There is friction in clearing customs, handling trade documents, checking for fraud in trade finance, and ensuring the safety and timely delivery of goods. This is because the approach to trade and trade finance is still manual and paper-based. We need to have end-to-end digitalisation of trade processes. Chongqing and Singapore can work together to apply FinTech solutions to make the STC hassle free, safe, and cost efficient for all stakeholders. Chongqing’s interest to develop a Fintech experimental and demonstration zone in the Western Region is thus timely. The Fintech zone can serve as a source of technology solutions for the successful development of the STC. Several players have embarked on initiatives in this area. For example, VCargo Cloud from Singapore has worked on digitalising the STC’s work flows onto cloud services, synchronising and sharing the information provided by different parties from trade, logistics, and supply chain. I am glad to share that there will be a signing of a four-party Memorandum of Understanding (MoU) later today at the Summit that will catalyse FinTech cooperation between Chongqing and Singapore. The MoU will cover enterprise and talent exchange, the establishment of an incubator platform and a regular communication mechanism. Under a separate MoU, OCBC Bank, Xiaomi Inc, and Hanhua Financial Holding Co will explore Fintech collaboration in the areas of retail and institutional financial services in China. This collaboration will enable more than 300 million Xiaomi retail customers and business partners to have access to innovative financial services.
Risks of changing the regulator’s role If you accept the case for detailed rules being made by regulators, the next debate then is over what checks and balances are needed to give stakeholders confidence in the operation of the new framework. Might we pursue the stability of the graveyard by imposing ever more stringent rules? Or might we go the other way, becoming captured by industry and not protecting policyholders enough? Put bluntly, can we be trusted with more power? To address the point about the graveyard head on: I do not for one moment accept the caricature of a rampant regulator intent on crushing the industry under a slow-motion avalanche of new capital requirements, heedless of the wider consequences. History gives the lie to this caricature. Take the topical example of the matching adjustment (MA), which I read in the trade press last month is to be a ‘key battleground’ in the review of Solvency II. The primary effect of the MA is to reinforce the incentives that life insurers have to make longterm investments. It is something that the PRA had to fight hard for in EIOPA, often with little support from other countries. This matching is prudentially beneficial and may make annuities cheaper than they would otherwise be, but of course it also involves taking more risk because it boosts capital levels and lowers capital requirements.