Ravi Menon: Remarks on the MAS Annual Report Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the MAS Annual Report 2020/2021, Virtual Media Conference, 30 June 2021. * * * Good morning and thank you for joining us today. GLOBAL ECONOMY The global economy is recovering from last year’s deep recession. The recovery is characterised by three key features: It has been a dual-speed recovery. The recovery is likely to gather momentum. But there are notable downside risks. First, the dual-speed recovery. The world’s two largest economies and Singapore’s two main trading partners – the US and China – are witnessing strong rebounds. According to consensus forecasts 1 , the US economy is expected to grow by 6.7% this year from last year’s 3.5% contraction, and China by 8.7% compared to 2.3% in 2020. The recovery in Europe has been more modest. Policy support has been on a smaller scale than in the US, and a renewed wave of infections in March and April has held the economy back. But economies are re-opening and pent-up demand is starting to flow through. In South East Asia, the recovery has been impacted by a resurgence in COVID-19 infections of varying intensities. The weighted average of ASEAN-52 manufacturing PMIs 3 fell to 51.7 in May, from 53.1 in April, even as the global index strengthened. The impact on services has been greater with the tightening of mobility restrictions. Second, a firmer global recovery is expected in the second half of 2021.
The FCA has a strategic objective to ensure that the relevant markets for financial services function well. Its formal operational objectives are to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers in relevant markets. It is obviously important that the FCA and PRA work closely together even though they have separate, differing objectives. Perhaps the most crucial aspects joining us are (i) that all PRA-authorised firms are dual regulated by the FCA as well for conduct purposes (ii) that the FCA has a primary objective to promote effective competition and the PRA has a secondary objective to facilitate it, and (iii) the FCA and PRA depend on shared data to carry out their roles. The close co-operation of the PRA and FCA is built into the system in part through cross membership of boards. The CEO of the FCA sits on the PRA Board (and is an FPC member ex officio). The CEO of the PRA sits on the FCA Board (and is also an FPC member). The PRA has a Board because it is currently constituted as a formal subsidiary of the Bank of England. It has been proposed that this arrangement changes so that the PRA becomes an authority within the Bank, and the PRA Board would become a new Prudential Regulation Committee. These proposals are subject to public consultation and will be debated in Parliament before being finalised.