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
 
A SOUND AND PROGRESSIVE FINANCIAL CENTRE 28
 
Banking 28
 
Lower Paid-up Capital for Incorporated Wholesale Banks 28
 
Changes to Minimum Liquid Assets and Minimum Cash Balance Requirements (Amendments to MAS Notice 613) 29
 
Developments in Islamic Finance 29
 
Box Story 3 - Basel II Implementation in Singapore 30
 
Insurance 30
 
Enhanced Governance and Disclosure Framework for Participating Insurance Business (MAS 320) 30
 
Revision to Rules for Investment-Linked Products (MAS 307) 31
 
Follow Up on Framework for Insurance-Linked Securities 31
 
Capital Markets 31
 
A More Globalised and Sophisticated Equity Market 31
 
Size of Debt Market 32
 
Assets Under Management 32
 
Strong Treasury Market 33
 
Proposed Legislative Amendments to Securities and Futures Act and Financial Advisers Act 33
 
Amendments to the Singapore Code on Take-overs and Mergers 34
 
Box Story 4 - Guidelines on Fair Dealing -Board and Senior Management Responsibility for Delivering Fair Dealing Outcomes to Consumers 35
 
Thematic Approach to Market Conduct Supervision 35
 
Enhancing Market Discipline 36
 
Box Story 5 - Singapore: The Premier International Real Estate Financing Centre 36
 
REITS 37
 
Revised Property Fund Guidelines 37
 
Licensing Framework for REIT Managers 37
 
Extension of the Singapore Code on Take-overs and Mergers to REITs 37
 
Regulatory Oversight of Commodity Futures 38
 

Box Story 3: Basel II Implementation in Singapore

Basel II took effect in Singapore on 1 January 2008, marking a milestone in MAS' efforts to implement a more risk-sensitive capital framework for banks incorporated in Singapore.

Formally known as "International Convergence of Capital Measurement and Capital Standards: A Revised Framework", Basel II is a new regulatory capital standard established by the Basel Committee on Banking Supervision in June 2004.

The release of MAS' Basel II rules was a culmination of extensive industry and public consultations since 2004. Besides formal consultations, MAS engaged the banks regularly through meetings and onsite visits to assess their implementation progress. As an example of our belief in the importance of working closely with the industry through the Basel II process, MAS sponsored the formation of an industry working group to develop requirements for disclosure and regulatory reporting. MAS also actively supported initiatives by the banking supervisory community to promote crossborder cooperation and communication on Basel II implementation. Such efforts were aimed at ensuring a smooth implementation of the new framework in Singapore by addressing potential implementation challenges as early as possible and allowing the industry to be closely involved in policy formulation.

In addition, MAS conducted onsite supervisory visits to assess banks' readiness to adopt Basel II's more sophisticated approaches to measuring, managing and providing capital for credit risk. The reviews focused on the banks' oversight and control frameworks, as well as their systems and processes.

The implementation of Basel II will encourage further advances in the risk management practices of banks in Singapore. This would in turn enhance the safety and soundness of our banks. The framework comprises three "pillars". Pillar 1 prescribes rules on how banks should calculate the minimum capital that they are required to hold for credit, market and operational risks. Pillar 2 describes the accompanying supervisory review of a bank's internal capital adequacy assessment. It encourages banks to continually develop and use better risk management techniques to monitor and manage their risks, and to have processes for assessing their overall capital adequacy in relation to their risk profile. Pillar 3 prescribes minimum disclosure requirements to facilitate market discipline.

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