ravi menon : budget carefully, borrow responsibly, invest wisely remarks by mr ravi menon, managing director of the monetary authority of singapore, at the launch of the tamil financial literacy guide, singapore, 16 november 2014. * * * mr kumaran barathan, ceo of sinda ladies and gentlemen, good morning. value of patience and prudence in the 1960s and 1970s, a psychology professor at stanford university in the us conducted a study on children ’ s behaviour. he offered each child a choice : get a marshmallow immediately or, if they waited a little longer, get two marshmallows. some children did not want to wait, or perhaps they had doubts about the professor keeping his word. so, they chose to have their sweet there and then. others were more patient and received two marshmallows, as promised. fast forward 20 years. follow - up studies were done on the same group of children. those children who had chosen to delay getting their marshmallow generally performed better in their lives. they achieved better test results in school, for example. and yes, they kept themselves in better shape too! the results have intrigued psychologists, social scientists, and educators ever since. many more studies are being conducted and more elaborate theories are being proposed to explain them. but maybe our forefathers knew the answer all along : the value of patience and prudence ; in other words, delay rewards today so that we can reap greater rewards tomorrow. does that not offer a recipe for success in so many areas of our lives? we tell our children to play less and study more, so that they can acquire the education necessary to lead productive and comfortable lives in future. we tell ourselves to eat less and exercise more, so that we can keep in good health for a longer time and continue to enjoy good food. should it be any different in matters financial? what does it mean to be patient and prudent in finance? three things. budget carefully borrow responsibly invest wisely these are the three areas that moneysense – our national financial education programme – will focus on increasingly. moneysense – spearheaded by mas and involving a number of government agencies – has been working in partnership with the financial industry, education institutes, and professional and consumer associations to help empower singaporeans to manage their finances well. bis central bankers ’ speeches budget carefully let me start with budgeting – the first area of focus. the financial questions we face in

. 16. globally, financial supervisors are responding to this challenge in two ways. 17. first, many countries are now considering changes to the institutional structure of their supervisory authorities in the aftermath of the crisis. in this regard, mas is rather unique in combining financial sector regulation and supervision, central banking and development responsibilities under one agency. this structure has served us well. building on this, mas recently implemented a revised organisation structure. aimed at broadening and deepening our management bench, this structure would also serve to enhance our ability to respond more effectively to supervisory challenges ahead, and to derive greater synergies from the combined structure. 18. second, many financial supervisors are stepping up their investment in building up and enhancing their supervisory resources and capabilities. the crisis has underscored the need for financial supervisory authorities to have adequate and well - trained staff, so as to cope with the demands of supervising financial institutions in a fast - moving, complex and challenging operating environment. to maintain a high degree of confidence in the quality of supervision, we recently set up the mas academy and devote considerable resources into training and developing our central banking and supervisory staff. working in partnership with industry : shared outcomes and responsibility 19. however, sensible rules and effective supervision are not enough. we need a third pillar of partnership, where authorities and financial institutions each take on specific responsibilities to develop a shared ownership of supervisory outcomes. indeed, the design of regulation and the supervisory approach taken should allow for financial institutions to take on responsibility in contributing towards desired supervisory outcomes where appropriate. let me highlight two of these areas, namely the industry ’ s role in improving corporate governance and in capability building. corporate governance 20. one lesson from the recent crisis is that good corporate governance matters. the failure by boards to exercise effective risk management oversight had damaging consequences for many institutions. boards play a vital role in safeguarding the safety and soundness of their institutions by setting the risk appetite, remuneration policies and strategic direction, amongst others. for directors to discharge their responsibilities, they have to have the requisite knowledge, skills and experience. 21. mas will place increasing emphasis on the quality of the board of directors of financial institutions. among the proposals to enhance our corporate governance framework for locally incorporated banks and significant life insurers is the requirement for financial institutions to assess the current skills of their boards on an ongoing basis, and to establish a continuing development programme for all their directors. given the important role that the banking industry plays in our economy, mas