cannot insulate our financial sector from the stresses and turbulence in international financial markets. • we must remain open but be able to absorb shocks from abroad and bounce back. high prudential standards have therefore been a hallmark of singapore ’ s financial sector since the very beginning. • in recent years, we have further strengthened the resilience of the system through higher capital requirements and enhanced liquidity rules. singapore banks operate well above the regulatory capital minimums. bis central bankers ’ speeches • the basel committee prescribes a minimum tier 1 capital adequacy ratio of 6 % ; • mas has set a regulatory minimum of 8 % ; • the three local banking groups have tier 1 ratios in excess of 13 %. singapore banks are well - placed to meet the basel iii leverage ratio requirements, currently proposed as 3 %. • in fact, the three local banks have leverage ratios above 7 %. mas has had a liquidity requirement long before an international standard was developed and has recently increased the risk sensitivity of our liquidity rules. • the three local banks ’ liquidity coverage ratio or lcr is already well above 100 %, the target set by the basel committee for 2019. these strong buffers – built up in good times – are now serving us well as we enter a soft patch in economic conditions. • the banking system ’ s ratio of non - performing loans went up to 1. 9 % in q2, from 1. 3 % a year ago. • but the banking system has set aside provisions to cover more than 100 % of its npls. there have been concerns raised about the impact of the oil and gas ( o & g ) sector. • the o & g industry has been under pressure from low global oil prices for some time. • we expect to see some of that pressure showing up in our banks ’ npls. the banks have been actively managing the risks from the o & g sector. • the banking system ’ s exposures to the o & g sector as a proportion of total exposures ( i. e. including non - bank loans, debt securities and contingent liabilities ) is less than 10 %. • among the local banks, o & g exposures are even lower, at about 6 %. it is also important to appreciate that there is no systemic problem across the o & g industry. • the problems in the o & g industry are concentrated in the upstream marine and offshore engineering segment which makes up less than one - fifth of the

##powering our children and youth with the knowledge to develop the habits of cost avoidance and resource control. for example, the wise use of power or electricity ; controlling the amount of water we use ; or taking good care of public properties ; all these are about cost avoidance and savings. even the throwing of our garbage in proper rubbish bins avoids the costly exercise of hiring people to clean up our towns and villages. it is time that all of us ; the government, financial institutions, schools, teachers, parents and family to empower our children and youth with knowledge and experience to participate in resource saving habits and avoid habits that can incur costs. let us empower them to take part and save smart! finally, let me take this opportunity to thank all of you who are part of this event today. let me especially thank the six primary schools ; namely burns creek adventist primary school ; florence young christian primary school ; saint nicholas primary school, chung wah primary school, saint john primary school and bishop epalle primary school, for accepting our invitation to be part of the program and to teach your primary school students about financial education over the course of the past 6 weeks. i hope your schools will continue to help spread the gospel of ‘ take part, save smart! ’ and take the lead in teaching financial education in your schools in years to come. i must thank our three commercial banks who were very happy to be the schools foster banks for sparing time today to come and give real life examples of translating what has been taught in the classrooms to being able to open bank accounts and learn about the many saving products and services that commercial banks offer to the communities. i hope that the relationship that you have forged with the school and children will grow in many years ahead. also big thanks to all our stakeholders who are here to encourage all of us to ‘ take part and save smart! finally, let me thank our cbsi 40th anniversary committee, who had been planning this event. without their effort we will not be celebrating this event today. bis central bankers ’ speeches learning is about having fun and i am sure there is so much to learn from the stalls of our stakeholders today. i urge all of you to take part and save smart! thank you. bis central bankers ’ speeches