CONTENTS
HOME
OUR WORK - Managing Risks, Sustaining Growth
A MORE CHALLENGING POLICY ENVIRONMENT
MONETARY POLICY - PROVIDING AN ANCHOR FOR PRICE STABILITY OVER THE MEDIUM-TERM
MANAGING THE CHALLENGES OF INCREASED GLOBAL FINANCIAL UNCERTAINTY
A SOUND AND PROGRESSIVE FINANCIAL CENTRE
CURRENCY
 
MANAGING THE CHALLENGES OF INCREASED GLOBAL FINANCIAL UNCERTAINTY 20
 
International Financial Markets: Subprime Crisis 20
 
Asia: Resilient So Far But There Are Risks 23
 
Enhanced Surveillance and Supervision 24
 
Money Markets: Staying Vigilant 24
 
Business Continuity and Crisis Management 25
 
FATF Mutual Evaluation Exercise 2007/2008 26
 
AML/CFT Notice to SVF Holders 26
 
External Validation Performed Between Other Ministries' Internal Audit Departments and MAS 26
 
Box Story 2 - Audit Committee Guidance Committee 27
 
Risk Management Guidelines for Insurance Companies 28
 
Consumer Protection (Fair Trading) Act - Inclusion of Financial Products and Services 28
 
Corporate Governance of Listed Companies 28
 

Enhanced Surveillance and Supervision

As signs of the US subprime mortgage market problems emerged in the early part of 2007 and developed into a wider financial crisis, MAS intensified financial system surveillance and supervision of financial institutions in Singapore. We coordinated our macroeconomic surveillance, supervisory and market functions more closely to enhance monitoring and oversight of the financial system. We stepped up offsite supervision and surveyed Singapore-based financial institutions for any exposure that they might have to subprime or subprime-related products. We closely monitored the impact of the market turmoil on their liquidity, funding and overall financial position, among other things. Reported exposures of Singapore-based financial institutions to the US subprime mortgage market or structured product markets, including structured investment vehicles, were not significant compared to their total assets and did not pose systemic risk.

Greater focus was given by MAS to regular stress-testing work performed by Singapore-based financial institutions. On an annual basis, major banks and life insurers participate in a co-ordinated stress-testing exercise, based on common risk scenarios provided by MAS. MAS worked closely with them to review their internal stress test results and parameters. The stress test results reported by the major banks and life insurers showed that they were generally resilient. We also maintained regular contact with home regulators of foreign financial institutions to exchange information and worked with the Singapore Exchange (SGX) to monitor brokers' exposure, capital adequacy and their ability to meet their payment obligations.

Notwithstanding the limited exposure of Singapore-based financial institutions to US sub-prime mortgage-backed assets and collateralised debt obligations, MAS continues to emphasise the need for financial institutions to maintain prudent risk management and to provide feedback to MAS on potential stresses. As demonstrated in the international crisis, and especially under current volatile market conditions, financial institutions should also ensure that their stress test scenarios are sufficiently robust and forward-looking, and integrate risk exposures across business lines.