the participants but the ccp and the system as a whole ; with a larger and more diversified pool of participants, the impact on the ccp due to a default of any single particular participant would be reduced. self - clearing can also widen ccp access on cost - effective terms and allow proprietary derivatives trading firms, such as buy - side players, to join ccps as members and thereby reduce their counterparty and fellow customer risks. ccps will have the flexibility to design suitable self - clearing models, taking into account the risks and needs of self - clearing members. we have seen recent innovations by eurex and cme to allow certain market participants which are not allowed to take part in the ccp risk mutualisation as a result of their mandates, to selfclear on the ccp. remote clearing will allow offshore participants, which do not currently have a presence in singapore, to join our ccps, thus bringing about new, additional liquidity to local markets. the increased breadth and depth of the markets in turn benefits onshore members which will continue to be key players in our domestic markets. at the same time, such memberships allow offshore firms to gain familiarity with the local market and to deepen their participation. there are some understandable concerns if remote or self - clearing can undermine financial stability in domestic markets. in singapore, our regulatory standards and expectations will not change. we will only allow ccps to admit self - clearing or remote clearing members if they have put in place adequate admission, ongoing monitoring and risk management frameworks. beyond equivalence assessments, we will consider the formation of supervisory colleges for our ccps should they be deemed as internationally active. putting recovery and resolution plans in place allow me to share a final set of remarks on recovery and resolution plans. even as we continue to strengthen the resilience and accessibility of ccps, we must continue our efforts to ensure that recovery and resolution plans for ccps are in place. there have been greater focus and thought given to arrangements to deal with default risks but it should also be recognised that other risks such as custody and investment risks can also pose a threat to a ccp's viability. hence, in line with the cpmi - iosco report on recovery of financial market infrastructures, mas expects and will place priority to ensure our ccps have clear arrangements to enable custody and investment losses to be allocated in a way which allows ccps to be solvent and can continue to provide its critical services. at the

became clear that supply - side factors and the role of expectations also needed to be worked in. thus, today many macro models build in these factors. one example is how most models now work in the impact of the economy ’ s potential output on inflation outcomes. in the us, modellers are faced with growing evidence of an emergent “ new economy ”. the hypothesis is that high rates of growth can be sustained without triggering off inflationary pressures, even at the point of full employment. i understand that staff from the federal reserve constantly update their estimates of key model parameters, such as the nairu2 as well as trend productivity to reflect the features of this new economy. these updated estimates have been used to help shape the fed ’ s forecasts of growth and inflation, thereby ensuring that the policymaking process is an informed one. the second quality i have in mind refers specifically to the model ’ s role in forecasting and policy analysis. a model must have a good track record, in order to serve as a reliable guide to the policymaker. i am not asking for spot - on point forecasts or estimates but, at a minimum, a macro model must be able to provide policymakers with a good feel for the directional effects of various policy options. thirdly, the workings of the model must be transparent. ideally, the structure of the model should correspond to a flowchart of the linkages within the economy. fed governor laurence meyer has said in a recent speech3 that model - based forecasting needs to “ start with a paradigm and end with a story ”. non - accelerating inflation rate of unemployment. to the stern graduate school of business, new york university : “ start with a paradigm, end with a story : the value of model - based forecasting and policy analysis ”. ultimately, when policymakers want to introduce policy changes, they want to know through what channels the effect of this policy will flow and how agents will react to this policy. in other words, policymakers want to know the story going on behind each policy reaction and not just be buried under masses of model output. fourth, macro modelling should adopt a pluralistic approach. policymakers are like consumers while macro modellers are the producers. as the well - known econometrician clive granger4 said, “ it is worth remembering that consumers usually prefer having a choice. it is rare for one model to be superior for all possible purposes : forecasting, policy making, conditional forecasts,