Also, if governments do continue to contemplate the possibility of fiscal support in a crisis, then there might need to be some kind of agreement – conceivably case by case – on  4  For a discussion of capital of last resort see, See Tucker P M W (2009f) “The Crisis Management Menu”, SUERF, CEPS and Belgian Financial Forum Conference: Crisis Management at the Cross-Roads, pp. 13 and Tucker P M W (2009b), “The repertoire of official sector interventions in the financial system: last resort lending, market-making, and capital”, Bank of Japan’s 2009 International Conference, Tokyo, May 2009, pp. 17. 5  A “purchase and assumption” is the term used by FDIC to describe when a healthy institution purchases some or all of the assets of a failed deposit taker. BIS Review 33/2010  5  principles governing the contributions imposed on each country to meeting the costs of the resolution. But the ideas I aired in the first part of the remarks were aimed at helping to take that off the table. A principle of equitable treatment of worldwide creditors and depositors would be consistent with the imposition of losses on unsecured creditors or uninsured depositors, either in a going-concern restructuring of the kind I outlined earlier or through the application of more standard SRR tools to gone-concern bad banks. But it would require losses to be imposed on an equitable basis, respecting the existing priority ranking regardless of the jurisdictionallocation of creditors. That might require recognition across the main jurisdictions of certain safeguards.
Similarly, Chinese banks can use loan securitisation to recycle bank capital and re-channel the funds to real economic activities back home. •  ICBC’s opening of its Asia Pacific Shipping Finance Centre is a good example of this. •  The centre will help ICBC Singapore securitise its shipping and related loans originated in the Asia Pacific, by tapping the Singapore bond market. Risk management As Chinese corporates continue to venture abroad in Asia, they will confront a variety of risks. These risks need to be managed well. First, there are the usual foreign exchange and interest rate risks. •  As the largest FX market in the Asia Pacific, Singapore offers Chinese corporates effective FX hedging solutions to manage their risk exposures. •  The Singapore Exchange has a strong suite of FX futures contracts, including Asian currencies, and the take-up rate has been strong. •  Many corporate treasurers have chosen Singapore for their regional treasury centres covering Southeast Asia, and even the Greater China region. Second, some of the investments by Chinese corporates could be in locations that are vulnerable to natural disasters. •  Investors would need to take into account not only the immediate risk of loss due to a natural catastrophe but also the secondary impact on their supply chains and working capital. •  Singapore has a critical mass of specialty insurers who can provide appropriate cover against such natural catastrophe risk. Third, infrastructure projects typically expose investors to significant political and credit risks.