I am not claiming that the current framework is perfect, or that it is necessarily better than the old framework augmented with the new tools used to directly absorb excess reserves, but it is useful to have flexibility in how to implement monetary policy. We have now seen in practice that changes in administered rates can effectively move market rates – both because effective competition helps bring administered and market rates closer together and because the mere existence of administered-rate facilities, like the RRPs I mentioned earlier, can affect competition between private borrowers and investors even when these facilities see little usage. As we learn more about the practical aspects of using these mechanisms to influence money market rates in the United States, a much wider range of potential operating frameworks becomes viable. It will now be important to make sure that all the costs and benefits of different approaches are considered carefully to get the most effective framework for monetary policy implementation. In particular, there are important trade-offs that may need to be considered in a framework that can flexibly provide liquidity for monetary policy implementation and broader transmission. It is possible, for example, that financial market participants may anticipate that the central bank will make liquidity plentiful during times of stress and that this could reduce their incentives to manage their liquidity conservatively. For banks, new Basel III liquidity regulation, such as the liquidity coverage ratio and the net stable funding ratio, partially mitigates this concern.

2  Walker, David (July 2009), "A Review of Corporate Governance in UK Banks and Other Financial Industry Entities", Her Majesty's Treasury; G20 Working Group 1 (March 2009), "Enhancing Sound Regulation and Strengthening Transparency", G20; OECD Steering Group on Corporate Governance (May 2009), "Corporate Governance and the Financial Crisis - Key Findings and Main Messages", OECD. 2  BIS Review 147/2009  complacent. We must not let up in our efforts to improve our regulations and codes, as well as in the actual practices and governance culture. As part of this effort, I am pleased to announce that we will be establishing a Corporate Governance Council, comprising members from the private and public sectors. The objective of the Council will be to promote a high standard of corporate governance in companies listed in Singapore so as to maintain and enhance investors' confidence. In turn, this will enhance Singapore's reputation as a leading and trusted financial centre, and benefit all players involved. In conceptualising the Corporate Governance Council, the CCDG serves as a useful reference. Unlike the CCDG, which also had responsibility for promulgating accounting standards and improving disclosure practices, the Corporate Governance Council's focus will be squarely on corporate governance matters. Among the Council's roles will be the identification of opportunities for continuing professional development of directors and the development of practical guidance for Board committees. By taking into account perspectives of relevant stakeholders, the Council can develop initiatives that are robust and balanced, and achieve broad support and alignment of all parties.