•  Many blue chip companies as well as government agencies have issued bonds. 45. But retail participation in corporate bond market has been low. •  It is costly for bond issuers to tap retail market. •  Minimum lot sizes are at least $  46. MAS and SGX are reducing cost of retail bond issuance and making it easier for retail investors to buy corporate bonds listed on SGX. •  Bond Seasoning Framework and Exempt Bond Issuer Framework will allow eligible corporate issuers to issue bonds to retail investors at lower cost in minimum denominations of $ while ensuring sufficient safeguards for investors. •  Proposals for both initiatives have been put out for public consultation and response has been positive. •  MAS will finalise and announce rules soon. Expanding ETF options 47. Equity investment offers potential for higher returns compared to regular savings and fixed income products. But investing in individual stocks entails higher risks and exposure to market volatility. 48. Exchange-traded funds (ETFs) can be low-cost way for investors to gain exposure to basket of underlying equities to build a well-diversified investment portfolio. ETFs also give investors exposure to various asset classes including bonds and commodities. 49. MAS has made it easier for retail investors to access more ETFs. •  Previously, all ETFs using derivatives were classified as complex or Specified Investment Products (SIP) – they could only be sold to retail investors with enhanced safeguards.
Improving our fiscal position is the most effective means we have available to reduce our vulnerability during this prolonged period of adjustment. We need to produce a substantial reduction in our structural deficit over the medium term and begin to reduce the more dramatic longer term gap  2/3  between our resources and commitments. And we need to restore a reasonable cushion in our structural budget balance to help us deal with future shocks. If we are unable to begin to generate more confidence in the capacity of the U.S. political system to produce these improvements, we would face a greater risk of future increases in risk premia. And even though substantial fiscal consolidation would not by itself bring the external imbalance down to a more sustainable level, it would improve the prospect for a smoother adjustment to that outcome. The general risk inherent in these imbalances—the risk of more adverse growth outcomes and asset price volatility—reinforces the importance of sustaining the strength and resilience of the U.S. financial system. Our financial system today is in substantially stronger shape than it was even in the recent past, and the major institutions now appear to be managed so that they are less vulnerable to the type and magnitude of shocks they’ve experienced in the past couple decades. Our challenge, however, it to make sure they are as well positioned to deal with the full range of potential future risks.