MAS has been working closely with Singapore-incorporated banks to prepare for the implementation of Basel II in Singapore on 1 January 2008.
During the course of the year, MAS released three consultation papers as part of its Basel II–related rule making process to supplement the existing body of Basel II–related guidance so far issued. In addition, we participated in an industry working group formed to develop requirements for disclosure and regulatory reporting under Basel II. This initiative provided an opportunity for the industry to be closely involved in the early stages of policy formulation. MAS also conducted onsite supervisory visits to assess the banks’ readiness to adopt Basel II’s more sophisticated credit risk approaches. These reviews focused on the banks’ oversight and control frameworks, as well as their systems and processes. At a broader level, MAS will continue to assess the adequacy and effectiveness of the banks’ risk management practices as part of the supervisory review process under Basel II. Such reviews will also take into account the banks’ own internal assessment of their risks, risk management capabilities, and capital adequacy.
As both a home and a host supervisor, MAS actively supports initiatives within the supervisory community to improve communication and cooperation on Basel II implementation. MAS attended several supervisory colleges organised by foreign supervisors during the year. In our role as a home supervisor, MAS continued to engage host supervisors on the Basel II implementation progress of Singapore
-incorporated banks that operate in their markets. These efforts are aimed at addressing implementation challenges faced by banks with international operations and promoting efficient use of supervisory resources.