also been focused on asset price inflation in recent years, especially in the property market. the mas, working with other government agencies, has introduced several rounds of measures to cool an overheated property market. 25 there were three motivations behind mas policy measures. • anchor inflation expectations. high and rising asset prices could fuel expectations of still higher general prices. • support financial stability. unsustainably high property prices could create risks of financial stability given the banking system ’ s loan exposure to property. • encourage greater financial prudence. the combination of global low interest rates and high asset prices could lead to some households over - extending themselves financially. 26 how far have these policy objectives been met? • there are some indications that property market is stabilising. the private property price index has moderated by cumulative 3. 3 % over the last three quarters. this has alleviated the pressure on headline inflation, as i have explained earlier. • the banking system is resilient to property market shocks. stress tests of our banks during last year ’ s financial sector assessment programme by the imf showed they were resilient against various stress scenarios. these stresses included a combination of : domestic interest rates increasing by more than 200 bps ; unemployment rate rising above 10 % ; cumulative decline in equity prices up to 70 % over three years ; and cumulative decline in residential property prices up to 50 % over three years. mas ’ own stress test this year – assuming disorderly unwinding of quantitative easing in us and higher level of usd funding squeeze – shows similar results. • household balance sheets are in better shape. last year i highlighted mas ’ concerns over rising household leverage. property - related measures have helped to strengthen overall household balance sheets in two ways. first, they have tempered the growth of household debt. year - on - year growth of household debt has moderated from nearly 13 % in the third quarter of 2011 to 5. 5 % in the first quarter of 2014. second, the risk profile of new housing loan borrowers has improved. almost all new housing loans granted since introduction of total debt servicing ratio, or tdsr, were within the 60 % threshold. 27 but it is too early to ease property - related measures 28 the measures can be broadly categorised into structural and cyclical measures. • structural measures include the tdsr and caps on loan tenures. they aim to ensure that households do not take on financial obligations beyond their repayment capacity. structural measures are therefore

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