4 As we celebrate CCS’ achievements , it is also timely for us to take stock of the consumer credit situation in Singapore, and consider how the Government, CCS, the banks and the social service sector can continue to work together to encourage financial prudence and help Singaporeans in need. Consumer credit situation in Singapore Household balance sheets in Singapore 5 The consumer credit situation in Singapore is on the whole healthy. Household balance sheets are generally strong. The net wealth of the household sector, or their assets net of liabilities, has grown significantly over the past 10 years, and stands at about four times of GDP. But while we are in a good position overall, there are some individuals and families who have over-extended themselves and are especially at risk when interest rates rise. 6 The Government has taken a multi-pronged approach to encourage financial prudence. We introduced several rounds of property-related measures to avoid a boom-bust cycle and hence anchor financial stability, and to ensure that individuals and households do not overstretch themselves. These measures include the Total Debt Servicing Ratio (TDSR) framework and tightened loan-to-value (LTV) ratios for housing loans. 7 These measures have helped to strengthen household balance sheets. (a)  First, they have slowed the growth of household debt. (b)  Second, the risk profiles of borrowers have improved.
The Agreement on Net Financial Assets Let me conclude by turning briefly to the recent decision to publish the Agreement of Net Financial Assets, also known as ANFA. This is another step to live up to our commitment to be accountable and transparent, both towards you as Parliament and towards the public at large. The ANFA is an agreement between the ECB and the euro area National Central Banks – the NCBs. It ensures that monetary policy is unaffected by NCB operations related to their national, non-monetary policy tasks. The right to perform such tasks dates back to the start of Economic and Monetary Union. At that time, the founding member states decided to centralise only central bank functions and tasks that are necessary to conduct a single monetary policy. All other tasks remained with the NCBs. Such national, non-monetary policy tasks include managing the NCBs’ remaining foreign reserves – including gold – after the transfer of foreign reserves to the ECB, managing some non-monetary policy portfolios including those related to pension funds for their employees, or providing payment services to national governments. When the NCBs hold portfolios not related to monetary policy as part of their national tasks, these portfolios are financed either by central bank money provided by the NCBs or by nonmonetary liabilities. This does not interfere with monetary policy as long as it is limited to less than the amount of banknotes needed by the public.