Jacqueline Loh: Shanghai and Singapore - synergies amidst a dynamic Asian financial landscape Keynote address by Ms Jacqueline Loh, Deputy Managing Director of the Monetary Authority of Singapore, at the Second Shanghai-Singapore Financial Forum, Shanghai, 30 November 2016. * * * Ladies and Gentlemen Introduction 1 Good afternoon, it is my pleasure to join you at the 2nd Shanghai-Singapore Financial Forum (SSFF). 2 In November last year, the Monetary Authority of Singapore (MAS) and the Shanghai Municipal Financial Services Office (Shanghai FSO) launched the inaugural SSFF. That was a significant and important milestone. As the Chinese saying goes, 二人同心，其利断金. The SSFF is more than just a forum. It is a reflection and commemoration of the longstanding relationship and cooperation between Shanghai and Singapore. Following last year’s success, both sides are keen to build on the good momentum achieved and bring our relationship to a higher plane. 3 The aspirations of both the MAS and Shanghai FSO are reflected in the theme for this year: “Shanghai and Singapore – A Partnership for a New Asian Financial Landscape” . Our hope is that both cities can work together to forge a stronger, more future-ready partnership ahead. This is important for both Shanghai and Singapore, which are international financial centres in the midst of a rapidly evolving Asian financial landscape. 4 Let me outline briefly what we have achieved together so far and highlight the synergies that we see ahead for both Shanghai and Singapore. I.
Figures differ across countries – with the lowest numbers in the Czech Republic (around 20 percent) and the highest in Romania (above 50 percent) – but the tendency is the same. Referring to the benefits of euro adoption, one of the prominent ones, namely the lower financing costs, is no longer obvious. The incomplete institutional setup of the European project in general and the European Monetary Union in particular – weak fiscal rules and the lack of any transnational instruments that would have enabled monitoring cross-border private capital flows – gave rise to a number of vulnerabilities which the recent crisis has exposed. To be more specific, what sets the European Union apart from the other industrialized economies is precisely the fact that the initial banking crisis which hit everybody here gave birth to fears of sovereign default, which reinforced banking system vulnerability and sapped investor confidence further, thus deepening the recession. The consequence of all that was the financial fragmentation issue, which is precisely the reason why the lower financing cost benefit of euro adoption, seems to have vanished. Another unfortunate consequence was that the benefits brought about by commercial integration were significantly diminished by lack of growth in the euro area. The fixes proposed to the institutional architecture of the European Monetary Union, such as the setup of the European Stability Mechanism and even that of the Banking Union, brought 2  BIS central bankers’ speeches  about direct costs of adopting the euro.