Lee Hsien Loong: Financial sector liberalisation - going global  Speech by Mr Lee Hsien Loong, Chairman of the Board of Directors of The Monetary Authority of Singapore and Deputy Prime Minister, at the Monetary Authority of Singapore Work Plan Seminar, held in Singapore on 3 April 2000. * 1. *  *  Introduction  Since 1997, while the Asian region was undergoing a traumatic crisis followed by a sharp recovery, the international financial scene has not stood still. Financial innovation has continued unabated, institutions are rationalising and consolidating, and transactions and services are rapidly going electronic and online. Singapore has been directly affected by these global trends. It is as well that we pressed on with our financial liberalisation programme despite the crisis. MAS and the industry have had a busy two years. It is timely now to take stock of what has been achieved, and map out the tasks ahead. Our objective has been to open up the financial sector, progressively but decisively. We have aimed to allow market forces greater free play, get investors to take full responsibility for their decisions along with the outcomes, and shift MAS’ emphasis to setting the framework and upholding standards of integrity and supervision. Ultimately, we aim to become a vibrant and dynamic global financial hub. How much of this vision have we so far realised? 2. Financial sector reform - concrete changes  We have made many concrete changes across the financial services industry.
The officers responsible for supervision will naturally be more conservative than those promoting the financial sector. Managed well, this tension is constructive. Officers must continue to speak up and express their views, even though they may sometimes be overruled. With this approach to regulation, it is imperative for MAS to foster closer cooperation with the industry. We have made a serious effort to build a constructive exchange and dialogue with the private sector. We must continue to strengthen this culture of openness. Central bankers must treat some matters with the utmost discretion, to be discussed only in hushed tones among a select priesthood. But we cannot do all our business this way. In our day-to-day dealings with the financial institutions, we have to be constantly willing to explain the rationale for decisions and policies. At the same time, we must listen to proposals and ideas from the industry and feedback. As we continue to liberalise, we will need inputs from industry participants on many issues. We have to understand the industry’s point of view, and yet not be captured by the industry we are regulating. This mindset must permeate the whole of MAS, to every staff member. 5. Industry specific issues  Banks The first priority for banks is to upgrade their capabilities and strengthen their management teams. This is the only way for them to hold their own in the new environment, either by themselves or linked up with others in a strategic alliance or merger.