Such inclusive, ongoing cooperation and information sharing builds trust and understanding. It will also enhance the effectiveness of resolution implementation by pre-empting host regulators from taking actions that may be incompatible with the home regulator’s resolution actions, due to a lack of clarity or awareness over the home regulator’s intended actions. Conclusion In conclusion, the issues confronting regulators today are wide ranging. This event is an excellent showcase of how regulators can come together to share our experiences and to keep each other apprised of developments in our respective regions. For instance, Europe’s Capital Markets Union project is an exciting development which we look forward to learning more about from our European colleagues. With various market integration initiatives also underway in Asia, there is room for us to exchange views and to learn from each other. Thank you for your attention. 1 France, Germany, Italy, Spain, UK. 2 Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, and  Thailand. 3 Data source: IMF. 4 MAS’ Guidelines on the Regulation of Clearing Facilities, revised , set out the circumstances under which  overseas clearing houses are required to be regulated in Singapore, and how we approach the regulation of such entities. 5 In relation to financial risk management and recovery practices. 4/4  BIS central bankers' speeches
Collateral should be required, but good collateral can never outweigh a borrower with a poor credit rating or an uncertain project. The bank must also make a realistic assessment of the value of collateral. For example, it is common to provide the borrower’s own premises as collateral. However, when a borrower goes bankrupt the value of the premises often declines substantially, as it is difficult and costly to adapt them to another user. The banks accepted high concentrations, not merely in lending to individual borrowers, but also credit granting to individual sectors and geographical areas. For example, the banks’ loans to the property sector, or with property as collateral, accounted for more than 60 per cent of all loan losses. This is a concentration risk that contravenes all sound risk management and is currently prohibited. However, it is easy to say all this with the benefit of hindsight. At the end of the 1980s, the banks had substantial profitability and low loan losses. Economic activity was strong. I believe that all of us active in the financial system then would have found it hard to believe that a crisis was impending. Nevertheless, the Swedish banks had one important piece of the puzzle already in place prior to the crisis. They were well capitalised and had built up capital reserves that corresponded to, or exceeded, the statutory level of 8 per cent. This created some resilience and to a great extent reduced society’s direct costs when the crisis occurred, as the bank owners’ money was lost first.