Welcome Address By Mr Heng Swee Keat, Managing Director, Monetary Authority of Singapore at "Be $AVVY With Your $" Seminar on 11 October 2008
Mr Lim Swee Say, Secretary General for NTUC and Minister, Prime Minister’s Office;
Mdm Halimah Yacob, NTUC Deputy Secretary General and Director of NTUC Women's
Mr Liew Heng San, Chief Executive, CPF Board;
Mr Chang Long Jong, Deputy CEO of Mediacorp;
Distinguished guests, friends, ladies and gentlemen.
2 Thank you for taking time today to attend this afternoon’s seminar. In particular,I would like to thank NTUC, CPF Board and Mediacorp for partnering MoneySENSE in organising today’s event.
3 The global financial turmoil, which began more than a year ago in the US, is still continuing. Billions of dollars have been lost in the mortgage and securities markets. Many banks have failed, both in the US and in Europe. Stock markets have fallen sharply globally. Banks are afraid of lending to each other and to companies, and this will affect economic growth. The scale and impact of these events are unprecedented.
4 Given the global turbulence, we understand that consumers here have concerns
about the safety of their deposits, insurance plans and investments.
5 I would like to assure you that the financial institutions here are sound and operating normally. There are several reasons for this. First, we do not have subprime mortgages that are originated here. Banks and insurance companies in Singapore have limited exposures to such assets or to the banks that have failed. Second, MAS has been conservative in our approach to the supervision of financial institutions. Their assets must exceed liabilities by a good margin, and we require them to hold sufficient capital. Financial institutions here, both local and foreign, have invested resources in risk management. Third, unlike banks elsewhere that face serious problems of liquidity, depositors and investors here maintain a high level of confidence in our financial institutions. We are also strict about the spreading of rumours.
6 But given the global conditions, we must not be complacent. MAS will work
hard, together with the industry, to maintain a high level of vigilance, so as to keep our system here safe and sound.
7 Some investors have invested in structured products, including those linked to Lehman Brothers which has failed. We understand their concerns and anxieties. Our immediate priority is to ensure a fair and speedy resolution, and a thorough investigation of their complaints. We have appointed independent persons to oversee the complaints handling and resolution process at financial institutions. We have set out the various steps that are being taken to help affected investors. Where there are breaches of regulations, we will take firm action.
8 But the unprecedented events in the global financial markets have raised the need for regulators everywhere to review aspects of their regulatory approach. While our current regulatory regime is fundamentally sound, MAS is doing a review of the sale of certain types of financial products. Some areas we may need to review include clearer product labeling and stronger suitability requirements to ensure that unsuitable products are not sold to vulnerable investors.
9 Members of NTUC are very familiar with the concept of tripartite cooperation. Such cooperation recognizes the importance of everyone playing his or her role, to achieve a good outcome. In the same way, good investment outcomes also need such a tripartite cooperation among the regulator, the financial institutions and investors. I have briefly mentioned what MAS has been doing to keep our financial system sound and safe, and to ensure that financial institutions deal with consumers fairly.
10 For financial institutions, their Board and senior management must ensure that all their staff who package financial products and advise consumers must put fair dealing as a top priority. They must take care of consumers’ needs and serve consumers well, in order to earn their trust and confidence. If they do this well, they will build good long-term relationships with their customers.
11 Let me now say a few words about the third part of this tripartite relationship – consumers. As workers, we put in great effort to learn new skills and knowledge, so that we can operate complicated machines or serve customers well. To do a good job in our workplace, we need to learn continually. In the same way, to do a good job in managing our own money, we too must put in effort to learn how to plan our financial needs prudently, and how to invest wisely.
12 MAS is committed to helping Singaporeans to be more financially savvy. In 2003, MAS launched the MoneySENSE programme, which is a partnership with 6 other government agencies - CPF, MOE, MOM, MCYS, PA and National Library Board. Since its launch, we have published over 170 articles in the media, and organised talks and seminars for over 36,000 participants. We have also issued consumer guides with a circulation exceeding 2.2m. The media has been very supportive, both in partnership with us, as well as on their own.
13 For today’s event, I would like to express our appreciation to the MoneySENSE volunteer speakers - Shannon and Kimmis; Chin Heng and his team at CPF; Mdm Halimah Yacob and her team at NTUC, and Mediacorp for your strong support. In our publications, we try hard to explain financial planning, but I am sure Gurmit Singh, Michelle Chong, Edmund Chen and Huang Biren can simply do better.
14 This latest partnership that CPF and MoneySENSE is forging with NTUC is particularly significant, as NTUC has been very committed and effective in reaching out to our workers. With NTUC’s support, MoneySENSE hopes to make significant progress in raising the financial literacy among our workers. The presence of Minister Lim Swee Say, Madam Halimah Yacob and leaders of NTUC at today’s event testifies to the high level of commitment. Madam Halimah will be participating in the panel session later. It is now my honour and pleasure to invite Minister Lim Swee Say to address us.