successful lion city bond issuances worth rmb10. 5 billion to - date, and we will look to promote greater bond issuance activity on a sustained basis. • second, enhance market infrastructure to facilitate growth of rmb activities. in response to market demand, mas has recently introduced rmb overnight liquidity bis central bankers ’ speeches facility to meet end - of - day rmb liquidity needs in the market. we will work with the industry to develop a rmb real time gross settlement ( rtgs ) system to raise the efficiency of rmb payment settlements in singapore. investment gains stable but profits higher due to translation effects 55 finally, i shall touch on mas ’ financial results. 56 mas recorded overall profit of s $ 15. 8 billion for fy2013 / 14. in fy2012 / 13, we recorded a loss of s $ 10. 6 billion. however, focusing on these numbers misses larger point about how mas ’ investments have performed. 57 as i had explained on previous occasions, mas ’ overall profit position is strongly influenced by currency translation effects – these are the effects of converting value of our reserves in foreign currency to singapore dollars ( sgd ). • a weaker sgd means a positive translation effect, i. e. investment gains on our foreign assets are amplified when reported in sgd. • conversely, a stronger sgd means a negative translation effect, i. e. investment gains are smaller or even negative when measured in sgd. but these translation effects have no bearing on the international purchasing power of mas ’ reserves. 58 therefore, it is important to look at the underlying investment gains holding the sgd exchange rate constant to strip out currency translation effects. when we do this, for fy2013 / 14, mas posted foreign investment gains of s $ 10. 6 billion, comparable to investment gains of s $ 9. 4 billion for fy 2012 / 13. 59 for this financial year, we recorded positive translation effects as sgd weakened against the usd, euro and gbp. in the last financial year, we had negative translation effects because the sgd appreciated against these three currencies as well as the jpy. 60 to help make sense of mas ’ underlying investment performance, we have provided a write - up on page 27 of annual report, showing the overall profit position, currency translation effects, and investment gains. 61 as shown in the chart on page 27, mas ’ investment gains have been relatively stable. this reflects

much more integrated and global competition has intensified. we need to be part of this globalisation process and not close our doors to it. this is why we have been gradually introducing more competition into previously protected sectors of the economy, such as the financial sector and the telecommunications sector. these are challenging times ahead for us. but as economic recovery gathers pace, it is easy for euphoria to overtake the need for improvement and change. it could also tempt us to scale back or postpone painful restructuring initiatives. but we cannot let this happen. we must reflect upon the boe ’ s financial stability conjecture and outlook, november 1999. lessons of the crisis and use them creatively to strengthen the economic systems, both domestically and internationally. this conference is timely. macro modellers can use this opportunity to do some soul - searching. you can ask yourselves how macroeconometric modelling can facilitate good public policy in this post - asian crisis era. for the critics and the sceptics, the asian crisis is evidence that macro modelling has failed badly. for them, macro modelling is an old millstone in a new millennium. perhaps resources should be freed up for more productive activities? however, the indications are that more and more central banks are embarking on projects to develop macro models of their economies. i take a sympathetic view, and not only because i am addressing a crowd comprised largely of economists and analysts. in my view, macro models can function as good navigational tools for the policymaker. but i must qualify that not all models fit the bill. how macro modelling can remain relevant to policymakers - five qualities i am no expert in the field and my comments today are solely from the point of view of a public policymaker. i believe that macro models must exhibit five qualities in order to be useful to policymakers. first and foremost, macro models must be responsive to structural changes in the economy. otherwise, the macro models will have little or no value for the policymakers who must make hard decisions based on the policy implications of the models. models today have in fact evolved to be quite different from those in the 1970s. then, macro models placed much emphasis on demand - driven outcomes for the economy. that was because governments believed in the power of discretionary monetary and fiscal policies to promote high growth and low inflation. however, the repeated failure of such macro models to identify critical turning points in the 1970s and 1980s caused many economists to question the old assumptions behind the models. it then