Asian-Pacific Association of Banking Institutes (APABI)

International financial bodies have also taken note: “The first sign that the ground is shifting is the continued appreciation of risk asset prices,” writes the IMF in its most recent Global Financial Stability Report, noting several factors which have contributed to elevated risk since the pandemic. Higher asset prices allow borrowers to take on more debt, storing up risk within the financial system.

Risk is the business of finance, and in some ways we are used to these ordinary credit cycles, but what is newer is the growth of the risk taxonomy. Therefore, this edition of APABI Focus delves into the growing diversity of risk types. Operational risk has become increasingly important throughout Asia, and fraud is the topic of the greatest interest of APABI members within that scope, by far.

Our Insights section further features a special report by Professor Bert Scholtens of the University of St. Andrews, recommended by CBI (UK), on biodiversity risk, particularly highlighting the role of financial institutions and innovative financial instruments. As the risk landscape becomes increasingly multifaceted – including nature, markets, geopolitics, and more – banks will need more robust systems and frameworks to manage this complexity.

I hope everyone has had a refreshing holiday season, and wish you a prosperous 2026 (on a risk-adjusted basis)!

Regards,

David Stinson
Editor-in-Chief, APABI Focus Newsletter