For example, the Group of 22, which in fact had grown to have 33 members, was scaled back to become the Group of 20 – though actually it includes 19 countries and the European Union, which makes 34! That momentous change, in 1999, has not obviously made the world a safer place. The founding of the G20 did, however, represent a recognition by the international community that solutions to global financial pressures had to reach well beyond the G7. Singapore is not represented at the G20. Nor are regulators like the FSA. Nonetheless, the group, composed of finance ministers and central bankers from both developed and emerging markets, has been useful in obtaining emerging market high-level political buy-in to initiatives arising from elsewhere in the financial system. The G20 have all agreed, in principle, to undergo IMF Financial Sector Assessment Program (FSAP) evaluations and, under the current chairmanship of Mexico, they are looking at economic growth and the role of institution - building in the financial sector along with crisis management, transparency, combating terrorist financing and development issues more broadly. These institutional adjustments do not look fundamental. But there has been more change below the surface than they might suggest. Perhaps most importantly, a broad, albeit not universal, international consensus has developed that soft currency pegs, or other fixed exchange rate regimes, are, in combination with an adverse policy mix, highly likely to contribute to financial crises, and highly unlikely to protect countries from the financial market implications of poor economic fundamentals, or unstable financial systems.

For example, the International Monetary Fund (IMF) recently revised its estimate of the write-downs on expected losses by financial institutions on bad assets to $ trillion. 1 The scale of these losses remains significant. Further, several weakness in the global economy continue to present risks to the sustainability of the recovery. These include the continued deleveraging by banks and households, rising unemployment, weak fiscal positions in certain economies, and a reduced buffer for further decisive intervention. In addition, with the revival in investor confidence and generally conducive global liquidity conditions, authorities have been keeping a close watch on the asset markets. In Singapore, MAS recently decided to disallow the Interest Absorption Scheme and Interest-Only Housing Loans for private residential property lending. We will closely monitor developments in the property market and the broader economy. Our upcoming Monetary Policy review in October will continue to focus on MAS’ objective of maintaining overall price stability for the mediumterm. In this climate of relief and confidence, it is also easy to lose the sense of urgency to address lessons that can be learnt from the crisis. Much remains to be done, especially in  1  IMF Global Financial Stability Report (GFSR) - Navigating the financial Challenges Ahead dated October 2009. BIS Review 121/2009  1  strengthening risk management. Each of us, as regulators, as industry participants, as research institutes, academics and researchers, has an important part to play. Role of regulators First, there is need for global regulatory reforms.