Deepening and broadening our talent pool will be a continuing challenge for the financial sector and for MAS. MAS and industry players have taken steps together to address this. The Institute of Banking and Finance had been re-organised to better meet the needs of the industry as a financial training intermediary. It will also serve as a platform for the industry to provide regular feedback on manpower needs and issues. The industry has established the Financial Industry Competency Standards Committee, which will develop internationally aligned competency benchmarks for the whole financial industry. MAS is also working with specific industries to address their human resource needs through a manpower conversion scheme. This scheme will help mobilize, train and channel resources to support growth areas quickly. MAS will work with financial institutions to build and upgrade talent in the financial sector workforce. Singapore has always welcomed talented individuals to live and work here. They have contributed much to the vibrancy of our financial sector. Singapore must remain open to talent and continue to be a conducive environment to work and live in, so that we can continue to attract talent here, and also retain able Singaporeans. Conclusion MAS is committed to the vision of Singapore as a leading global financial sector, one which is competitive, fosters enterprise and innovation, and maintains high regulatory standards. We have made steady progress toward this goal and must continue to do so.
In addition, the lowest permitted level for total Tier 1 capital is raised from four per cent to six per cent. Basel III also introduces a capital conservation buffer of 2.5 per cent, consisting of Core Tier 1 capital. This means that the banks should have a Core Tier 1 capital holding of at least seven per cent. If a bank falls below the seven per cent limit, its entitlement to pay dividends and to conduct share buy-backs will be restricted. The proportion of profits that must be retained within the bank increases the further below the seven per cent limit the bank goes. The idea behind this is to force the banks to accumulate their profits as capital instead of paying them as dividends to the shareholders. However, this will not affect Sweden, at least not directly. Swedish banks are well capitalised and have a quota for Core Tier 1 capital that is already above seven per cent. We will, however, see effects at the international level and, as we are highly affected by what happens abroad, Swedish banks and Sweden in general will also benefit from the fact that banks in other countries will become more resilient. Apart from the changes in levels, there are also stricter requirements regarding the quality of the capital held by the banks. As equity constitutes the difference between assets and liabilities on the balance sheet, both the size and quality of the capital will be highly affected by how a bank’s assets and liabilities are valued.