Although the provision of foreign currency liquidity through reserves was clearly important during the crisis, most studies seem to support the conclusion that dollar swap lines made the pivotal difference, especially when they were uncapped vis-à-vis some key central banks. To a significant degree, this was the domestic LOLR process replicated at the international level. Does this mean that we have the solution? At the conceptual level, yes, but at the practical level, maybe not. At present, such swap lines are not a permanent and reliable feature of the international monetary system, and there are important unresolved governance issues, such as who should decide which countries get a swap line and which do not. Let us now move back to the EU/EEA level, where we have the contradiction between the European Passport, on the one hand, and national supervision, a national safety net of deposit insurance and LOLR, and national crisis management and resolution regimes, on the other. The crisis revealed that this framework is deeply flawed. First, it ignores the FX liquidity risk that I discussed earlier. Banks from small countries with independent currencies are more exposed to this risk than, for instance, banks within the euro area. Second, country size and bank size relative to countries are important factors in the viability of bailout options. The Icelandic banks are a good example of this. Keeping in mind what I have said about the fault lines in cross-border banking, let us go back to the collapse of the Icelandic banks.
While the existing arrangement has worked well, experience in other developed markets has also demonstrated that such a facility is particularly useful in times of unusual market volatility, as this enhances confidence that liquidity needs in the banking system will be met. 18. Hence, to enhance the robustness of the system, MAS will widen participation in the Standing Facility to MEPS+ participating banks, subject to necessary documentation. The PSA/ISMA Global Master Repurchase Agreement continues to be a requirement for banks to access the borrowing facility which will remain collateralised against Singapore Government Securities. We will provide more details on this to the banks over the next few weeks. Corporate governance, market conduct 19. Apart from dealing with issues relating to the safety and soundness of banks, and the stability of financial system, MAS has also been working on improving the responsiveness of our rules, as well as on improving corporate governance and market conduct. 20. MAS is proposing amendments to the Securities and Futures Act and the Financial Advisers Act. The amendments aim to facilitate new business activities and products in response to market needs, to enhance the market misconduct enforcement framework and to fine-tune the legislation to achieve greater clarity, consistency and operational efficiency. Policy and legislative consultation on the proposed amendments to the Acts have already been conducted. We will table the Amendment Bills within the next few months. 21.