This shift away from a "one-size-fits-all" minimum liquidity requirement would be in line with international best practices for liquidity risk management. The new framework will be announced in the second half of this year. Its implementation will be phased out to minimise potential disruptions to financial markets. As business models and technologies continue to evolve, MAS has kept close touch with market participants and discussed with them the possible risk implications of new activities. We have avoided pre-empting market developments with premature regulation. Regulation has to be responsive but it cannot prejudge how the market will develop and business strategies will crystallise. MAS has issued regulatory guidelines on the provision of financial services through new delivery channels. Examples include the policy statement on capital treatment of internet-only banks; guidelines on technology risk management for all institutions engaging in internet banking; and sound practice guidelines on internet securities trading. The proposed SFA will introduce an authorisation regime to cater to new trading systems, often referred to as Alternative Trading Systems, so as to increase the scope of products available to investors. Developing talent Attracting and developing talent, both Singaporean and foreign, is critical to fostering innovation and a vibrant financial centre. In January this year, MAS announced that a Financial Network for Excellence in Training (f-NExT) would be established to encourage greater collaborative efforts in enhancing workforce capabilities within the financial sector. The Institute of Banking and Finance (IBF) will take on a new role as the central executive arm of f-NExT.

Against the backdrop of a weaker external economic environment and a more protracted global electronics downturn, near term growth prospects for the Singapore economy have turned significantly weaker while inflationary pressures are subsiding. The slowdown reflects a decline in demand, not an erosion of competitiveness. There is no reason for any persistent weakening of the Singapore dollar. MAS has therefore shifted to a neutral exchange rate policy stance, with a policy band centred on a zero percent appreciation of the $ MAS will continue to guide the $ within this exchange rate band, and stands ready to intervene to dampen excessive volatility should this become necessary. 3  Financial sector supervision and development  MAS' financial sector policies seek to promote a sound and resilient financial system while facilitating innovation, dynamism and competition. Recent and ongoing initiatives by the MAS have focused on: ·  harmonising regulation across the financial sector;  ·  liberalising access to the domestic industry;  ·  promoting corporate governance and market discipline;  ·  implementing a risk-focused supervisory framework; and  ·  developing talent in the financial sector. Harmonising regulation Convergence of financial activities and consolidation of financial institutions have made a more harmonised and integrated approach to regulation more urgent. Consistent regulatory treatment for similar products and activities will help level the playing field; it will also lower compliance costs by streamlining relevant regulations and reporting requirements across activities. As an integrated regulator, MAS has made significant progress in harmonising regulation.