We have received good feedback on these proposals and will issue a final set of guidelines shortly. A less prescriptive regulatory approach requires that consumers be empowered through enhanced disclosure and education to make better-informed decisions themselves. This is particularly relevant in the current context of financial innovation which has spawned a growing array of retail products and services with enhanced distribution networks. MAS will work closely with industry associations and other public sector agencies to develop consumer guides and educational programmes to raise the financial literacy of consumers. We have also facilitated the development of industry-based mechanisms to offer consumers faster and more cost-effective ways to settle disputes with banks and insurers. The banking industry has set up a Consumer Mediation Unit and the insurance industry the Insurance Disputes Resolution Organisation. Enhancing organisational effectiveness The year was also eventful for MAS as an organisation, as we continued to build on our structure, systems, and people to better meet the challenges posed by a changing and uncertain external environment. We restructured the organisation to better integrate our supervisory functions, align resources with our objectives, and build technical and managerial depth. We stepped up efforts to enhance the skills and expertise of our staff, sending more of our staff on external attachments to financial institutions and supranational organisations, and putting in place a more systematic approach in functional training. The integration with the previous Board of Commissioners of Currency, Singapore (BCCS) was carried out successfully following the merger on 1 October 2002.

Here I am specifically referring to those with financial markets that are small relative to the amount of international portfolio capital that can be mobilised by foreign investors, and those acting for them, but big enough to whet their appetite for profit. Arguably, the market discipline imposed on macro-economic policies of emerging markets may de facto be more stringent than those imposed on developed markets. Indeed, what is acknowledged by many as an unsustainable, large current account deficit has been sustained in the United States for some time now, no doubt for a lot longer than if one of equivalent size relative to GDP were run by an emerging market. To be sure, there is consensus on the need for greater macro-economic discipline, robust institutions and market structures, as a defence against monetary and financial instability. There has been much progress, for example, on improving corporate governance, and I do not wish to belittle the serious efforts made at this important micro level, through the promotion, and the interaction, of individual, regulatory and market disciplines. There is also much greater discipline in pursuing prudent macro-economic policies, to the extent of attracting criticisms of excessive conservatism, particularly in respect of the running of substantial current account surpluses and the accumulation of large foreign reserves. I am sure these independent efforts of individual jurisdictions, reflecting their different pre-occupations, arising from different domestic circumstances, will, in the fullness of time, ease their tasks in the maintenance of monetary and financial stability.