How this policy should actually be carried out in practice is a complicated issue and I believe that the IMF can play an important role in this context too. The financial crisis revealed major problems The era in which we were said to be living in the best of all possible worlds, popularly known as “The Great Moderation”, came to a disastrous end in 2007. Following a long period of steady growth and stable low inflation, we had been lulled into the belief that this would never change. We believed that the financial markets were excellent at converting savings to loans and distributing risks so that they were taken by agents who both wanted and were able to  1  The Nordic-Baltic constituency consists of Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. BIS central bankers’ speeches  1  bear them. The risks that were mainly discussed were the imbalances in the global economy in the form of countries with large current account surpluses and those with corresponding deficits. Those who raised questions about the stability of the global financial system and the risks relating to a rapid expansion of credit found it difficult to be heard in this situation. The financial crisis brought into focus the inability of the international community to prevent and manage crises in the global financial system. There were several problems. First, there was a lack of knowledge about the links and the contagion risks in the financial system.
The proposed amendments drew reference from the revised FATF Recommendations and international best practices, so as to take into account latest global developments and incorporate emerging best practices. Some of these amendments relate to enhanced transparency on beneficial ownership information. MAS is currently reviewing the feedback from the private sector and will also be looking at updating the MAS Notice on AML/CFT for licensed trust companies. Continual review of our policies and guidelines, in consultation with industry stakeholders such as yourselves, remain the bedrock of our regulatory approach. It makes sure that Singapore’s regulatory regime is in line with international standards, while at the same time taking into account industry feedback to facilitate practical implementation. Increased momentum towards tax transparency 18. Turning now to tax transparency. 19. To combat cross border tax evasion, the G20 endorsed Article 26 of the OECD Model Tax Convention on Income and Capital to be the global standard for Exchange of Information (“EOI”) for tax transparency, in 2009. This provided for bilateral EOI-on-request, where a jurisdiction may request from another jurisdiction information on its tax payer that is foreseeably relevant to its determination of whether the tax payer has evaded taxes. 20. Following that, there has been strong progress towards enhanced tax transparency – most recently, the G20 and OECD advocated the adoption of AEOI as the new global standard for tax transparency (the “AEOI Standard”), and urged all jurisdictions, including all financial centres, to implement the AEOI Standard swiftly.