Working closely with the Commercial Affairs Department and the Attorney-General’s Chambers, MAS undertook a rigorous probe of these transactions which were part of a large, complex, cross-border money laundering scheme. Last year, I said that the findings on the 1MDB-related transactions that flowed through here had made a dent in our reputation as a clean and trusted financial centre. I believe we have begun the process of restoring that reputation. We have taken tough and unprecedented enforcement actions and sent an unequivocal message that MAS will not tolerate the criminal abuse of Singapore’s financial system. Just last month, we announced the completion of an intensive two-year long review of banks connected to 1MDB-related transactions known to-date. All in, we have closed 2 merchant banks and fined 8 banks nearly $ million – the heaviest aggregate financial penalties to-date. We have also issued prohibition orders (POs) against 4 individuals and served notices of intention to issue POs against 3 others for various regulatory breaches. MAS also issued lifetime bans, for the first time, against 2 of these individuals. MAS’ regulatory actions so far are based on what we know to-date. Thanks to excellent co-operation we have had with overseas jurisdictions, Singapore authorities were able to obtain good intelligence and piece together most of the significant flows from end to end. We have found nothing new in the latest filing by the US Department of Justice that warrants further action by us.
This cluster comprises the manufacturing, transport & storage, and wholesale services sectors. These activities comprise some 43% of the economy and, on average, contributed slightly over two-thirds of sequential GDP growth in Q4 2016 and Q1 2017. Electronics manufacturing firms expect business conditions to remain favourable in the next six months, albeit slightly slower than in H1 2017. MAS expects higher growth in this cluster to flow-through more broadly to the rest of the 2 / 10  BIS central bankers' speeches  economy and gain momentum over time. The modern services cluster recorded mixed outcomes over the last two quarters but is poised for higher growth in the second half of this year. This cluster, comprising financial, business, and ICT services, accounts for about 30% of GDP. Financial services saw a strong outturn in Q4 last year but a sequential pullback in Q1 this year, reflecting heightened political and geopolitical uncertainties globally which dampened investor sentiments. The performance of modern services is likely to improve as the global economy recovers and the upturn in the trade-related cluster raises business confidence and investments. The pickup in regional growth and trade should help anchor growth in lending and trade financing activities. Demand for ICT services will be boosted by government initiatives, as well as general IT deepening that is occurring in Singapore and the regional economies. The domestic-oriented cluster has had lacklustre growth and some segments are expected to remain weak.