The government has endorsed this move since then, and stated in its recently released Vision 2025 policy document that “for medium to long-term price stability, the Central Bank will move towards a flexible inflation targeting regime. They will aim at continuously maintaining low inflation while supporting economic activity and competitiveness. The government will implement the legislative and operational changes necessary.” While it is heartening to note that the Central Bank and the government have agreed in principle that flexible inflation targeting is the way forward in the conduct of monetary policy, the full implementation of flexible inflation targeting by the year 2020 will require increased efforts to fulfil the remaining prerequisites for the success of inflation targeting. It is also expected that comprehensive amendments will be made to the MLA to facilitate the transition to flexible inflation targeting, to redefine monetary policy objectives, eliminate monetary financing of fiscal deficits, and ensure Central Bank autonomy and public accountability. Amendments to the MLA are also expected to streamline the monetary policy decision making process. Within the Central Bank, the ongoing upgrade of technical forecasting and analytical capabilities will continue, and it is expected that by 2020, the Central Bank will commence the publication of comprehensive Inflation Reports. The Inflation Report will explain inflation developments, inflation expectations, projections for inflation and other key macroeconomic variables, the assumptions behind such projections, reasons for any deviation of actual inflation developments from targeted levels, and remedial actions to be taken in the case of deviations.

In the last three years, MAS has imposed financial penalties on 27 FIs for AML/CFT offences. In a couple of cases, where ineffective management oversight resulted in inadequate implementation of AML/CFT controls, we have asked the senior management to be replaced. In the last six years, MAS has revoked the licenses of 15 money changers and remittance agents for serious AML/CFT breaches. 6  BIS central bankers’ speeches  But here too, we can do better. MAS will further strengthen its enforcement capability to conduct rigorous investigations and to take swift and dissuasive actions against errant FIs. We will take stronger regulatory actions against those FIs whose AML/CFT practices fall short of the expected standards. And we will make public our sanctions against persistently or egregiously errant FIs. Our closure of BSI Bank shows that we will not hesitate to take the most punitive actions where warranted. We are centralising all our enforcement functions across MAS in a new Enforcement Department. The new department will be responsible for not just AML/CFT offences but all other breaches of regulations and rules administered by MAS, including market conduct offences under the Securities and Futures Act. We are using data analytics to enhance market surveillance, to help us identify potential market misconduct and investigate specific offences. For example, we are exploring the use of machine learning algorithms to identify manipulative trading behaviour in the capital markets or to detect patterns across suspicious money laundering transactions. Finally, good cross-border cooperation with our foreign counterparts.