In the absence of almost total retrenchment in international banking – except in cases involving countries issuing reserve currencies and with strong fiscal capacity – the problem these swap lines were meant to address will not go away. The past few years have seen lively discussion of whether it is desirable and feasible to anchor the swaps more firmly in the international monetary system, through clearer and more transparent access criteria and a multilateral governance mechanism. Clearly, there are arguments for such institutionalisation, but I sense that this might be premature and that we should allow the discussion to evolve further. Those who oppose constraining central bank discretion in this area present important arguments. The most compelling are those based on the analogy with liquidity provision and LOLR in a national setting, where flexibility, speed, and large scale can be essential. This argues in favour of giving central banks a major role in the arrangements. Less compelling are arguments based on moral hazard, which would apply equally to domestic arrangements. What seems clear is that even greatly enhanced IMF facilities are not close substitutes for swap lines among central banks. First, the swap lines are there to provide short-term collateralised FX liquidity to banks, whereas IMF facilities are uncollateralised longer-term lending to sovereigns and are intended primarily to mitigate balance of payments problems. Norway and the euro area were offered USD swaps without prior balance of payments disequilibrium and the euro area, at least, badly needed it.

As we have seen from numerous case studies during the financial crisis, weak corporate governance is often the key reason for the failures of financial institutions. 10. Much work continues to be done in developing regulatory requirements on governance in many jurisdictions. In Singapore, MAS has proposed enhancements to its corporate governance regulations and guidelines, drawing lessons from the recent financial crisis and international developments. The key proposals include strengthening the Board of Directors’ independence and oversight on risk management; ensuring that the Board has the appropriate skills and time to perform its role effectively; and requiring the Board to set appropriate remuneration policies to prevent excessive risk-taking. INCOME should benchmark itself against the best governance practices even though it is set up as a co-operative. Addressing the gaps in insurance needs 11. As for opportunities, there remain gaps in Singaporeans’ insurance protection needs. Studies commissioned by the insurance industry have suggested that Singaporeans are under-insured. Many are not insured at all while of those who are, many are underinsured. The under-insurance is greatest in the 30–49 age group. This is not surprising. Singaporeans in that age group tend to have heavier financial commitments and a greater number of dependants. So they find the cost of having to pay insurance premium a stretch. Unfortunately, if they were to meet an untimely death, critical illness or physical disability, their dependants would be caught without a breadwinner and saddled with financial commitments like mortgages and so on. 12. There are many reasons for the under-insurance.