cpi inflation. for example, while wti oil prices in us $ have increased by more than 70 % from a year ago, domestic electricity tariffs and petrol prices rose by around 30 % each. similarly, while the imf global food and beverage index has soared by 43 % from a year ago, domestic food prices picked up by a more moderate 9 %. the effects of our policy tightening will continue to restrain cost and price pressures going forward. 8. however, we cannot totally insulate ourselves from the increases in global food and oil prices. hence, we must ensure that inflation expectations remain firmly anchored and that external price changes do not trigger second round effects. for monetary policy, our objective continues to be price stability over the medium - term. at the same time, other policy responses, as well as changes in household and business behaviour have been complementary toward this end. 9. mas ’ current monetary policy stance announced on 10 april 2008 remains appropriate given our assessment of current external economic developments. the next monetary policy statement will be released in october as scheduled. financial stability 10. the international financial system and the global economy are still facing significant challenges and downside risks. so far, prompt action by financial authorities in the us and europe has helped avert a wider crisis. but financial markets remain uncertain and volatile. 11. singapore banks have limited exposure to us mortgage related securities, and they remain well capitalised. over the past year, mas has intensified our monitoring of financial markets and our supervision of financial institutions. we have also conducted stress tests of singapore banks and the domestic operations of the large foreign banks here, and the results reported by the banks showed them to be resilient. nevertheless, there is no room for complacency. the current crisis provides important lessons on the areas we have to work on to enhance the resilience of the singapore financial system. mas is also participating in several international working groups that are reviewing ways to strengthen supervisory practices and standards. strengthening resilience : basel ii, liquidity management and standing facilities 12. as new international regulatory standards and practices are finalised, mas will consider strengthening our standards and market infrastructure where appropriate while taking care to avoid a disproportionate response. let me highlight three areas, where we had started reviewing our regulatory framework before the crisis and have proceeded to implement these new measures to further strengthen the resilience of our financial system. 13. first, an area found to be wanting elsewhere in the credit crisis was

the inadequate capital requirements that basel i placed on banks in respect of their securitisation activities. on 1 january 2008, all singapore - incorporated banks have adopted basel ii, a more risksensitive capital framework. the greater focus on enhancing internal risk management required under this new framework is especially timely given the volatile and uncertain environment. 14. second, mas has been working on improving liquidity risk management of banks before the current crisis. events in recent months reinforced the critical importance of liquidity management. to enable banks to better manage their liquidity risk, mas has put in place a revised minimum liquid assets framework. banks can apply to adopt a more risk - sensitive methodology for determining their regulatory liquidity reserves, which takes into account their risk management capability. 15. third, at the macro - level, to enhance liquidity management in the system, we will be making some changes to the mas standing facility that has been in place since june 2006. 16. the standing facility allows banks to place excess funds with or borrow from mas against singapore government securities collateral. this has helped to moderate intra - day volatility in interest rates as banks can avoid any undue scramble to square large, and potentially destabilising, positions in the market. the standing facility is currently open to the 11 primary dealer banks which are the most active banks in the singapore dollar money market. non - primary dealer banks could access the facility through the primary dealer banks. 17. while the existing arrangement has worked well, experience in other developed markets has also demonstrated that such a facility is particularly useful in times of unusual market volatility, as this enhances confidence that liquidity needs in the banking system will be met. 18. hence, to enhance the robustness of the system, mas will widen participation in the standing facility to meps + participating banks, subject to necessary documentation. the psa / isma global master repurchase agreement continues to be a requirement for banks to access the borrowing facility which will remain collateralised against singapore government securities. we will provide more details on this to the banks over the next few weeks. corporate governance, market conduct 19. apart from dealing with issues relating to the safety and soundness of banks, and the stability of financial system, mas has also been working on improving the responsiveness of our rules, as well as on improving corporate governance and market conduct. 20. mas is proposing amendments to the securities and futures act and the financial advisers act. the amendments aim to