Monetary Authority of Singapore Annual Report 2010/2011
Our Work

Fostering a Sound and Reputable Financial Centre

MAS is strengthening the risk-based capital requirements for Singapore-incorporated banks to address lessons from the global financial crisis and promote a more resilient banking sector. In July 2010, MAS amended the risk-based capital requirements for Singapore-incorporated banks. The amendments incorporated guidance by the Basel Committee on Banking Supervision (BCBS) to enhance bank-wide risk management and capital planning processes under Pillar 2 of the Basel framework as well as other policy enhancements to the capital rules. A second phase of amendments in H2 2011 will incorporate BCBS' recommended enhancements on capital requirements and disclosures for securitisations and market risk. MAS also supports the Basel III capital standards issued recently by the BCBS which are designed to address both firm-specific risks and broader, systemic risks. The enhanced framework sets out minimum standards for higher and better-quality capital, provides better risk coverage, introduces a leverage ratio requirement to supplement the risk-based requirement, and proposes capital buffers which can be built up in good times and drawn down in periods of stress. MAS will implement the Basel III capital standards appropriately in Singapore.

MAS issued a public consultation paper titled "Proposed Framework for Reinsurance Management" on 30 June 2010 setting out the proposed supervisory and regulatory framework governing reinsurance management of insurers. We also issued a consultation paper in July 2010 on the proposed revisions to the existing regulatory framework for trade credit insurance, political risk insurance and mortgage insurance. The proposals focused on aligning the contingency reserves and insurance risk requirements on these three lines of business with international practice. MAS is assessing the feedback and will incorporate the relevant changes into the legislations.