Such consolidation would permit small and medium-sized banks to attain sufficient scale to undertake the IT investment necessary to meet the challenges of the digital era. 4/5  BIS central bankers' speeches  While both national and cross-border consolidation options are potentially viable, the key consideration for financial stability is that the combined entity should be able to successfully execute the merger, resulting in a bank that can sustain profitability in the long run. 1 See European Banking Authority (2018), Risk Assessment Questionnaire – Summary of Results, December. 70% of banks view their cost of equity in this range, with a further 15% of banks estimating that it lies in the range of 10–12%. 2 See, for example, Babihuga, R. and Spaltro, M. (2014), “Bank Funding Costs for International Banks,” IMF  Working Papers 14/71, International Monetary Fund; Keeley, M. (1990), “Deposit Insurance, Risk, and Market Power in Banking,” American Economic Review, 80(5): 1183–1200. 3 See Andrews, D. and Petroulakis, F. (2019), “Breaking the shackles: Zombie firms, weak banks and depressed  restructuring in Europe,” Working Paper Series, No. 2240, ECB, Frankfurt am Main. 4 See Gopinath, G., Kalemli-Ozcan, S., Karabarbounis, L. and Villegas-Sanchez, C. (2017), “Capital Allocationand  Productivity in South Europe”, Quarterly Journal of Economics, 132(4): 1915–1967. 5 See Adalet McGowan, M., Andrews D. and Millot, V. (2018), “The walking dead? Zombie firms and productivity  performance in OECD countries,” Economic Policy, 33(96): 685–736.
Finally, +One, Synergistic Growth. Allianz seeks to inculcate systematic cooperation between business lines and markets across the Group to deliver profitable growth. Likewise, Singapore’s insurance market must continue to be underpinned by the strong partnership between industry, academia, and government. Research, talent development and market infrastructure are areas where active collaboration is a critical success factor. Conclusion The commitment of key industry players such as Allianz has been instrumental in establishing Singapore as a leading insurance market. On this happy occasion, we are also pleased to announce that Singapore has been chosen to host the Geneva Association General Assembly in 2015. The General Assembly will bring together global CEOs and other stakeholders in the insurance industry over a two-day conference to discuss industry trends. This is only the second time it will be hosted in Asia, after Japan in 2009. In closing, I thank Allianz for growing with Singapore. I am confident your strong presence in Singapore will serve you well as you continue to extend your Asian footprint. Once again, congratulations, and a very good evening to all of you. Thank you. 2  BIS central bankers’ speeches