The need to find a buyer to replace a seller can be expressed in the equivalent statement that the maturity of the liability is extremely long, in this case indefinite. The real problems stem from liabilities with very short maturities. These occur with debt finance, whether in terms of bank deposits payable on demand or longer-term debt finance which has almost run to maturity. In these cases, depositors who wish to withdraw their funds do not have to find replacement depositors. They simply take their funds out. The result is that, if this rush to the exit is on a sufficiently large scale, banks find themselves on the receiving end of a liquidity run. Such runs can occur even if the fundamentals are sound, although they are more likely when the fundamentals are weak. And the banking systems of some emerging markets compounded the problem by borrowing in foreign currency at short maturities and investing the proceeds in domestic currency assets at longer maturities. This was indeed a recipe for instability. The importance of short-term debt finance in the reversal of capital flows in recent years is clear. Virtually the whole of the $ billion reversal of flows to the five Asian crisis countries was accounted for by swings in short-term debt finance. And 80% of this swing resulted from changes in the net flow of finance from commercial banks.
In particular, FSTEP will offer scholarships to eligible top graduates from various universities to participate in its one-year fast-track training programme. I wish to congratulate FSTEP for the successful effort in designing a new syllabus and it continuous effort to improve the FSTEP programmes remain contemporary and relevant agreed to by all parties within the financial services industry. More importantly, it is my hope that FSTEP will continue to produce the quality of graduates that will meet the needs of the industry. I hope that all of you will have a fruitful discussion and dialogue. On this note, I declare open the event “FSTEP: Syllabus Enhancement”. 2  BIS Review 100/2010