It would not be proper for me to say anything about the ongoing investigations beyond the joint statement issued last week. It would also not be proper for me to comment on any specific institution beyond MAS’ statement last week because the supervisory examinations are still ongoing and we have to be fair to the institutions. The two statements last week are unprecedented. We have already said a lot more publicly than we usually do when investigations and reviews have not been completed yet. Instead, I want to focus today on what the findings imply for our financial sector. There is no doubt that the recent findings have made a dent in our reputation as a clean and trusted financial centre. MAS is disappointed with the lapses in AML/CFT controls and breaches of AML/CFT regulations that we have picked up in our FIs. I am told that money laundering is growing more sophisticated in nature and is carefully designed to avoid detection; that these incidents happen in every financial centre and the large and rising frequency in which fines are imposed in other jurisdictions show we are not alone in facing this challenge; and that the rules and practices here are already very strict and on par with global standards. BIS central bankers’ speeches  5  This may all be true but they cannot be an excuse for what has taken place. What happened is simply unacceptable. We may not be any worse than other jurisdictions. But that is no consolation.
We have not met the high standards we have set for ourselves. AML/CFT is like cyber security. Those who seek to abuse our financial system are getting smarter and more sophisticated. That cannot be a reason for failing to detect and deter them. As the threat grows, so must the effectiveness of our risk management. MAS is determined to fix the problem, working together with the industry. We need to draw lessons from the failings we have observed in the FIs and see how we can further bolster our AML/CFT regime. We will work hard with the industry to ensure that Singapore offers neither safe haven nor safe passage for tainted money from anywhere. Let me share our preliminary thoughts. Our AML/CFT regime comprises four key prongs: •  one a robust legal and regulatory framework that sets the rules;  •  two, active supervision of FIs to check for compliance with the rules and adequacy of controls;  •  three, strict enforcement to punish non-compliance; and  •  four, good cross-border cooperation. First, regulation. AML/CFT rules in the financial sector are strict. It is mandatory for all FIs to perform proper due diligence to know their customers. FIs are required to assess the risks and perform enhanced due diligence where the risks are higher. FIs are also required to monitor transactions on an on-going basis so as to identify and report any suspicious activities.