Annual Report 2001/2002

What is the Financial Sector Assessment Program (FSAP)?

FSAP is a joint INTERNATIONAL MONETARY fund (IMF)–World Bank initiative that was started in 1999 in response to the proliferation of financial crises in the 1990s. It is a comprehensive health check of a country’s financial sector that seeks to reduce the likelihood of financial crises by identifying the strengths, vulnerabilities and risks to a national financial system. In particular, an FSAP focuses on the link between financial sector soundness and the macroeconomic environment in addition to the usual business risks that might impact on financial institutions.

So far, more than 40 countries have participated in the FSAP including Canada, Hong Kong, Japan, Korea, Switzerland, and the United Kingdom. Singapore agreed in 2001 to undergo an FSAP in 2002/2003. An FSAP team comprising 10-15 experts from the IMF, the World Bank and experts from other regulatory organisations are likely to make two visits to Singapore as part of this assessment.

The FSAP has two main components. First, an assessment of the health of the financial system, including macro-economic factors that could affect its performance. This will include both industry and institutional-level stress and scenario testing. Second, the FSAP team will also assess Singapore’s compliance with relevant best practices, codes and standards in their Reports on the Observance of Standards and Codes. These international standards include the Basel Core Principles of Effective Banking Supervision, International Organisation of Securities Commissions’ Objectives and Principles on Securities Regulation, International Association of Insurance Supervisors’ Insurance Supervisory Principles and IMF’s Code of Good Practices on Transparency in Monetary and Financial Policies.

[Strengthening Surveillance] [Deepening the Analytical Foundation] [In-depth Studies on Structural Trends and Issues] [Exploring Linkages] [What is the Financial Sector Assessment Program?]

[Economic Research and Policy Making] [Backdrop: Challenges to the Singapore Economy] [Response to the Challenges]

[Table Of Contents]