Besides refining the treatment of liability risk, we will also look at capital charges for asset risks. This will help to level the playing field between banks and insurance companies, and minimise opportunities for capital arbitrage. The new capital requirements should also provide an early indicator of financial weaknesses, and thus facilitate progressive intervention by regulators. These risk-based capital requirements will be introduced by end-2003. Raising professional standards in insurance To improve corporate governance and internal governance, it is critical to raise insurance professional standards. All insurance professionals should constantly upgrade both their technical and management skills. In 2000, MAS appointed a private sector committee, the Committee for Efficient Distribution of Life Insurance Products (CEDLI) to recommend minimum standards of transparency, competition and efficiency in the distribution of life insurance products. MAS accepted CEDLI's recommendations to enhance the sales advisory process and professional training. To date, industry practitioners have adopted these minimum standards enthusiastically. Many have gone further, and set their own requirements that exceed the prescribed standards, because they realised that this makes them more competitive in the market. This has improved the level of professionalism among life insurance agents and greatly enhanced the reputation of the industry, which in turn, is helping the industry to attract higher-calibre talent. Training and competency requirements should apply across-the-board to all insurance professionals, and not just to life insurance intermediaries. MAS is currently reviewing the manpower capabilities of the insurance industry and will identify the main competency gaps and areas of weakness.

11 In an article in the Financial Times late last year, Anders Åslund, a Senior Fellow at your Institute, argued in a refreshingly blunt manner for a change in the G20. 12 The ongoing efforts to change global governance should not be limited to the IMF alone. In saying this, I repeat that I fully recognise the important role played by the G20 in the time of crisis. However, while the G20 continues to exist and even expands into policy areas as varied as food security, energy and climate change, its legitimacy and democratic foundations must be reinforced. This can be achieved by, for example, representation and participation on a rotating basis. Everyone does not have to be present all the time. The constituency model of the IMF and the World Bank could be adopted, providing for the participation of other countries, even if only indirectly. In that vein, the G20 might be expanded by, say, four members in conjunction with the adoption of a structure which embraces the rest of the world. On the matters of economics and finance, I view the G20 as a complement, not an alternative, to the IMF. An appropriate solution would be the recognition of the IMF and the IMFC as the statutory-based principal forum. G20 collaboration on these matters would be recast in the IMFC or in an enhanced version in the Council if the membership decides to activate the provisions on its establishment. The IMFC is an institution of the IMF and thus has a statutory basis.