MAS: Annual report 2006 / 2007
CONTENTS
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ENTERPRISE: Our Role
BUILDING ON A ROBUST MACROECONOMIC ENVIRONMENT
DEVELOPMENTS IN THE SINGAPORE SECURITIES MARKET
FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE
RISK MANAGEMENT & INFRASTRUCTURE
GROWING SINGAPORE AS AN INTERNATIONALLY COMPETITIVE FINANCIAL CENTRE
CURRENCY
ORGANISATIONAL INITIATIVES
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 < /a> 32
 

Enhancing MAS’ Role in Bank Resolution
MAS seeks to promote and preserve stability in the financial system through high standards of licensing, regulation and supervision. However, we do not aim to prevent the failures of all financial institutions. A "zero-failure" regime is neither feasible nor desirable as it leads to considerable moral hazard for the regulator and places excessive regulatory burden on financial institutions. When dealing with a bank in distress or insolvency, a private sector resolution option is often preferred by regulators. If this is not possible, international experience has shown that quick action by the regulator is important to minimise losses to depositors and other creditors, and to maintain stability in the financial system. With these objectives in mind, MAS has introduced new provisions in the Banking (Amendment) Act 2007 to give ourselves a broader range of resolution options and a wider role in the resolution process of a bank.