Besides financial regulations, MAS is taking steps to strengthen the robustness of interbank funding markets. The financial crisis revealed the need to enhance banks’ management of liquidity. As the banking system grows, demand for high quality, liquid assets will grow. To address this, MAS will do two things. 17. First, we will increase the availability of liquid securities to banks by issuing shortterm MAS bills as part of money market operations. Currently, we use three instruments in our money market operations – foreign exchange swaps, borrowings and repos. MAS Bills will be our fourth instrument. These bills are negotiable, so banks needing liquidity can sell them or pledge them as collateral in interbank repo markets as well as the MAS Standing Facility. This will facilitate banks in managing their liquidity. 18. We expect to commence issuing MAS Bills in 2Q 2011. To prevent overlapping with SGS T-bills, MAS bills will have tenors of up to 3 months. We will phase MAS Bills in gradually, with up to $ billion initially, and then build up from there. 19. Second, we will continue to enhance the Standing Facility, which is the key liquidity facility for banks. 20. Last year, I announced that we would accept AAA-rated Singapore dollar debt securities issued by supranationals, sovereigns and sovereign-guaranteed companies. We also admitted these securities as Tier 2 liquid assets under Notice 613 with the same haircut as Singapore Government Securities. With immediate effect, we will extend the list of issuers to AAA-rated and zero risk-weighted public sector entities. 21.

On market conduct, MAS has issued two consultation papers on the sale of listed and unlisted investment products, to strengthen safeguards for retail customers and enhance MAS’ regulatory powers. We will be issuing our response to the feedback received in 2H2010. Proposals which do not require legislative amendments will be implemented first. Financial institutions will be expected to adopt the remaining proposals even before legislative implementation as good practice in conducting business with their customers. 14. MAS also issued the Guidelines on Fair Dealing last year. The Guidelines stress the responsibilities of the Board and Senior Management of financial institutions to set the corporate culture and direction to deliver fair dealing outcomes to customers. Over the last year, MAS has written to CEOs and Boards of major financial institutions to emphasise our expectations. We have noted increasing awareness among financial institutions of the importance of dealing fairly with customers. Going forward, MAS will continue to engage the Board and Senior Management of financial institutions, and assess their implementation of the Guidelines through off-site and on-site supervision. Financial institutions are also expected to conduct their own mystery shopping, while MAS’ mystery shopping exercise will serve as an independent check and benchmark practices across financial institutions. 15. In strengthening our regulatory and supervisory regimes, MAS will continue to maintain our balanced and consultative approach. We remain focused on achieving good regulatory outcomes that are appropriate to Singapore and seek to promote sustainable development of the financial sector. 16.