In September
2003, Singapore completed the Financial Sector Assessment
Programme (FSAP). This is an external assessment by a
team of International Monetary Fund (IMF),World Bank and
regulatory experts, of a country’s financial systemic
stability and degree of compliance with and implementation
of international financial sector standards and codes.
The Financial System Stability Assessment report contains
the main findings of the review and is available on the
IMF website.
The FSAP team found Singapore’s financial system
to be generally robust, having weathered past negative
economic shocks, including the financial crisis, the global
electronics downturn and Severe Acute Respiratory Syndrome,
without serious consequences. Stress tests generally indicate
that Singapore’s systemically important financial
institutions remained resilient even under severe scenarios.
The assessors nevertheless recommended that MAS continues
to strengthen our macro-surveillance function. They noted
a high level of observance of international standards
and codes, technical competence, and standards of policy
effectiveness.
The FSAP team also assessed Singapore’s anti-money
laundering framework for compliance with the Financial
Action Task Force (FATF) standards for Anti-Money Laundering
and Countering the Financing of Terrorism. They found
that Singapore complied well with most of
the FATF standards and had in place a sound and comprehensive
legal, institutional, policy and supervisory framework
for countering money laundering and the financing of terrorism.
The FSAP team recommended three measures to address some
medium-term vulnerabilities. MAS is generally agreeable
with the FSAP team’s findings and we have been taking
steps to follow-up on them. The measures were:
•
The risk-based regulatory
and supervisory framework could be further enhanced
through the completion of the review of the regulatory
minimum capital requirements for local banks and
the implementation of the risk-based capital framework
for insurance companies.
•
MAS should strengthen
its accountability, independence and oversight capabilities
by reducing the Potential for conflicts of interest
arising from the multiple official responsibilities
of our chairman.
•
MAS could further improve
our monetary and financial policy transparency by
disclosing more information to the public.
Enhancing Risk-focused Supervisory Approach
Box 1 – Fostering a Sound and Progressive
Financial Services Sector
