Monetary Authority of Singapore Annual Report 2011/2012
Our Work

Intensifying Prudential Supervision and Monitoring of Financial Institutions

In light of developments in the international financial system such as the European sovereign debt crisis, MAS maintained close supervision of financial institutions in Singapore. We coordinated our macro-surveillance and supervisory and specialist risk functions more closely to assess the implications of these external developments on financial institutions and on the financial sector as a whole. Regular dialogues were held with foreign regulators to discuss developments affecting the individual institutions at the global level and to share supervisory information. This allowed MAS to have a more holistic understanding of macroeconomic developments and the impact on Singapore’s financial sector, as well as to formulate and implement pre-emptive supervisory measures where necessary.

In Q1 2011, MAS conducted an industry-wide stress test of banks in Singapore. Under the prescribed stress scenario, results showed that all major banks would continue to maintain adequate capital buffers above MAS’ regulatory requirements. In addition to the regular industry-wide stress test conducted by MAS, banks are also required to conduct their own internal stress tests to address risks specific to their operations.

In 2011, MAS also carried out a small pilot project to establish a macroprudential surveillance framework for insurance. MAS will enhance this framework and collect data from all insurers on a regular basis. This will enable MAS to monitor any potential build-up of systemic risk and vulnerabilities within the sector, and to better understand the linkages with the financial markets and the broader economy.