Following the implementation of inflation targeting, the report will be published quarterly; - a model calibrated by the Bank’s staff is currently being tested and will be used for forecasting purposes. Instead of going into the details related to the Inflation Targeting framework, I will let my fellow speakers tackle the most important issues. Shortly after this, Deputy Governor Ms. Rachel Lomax will present a compelling account of UK’s experience and, may I add, success as a benchmark inflation targeter. After the lunch break, Gill Hammond, Deputy Director of CCBS, will give you an excellent presentation dealing with specific issues and challenges faced by emerging market economies when adopting inflation targeting. Later on, we will have our guests from the Czech National Bank and the National Bank of Hungary giving you a purposeful insight of such challenges and of their countries’ experiences with the IT framework. Mr. Ludek Niedermayer, Deputy Governor of the Czech National Bank, will first explain to you “why and how” inflation targeting was adopted in the Czech Republic – the first country to embrace this regime in our region. Then, it will be for Ms Csermely Agnes, Director with the National Bank of Hungary, to share with us the “Lessons and Challenges” put forth by the Hungarian experience with inflation targeting.
In the treasury market, we have maintained our position as the world’s fourth largest forex trading hub after London, New York and Tokyo. We continue to rank as the second largest over-the-counter (OTC) derivatives hub in Asia after Japan. We will build on these strengths and deepen our markets by developing the structured finance market. The asset securitisation market has already taken off, with structured products accounting for more than half of the Singapore dollar debt market. This will be further boosted when Singapore’s first loan securitisation programme for Small and Medium Enterprises is launched. ASEAN will continue to be an important market. We should build closer ties with some of the fast emerging ASEAN economies. For example, we have made a proposal to Vietnam to connect our two economies, including our financial markets, so as to reap the benefits of synergy. Vietnam is receptive. We are approaching this at a pace which Vietnam is comfortable with. Besides ASEAN, we should also position ourselves to play a bigger role in other growing regions. I am pleased to note that our local players have embraced globalisation to capitalise on opportunities in the region and beyond. In response to increased competition, our local banks have consolidated and expanded abroad. They remain profitable, sound and well-capitalised, and are becoming regionally competitive. China, India and the Middle East offer rich opportunities for both wealth management and capital markets activities. Singapore can play a useful intermediary role to serve the needs of Chinese companies seeking funding and expansion overseas.