We are not going to prescribe the approaches for our banks to adopt, but we have encouraged them to put in place the more advanced risk management practices that would enable them to move to the internal ratings-based approaches if they chose to do so. To enhance risk management capabilities in institutions, we have also issued comprehensive guidelines on international best practices. We have recently completed the IMF/World Bank’s Financial Sector Assessment Program (FSAP). According to the preliminary findings, the assessors have concluded that Singapore’s financial sector is robust with few short-term vulnerabilities. While we can take heart from the positive FSAP findings, we must not be complacent. We must remain vigilant to ensure continued confidence in our financial system. Strengthening partnership with industry Second, strengthening partnership with the industry. MAS has collaborated with the industry in several areas. We have embarked on a joint initiative with SGX to cultivate a stronger research-oriented environment in the stock-broking industry. We have also partnered banks to establish a cheque truncation system, and to include the Singapore Dollar as one of 11 global currencies in CLS (Continuous Linked Settlement). The participation in CLS eliminates FX settlement risk, and further consolidates Singapore’s position as a leading FX trading centre and a key node in the global financial system. Last year we formally adopted a policy of extensively consulting industry on new regulatory changes. Since January 2003, we have issued 17 consultation papers. The feedback from industry both here and abroad, has been useful in helping us formulate these changes.

In terms of monetary policy, interest rate cuts and injection of  2  BIS central bankers’ speeches  liquidity into the markets, and in terms of fiscal policy, temporary cuts in consumption taxes could be mentioned as examples of the overall accommodative policy stance in Turkey in 1 2009 . With the help of these policies, the dynamics of the economy in Turkey turned to positive in 2010; however, the increase in foreign capital inflows due to the exceptionally loose monetary policies by the advanced economies led to an excessive credit growth and an appreciation pressure on the Turkish currency, widening the external deficit. In response to these developments that have repercussions on the current account and the financial stability, CBRT responded by widening the overnight interest rate corridor with the aim of deterring short-term foreign capital inflows. Additionally, as part of the restrictive fiscal and financial policies, macroprudential measures were implemented in collaboration with other regulatory institutions and fiscal discipline was strengthened through tax hikes. When we come to 2011, Euro area debt crisis took over the markets; however, commodity prices displayed an upward trend as the global monetary expansion and its effects on the markets still continued. Decreasing risk appetite led to capital outflows from developing economies. As the increasing energy prices and the pass-through from the depreciating currency started to put excess pressure on the consumer price inflation, CBRT responded this time with AMT complemented with measures relaxing the financial markets’ liquidity needs.