Importantly, the authorities should engage the private sector early into the process of market development so that the direction of policy and development is aligned with needs of the private sector. Most of the issues that I have raised today are not new, but they are the important ones. Again, I will not be surprised if many of you are also having the same thoughts. Such convergence of ideas will be good in helping to advance our interest and work on regional financial cooperation. I am confident that we can move forward more rapidly in the direction that will be most beneficial to our economies, while sharing a common vision of greater prosperity and economic well-being for our region. Thank you for your attention. 3/3
BIS central bankers’ speeches  5  For example, to cool Singapore’s property market, we imposed multiple measures to target different aspects of systemic risk. •  Tighter LTV ratios on borrowers with multiple housing loans served to moderate credit-fuelled investor demand. •  Caps on housing loan tenures served to curtail the phenomenon of those who stretched out their loans in order to meet the tighter LTV ratios. •  Transaction taxes in the form of stamp duties served to constrain demand from investors who did not take loans to buy properties a. Stamp duties on sellers helped to deter speculators who resell their properties shortly after purchase. b. Stamp duties on buyers helped to curb investor demand by raising the hurdle rate. •  Such a multi-dimensional approach required close co-ordination among the Monetary Authority of Singapore, the Ministry of Finance, and the Ministry of National Development. So, where does all this leave monetary policy? •  To the extent that strengthened microprudential policies coupled with the newly developed macroprudential policies can adequately address the problem of financial stability, monetary policy is freed to focus on price stability. •  We are back in the Tinbergen world. •  Or are we? Monetary and macroprudential policies: working hand-in-hand? If only our job were that simple. Macroprudential policies are still in the experimental stage: •  Its transmission mechanisms are not well understood. •  Its collateral effects and potential distortions have not been studied in depth.