The global environment has become more complex and challenging this past year. Even as countries are progressively emerging from the COVID-19 pandemic, Russia’s invasion of Ukraine has had, and will continue to have, far-reaching effects on supply chains, inflation, and the outlook for growth. 

MAS has tightened monetary policy four times since October 2021 to help ensure medium-term price stability, amid sustained growth in the economy. These moves should slow the inflation momentum, but cannot fully mitigate the pass-through of higher global inflation, especially in food and energy prices. The domestic labour market is tight and some pick-up in consumer services inflation is to be expected. However, MAS expects core inflation to stabilise by the latter part of the year.  

The financial sector should continue to grow handsomely. It performed strongly through the pandemic, growing an annual average of 7.2% over 2020-21. Growth has been broad-based, across banking, insurance, asset management, and payment services. The past two years also saw a net creation of 5,800 jobs in financial services. 

On the regulatory front, MAS has continued to focus on ensuring a robust and resilient financial sector, amid continued digitalisation, technology adoption, and innovation in products and business models. The Financial Services and Markets Act (FSMA) was passed by Parliament in April this year, enhancing MAS’ regulatory and enforcement powers to respond effectively to emergent risks across the financial sector.

There has been an increase in online phishing scams, globally and in Singapore. MAS, together with government agencies and financial institutions, has significantly stepped-up actions and taken a more co-ordinated approach to keep digital banking safe and secure against this threat. New and enhanced measures have been implemented to prevent, detect and respond to scams. 

MAS has also continued to make good progress in harnessing technology to enhance its supervision of the financial sector. To improve our ability to identify and disrupt networks of illicit financial flows, MAS will facilitate information sharing among financial institutions through a secured digital platform - COSMIC (Collaborative Sharing of ML/TF Information & Cases). When completed, financial institutions will be able to share relevant information on customers or transactions where they cross material risk thresholds, to prevent money laundering, terrorism financing, and proliferation financing. 

MAS continues to adopt a balanced approach in fostering sound and sustainable growth of the digital asset ecosystem. It welcomes innovative use of blockchain technology that can enhance efficiency and bring cost effectiveness, including in cross-border payments and trade finance. MAS issues licences to payment service providers that add value to this ecosystem and have strong risk management capabilities. Given the highly speculative nature of cryptocurrency investments, MAS has also stepped-up efforts to warn that such investments are not suitable for retail investors, and since January this year, prohibited the marketing or advertising of digital payment token services to the general public in Singapore. 

Amid the increasing urgency for global climate action, we have stepped up efforts to strengthen the resilience of our financial sector to environmental risks, and to promote a vibrant green finance ecosystem to support Asia’s transition to a sustainable economy. MAS Managing Director Mr Ravi Menon has been appointed chair of the Network for Greening the Financial System (NGFS), a grouping of 116 central banks and supervisors dedicated to strengthen the financial industry’s response to meet the goals of the Paris Agreement. MAS also co-led a Technical Expert Group (TEG) with the US Securities and Exchange Commission within the International Organization of Securities Commissions (IOSCO) Sustainable Finance Task Force, to inform IOSCO’s potential endorsement of future standards issued by the International Sustainability Standards Board (ISSB). To address the financial sector’s need for sustainability-related data, MAS, in partnership with the industry, will pilot four digital platforms under Project Greenprint to mobilise capital, monitor sustainability commitments and promote a green finance ecosystem. We will set out a fuller update of our strategies and initiatives in MAS’ Sustainability Report later this month.

On behalf of the Board, I thank all MAS staff and our partners for your commitment to high standards amidst continuing innovation. The theme for MAS’ golden jubilee last year - “Serving Our Nation, Securing Our Future”, and the celebrations we had were fitting reminders that it has been the contributions of many that has made MAS the highly regarded central bank and financial regulator that it is today. We also thank Mr Quek See Tiat for his contributions to the MAS Board over the past nine years, including as Chair of the MAS Audit Committee. A warm welcome too, to Mr Chaly Mah as the new Chair of the MAS Audit Committee. 

Let us continue to do our best, and strengthen Singapore’s reputation for macroeconomic stability and its standing as a resilient and dynamic financial centre. 

Tharman Shanmugaratnam 
Chairman