We are looking to issue more and in longer tenor, in the future. As for the MAS Standing Facility, we have, in the last two years, progressively expanded the range of eligible collateral. MAS has signed cross-border collateral arrangements with other central banks. Banks can now use as collateral, Euro and Sterling cash, as well as French, German and British government securities. We are now finalising similar arrangements with the US Federal Reserve, so that banks will be able to pledge US Treasury bills and notes to obtain Singapore dollar liquidity at the Standing Facility. These initiatives significantly enhance banks’ flexibility to tap on global sources of liquid assets. Let me now touch on the regulation of financial markets. A key focus of international regulatory reforms has been on the trading of OTC derivative contracts. MAS will meet objectives set by G20 Leaders on regulation of OTC derivatives as well as recommendations by the Financial Stability Board (FSB). We are now reviewing our detailed policies and will conduct consultation by the end of this year on all aspects of FSB’s recommendations. MAS aims to meet FSB target to implement the recommendations by end 2012. There are four key thrusts in FSB’s recommendations on OTC derivatives trading. First, standardise derivative contracts. MAS is working with Singapore Foreign Exchange Markets Committee (SFEMC) to encourage further standardisation of derivative products. The SFEMC will formulate a code of conduct for financial institutions operating in the OTC market. Second, mandate central clearing of all standardised contracts.

Singapore’s regulatory regime already meets or exceeds international norms, and this has enabled us to weather the financial crisis relatively well. Following the crisis, international regulatory standards are being raised. We are well-placed to meet them. Let me start with banking. MAS announced last month we will require Singaporeincorporated banks to meet Basel III capital requirements earlier than the Basel Committee’s schedule, and at a higher standard. Market reaction to this announcement has been positive because Singapore-incorporated banks are well-capitalised and in a strong position to meet MAS’ revised requirements. These requirements will help keep our banking system strong and safeguard our financial stability. Likewise for liquidity. Singapore was one of earliest jurisdictions to require banks to maintain minimum liquidity levels. Over the years, this has evolved to a risk-based liquidity risk supervision framework. Singapore banks are therefore well positioned to meet the new Basel liquidity ratios. Effective regulation is not just about setting high standards. It is also about creating market conditions that enable financial institutions to meet the standards. Take for instance the higher liquidity requirements under Basel III. MAS has taken steps to increase the availability of liquid assets in the market and collaborate with other central banks to expand eligible collateral in the MAS Standing Facility. Let me elaborate. BIS central bankers’ speeches  3  We started issuing one-month MAS Bills in April this year. This has added about $ billion of high quality liquid assets for financial institutions. We have seen good interest in the Bills.