in response to a more risk - sensitive environment. significant changes in financial regulation are underway. global regulators under the auspices of the financial stability board, the basel committee on banking supervision, are working to put fractured financial markets back on a sounder footing. these changes include increasing the quality and quantity of risk - based capital, introducing new global liquidity requirements, and developing a fresh regulatory approach towards systemically important financial institutions. such reforms should bring about greater stability to the global financial system. 9. these changes will not be dramatic for singapore - based financial institutions because mas ’ regulation and supervision have been sound, prudent and effective. this has helped our financial system to remain resilient through the crisis. last week, mas communicated our long - standing approach in the latest monograph – “ tenets of effective regulation ” where we reiterated that our approach to regulatory development is outcomefocused, risk appropriate and impact sensitive. mas ’ policies and actions need to be clear and consistent as well as responsive to industry and market changes and economic cycles. we believe that a stable and dynamic financial system that serves the needs of the economy and the public cannot be built on regulation alone. responsible and competent board and senior management who manage the risks of their financial institutions well are also critical. growing interest in islamic finance 10. the general outlook for islamic finance remains positive despite the negative spillover from the financial crisis. as a basic tenet, islamic finance emphasizes that financing activities should underpin real commercial activities. due to its widening acceptance and its appeal as a means for ethical investment, the industry is expected to continue growing at twice the pace of its conventional counterpart. as such, surveys estimate that the industry will soon cross the us $ 1 trillion mark in total assets. 11. but similar to conventional banks, islamic financial institutions have been impacted by the economic slowdown and resulting weaker asset prices. some financial institutions have been badly affected by the over - concentration in illiquid assets and overlyoptimistic business plans. the islamic industry therefore needs to take heed of the lessons learnt from the current crisis and pay greater attention to issues related to capital adequacy, market liquidity and risk management. overcoming these challenges will require strong cooperation within the industry and across different jurisdictions. mas, as a full and council member of the islamic financial services board ( ifsb ) since 2005, will continue to advocate and support multi - national initiatives that would bring about such improvements. singapore as a global city for business

& corporate regulatory authority, or acra, will lead a study on the duties of directors, taking into account of standards observed internationally as well as the corporate environment in singapore. acra will work with the singapore institute of directors, icpas, the mas and sgx, and other stakeholders in this study. corporate governance – enhancing performance a sound and responsive regulatory framework is critical to corporate governance. but it is worth reminding ourselves that corporate governance is not merely about compliance with the rules. corporate governance is in the wider sense about how the business and affairs of a company are directed and managed in order to enhance corporate performance and long - term shareholder value. good corporate governance is ultimately about performance and accountability to shareholders. this relates to the effective functioning of the board – how it draws on different skill - sets amongst directors, how it sets strategies, and how it interacts with senior management to build knowledge and make decisions in the interests of shareholders. well - functioning boards aimed at sustained performance are in truth work - in - progress in singapore and elsewhere in asia – we probably have more distance to cover in this regard than in compliance with rules. many companies do not have a good mix of experience and skills amongst their directors. while some of the bigger companies may have the necessary resources and can seek outside help, there are a large number of companies that require help along this journey. we should therefore focus our energies not just on formulating sound rules and best practice codes, but on encouraging and helping companies to address practical issues in making their boards effective and high - performing. corporate governance study commissioned by mas and sgx this is one of the reasons why mas and sgx jointly commissioned a study on improving the implementation of corporate governance practices in singapore. this study was carried out by associate professor mak yuen teen of the national university of singapore ’ s business school and the corporate governance and financial reporting centre. the study focused on assessing the current state of corporate governance practices in singapore and proposing practical measures to improve board effectiveness and governance. details of the study can be found in the report, which mas and sgx will be publishing on their websites later today. for now, let me highlight two particular areas of the study ’ s recommendations that we have started working on. professional development and training of directors one area of improvement is in the training of directors. having committed and skilled directors is a key component in the effective functioning of the board. director training is particularly relevant for new or first - time directors, to assist