10 Asian regulators on the Basel Committee and on the FSB can help to present Asia’s perspectives at these international forums. Central banks as well as international organisations such as the International Monetary Fund (IMF) and the Asian Development Bank (ADB) should also weigh in to lend insights from their economic surveillance work. This will allow regional concerns to be sufficiently factored into the global rule-making and evaluation process. The craft of supervision 11 Rules and standards cannot replace judgment. Good supervisory instincts and technical competence are required to discover, scrutinize and evaluate key risks. This can only be done if banking supervisors do not see their role as a mere compliance function. An effective banking supervisor must be able to assess a bank’s understanding of its risks, its business practices as well as judge its corporate governance and culture. 12 The need for consistency and rigour also mean that supervisory judgment is not just an operational matter. Having formal supervisory decision-making forums is an important component of a good supervisory process. For example, in the MAS, our Banking Supervision heads come together in regular meetings to guide supervisory reviews and decisions. As an integrated supervisor, I also chair a Management Financial Supervision Meeting as well as a Regulatory Actions Meeting that oversees the broad scope of our supervisory policies and enforcement actions respectively, across banking, insurance and capital markets activities. In other words, supervisory practices require as much thought and policy considerations as the rules and regulations.
MAS also implemented a 24/7 Sectoral Security Operations Centre (SOC) to obtain information from intelligence sources on cyber threat targeting our financial sector. We have partnered the Association of Banks in Singapore (ABS) to update MAS’ Technology Risk Management Guidelines. Also in partnership with the ABS, we are in the process of establishing guidelines for “redteaming” to enhance cyber security testing. 27 I know that this theme of technology will feature prominently over these two days. Such mutual sharing and learning will be an important aspect of regulatory up-levelling. Integrity and Conduct 28 Last but not least, let me wrap up my remarks by highlighting the importance of strong integrity and proper conduct in the financial industry. No amount of regulatory reforms or supervision can assure a stable financial system if the culture and conduct of firms and individuals are flawed. Around the business complexities of different firms, the core should be the same – a business culture centred on doing right and doing good. 29 MAS will be stepping up our supervisory reviews on various aspects of risk governance and culture in financial institutions. Recently, we conducted a culture and conduct survey among a number of the key institutions. Based on the survey responses, we are carrying out dialogues to ascertain commonalities and differences in industry practices. We are sharing our supervisory experiences with other regulators to learn from one another. From these, we hope to provide the broader industry with our observations on best practices and areas for improvement.