For the time being, there is no point speculating on when interest rates will be cut. On the contrary, as you know from the voting we published, some Bank Board members are still thinking about raising rates further – our monetary policy meeting is next Wednesday. A strong koruna played an important role in the turnaround in inflation. We adjusted the monetary policy strategy in July 2022. We stabilised interest rates and verbally supported a strong koruna. In a speech at Masaryk University in November 2022, I presented the conditions under which our koruna would be strong again (Michl, 2022). Although we did not raise the CNB's repo rate further to more than 7%, we managed to have a record-strong currency. The average monthly exchange rate of the koruna to the euro was the strongest ever in April 2023, reaching CZK 23.44 to the euro (for comparison, it was CZK 23.55 to the euro in July 2008). I will always be proud if we have a strong koruna during my mandate. In 2023 Q1, the strongest-ever koruna together with the highest interest rates since 1999 created the tightest monetary conditions in more than twenty years (a more detailed analysis is available in our blog post published on the CNB website, see Adam and Michl, 2023). The strong exchange rate made imports cheaper and tightened monetary conditions also for exporters. The large ones in particular had not been influenced by our monetary policy too much until then, since they were taking out loans in euros.

The guidelines for internal governance will deal with the main responsibilities for the Board, stress the importance of transparent and performance-linked compensation; emphasise the need for the integrity of financial information; encourage fair dealings with the members of the public who are policy-holders and urge insurers to engage in regular communications with policy-holders. BIS Review 44/2002  3  Life insurance companies are entrusted with the management of long term funds. We are considering more rigorous corporate governance requirements for life insurers. We intend to formally introduce and enforce the corporate governance framework for the insurance industry later this year. Imposing risk-based capital requirements In a world of new and increased risks, appropriate levels of capitalization are necessary. Insurers face mounting complexities, given the increased volatility of asset risks and the diversity of liability risks. In Singapore, as in many other countries, the existing statutory framework of solvency and capital adequacy for insurers is essentially a "one-size-fits-all" approach. This is clearly no longer appropriate, since different insurers have acquired different levels of exposures to financial risks and developed different underwriting specialties. In banking, a risk-based capital approach is well-established. There are clear guidelines from the Bank for International Settlements, and a new standard is undergoing extensive worldwide consultation. For the insurance industry, the same level of regulatory consensus does not as yet exist. MAS has formed two work groups comprising industry practitioners, representatives of professional associations and regulators to develop risk-based capital models for life and non-life insurance.