Ravi Menon: MAS Marks 50 Years Serving Singapore Welcome remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS 50th Anniversary Partners Appreciation Evening, 7 October 2021. * * * Prime Minister Lee Hsien Loong, Chairman and Board Members of MAS, ESM Goh Chok Tong, Friends and Family of MAS Welcome to the MAS’ 50th Anniversary Partners Appreciation Evening – the first in a series of events to commemorate our Golden Jubilee. This evening is a time for thanksgiving. There are about 50 of us here at the MAS Building and about 800 friends and family joining us virtually. This includes our friends from the financial industry, consumer and governance groups, tripartite partners, academic institutions, and international organisations. And of course, our family – past and present staff and leaders of MAS and our colleagues in the broader Public Service. This is a special occasion for me personally. I joined MAS in 1987 and have spent most of my professional career here. So much of what I have learnt and how I have evolved, I owe it to the many bosses and colleagues I worked with in MAS over the years. MAS was already a highly competent organisation in 1987, and I have seen it grow over the decades to become what it is today – a central bank and financial regulator highly regarded among its international peers and the global financial industry.
Strengthen the continuing efforts aiming at market transparency Experience shows that uncertainty and incomplete information are determining factors in mimetic behaviour. These shortfalls in market transparency make mimetic behaviour seem rational to agents, who prefer to follow bigger participants, who are thought to be better informed, rather than develop their own analysis. Strengthening transparency therefore continues to be a priority. One of the objectives of transparency is to enable better differentiation of borrower creditworthiness. A key feature of mimetic behaviour is that all borrowers are "tarred with the same brush". So when one emerging economy encounters difficulties, all neighbouring countries, or countries that share common characteristics, are treated in the same way – regardless of their actual economic and financial situation. The same applies to businesses operating in the same economic sector. Transparency has substantially increased since the Asian crisis, thanks to a solid global consensus. Let us continue and reinforce these efforts. Take into account the medium and long-term perspective of some market participants Some investors, such as pension funds and insurance companies, have to invest funds in order to enable their customers to build up wealth over the medium and long term, notably in preparation for retirement. Consequently, these types of investors are supposed to behave differently from traders and short-term investors, who are working on a very different time horizon. But at times it seems that they are all pushed to behave in much the same way, on the basis of a very short-term horizon.