A Perennial Goal: Coupling Prudence with Innovation
The Monetary Authority of Singapore (MAS) is not often in the public eye. It has however played a critical role in Singapore’s economic development, keeping inflation low to support sustained economic growth, preserving financial stability and trust, advancing the development of a global financial centre, and judiciously managing a significant component of Singapore’s reserves.
This 50th anniversary compilation provides convenient access to the thinking behind MAS’ policies and strategies as they have evolved, through 50 landmark statements by its leaders.
The span of MAS’ roles has grown over the years, and has made it quite distinct among its international peers. It began with narrow functions: indeed its name as a monetary authority rather than a central bank had its origins in the days of the currency board system, when currency issuance was managed outside of MAS. It has long since become a full-fledged central bank, conducting monetary policy, managing Singapore’s official foreign reserves, and ensuring overall financial stability and a reliable payment system.
However, MAS is also one of few central banks that are an integrated financial regulator. It oversees the full span of banking, insurance and capital market activities, fostering the soundness of individual financial institutions and safeguarding the interests of investors and consumers of financial products. Additionally, MAS has taken on the mandate of promoting a vibrant financial hub with a skilled workforce, connected to global and regional markets.
An underlying theme in this compilation is a strategic vision that combines prudence with an appetite for innovation. MAS has a unique dual reputation. It is viewed as stricter than most prudential supervisors, with Singapore’s record of financial stability being testimony to this. But it is also, among supervisors, one of the most facilitative of business development and proactive in promoting technological innovation and green finance.
These two bearings at the heart of MAS’ strategies have not been incompatible. They will be inseparable in a future where financial stability will itself depend on a progressive response to the challenges of disruptive business models and the climate crisis.
MAS has been willing to depart from convention in crafting policies to fit Singapore’s own circumstances. In the early 1980s, MAS chose to use the exchange rate as its instrument of monetary policy, and effectively gave up control of domestic interest rates and money supply. In the midst of the Asian financial crisis, MAS embarked on a bold liberalisation of Singapore’s financial sector rather than hunker down.
Unusual too for a central bank, MAS has worked in close coordination with government ministries to implement macroprudential measures, aimed at preserving financial stability, promoting a sustainable property market, and safeguarding financial prudence of households. Be it in the areas of macroprudential stability, jobs and skills, digital technologies, sustainability, or financial literacy, MAS has been able to work collaboratively with other public agencies without loss of autonomy where it counts as a central bank or financial supervisor.
I am privileged to have been closely engaged with MAS over the last four decades, working alongside many dedicated and highly capable officers and my colleagues on its Board. I pay tribute to all those who led and served in MAS over the last 50 years, for their deep professionalism, unstinting drive for excellence, and commitment to public service.
MAS Chairman Tharman Shanmugaratnam shared that the Commemorative Book tells the interesting story of how MAS built up credibility over the past five decades as a central bank, a financial supervisor and a partner with the industry in developing a financial centre by doing things in our own way because our circumstances were different.
Commemorative Book Launch
Former MAS Managing Directors Mr J. Y. Pillay and Mr Koh Yong Guan launched “Resilience, Dynamism, Trust: 50 Landmark Statements by MAS Leaders”, a compendium of key speeches and statements over the past 50 years.