last year, there were several bond deals of about s $ 1 billion from domestic corporate issuers successfully placed in singapore. structured debt products now account for about 35 % of the total s $ debt issuance, reflecting a move towards more sophisticated debt instruments. with deeper and more mature capital markets, and greater confidence and experience in managing larger s $ flows, we are now ready to make a further move. since october last year, mas has been seeking the views of key market participants on how we can facilitate the continued growth of the s $ capital markets. following these dialogues, we have reviewed the non - internationalisation policy, taking into account their ideas and suggestions. we have decided to further liberalise the policy, to lift many of the specific restrictions on the use of the s $. henceforth, we will retain only two basic guidelines : a. first, financial institutions may not extend s $ credit facilities exceeding s $ 5 million to nonresident financial entities, where they have reason to believe that the proceeds may be used for speculation against the s $ exchange rate. this continues to be necessary, as we have no reason to allow offshore speculators to access the liquidity in our onshore fx swaps and money markets. b. second, when a non - resident entity wishes to obtain a s $ loan, or tap our equity or bond markets to fund overseas activities, it must swap or convert the s $ proceeds into foreign currency as and when it uses the proceeds offshore. this guideline is unlikely to stand in the way of market development, as the s $ is not a currency commonly used for transactions abroad, and non - resident entities would in any case wish to swap or convert the s $ proceeds into a currency of their choice for overseas use. with this liberalisation, the following will now be possible. a. first, mas will exempt all individuals and non - financial entities, which includes corporate treasury centres, from the s $ lending restrictions of the non - internationalisation policy. this recognises that such entities are not usually the prime drivers of destabilizing currency speculation. b. second, for non - resident financial entities that continue to be governed by the s $ policy, we will lift restrictions in the following financial activities : i. asset swaps, cross - currency swaps and cross - currency repos can now be transacted freely. mas had hitherto treated such transactions as forms of s $ lending. it will no longer do so

is also relatively larger and more established, compared to other countries in the region. by 1997, we had decided that we were sufficiently well established to shift from our previous highly conservative and risk - averse regulatory approach towards the financial industry and instead supervise with a lighter touch and accept calculated risks in order to promote its development. as part of this overall liberalisation, we progressively relaxed restrictions on the singapore dollar, and fostered the growth of our capital markets, throughout the asian crisis. our monetary policy has been centred on the exchange rate since 1981. but as a large financial centre with open capital markets, we are exposed to large and sometimes, volatile capital flows. thus we have long maintained an explicit policy of discouraging the internationalisation of the singapore dollar, in order to support our monetary policy framework. we limited the use of the singapore dollar by non - residents for purposes unrelated to the singapore economy, for example currency speculation. this non - internationalisation policy, supported by our strong macroeconomic fundamentals and substantial foreign reserves, has helped us to maintain a stable singapore dollar, and to avoid large swings in our exchange rate which would have severely damaged our economy. the trade - off was less vibrant capital markets. indeed in some cases, the tight domestic restrictions fostered the growth of offshore markets in these restricted activities, undermining our purpose. recognizing this, we have over the past four years progressively relaxed the s $ restrictions. our approach has been a cautious one : weighing the trade - off between development and the risk to exchange rate management, and feeling our way forward step by step. our efforts have yielded encouraging results. the outstanding volume of singapore government securities ( sgs ) has doubled since 1998 and average daily turnover volume increased about threetimes. sgs outstanding volume in 2001 was s $ 54 billion and average daily turnover was s $ 1. 9 billion. new corporate debt issuance has continued to grow strongly, with s $ and non - s $ corporate bond issuance totalling a record s $ 72 billion in 2001. this was an almost 8 - fold growth over issuance volumes in 1998, spurred by exceptional merger and acquisition activities, but significant nevertheless. outstanding corporate bonds have also more than doubled to s $ 80 billion. besides higher volumes of issuance, we are also seeing a greater diversity of corporate bonds in the market. the tenors issued range evenly across a spectrum of maturity up to 15 years. the average size of s $ - bond issues has also increased.