Over the last three years, the Government of Singapore Investment Corporation, or GIC, committed to place out $ billion, and MAS to place out $ billion, to be managed by fund managers based in Singapore. We progressively liberalised rules governing the Central Provident Fund, to allow Singaporeans to invest their retirement savings under professional management, instead of leaving them with the Government. These policies and initiatives have yielded good results, and attracted new players who have contributed to the depth of our asset management industry. Despite difficult market conditions in the year 2000, Singapore's wealth management industry has remained resilient. The MAS' latest Survey of the Asset Management Industry shows that total assets under management in Singapore did not decline last year, but continued to grow, albeit slowly. As at end-2000, total assets under management in Singapore amounted to $ billion. Discretionary assets under management showed a decrease,  4  BIS Review 45/2001  reflecting the decline in market valuations in the region, but this was more than offset by an increase in advisory assets. Incumbent managers in Singapore have adopted a long-term perspective. They have increased the scale of their operations, priming for a market upturn. The pool of talent in the industry has grown, with the number of investment professionals located here growing by about 10% in 2000, to a headcount of 1,000. 24 new fund management outfits were established over the last year, bringing the total to 215 companies. Electronic financial services Another promising area is electronic financial services.

I will highlight three main dimensions along which greater integration is taking place, and discuss Singapore's policies and responses in each of them: the emergence and consolidation of international banks, regulatory cooperation and harmonisation, and the shakeout in the location of financial activities. Dimensions of greater integration and Singapore’s response Emergence and consolidation of international banks The first dimension is the emergence and ongoing consolidation of large international banks. International banks are seeking scale and scope through mergers and acquisitions. This is driven by deregulation, technology, and large economies of scale, as well as by the demand for one-stop, integrated financial services from banks' customers who are themselves globalising. The ability to offer clients access into several markets in different classes of financial instruments has become a valuable competitive edge. The wave of mergers has included Citibank and Travellers, Chase and J. P. Morgan, Deutsche Bank and Bankers' Trust, BNP and Bank Paribas. In Japan, the city trust and long term credit banks have merged into 4 major groups, in search of efficiency and rationalisation. In some smaller economies that have opened up their financial industry, most if not all of the domestic banks have been absorbed by foreign players. This has occurred in New Zealand, Mexico, and Argentina. Whether this is a happy development is yet to be seen. But worldwide, this process of consolidation has not been carried to the limit, nor is it likely to. Most mergers and acquisitions have taken place in the OECD countries, and often within the same country.