A society: •  that spurs continuous innovation in payments technology;  •  that gives consumers maximum convenience and confidence in making payments;  •  that enables firms to increase productivity through payments integrated with business processes; and  •  where swift, simple, and secure payments is a reality for everyone. MAS has been working closely with the financial industry and other government agencies to drive electronic payments. We have also engaged KPMG Advisory to study Singapore’s payments landscape; KPMG’s report will be released later today. Let me elaborate on the four key strategies to create an e-payments society: •  streamlined regulation;  •  inclusive governance;  •  interoperable infrastructure; and  •  pervasive digitisation. Streamlined regulation – targeted, activity based, risk appropriate First, we will streamline our regulatory framework for payments; strengthen consumer protection; and make regulation more targeted based on the specific payment activities that businesses undertake. The existing regulatory framework for payments cuts across the Money-Changing and Remittance Businesses Act (“MCRBA”) and the Payment Systems (Oversight) Act (“PS(O)A”). The MCRBA was introduced in 1979, an era when bricks-and-mortar money changers and remittance agents were the norm. •  For more than three decades, it has served us well. •  We have a thriving remittance industry that provides an essential service to residents, including the many foreign workers in Singapore. The PS(O)A was enacted in 2006, with the objective of keeping our key payment systems safe and efficient.

According to the literature, for supervision to be considered effective it should be able to effectively develop, implement, monitor and enforce supervisory policies under normal and stressed economic conditions. BIS (2012) defines several preconditions for effective supervision in practice: 1) sound and sustainable macroeconomic policies as a core precondition for stable financial system; 2) a well established framework for financial stability policy formulation i.e. clear framework for macro prudential surveillance and financial stability policy formulation; 3) proper regulatory environment; 4) a clear framework for crisis management, recovery and resolution; 5) an appropriate level of systemic protection (or public safety net) such is a system of deposit insurance which contributes to public confidence in the system and thus limit contagion from banks in distress and 6) effective market discipline. Transparency is another factor that gains growing importance in recent years. Thus, in order to restore confidence and rebuild financial stability there was a strong push towards supervisors to increase their transparency to the markets and the public. One supporting argument for these trends is the role of transparency as prerequisite for accountability. Higher transparency enhances the legitimacy of the supervisor, also safeguarding his independence. When transparent, the supervisory actions become more predictable thus helping to shape expectations and foster linkages across institutions and markets. Finally, transparency sets the ground for careful and consistent decision-making, reducing the scope for arbitrary decisions. Empirical research (Arnone et al., 2007), finds a positive correlation between the transparency of the supervisor and the effectiveness of banking supervision.