tharman shanmugaratnam : the gallery – promoting singapore ’ s central bank role and mission remarks by mr tharman shanmugaratnam, chairman of the monetary authority of singapore, at the opening of the mas gallery, singapore, 16 february 2016. * * * esm goh chok tong family members of former chairmen, mr hon sui sen and dr goh keng swee, and of former managing director mr lim kim san former managing directors, mr michael wong pak - shong, mr jy pillay and mr lee ek tieng current board members members of the mas management and staff, and especially, mas pioneers thank you to everyone for coming to the opening of our mas gallery. the gallery is aimed at helping the public understand the mission of the mas, and its role in promoting both growth and stability of the singapore economy and financial system. the gallery aims to help the public understand • how we keep inflation low over the long term through mas ’ policies in managing the exchange rate of the singapore dollar, • how we supervise the financial sector – the banking, insurance and securities industries - to ensure confidence in our financial system, • how we promote the development of a vibrant financial centre that serves a good part of asia and in some respects the rest of the world, • how we also seek to ensure that the financial system serves the interests of consumers, and how we try to help singaporeans manage their finances well. the mas staff responsible for the gallery have put a lot of thought into its design and content. but the gallery will keep evolving, and we will want it to stay relevant to singaporeans young and old. it is significant too that we are opening the gallery in 2016, when we commemorate the 45th anniversary of the mas. if we think about what we have achieved in these 45 years, what ’ s most precious is credibility. credibility is the most precious asset that a central bank and a financial regulator can have. the mas ’ credibility was founded in its early years. i want to mention the leaders and staff who were involved in putting in placed these foundations of today ’ s credibility. mr hon sui sen in particular, our first chairman ( 1971 - 1980 ), mr michael wong pak - shong, who was the managing director, and the staff at that time, including mr ng kok song, mrs ong - ang ai boon, mrs elizabeth sam. together they built an organisation, bringing together no fewer than nine different offices and functions in

the guarantee bolsters the confidence that the public has in singapore ’ s financial system. it provides certainty to singaporeans during such challenging and uncertain times in the international environment, notwithstanding that in singapore our institutions are fundamentally sound. third, financial services are an important pillar of singapore ’ s economy, accounting for 12 % of gdp and 5 % of singapore's employment. beyond this substantial direct contribution to gdp, the financial sector plays a critical role in intermediating credit for the economy, and in providing other critical financial services to companies and depositors in singapore. it is therefore important for the whole economy that the financial sector continues to function normally. should financial institutions in singapore become less competitive or credit become less readily available, it would hinder the financing of economic activities and raise the borrowing costs of businesses. this would aggravate the already challenging economic situation and thereby adversely affect our growth and jobs. fourth, this financial crisis is not confined to any country or region, but is a global one. singapore ’ s guarantee of deposits demonstrates our confidence in the soundness of our financial system, and helps contribute towards restoring confidence in the international financial system. why the guarantee is sufficient and prudent the deposits of individuals and non - bank customers with banks, finance companies and merchant banks in singapore amount to about s $ 700 billion. in view of mas ’ stringent regulations and close supervision of financial institutions in singapore, their strong capital and asset positions, and the potential support that foreign institutions in singapore can avail themselves of where necessary under the government guarantees provided by their home jurisdictions, mas and the ministry of finance have assessed that the backing of s $ 150 billion of the government ’ s reserves provided to the guarantee would be more than sufficient. let me explain. first, the likelihood of a bank failure as a result of problems in singapore is small as our banking system is sound and closely supervised, even though it is possible that problems elsewhere will affect a bank ’ s operations in singapore. second, even if a bank were to fail here, it should still have substantial assets to meet its liabilities to depositors. under the law non - bank depositors enjoy priority in being paid, ahead of other unsecured creditors. this makes it more likely that the failed institution will have sufficient assets to pay out to depositors. hence, for the guarantee to be called, two things have to happen : a bank has to fail, and at the same time its assets must be worth so little that