market operations system. the key aspect is that a wide range of counterparties deal with the reserve bank on a regular basis as part of our daily liquidity operations. hence banks are accustomed to dealing with us and have a well - established relationship with us. to recap, there is an important role for a central bank to play in a fractional reserve banking system as the lender of last resort. this is particularly the case in dealing with liquidity events where the central bank's provision of liquidity can be regarded as a public good. 6 as noted, the central bank does not provide the liquidity insurance for free ; it is at a penal rate. moreover, the institution must hold an adequate amount of collateral that is of acceptable quality to the central bank to lend against. such collateral may well deliver a lower rate of see again the governor ’ s melville lecture as well as charles goodhart in “ myths about the lender of last resort ”, in c goodhart and g illing ( eds ) ( 2002 ), financial crises, contagion, and the lender of last resort : a reader, oxford university press, oxford, pp 227 – 248. to be clear, i am not talking about the proposed liquidity facility that will form part of the australian approach to the basel liquidity rules discussed below. rba ( reserve bank of australia ) ( 2010 ), annual report 2010. see kearns j and p lowe ( 2008 ), “ promoting liquidity : why and how? ”, in p bloxham and c kent ( eds ), lessons from the financial turmoil of 2007 and 2008, proceedings of a conference, reserve bank of australia, sydney. bis central bankers ’ speeches return than other assets the bank might otherwise hold ( although not necessarily so on an appropriately risk - adjusted measure ). in that regard, i will now turn briefly to the basel liquidity standards. the aim of those standards is to reduce the frequency with which banks might need to seek assistance from the central bank in a liquidity event to a very small number. it does so by making the size of the liquidity buffer banks are required to hold dependent on the structure and maturity of funding. thus, while the central bank can ultimately liquefy part of the balance sheet of a solvent institution in times of liquidity stress, in expectation, this would be a rare event. an institution should not be careless about its funding structure on the presumption of that support.

credit risk and liquidity risk management. these guidelines will spell out the key principles for sound risk management which banks are encouraged to follow. improvements made to risk management in order to comply with these risk management guidelines will help banks develop prudent and understandable policies, and improve their methods for measuring and managing firm - wide risks. these guidelines will incorporate comments from industry practitioners and other experts in the field of risk management. next, there will be a significant addition to singapore ’ s risk management infrastructure. to help financial institutions mitigate credit risk through information pooling, the singapore consumer credit bureau will be launched in september this year. mas welcomes this joint - venture initiative between the association of banks in singapore ( abs ) and a consortium comprising dun & bradstreet international and baycorp advantage, among others. with the rising popularity of consumer credit across asia and the likely increase in credit risks due to the difficult economic conditions, financial institutions are increasingly faced with the challenge of improving the quality of their consumer credit portfolios while increasing their market share in the face of global competition. take for example the credit and charge card. in 2001, total card billings in singapore were s $ 11 billion and bad debt written off by financial institutions was s $ 79. 5 million. over the past year, the personal bankruptcy rate has risen by 19 %. credit and charge cards approval rate has risen by 14. 4 % over the same period. the availability of timely and reliable customer credit information is therefore vital in banks ’ decisions to grant or sustain credit facilities. the establishment of a credit bureau in singapore is timely and will enhance the reliability of banks ’ internal credit rating systems. participating banks will disclose and in turn receive credit information from the credit bureau for the purpose of assessing the credit worthiness of their retail customers. credit information will include both positive and negative data and access to the bureau ’ s database will initially be restricted to the participating banks, banks ’ customers and the bureau itself. the establishment of the credit bureau is likely to increase credit business, lead to more competitive pricing of credit facilities and lower credit loan defaults and delinquency rates. to address the concerns over the treatment of credit data, mas would follow two broad principles. refers to the submission of customer ’ s payment histories on their credit facilities. positive data refers to timely payment ( i. e. a good customer ) and negative data refers to overdue payments. first, it is important that individuals have access to their own credit files