Content Page
Modest Recovery in 2003
Financial Market Activity
Rise in Asian Dollar Market Lending . Box 12 – A Robust Financial System
Healthy Growth in Corporate Debt Market . Active Trading in Equities and Futures Market
Vibrant Treasury Market . Box 13 – The Singapore IPO Market
Mixed Performance for Insurance . Box 14 – Bank Loans to HDB Flat Buyers
Box 12
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
Enhancing MAS’ Supervisory Capabilities
Box 2 – Stress Testing of Life Insurers
Box 3 – Streamlining Inspection Function
Thematic Inspections to Improve Surveillance