heng swee keat : financial developments in singapore opening remarks by mr heng swee keat, managing director of the monetary authority of singapore, at the press conference on the monetary authority of singapore ’ s annual report 2009 / 10, singapore, 29 july 2010. * * * strong recovery from the recession 1. the singapore economy has recovered strongly from the recession. five quarters since gdp reached a trough, singapore ’ s output has exceeded its pre - crisis peak by 13. 3 %. the rapid climb from the trough can be traced to several inter - related factors. in particular, the domestic economy had been lifted by the cyclical upturn in global trade and financial market conditions since early 2009, supported by inventory restocking and unprecedented policy stimuli in the major economies. given its openness and competitiveness, singapore was in an especially strong position to benefit from these global forces through our externally - oriented sectors. in addition, investments made in the earlier years were completed in time to tap onto the global upturn. these investments introduced new activities in singapore ’ s economic landscape, including high - end manufacturing and tourism services, and strengthened the competitiveness of our existing industries. 2. global markets also recovered strongly after march as the financial system stabilised and investor confidence recovered. taking into account translation effects stemming from the stronger singapore dollar, interest and dividend income, as well as gains in the valuation of assets, mas recorded a net profit of $ 10. 12 billion during the financial year. 3. looking forward, considerable risks remain in the global economy and the global financial system. singapore ’ s financial system has, by and large, weathered the crisis well. however, we must not be complacent and we need to prepare ourselves to respond to any future challenges. there are three areas which mas has been working on and which we will continue to focus on in the coming year : first, sustaining macroeconomic stability in the postcrisis period ; second, strengthening the financial system ; and third, maintaining the growth of singapore ’ s financial services sector. sustaining macroeconomic stability in the post - crisis period 4. the strong pace of growth seen in the first half of this year is not expected to be sustained. growth is likely to have peaked at the middle of this year, and will moderate to a more sustainable rate, as external demand slows after the post - crisis bounce from stimulus measures and inventory effects wane worldwide. for 2010 as a whole, the singapore economy

accept aaa - rated singapore dollar debt securities issued by supranationals, sovereigns and sovereign - guaranteed companies. we also admitted these securities as tier 2 liquid assets under notice 613 with the same haircut as singapore government securities. with immediate effect, we will extend the list of issuers to aaa - rated and zero risk - weighted public sector entities. 21. i also announced last year that we have established a cross - border collateral arrangement with de nederlandsche bank. this year, we have established such arrangements with the banque de france, bundesbank and bank of england. these arrangements will allow banks in singapore to pledge euro and sterling cash and eligible government securities, custodised with these central banks, as collateral when they access the mas standing facility. 22. these measures will help to broaden the availability and diversity of regulatory and liquid assets for banks and allow international banks greater flexibility to tap on their global sources of liquidity, while maintaining the high quality of eligible collateral of the standing facility. maintaining the growth of singapore ’ s financial services sector 23. let me now turn to the performance of our financial sector. the sector has staged a strong rebound as global financial conditions improved. in the first quarter of this year, the financial sector grew by 3. 5 %, its fourth straight quarter of expansion. more recent data such as bank lending suggests that the financial sector continued to expand in q2. meanwhile, hiring in the financial sector has picked up from 4, 000 in q4 2009 to 5, 500 in q1 this year. the 5, 500 financial sector jobs created accounted for 15 % of total job creation in q1 2010. 24. the recovery in the financial sector is broad based – banking intermediation, trading and asset management activities have all rebounded. in particular, financial assets managed by the singapore asset management industry reached a new high in 2009. total assets managed grew by 40 % to reach s $ 1. 2 trillion ( us $ 861 billion ), exceeding the pre - crisis peak in 2007. average daily trading volume of foreign exchange ( fx ) and fx derivatives have recovered to us $ 290 billion in april 2010, an increase of 11 % from six months ago in october 2009 and near pre - crisis levels. we are also today one of asia ’ s leading commodity derivatives trading centres. 25. the financial sector ’ s strong recovery is, in part, due to our strong fundamentals, as well as action taken by the