W103841 size W 160mm x H 240 mm Mac.10 C.bee 1st Pantone 872C W103841 size W 160mm x H 240 mm Mac.10 C.bee 1st Pantone 872C W103841 size W 160mm x H 240 mm Mac.10 C.bee 2nd Pantone 872C MAS held an in-house competition for the design of our 40th Anniversary logo. The winning design concept came from Spencer Hsu. “Sustaining Stability. Serving Singapore” articulates our mission of promoting low inflation and a resilient financial services sector, serving the needs of Singapore and its people. The number ‘4’ and the gold coin in the MAS logo form the number ‘40’. The four billowing streamers represent MAS’ core values: Integrity, Enterprise, Commitment and Teamwork. The upward direction of the streamers reflects our collective aspiration to take MAS to greater heights in the years to come. W103841 size W 160mm x H 240 mm Mac.10 C.bee 1st Pantone 872C MAS is the central bank of Singapore. Our mission is to promote sustained non- inflationary economic growth, and a sound and progressive financial centre. MAS’ FUNCTIONS • To act as the central bank of Singapore, including the conduct of monetary policy, the issuance of currency, the oversight of payment systems and serving as banker to and financial agent of the Government; • To conduct integrated supervision of financial services and financial stability surveillance; • To manage the official foreign reserves of Singapore; and • To develop Singapore as an international financial centre. W103841 size W 160mm x H 240 mm Mac.10 C.bee 1st Pantone 872C CONTENTS Tribute to ESM Goh 07 Insurance Resolution and Policy Chairman’s Message 08 Owners’ Protection 28 Board of Directors 10 Review of Insurance Act 29 Management Team 12 Enhancing Safeguards for Retail Customers 29 Board Committees 14 Enhancing Regulatory Regime for Fund Management Companies 30 Organisational Structure 15 Achieving Fair Dealing Outcomes 30 Enhancing Corporate Governance Standards 31 Conclusion of First Two Civil Penalty Cases 31 Box 3: The Representative Notification OUR WORK Framework 32 Staying Resilient, Sustaining Growth Enhancing Market Conduct 33 THE GLOBAL RECOVERY IS Audit Assurance 33 CONSOLIDATING 18 Modest Growth in the G3 amidst SINGAPORE AS AN INTERNATIONAL Uncertainties 18 FINANCIAL CENTRE 33 Strong Growth in Asia ex-Japan was Financial Sector Growth 33 Underpinned by the Private Sector 19 Promoting Partnership Framework and Downside Risks in Financial Markets Enhancing Infrastructure 34 have Increased 19 Promoting Partnership Frameworks 34 Higher Energy Costs Push Up Inflationary Trading and Clearing Infrastructure 34 Pressures 20 Box 4 : Private Banking Industry - Code Singapore: Record Growth in 2010 20 of Conduct 35 Consumer Prices and Wages Remain Infrastructure for Long Term Growth 35 Elevated 21 Raising Standards and Building Competencies 36 MONETARY POLICY 22 Deepening Competencies in Banking 36 Box 1: The MAS Core Inflation Measure Building Research Capabilities 36 for Singapore 24 CURRENCY AND PAYMENT SYSTEM 36 LIQUIDITY MANAGEMENT 26 MEPS+ 36 Enhancing the Standing Facility 26 Managing Dollars and Cents 36 Enhancing the Repo Facility 26 PBC-MAS Bilateral Swap Facility 26 Box 2: Issuance of short term MAS bills 27 OUR PARTNERS ENSURING SAFETY AND SOUNDNESS Valuing Partnerships, Building Cooperation OF FINANCIAL INSTITUTIONS AND FINANCIAL SYSTEM 27 ENHANCING STRATEGIC PARTNERSHIPS IN Prudential Supervision and Surveillance 27 AN EVOLVING FINANCIAL LANDSCAPE 40 Fostering a Sound and Reputable Financial Enhancing Global Financial Stability and Centre 27 Regulatory Reform 40 Property Market Measures 28 Facilitating International Financial Review of Deposit Insurance Scheme Discussions 41 in Singapore 28 4 MAS ANNUAL REPORT 2010/2011 W103841 size W 160mm x H 240 mm Mac.10 C.bee 2nd Pantone 872C CONTENTS Deepening International Cooperation 41 FOSTERING CLOSER TIES 53 Strengthening Capital Markets Development Closer ties within MAS 53 and Regional Surveillance 42 Family Day 2011 53 Pursuing Closer Bilateral Engagements 43 Hobby Groups 53 Strengthening Cooperation with Healthy Lifestyle 53 Industry Partners 43 Closer ties with counterparts 54 Enhancing Payment Card Security 43 Inter-Central Bank Games 2010 54 Financial District Security Programme (FDSP) 44 Closer ties with community 54 Addition of Primary Dealer 44 Charity Initiatives 54 Partnership with Academia 44 Financial Conferences and Events 45 Box 5: MoneySENSE – Continued FINANCIAL STATEMENTS 58 Efforts to Bring Financial Education to the Community 45 KEY ECONOMIC AND FINANCIAL STATISTICS 88 STATISTICAL ANNEX 92 OUR PEOPLE GLOSSARY 112 Growing Expertise, Grooming Leaders BUILDING HIGH PERFORMANCE TEAMS AND A STRONG MAS FAMILY 50 Expertise Development 50 MAS Academy 50 Attachment 50 Leadership Development 51 Young Professionals Programme 51 People Leadership Programme 51 Leadership Community Retreat 51 Coaching 51 Box 6 : Honing Specialist Knowledge - The Inaugural Trainer and Peer Group Awards 51 Engaging Staff 52 MAS Staff Seminar 2011 52 Recognising Our People 52 Service Appreciation Awards 52 National Day Awards 52 Risk Management and Infrastructure 52 Business Continuity Management (BCM) 52 Enterprise Risk Management 53 MAS ANNUAL REPORT 2010/2011 5 W103841 size W 160mm x H 240 mm Mac.10 C.bee 1st W103841 size W 160mm x H 240 mm Mac.10 C.bee 3rd Pantone 872C MASMAS ThanksThanks EmeritusEmeritus SeniorSenior MinisterMinister GohGoh ChokChok TongTong MrMr Goh Goh Chok Chok Tong, Tong, Emeritus Emeritus Senior Senior Minister, Minister, the successfulComprehensive signing Economic of the Comprehensive Co-operation waswas appointed appointed Chairman Chairman of of the the MAS MAS Board Board of of EconomicAgreement Co-operation (CECA). His cultivation Agreement of Singapore's(CECA). His DirectorsDirectors on on 20 20 August August 2004. 2004. He He was was the the fifth fifth cultivationbilateral relationship of Singapore's with bilateral China relationshipresulted in ChairmanChairman since since the the establishment establishment of of MAS MAS in in 1971. 1971. withimportant China milestones, resulted inincluding important the approvalmilestones of duringMAS as hisa Qualified term as ForeignChairman, Institutional including Investor the AsAs Chairman, Chairman, MrMr GohGoh played an importantimportant role role in approval(QFII) to invest of MASin China’s as ainterbank Qualified market, Foreign the inseveral several key key initiatives initiatives that that strengthened strengthened the MAS' MAS' Institutionalestablishment Investor of a China-Singapore (QFII) to invest in currency China’s capabilitiescapabilities and and enabled enabled it itto to fulfill fulfill its its missionmission and and interbankswap arrangement market, and of CNY150the establishment billion for ofthe a functions.functions. He He providedprovided leadership andand guidance guidance to China-Singaporepurpose of promoting currency bilateral swap trade arrangement and direct tostrengthen strengthen MAS’ MAS’ economic economic and andmonetary monetary policy ofinvestment, CNY150 billion and in-principle for the purpose agreement of promoting for the policyanalysis, analysis, financial financial supervision, supervision, surveillance surveillance and bilateralestablishment trade of and a Renminbi direct investment.clearing bank His in andrisk riskmanagement. management. His emphasis His emphasis on the onbroader the foresightSingapore. in Hisengaging foresight the in Middleengaging East the created Middle broaderand longer-term and longer-term perspective perspective to MAS’ to policies MAS’ opportunitiesEast created opportunities for stronger regionalfor stronger cooperation regional policieswas particularly was particularly valuable. valuable.During the He recent oversaw global andcooperation paved the and way paved for the the further way for development the further thefinancial efforts crisis,of the heMAS oversaw Board the and efforts management of the MAS ofdevelopment Islamic finance of Islamic in Singapore. finance in Singapore. teamBoard to andsteer management Singapore successfully team to steer through Singapore the recentsuccessfully global financialthrough the crisis. challenges. Mr Goh stepped down as Chairman on 20 May 2011, butbut continues continues to to contribute contribute to theto MAS MAS asas MrMr Goh Goh was has instrumental also been in strengthening instrumental MAS’ in Senior Advisor. The MAS Board, Management linksstrengthening with its international our partnerships partners, with especially international in and Staff thank Mr Goh for his years of leadership China,counterparts, India and includingthe Middle China, East. His India leadership and the as ChairmanChairman of ofMAS, MAS, and and welcome welcome Deputy Deputy Prime inMiddle fostering East. closer His economicleadership ties in fostering with India closer laid MinisterPrime Minister Tharman Tharman Shanmugaratnam Shanmugaratnam as theas theeconomic groundwork ties with for Indiathe successfullaid the groundwork signing offor newly-appointedthe newly-appointed Chairman Chairman of MAS. of MAS. MAS ANNUAL REPORT 2010/2011 7 W103841 size W 160mm x H 240 mm Mac.10 C.bee 3rd Pantone 872C Chairman's Message Global economic growth recovered in 2010. Asia risks – both to global economic growth and led the pick-up, driven by robust intra-regional financial stability. Geopolitical tensions in the trade and strong demand in domestic markets. Middle East/North Africa region pose continuing The Singapore economy saw a pronounced uncertainties. Asia is facing rising inflation, upswing, growing