Commentary
Commentary by a Finance Professional
I have spent enough time around financial markets to know that one of the most dangerous words in a boardroom is often 'normal'. The word carries an assumption that yesterday's conditions remain a reasonable guide to tomorrow: established trade routes will continue to function, currencies will remain within familiar ranges, funding markets will remain accessible and a financing strategy that worked last year can simply be repeated. For a considerable part of my professional life, financial planning was built around some version of that premise. I am no longer persuaded that it provides a sufficiently reliable foundation for decisions involving substantial amounts of capital.
The financial system has absorbed a succession of shocks that have steadily weakened the case for treating stability as the default condition. Trade disputes challenged assumptions about the permanence of global supply chains; the pandemic exposed the vulnerability hidden inside highly efficient but concentrated production networks; the inflationary episode that followed forced central banks into a rapid tightening of monetary policy; and geopolitical conflicts subsequently disrupted energy, commodity and shipping markets. By 2026, these pressures are operating against a backdrop of significant public and private indebtedness, leaving parts of the financial system more sensitive to changes in interest rates, liquidity and investor sentiment than they might appear during calmer periods. The IMF's April 2026 Global Financial Stability Report described financial stability risks as elevated and highlighted the potential for geopolitical developments to generate tighter financial conditions, currency pressures and wider spillovers into emerging markets.
What interests me is not simply the warning itself, but what it says about the way financial institutions should now approach their business. For many years, growth occupied the centre of the conversation. Banks sought larger loan books and broader customer bases, companies pursued new markets and acquisitions, while investors looked for higher returns. Risk management was an essential counterweight, but it often operated within a framework in which expansion remained the principal objective and risk controls were expected to prevent that expansion from becoming excessive. I think that hierarchy is changing because the value of being able to withstand disruption is becoming more apparent.
Resilience is no longer merely a defensive quality. It is an economic asset. A company that can continue funding inventory and payroll when credit conditions tighten has an advantage over a competitor that depends upon continuous access to inexpensive financing. An importer with several banking relationships can respond more effectively when one channel becomes constrained. A multinational whose treasury function has properly considered its currency exposure is better placed to absorb exchange-rate volatility than a company that treated foreign-exchange risk as an administrative matter. In each case, resilience has a commercial value because it determines whether the business can continue making decisions when other companies are forced to stop.
The same principle applies to banks themselves. A modern financial institution cannot reasonably assess a transaction in isolation from the circumstances in which the transaction will operate. A loan may be denominated in one currency, secured against assets in another jurisdiction and repaid from revenues generated somewhere else. The borrower's business may depend upon imported energy, overseas suppliers, foreign customers and shipping routes that it does not control. Looking only at the current balance sheet can therefore produce a technically correct but commercially incomplete assessment of risk.
The more useful question has become: what happens to this business if the world around it changes? That question is different from asking whether a borrower is creditworthy today. A company can be creditworthy under current conditions and become considerably more vulnerable after a sharp currency depreciation, a prolonged supply disruption, an unexpected rise in energy costs or a substantial increase in refinancing costs. None of those events necessarily changes the quality of management or the underlying assets immediately, yet each can alter cash flows and liquidity sufficiently to affect debt-servicing capacity. Good banking increasingly requires an understanding of that transition rather than merely a snapshot of the borrower at the moment credit is approved.
Cross-border finance makes the distinction particularly important because risks can accumulate across several jurisdictions and currencies. Consider a manufacturer that imports raw materials priced in dollars, operates factories in an ASEAN economy, borrows partly in foreign currency and sells finished products across several markets. Its credit profile cannot sensibly be assessed by examining its domestic revenues and liabilities alone. The bank needs to understand the relationship between the currencies of its revenues and costs, the reliability of its suppliers, the duration of its working-capital cycle, the accessibility of alternative financing and the consequences if one component of the supply chain becomes unavailable.
This is where I believe sophisticated banking will increasingly differentiate itself. Financial risk does not respect the organisational divisions within a bank. A geopolitical shock can become an energy shock; an energy shock can feed inflation; inflation can change expectations about interest rates; interest-rate movements can affect currencies and bond valuations; currency pressure can encourage capital outflows from emerging markets; and those outflows can increase refinancing costs for businesses and governments. What begins as an event outside the financial system can therefore travel through several parts of that system before eventually appearing as a credit problem on a bank's balance sheet.
The response cannot be compartmentalised either. Liquidity management, treasury services, trade finance, foreign-exchange capability and correspondent banking are sometimes discussed as separate product areas, but their importance becomes much clearer during disruption. A business that cannot move money efficiently, obtain the necessary currency, finance goods in transit or access working capital can face difficulty even when its underlying business remains fundamentally sound. These services therefore deserve to be viewed as strategic infrastructure supporting the client's ability to operate rather than simply as ancillary banking products.
The evolution of Asian capital markets reinforces that argument. The Asian Development Bank's $6 billion initiative to deepen ASEAN capital markets, with the broader programme expected to help mobilise as much as $30 billion in additional investment by 2030, is significant because it is designed to expand the channels through which capital can reach businesses and projects. The programme includes support for local-currency bond markets and wider regional capital-market development. The most important consequence may be the creation of greater choice rather than simply the injection of additional money.
Choice is valuable during stable conditions and becomes critical during periods of stress. A company that can choose between bank lending, local-currency bonds, international debt, equity and private capital has more options when one source of funding becomes expensive or unavailable. An investor with access to a broader range of instruments can diversify risk more effectively. A bank capable of helping clients move between these sources of capital becomes more useful precisely when markets become difficult. The financial institution's role consequently extends beyond supplying its own balance sheet; it increasingly involves helping clients navigate an ecosystem of different sources of capital.
That shift also changes the competitive meaning of banking relationships. If the only question between a client and a bank is the interest rate on a loan, the relationship is relatively easy to commoditise. If the bank understands the client's cash flows, currency exposures, supply chains, refinancing requirements and access to different pools of capital, the relationship becomes considerably harder to replace. The institution is no longer simply selling money. It is helping the client construct a financial architecture capable of surviving different operating conditions.
I am equally interested in what is happening beneath the visible layer of international payments. The BIS's Project Agorá has been testing how tokenised central-bank reserves and commercial-bank deposits could operate within a shared platform for wholesale transactions across currencies and jurisdictions. Its real-value testing in 2026 involved central banks and regulated financial institutions from several major financial markets. The significance lies less in the amount of money involved than in the fact that infrastructure once regarded as largely fixed is now being reconsidered.
If cross-border settlement can eventually become faster, more transparent and more interoperable, the implications for corporate treasury could be substantial. Shorter settlement cycles can reduce the amount of capital tied up between payment and receipt. Greater interoperability could make it easier for businesses operating across several jurisdictions to manage liquidity. New forms of settlement could eventually allow payment, foreign exchange and trade-finance processes to interact more closely than they do today. But I would caution against confusing technological possibility with commercial inevitability. Financial infrastructure changes slowly for good reasons, and improvements in speed must be accompanied by adequate controls, legal certainty, liquidity and trust.
That is why I do not believe the future belongs to banks that merely digitise existing processes. Digital interfaces and automated workflows are useful, but technology by itself does not tell an institution whether a transaction makes commercial sense or whether a particular exposure is likely to become problematic under stress. The stronger institutions will be those capable of combining technology with judgement: using data to see exposures earlier while retaining the human expertise required to understand what those exposures actually mean.
The same conversation needs to take place with corporate clients. A company should not ask its bank only, 'How much can you lend us?' That remains an important question, but it is no longer sufficient. A better conversation asks how the financing structure will behave if interest rates rise, a currency weakens, a major customer delays payment, a supplier becomes inaccessible or refinancing markets become temporarily hostile. The objective is not to construct a financing structure that assumes the worst at every turn. It is to understand where the structure could fail and determine whether the business has enough flexibility to respond before that failure becomes critical.
This approach also changes the way growth itself should be evaluated. Growth financed on fragile assumptions can create less value than slower expansion supported by dependable liquidity and diversified funding. A company that expands aggressively while becoming heavily dependent upon one currency, one lender or one market may increase its revenues while simultaneously increasing its vulnerability. Resilient growth asks a different question: can the organisation continue operating and investing when the assumptions underpinning the expansion no longer hold?
I believe that question will become increasingly important across Asia as companies expand regionally and financial markets become more interconnected. New trade corridors will create new financing requirements. Manufacturing diversification will alter working-capital patterns. Regional infrastructure will require longer-duration funding. Businesses will increasingly need to manage several currencies and regulatory systems. At the same time, investors will become more attentive to liquidity, geopolitical exposure and the quality of the underlying cash flows supporting financial assets.
None of this argues for retreat. Quite the opposite. I see it as an argument for better banking. A financial institution that understands resilience can help clients continue investing when competitors are forced into defensive positions. It can structure financing with greater attention to currency and maturity risk, provide liquidity solutions when conventional funding becomes constrained and connect clients with alternative sources of capital when a single market cannot meet their requirements. In that sense, resilience can become a source of competitive advantage rather than simply a cost of compliance.
The next decade is unlikely to provide financial institutions with the relatively predictable backdrop that accompanied some earlier phases of globalisation. There will be new trade relationships, changing settlement systems, additional sources of private capital and further experimentation with financial technology. There will also be geopolitical shocks, regulatory changes, market corrections and periods in which liquidity becomes considerably more valuable than it appears during normal conditions. The institutions that prepare for that environment will not necessarily be those that make the most confident forecasts; they will be those whose structures remain functional when the forecasts prove wrong.
That, in the end, is how I now think about the banker's job. Growth remains essential. Without growth there is little economic purpose in allocating capital, and without productive investment there can be no sustainable expansion of wealth. But growth and resilience should no longer be treated as competing objectives. The better financial institution will understand that durable growth depends upon the ability to withstand interruptions, preserve liquidity, maintain access to capital and adjust financing structures as circumstances change.
For me, that is the real lesson of the financial environment we have entered. The banker of the next decade will be judged not simply by how much capital can be deployed when markets are favourable, but by how intelligently that capital has been structured before conditions deteriorate. The strongest banking relationship will not be the one that offers the largest facility at the lowest headline price. It will be the one that gives a client confidence that, when the world around the transaction changes, the financial structure can change with it.