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Annual Report 2015/2016

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Annual Report 2015/2016 Monetary Authority of Singapore ANNUAL REPORT 2015/16 Annual Report 2015/16 B C Monetary Authority of Singapore Annual Report 2015/16 D Monetary Authority of Singapore ANNUAL REPORT 2015/16 CONTENTS 05 Chairman’s Message ROBUST, TRUSTED, DYNAMIC AND 08 Board of Directors PURPOSEFUL FINANCIAL CENTRE 10 Management Team 32 A ROBUST FINANCIAL CENTRE 32 Industry Tests 11 Governance Structure 32 Enhancing the Resolution Regime 12 Board Committees 33 Banking 33 International Supervisory Cooperation 13 Organisational Structure 34 Securities, Futures and Over-the-Counter Derivatives 14 Key Economic and Financial Statistics 36 Enforcement 16 Number of Financial Institutions 37 Sectoral Security Operations Centre in Singapore 37 Insurance ANCHOR OF ECONOMIC AND 37 A TRUSTED FINANCIAL CENTRE FINANCIAL STABILITY 37 Preventing Money Laundering and Terrorism Financing 20 THE ECONOMY 38 Closure of BSI Bank Limited 20 Subdued Growth in the Global Economy 39 Enhancing Exchange of Tax Information 20 A Moderate G3 Recovery Framework 21 Slowdown in Asia Ex-Japan 39 Box 1: Dedicated Departments to Combat Money Laundering and Strengthen Enforcement 21 Heightened Financial Vulnerabilities and Risks 22 Low Global Inflation 39 A DYNAMIC AND PURPOSEFUL 22 Singapore’s Economic Growth Moderated FINANCIAL CENTRE in 2015 39 Financial Sector Growth Remains Resilient 23 Inflation Fell Due To Lower Oil Prices 40 Strengthening Capital Markets and Increasing Product Diversity 24 MONETARY POLICY 41 Enhancing the RMB Ecosystem 26 MACROPRUDENTIAL POLICY 41 Strengthening Infrastructure Financing 41 Harnessing Technology and Innovation 26 MANAGEMENT OF LIQUIDITY 42 Box 2: Formation of the FinTech 26 Enhancing MAS’ Standing Facility & Innovation Group 26 Renewal of the MAS-People’s Bank of China 44 Developing Globally Competitive Talent Currency Swap 45 Box 3: Unlocking Long Term Financing for Infrastructure 27 MANAGEMENT OF OFFICIAL FOREIGN RESERVES 46 Box 4: Formation of the Financial Sector Tripartite Committee 27 Investment Performance 2 Monetary Authority of Singapore SERVING THE PUBLIC, ENGAGING ONE MAS: INTEGRATED AND STAKEHOLDERS COHESIVE 50 SERVING THE PUBLIC 70 CELEBRATING 45 YEARS 50 Managing Dollars and Cents 70 Box 10: The MAS Gallery 51 Box 5: SG50 Commemorative Currency 72 Box 11: 45 Years in MAS: An Interview with 52 MoneySENSE Sapuan and Zainal 53 Box 6: Promoting Financial Literacy Through Island-wide Campaigns 74 RISK MANAGEMENT AND BUSINESS CONTINUITY 55 Facilitating Retail Access to Simple Low-cost Investment Products 74 Business Continuity, Disaster Recovery and MEPS+ Resiliency 56 PROTECTING CONSUMERS 74 International Operational Risk Working Group 56 Financial Advisory Industry Review 74 Financial Industry Security Programme 56 Encouraging Prudent Borrowing and 74 MAS’ Whistleblowing Policy Lending Behaviour 74 CONTROLS AND OPERATIONS 57 Enhancing Prospectus Disclosure Rules for Securities Offers 74 Audit Assurance 75 Procurement Management 57 PARTNERING ACADEMIA 75 Security and Fire Safety 58 Box 7: MAS Term Professorship in Economics 75 Building Services and Infrastructure and Finance at the National University of Singapore 75 ENHANCING PRODUCTIVITY AND BUILDING CAPABILITIES VALUED PARTNER ON THE 75 Staff Mobility and Productivity INTERNATIONAL FRONT 75 Reinforcement of MAS’ IT Security Infrastructure 75 Data Governance and Analytics 62 INTERNATIONAL FINANCE 62 International Financial Regulatory Reforms 76 BUILDING A STRONG MAS FAMILY 63 International Cooperation 76 Employee Engagement Survey 63 Promoting Global Growth and Stability 76 Bringing Our People Closer, Celebrating SG50 78 People Development 63 REGIONAL FORUMS 79 Leadership Development 63 ASEAN Financial Integration 79 Recognition of Staff 63 ASEAN+3 79 Partnership with Union 64 Executives’ Meeting of East Asia-Pacific Central Banks 81 FINANCIAL STATEMENTS 64 TECHNICAL COOPERATION 113 STATISTICAL ANNEXES 64 Regional and Bilateral Training 64 IMF-Singapore Regional Training Institute 134 GLOSSARY 65 Box 8: MAS Hosts Three High-Level Conferences 66 Box 9: ASEAN Financial Regulators’ Executive Programme Annual Report 2015/16 3 WHAT WE DO Our Mission To promote sustained non-inflationary economic growth, and a sound and progressive financial centre Our Functions • To act as the central bank of Singapore, conducting monetary policy, issuing currency, overseeing the payment systems, and serving as banker to and financial agent of the Government • To manage the official foreign reserves of Singapore • To conduct integrated supervision of the financial sector and financial stability surveillance • To develop Singapore as an international financial centre 4 Monetary Authority of Singapore CHAIRMAN’S MESSAGE This year’s MAS Annual Report comes at a time MAS’ monetary and financial policies aim to of heightened uncertainty around the world. preserve stability and confidence in the future Global growth is generally weak. The recovery amidst global economic fragility, and the in the advanced economies is hesitant and generally soft inflation environment. uneven despite extraordinarily accommodative monetary policies, and hampered in several In April 2016, MAS set the rate of appreciation of instances by a weakened political consensus the Singapore dollar nominal effective exchange on future directions. In Asia too, the momentum rate (S$NEER) policy band at zero percent. The of growth is slowing, amid a multi-year move represented the culmination of a series restructuring of the Chinese economy, lacklustre of measured steps MAS had taken to reduce demand in key export markets and the slow the rate of appreciation of the policy band in pace of domestic reforms in some economies. January and October last year. It recognised The unpredictable consequences of the UK the subdued inflation outlook over the next vote to leave the European Union further dented year, while ensuring price stability into the confidence globally. medium term. Against the weak external environment, the “MAS’ monetary and financial policies Singapore economy is projected to expand by 1–3% this year. Selected clusters of trade-related aim to preserve stability and confidence activities will continue to expand alongside in the future amidst global economic regional growth. Among the domestically- fragility, and the generally soft inflation oriented sectors, there is steady demand in environment.” infrastructure and for healthcare and education. Inflation remains subdued. Headline inflation Since 2009, MAS has strengthened existing has been negative for some time but could rules on property financing and introduced new turn positive towards the later part of this year. measures to ensure stability in the property MAS Core Inflation, which excludes the costs market and to encourage financial prudence of accommodation and private road transport, among borrowers. A full-scale property bubble is also anticipated to rise gradually over the has been averted, and property prices are course of 2016. However, the increase in core declining at a measured pace. MAS will continue inflation will be dampened by weaker external to monitor the property market, together with growth and reduced tightness in Singapore’s other government agencies. labour market. We have continued to keep a close watch on risk management practices and culture in Singapore’s “Against the weak external environment, financial sector. A thematic inspection of banks’ the Singapore economy is projected to credit underwriting standards showed that expand by 1–3% this year. Selected practices were generally sound. As part of ongoing clusters of trade-related activities will efforts to strengthen the resilience of the financial continue to expand alongside regional system, MAS has put out proposals to enhance growth.” its powers to facilitate the orderly and efficient resolution of distressed financial institutions. Annual Report 2015/16 5 CHAIRMAN’S MESSAGE Singapore’s financial centre is built on a working with the industry to facilitate the flow bedrock of trust and integrity. MAS requires of long-term funds to support infrastructure financial institutions to have robust controls development, especially in the Asian region. in place to prevent money laundering and This includes work to facilitate the transfer of terrorism financing and will not hesitate to take bank financing of infrastructure to institutional actions against financial institutions which fail investors, and the creation of performance to meet requirements. In 2015, MAS issued benchmarks to allow investors to better assess reprimands to several financial institutions and the risks and returns of infrastructure projects. imposed financial penalties for deficiencies in their controls. On 24 May 2016, MAS As part of the national SkillsFuture agenda, MAS ordered a merchant bank to be shut down for and the National Trades Union Congress (NTUC) serious breaches of anti-money laundering have led the Financial Sector Tripartite Committee requirements. (FSTC). The FSTC brings together the industry associations, government and labour movement, We have introduced several initiatives to safeguard to foster a versatile financial sector workforce, investors’ interests while expanding their savings well-equipped to embrace the opportunities and investment options. MAS refined its rules to and future needs of the financial industry. make it easier for eligible corporates to offer bonds to retail investors. Together with the Ministry of We are also developing a Smart Financial Centre Finance, we introduced the Singapore
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