The last point is of particular interest, since it indicates that policy-makers recognize that the Asian crisis should not be regarded as an exclusively negative phenomenon. In some neighboring countries, previously closed sectors are being opened up to greater foreign investment, business assets are at lower prices, and some corporations are more willing to enter into cross-border alliances. For banks, the minimum cash balance requirement has been lowered, and previously stringent capital adequacy requirements are to be lessened, though the new requirements will still be well within BIS guidelines. The MAS is also reviewing current restrictions pertaining to commercial banking in the domestic retail sector, and a five-year program of liberalization will be unveiled soon. Greater foreign competition in the retail commercial banking subsector is expected.
Moves are also afoot to promote the asset management industry.
Studies are also underway to reform the securities industry in Singapore. Reforms are likely to include an initiative, announced in late 1998, to change the ownership structures of the Stock Exchange of Singapore and the Singapore International Monetary Exchange, and to merge the two. The sorts of changes being envisaged by MAS for the financial sector will result in Singapore posing a greater challenge to Hong Kong as a hub for banking, capital market, and asset-management activities. In some respects at least, the Asian crisis has underlined the need for Singapore to further advance the country's economic profile to prepare for the regional landscape that will emerge after the regional downturn has become a thing of the past. Singapore must seek ways to up its value-added businesses, and to regain its margin of comparative advantage over countries that now have the added fillip of devalued currencies.