On capital adequacy, MAS is putting in place across the financial sector a risk-based framework based on common principles and objectives. The existing capital frameworks for insurance companies, securities dealers, and futures brokers, are being revised, so as to move towards a risk-based approach, not dissimilar to banking. In insurance, industry working groups are looking into the valuation and solvency framework for both life and general insurance business. In securities and futures, MAS has been working with the Singapore Exchange to establish a risk-based capital adequacy framework for licensed securities dealers and futures brokers. This framework will allow the brokers to better manage the risks they face, in the light of market and product developments. The new framework is expected to be introduced in the second half of 2001, and will take into account comments and findings from two rounds of consultation with the industry. In banking, where risk-based capital standards already exist, MAS welcomes the key thrusts of the proposed New Basel Capital Accord. It has been working closely with the local banks to develop their capabilities and resources, so as to implement the internal ratings based approach. Liberalising access Liberalisation efforts have kept pace. A more open and competitive environment will spur innovation and enterprise in the financial centre as well as provide Singaporeans with quality financial services. The insurance industry is completely open. The securities industry has been substantially liberalised and will be completely open from January 2002, when remaining trading restrictions on new members admitted to the Singapore Exchange will be removed.

As part of Singapore's efforts to forge bilateral free trade agreements with strategic partners, MAS has engaged in talks on financial services liberalisation and cooperation, including with Australia, Canada, the European Free Trade Association, Japan, Mexico and the US. 5  MAS annual accounts  Assets & liabilities On MAS' annual accounts, total assets increased by $ billion to $ billion as at 31 March 2001. The main components of the increase were due to a $ billion increase in foreign assets and a $  BIS Review 63/2001  3  billion increase in our holdings of Singapore Government Securities (SGS). As in the last financial year, the increase in SGS holdings reflected MAS' strategy of building up SGS to engage in more repurchase agreement (repo) transactions for our money market operations. On the liabilities side, there was an increase of $ billion in Government deposits with MAS, reflecting mainly increased issuance of SGS through the Authority. Income & expenditure statement For the financial year ended 31 March 2001, MAS registered profits of $ billion compared to $ billion in the previous year. The decrease resulted from translation effects arising from the strength of the Singapore Dollar against major currencies other than US Dollar over the financial year as a whole. 6  The organisation  MAS has strengthened its corporate planning process. We formed several cross-specialisation teams comprising more than 60 staff to evaluate developments and challenges both in the external environment and within the organisation.