Rapid growth in lending such as we have witnessed in a number of Asian economies can be a warning sign because it tends to be associated with a lowering of credit standards as banks lend to customers whose creditworthiness is more marginal. Moreover, much of this lending may find its way into the property market and stock market, adding to the upward pressure on asset prices arising from the inflows themselves. Reversal of inflows or a slowing down of the economy, as in Thailand, thus exposes the banks to both credit risk and market risk as asset prices fall. 15. With large capital inflows, banks may also find themselves incurring substantial net foreign currency liabilities. They will thus additionally be exposed to substantial foreign exchange risks if the domestic currency weakens. Financial liberalization and increased competition 16. Associated with, and leading to the global integration of financial markets is the trend of financial liberalization and increased competition. The trend has increasingly freed banks from direct controls on interest rates and on their permitted business activities in many Asian economies. We can see this in banking systems as far apart as those in China where the process of commercialization of the banking sector is now underway and in Japan which is planning its own version of Big Bang in the next few years. This new freedom can bring increased opportunities for the banks and can be a powerful incentive to increased efficiency in 4  International Capital Markets, IMF 1996.
Tharman Shanmugaratnam: Credit Counselling Singapore – ten years of helping individuals recover from debt problems Address by Mr Tharman Shanmugaratnam, Chairman of the Monetary Authority of Singapore, at Credit Counselling Singapore 10th Anniversary, Singapore, 28 October 2014. *  *  *  Mr Kuo How Nam, President of Credit Counselling Singapore, Pioneers of CCS, Distinguished Guests, Ladies and Gentlemen, 1 Good afternoon. I am very happy to be part of CCS’ 10th anniversary celebrations today. I commend CCS and its pioneers for your contributions in helping distressed borrowers over the past 10 years. 2 CCS has come a long way from its modest beginnings in 2004. It has grown in strength, winning the confidence and trust of the people it has counselled as well as the banking industry. This is the result of the dedication of CCS’ leaders, staff and volunteers. 3 I would like especially to thank Mr Kuo How Nam, who as CCS President led and inspired the CCS team, and worked doggedly to establish partnerships with banks and other organisations. He has shaped the CCS of today – a credible source of inputs to Government on matters to do with individual credit, and a valuable partner for the financial and social services sectors.