s Monetary Authority of Singapore Annual Report 2006/2007
MAS: Annual report 2006 / 2007
INTEGRITY  
Chairman's Message 06
Board of Directors 08
Board Committees 10
Management Team 11
ENTERPRISE: Our Role
BUILDING ON A ROBUST MACROECONOMIC ENVIRONMENT 14
The World Economy: A Fourth Consecutive Year Of Robust Global Growth 14
Box 1 - Economic and Financial Integration in East Asia 15
International Financial Markets: A Cautionary Note Against Abundant Liquidity 17
Strong Capital Inflows Make Asia Vulnerable To Shifting Risk Appetites 19
The Singapore Economy: Sustained and Broad-based Strength 20
Growth was Broad-based Across Key Sectors of the Economy 21
Labour Market Conditions Continued to Strengthen 21
Inflationary Pressures Remain Largely Contained, In Part Reflecting the Effects of Globalisation 21
Monetary Policy - An Anchor for Price Stability in A Strong Economy 23
Strengthening the Monetary Policy Formulation Process 23
Pushing the Frontier of Monetary Policy Research and Analysis 23
Box 2 - Enhancing Liquidity Management: The MAS Standing Facility 24
DEVELOPMENTS IN THE SINGAPORE GOVERNMENT SECURITIES MARKET 25
Singapore Government Securities Electronic Bond Update 25
Extending the SGS Yield Curve: The 20-year SGS 25
FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE 25
Changes to Capital Requirements for Singapore-incorporated Banks 25
Enhancing MAS’ Role in Bank Resolution 25
Changes to Rules on Unsecured Credit 25
Shift Towards Large Exposures Regime 26
Introduction of Asset Maintenance for Foreign Banks 26
Box 3 - An Update On Basel II Implementation In Singapore 26
Legislative Amendments to Securities and Futures Act and Financial Advisers Act 27
Box 4 - Monograph On Supervisory Framework For Financial Institutions 27
Trust Companies 28
Self-assessment Initiative 28
Anti-Money Laundering & Countering the Financing of Terrorism 28
Building Confidence in E-payments and Internet Banking Systems 28
Insurance Securitisation 29
Nomination of Beneficiaries to Insurance Policies 29
Policy Owners’ Protection Fund 29
Box 5 - Supervision Of New Initiatives in the Singapore Capital Markets - Jade And AsiaClear 30
Mortgage Insurance 30
Thematic Approach to Market Conduct Supervision 30
Box 6 - Market Manipulation 31
Mystery Shopping on Practices in the Financial Advisory Industry 31
Review on Switching of Investment Products 31
Enhancing Market Discipline 31
Corporate Governance of Listed Companies 32
Amendment to Code on Collective Investment Schemes 32
Implementation of Payment Systems (Oversight) Act 2006 32
RISK MANAGEMENT & INFRASTUCTURE 32
Strengthening Risk Management Framework 32
Business Continuity and Crisis Management 32
Crisis Management Exercises 33
Thematic Inspections on Business Continuity Management 33
Preparedness of Staff and Tenants for Emergency Situations 33
GROWING SINGAPORE AS AN INTERNATIONALLY
COMPETITIVE FINANCIAL CENTRE
34
Asset Management 34
Box 7 - Emerging Clusters In Singapore’s Financial Services 35
Active Trading in the Equities and Derivatives Market 37
Leading Real Estate Investment Trusts Market in Asia 38
Shipping Trusts Seek Singapore Listing 38
Infrastructure Finance Taps the Capital Markets 38
Box 8 - Regulatory Oversight Of Commodity Futures 38
Growth in Collateralised Debt Obligations Market 39
Growth in Over-the-Counter Commodity Derivatives Central Counterparty Clearing Activity 39
Box 9 - Listing Of Pioneer Exchange Traded Funds 39
CURRENCY 40
Dollars and Cents Management 40
ORGANISATIONAL INITIATIVES 41
Risk-based Audit Approach 41
Front, Middle and Back Office System 41
Development of Key IT Systems to Support Organisational Initiatives 41
Streamlining of Logistics and Administrative Processes 41
Maintaining an Optimal Physical Working Environment for All 41
Ensuring the Efficient Use of Energy Resources 41
Box 10 - Second Phase of Amendments to MAS Act 41
TEAMWORK - Our Partners  
SINGAPORE 2006 INTERNATIONAL MONETARY FUND  
  AND WORLD BANK GROUP ANNUAL MEETINGS 44
   
WORKING WITH INDUSTRY 46
Dialogues with Professional Associations 46
Singapore Investment Banking Association Equity Derivatives & Structured Products Taskforce 47
Industry Work Group On Securities And Futures Act / Financial Advisers Act Amendments 47
     
Representative Notification Framework 47
Survey On Compliance Costs 47
Box 11 - MoneySENSE - Taking On A Much Higher Profile 48
Box 12 - Sixth International Advisory Panel Meeting 49
Box 13 - MEPS+: Improving The Efficiency Of Payment  
  Systems And Its Impact On Our Customers 50
Building A World Class Talent Pool for Singapore’s Financial Sector 50
Building A Quality Workforce 51
Attracting Financial Talent 51
Financial Research 51
Box 14 - Overseas Outreach Efforts 52
FINANCIAL COOPERATION 52
Working With Foreign Regulators 52
Participation In International Forums and Initiatives 53
Partnership With Toronto Centre (MAS-Toronto Centre Regional  
  Leadership Programme for Securities Regulators 54
Regional Training Initiative 54
Financial Integration Initiatives 54
MAS and International Monetary Fund High-Level  
  Seminar On Crisis Prevention in Emerging Markets 55
Box 15 - Brunei-Singapore Currency Interchangeability  
  Agreement 40th Anniversary Celebrations 55
COMMITMENT - Our People  
DEVELOPMENT OF LEADERSHIP CAPABILITY  
  AND FUNCTIONAL EXPERTISE IN MAS 58
Building Leadership And Functional Competencies 58
Developing Leaders 58
Fin ancial Supervision Group Faculty Of Peers 59
Promoting Learning And Development 59
Leadership Community Retreat 59
Staff Seminar 60
Innovation Activities 60
DEVELOPING CLOSER TIES 61
Family Day 61
Inter-Group Games 61
Inter-Central Bank Games 62
Dinner & Dance 62
FINANCIAL STATEMENTS 65
Highlights 66
Statement by Directors 67
Auditor's Report 68
Income Statement 69
Balance Sheet 70
Statement of Changes in Equity 71
Cash Flow Statement 72
Statement of Backing of Currency in Circulation 73
Notes to the Financial Statements 74
KEY ECONOMICS AND FINANCIAL STATISTICS 96
STATISTICAL ANNEX 100
Monetary Statistics 100
Financial Structure 104
Commercial Banks 106
Finance Companies 111
Merchant Banks 112
Insurance Industry 114
Non-Bank Financial Institutions 115
Domestic Capital Market 116
Asian Dollar Market 117
Glossary 122