our banking system. We too can do better. Let me briefly suggest three things the industry and regulators can do together to strengthen trust in finance, with a focus on what we are doing here in Singapore. First, we must ensure that the financial system is not abused for illicit purposes – be it money laundering, tax evasion, or terrorist financing. In Singapore, we had a rude awakening in 2015 when it came to light how 1MDB-related funds were laundered through our banking system. MAS and the industry have worked hard since then to strengthen systems and processes to detect and deter illicit fund flows. Financial institutions have made significant strides in managing money laundering risks. Boards and management are more focused on addressing issues related to illicit finance. They have made the detection of money laundering risk a responsibility of front-line, customer-facing staff, and not just the compliance function. Many financial institutions have strengthened their remuneration frameworks to include financial crime risk management as a key performance indicator.
Zeti Akhtar Aziz: Greater financial integration and financial stability Opening remarks by Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, at the SEACEN 30th Anniversary Conference “Greater financial integration and financial stability”, Kuala Lumpur, 20 October 2013. *  *  *  Bank Negara Malaysia is honoured to welcome you to the SEACEN 30th Anniversary Conference on “Greater Financial Integration and Financial Stability”. We are especially honoured by the presence of Governors and senior officials who are here today, despite the pressing demands on our institutions during this period of persistent uncertainties in the global financial and economic environment. We continue to face challenging and often testing times. Over the recent five years, we have been confronted with recurring episodes of turbulence, followed by phases of transitory recoveries. We have seen, and have been part of, extensive collaborative measures and reforms pursued at both the regional and global level. Yet, the calm after the storm continues to evade us. The SEACEN and Asian economies have seen significant structural adjustments and wide ranging financial reforms in this decade. During this period intra-regional trade activity has rapidly increased, signifying the deepening of economic ties within the region. Intra-regional trade in East Asia has expanded from an average of 44% of total trade in 1995, to 50% in 2012. Intra-regional investment activity has also been on an uptrend.