to develop singapore into an asset management hub. we assessed very early on was that there was good potential for growing the asset management industry in singapore. a rising affluent class across asia would have assets needing to be managed. most of the savings in asian countries are still in the form of bank deposits. there is considerable scope for diverting some of these funds for professional management. there was also an opportunity for managing the asian mandates of global portfolio investors, an area where no clear leader had emerged. we believe that global funds and institutions would find singapore a good location from which to manage their asian portfolios. although for now the region is not a hot destination for inbound investments, this will change as the region picks up again. we therefore carried out a comprehensive strategy to strengthen our fund management industry. we streamlined licensing requirements for fund mangers, and provided more room for indigenous fund managers to grow. we introduced tax incentives, especially for fund managers managing substantial amounts of discretionary funds out of singapore. we leveraged on our domestic savings, both government and private, to attract fund managers here. over the last three years, the government of singapore investment corporation, or gic, committed to place out s $ 25 billion, and mas to place out s $ 10 billion, to be managed by fund managers based in singapore. we progressively liberalised rules governing the central provident fund, to allow singaporeans to invest their retirement savings under professional management, instead of leaving them with the government. these policies and initiatives have yielded good results, and attracted new players who have contributed to the depth of our asset management industry. despite difficult market conditions in the year 2000, singapore's wealth management industry has remained resilient. the mas'latest survey of the asset management industry shows that total assets under management in singapore did not decline last year, but continued to grow, albeit slowly. as at end - 2000, total assets under management in singapore amounted to s $ 276 billion. discretionary assets under management showed a decrease, reflecting the decline in market valuations in the region, but this was more than offset by an increase in advisory assets. incumbent managers in singapore have adopted a long - term perspective. they have increased the scale of their operations, priming for a market upturn. the pool of talent in the industry has grown, with the number of investment professionals located here growing by about 10 % in 2000, to a headcount of 1, 000. 24 new fund management outfits were established over

lee hsien loong : building one financial world address by mr lee hsien loong, deputy prime minister of singapore and chairman of the monetary authority of singapore, at the 42nd aci world congress, held in singapore on 25 may 2001. * * * managing financial integration : asia ’ s experience the last 25 years has seen the emergence of an increasingly borderless, integrated financial world. the collapse of the bretton woods system set in train the deregulation of domestic financial markets and the removal of barriers to cross - border finance. overall, the outcome has been positive. globalised financial markets have helped to integrate national economies into a global trading system, and finance growth through better allocation of world savings. but the benefits have not come without hazards. shocks are now transmitted quickly from one financial system to another. large speculative flows threaten to destabilise economies from time to time. the margin for policy error is narrow, and the penalty severe. one consequence of greater financial integration is that countries can no longer count on sound macroeconomic fundamentals alone to attract foreign capital. when deciding whether to lend or invest and at what price, international players increasingly look to the stability of countries'financial systems, the degree of transparency, the quality of the legal framework and the standards of corporate governance. on these counts, asia has much catching up to do. for too long, east asian countries directed their domestic banks to lend to well - connected familybased firms and conglomerates. even when the countries deregulated financial systems and freed their capital accounts, they did too little to strengthen financial supervision and regulation, develop liquid markets, and promote sound corporate governance. international creditors were eager to participate in the asian miracle, and accepted a close nexus between borrowers and lenders as the " way " business was done in asia. but lending on the basis of familiarity and relationships is prone to abuse and a recipe for financial mishaps. the asian crisis of 1997 / 98 vividly brought home the risks of this approach. the asian crisis is now past, but we are not back to the status quo ante. the situation today is troubled, but it is different from that in 1997 / 98. unlike then, there is no contagious financial panic, no more hot money to flee the region, crashing currencies and economies one after the other. the markets are more subdued, although they are not immune to shocks, especially from political developments. global investors and traders have been chastened