A fourth reason why the DBU-ACU divide is of less relevance today has to do with the significant changes in MAS’ own banking regulations, aimed at reducing systemic risks. •  All banks will be required to meet enhanced liquidity requirements that apply to the entirety of their operations by January 2016. •  Banks which are designated as domestic systemically important banks (D-SIBs) in Singapore will be subject to additional supervisory measures over both their domestic and offshore businesses.1  •  In addition, where a foreign bank branch has significant retail presence in Singapore, it will also be required to locally incorporate its retail operations. The subsidiary will be subject to the same suite of regulation as the local banks, and the same supervisory regime aimed at minimising risks to local depositors. 23. Together, the enhanced global and domestic regulatory standards mean that the DBUACU divide is no longer useful. If we continue with the divide, it would merely impose undue administrative burden on banks, without materially enhancing prudential soundness or systemic stability. 24. Hence, MAS will be removing the DBU-ACU divide in its banking regulations. The details will be released in an MAS consultation paper by August. There is no rush. We will implement the changes in close consultation with the banking community, and phase them in over time. 25. This is a significant rationalisation in our banking regulation landscape.
In revising the existing framework on corporate governance, we intend to take the opportunity to address this issue by improving how we capture board roles and responsibilities at the organisational level,  BIS central bankers’ speeches  3  taking into account all the things that we currently ask boards to do. This will reduce the need for the Bank to direct matters that boards must approve in specific business areas. It does not however, obviate the need for boards to be fully engaged in approving core policies such as risk and capital management strategies. In other areas, the board should determine matters that are reserved for its decision, and the Bank will look to the quality of engagement with management, escalation of issues to the board and the means by which boards obtain assurance on matters that it does not specifically approve. This will be reflected in our assessment of the quality of oversight and risk control functions of the insurer. I hope that these insights to some of the Bank’s current policy considerations will provoke reflections of your own on how your organisations are currently organised and positioned to cope with an environment that will only become more challenging on various fronts. We have much work still to do and over the course of the coming months, we will be seeking industry feedback on these issues. We also have our own expectations of the industry.