MAS' IAP Gives Strong Endorsement toSingapore's Financial Sector Growth Strategies
Singapore, 20 June 2005...The International Advisory Panel (IAP) of the Monetary Authority of Singapore (MAS) gave strong endorsement to Singapore's strategies for the continued growth of its financial centre.
2 The IAP expressed optimism about the long term growth prospects in Asia. They commented that the emergence of China and India as economic powerhouses was lifting all players. They observed the opportunities for Southeast Asia arising from international firms' desire for diversification of production locations and the search for returns on the part of international investors.
3 IAP members however noted the significant challenges facing the Asian economies. These included the growing rural-urban divide and income inequalities in the major economies. They also commented on the risk of overcapacity in certain industries over the medium term which could have a depressing effect on global prices. Further, the IAP highlighted the need for continued efforts to improve financial transparency and corporate governance and to promote a sound credit culture.
4 The IAP expressed confidence in Singapore's role as a centre for financial services in Asia. They endorsed Singapore's strengths in wealth management and treasury markets, underpinned by the growth of income and wealth across the region. They encouraged Singapore to build on its experience in servicing South East Asian corporates and investors, and engaging with a growing China. However they also emphasised the opportunities for Singapore in reaching out to new markets like India and the Middle East. IAP members were of the view that Singapore was well positioned to be a gateway for Middle Eastern investors to participate in the growth of China and Southeast Asia.
5 The IAP noted that the continued growth of Asia would require deeper and more liquid capital markets. This was where the challenges were greatest and where Singapore's small domestic market required it to look outward. They encouraged Singapore to help grow the ASEAN capital markets and continue to play a leading role in the integration of Asian financial markets.
6 In this respect, IAP members supported the Singapore Exchange's initiative to set up a regional over-the-counter (OTC) derivatives clearinghouse. This would lead to a more efficient functioning of the OTC markets by helping to reduce counterparty credit risk. It would also help build on Singapore's position as the Asian hub for the physical trading of commodities.
7 IAP members commended Singapore's pro-business and responsive regulatory environment, and competitive tax regime. They noted that Singapore's soft infrastructure of rule of law and neutrality would also be key moving forward. The IAP urged Singapore to maintain its overall cost competitiveness. They endorsed Singapore's proactive approach to attracting global talent and commented that this was one of its key competitive advantages. IAP members also advised Singapore to continue to focus on 'quality of life' factors such as excellence in education and a more vibrant cultural and social scene.
8 Minister for Education and Deputy Chairman of MAS Tharman Shanmugaratnam, who chaired the IAP, said "The IAP provided frank and constructive comments. They saw Singapore retaining a key position in Asian finance alongside other major centres like Tokyo, Shanghai and Hong Kong. They placed particular emphasis on the need for Singapore to diversify its role as a financial centre by reaching out to India and the Middle East while servicing the growing Southeast Asian and Chinese markets. They highlighted areas where Singapore continues to maintain a competitive advantage. MAS will take on board their comments and ideas."
Notes to editor:
Formed in 1998, the IAP advises MAS on Singapore's financial sector reforms and strategies. The knowledge and expertise of this distinguished advisory panel provides MAS with a global perspective on financial sector issues, and helps MAS keep abreast of market developments and trends in major international financial centres.
MAS IAP members who attended this year's meeting:
- Mr Tharman Shanmugaratnam, Chairman of the IAP, Minister for Education and Deputy Chairman of MAS;
- Dr Josef Ackermann, Chairman, Group Executive Committee, Deutsche Bank AG;
- Sir Andrew Crockett, President JP Morgan Chase International;
- Mr Michael Diekmann, Chairman, Board of Management, Allianz AG;
- Mr Shigemitsu Miki, Chairman, The Bank of Tokyo-Mitsubishi, Ltd;
- Mr Michel Pebereau, Chairman, BNP Paribas;
- Mr Ratan Tata, Chairman Tata Sons Ltd; and
- Dr Junichi Ujiie, Chairman of Nomura Holdings, Inc.
Photos for the IAP meeting:
IAP members with MAS Chairman SM Goh Chok Tong.
(From L-R: Mr Heng Swee Keat, Managing Director, MAS; Dr Junichi Ujiie, Chairman of Nomura Holdings, Inc; Mr Michel Pebereau, Chairman, BNP Paribas; Mr Ratan Tata, Chairman, Tata Sons Ltd; Mr Michael Diekmann, Chairman, Board of Management, Allianz AG; Senior Minister Goh Chok Tong, MAS Chairman; Mr Tharman Shanmugaratnam, Minister for Education, MAS Deputy Chairman, and IAP Chairman; Dr Josef Ackermann, Chairman, Group Executive Committee, Deutsche Bank AG; Mr Shigemitsu Miki, Chairman, The Bank of Tokyo-Mitsubishi, Ltd; Sir Andrew Crockett, President JP Morgan Chase International.)
IAP members talking to MAS Chairman Senior Minister Goh Chok Tong.
(From L-R: Mr Michael Diekmann, Chairman, Board of Management, Allianz AG; Senior Minister Goh Chok Tong, MAS Chairman; Mr Tharman Shanmugaratnam, Minister for Education, MAS Deputy Chairman, and IAP Chairman; Mr Heng Swee Keat, Managing Director, MAS; Dr Junichi Ujiie, Chairman of Nomura Holdings, Inc; & Mr Ratan Tata, Chairman, Tata Sons Ltd)