The existing criteria and selection process are undergoing a rigorous review to strengthen the current assessment process and uplift the quality of audits so that auditors are also abreast with the emerging risks and implications of the Basel III framework and the new accounting standards that are to be enforced within the next few years. With a view of facilitating risk management of emerging technologies and to encourage further digitalisation of banking operations, several policies will be introduced to define regulatory expectations on use of cloud computing and define minimum regulations on the use of relevant fintech solutions. Further, a comprehensive technology risk assessment programme would be conducted to assess and improve the technology risk resilience of banks. Over the last five years, while the banking sector has grown approximately by 15 per cent annually, the non-bank financial institutions sector has grown approximately by 20 per cent. Although the sector accounts for a comparatively small share of around 8 per cent of the total assets of the financial system, the rapid growth and broad outreach of the sector necessitate proactive supervision and regulatory guidance. While several regulations have been introduced to strengthen these institutions, some licensed finance companies have shown signs of stress, while the rapid expansion of certain others have been curtailed due to their lack of compliance with regulatory requirements. This reiterates the need for continued strengthening of the existing regulatory framework of non-bank financial institutions to ensure the soundness of the sector and contain its spillover effects on the whole system.

In fact, to break away from a potentially vicious cycle of debt, the Central Bank has made prudent debt management a bank-wide strategic priority in its mission to ensure debt sustainability. As you all know, the Central Bank is responsible for raising, managing and servicing of government debt and carries out its functions with the objective of ensuring that the government’s financing requirements are met at the lowest possible cost in a timely manner, while ensuring the sustainability of debt obtained on behalf of the government. Following what was outlined in the previous Road Map, several measures were implemented in 2017 to enhance the transparency of debt management operations. In July 2017, a new hybrid primary issuance system for Treasury bonds was introduced to enhance the efficiency and transparency of the domestic borrowings of the government. We have also published an issuance calendar for government securities in the Central Bank website on a rolling basis to improve the transparency and predictability of the primary auction process and government securities market. Looking ahead, in 2018, we will continue to work towards enhancing the security, efficiency and transparency in public debt management further. Subject to the enactment of the Liability Management Act, in early 2018, liability management measures will be executed in order to improve the underlying risk profile of the public debt stock. This would enable us to minimise the refinancing risk by altering the maturity profile of the outstanding debt stock.