institutions ’ attention on managing their risks and safeguarding the robustness of their liquidity, earnings and capital so that they remain financially sound through the economic downturn. second, we took steps to ensure well - functioning markets. singapore ’ s interbank money markets did not experience the seizure that griped the libor markets. however, the openness of our markets meant we could not be immune from the global dislocations. mas reassured financial institutions that they would have access to s $ and us $ liquidity in three ways. we kept a higher level of liquidity in the banking system. we also expanded eligibility to the standing facility to all banks that participate in the mas electronic payment system, meps +, allowing them to repurchase sgs for s $ funds with the mas. finally, we entered into a us $ 30 billion swap arrangement with the us federal reserve. this arrangement has been extended to 1 february 2010. third, measures were put in place to maintain confidence of investors in singapore as an international financial centre. in response to announcements by jurisdictions in the region of blanket government guarantee on deposits, the singapore government announced on 16 october 2008 a guarantee on deposits of individuals and non - bank customers of banks licensed in singapore. this was aimed at ensuring a level international playing field for banks in singapore and demonstrated the government ’ s confidence in the soundness of the financial system. it has also had the effect of maintaining the confidence of investors and depositors in our banking system. state of the financial system the measures taken around the three pillars of maintaining sound financial institutions, ensuring well functioning markets and maintaining confidence of investors, as well as the way in which institutions and market players responded to the crisis, have helped our financial sector weather the crisis. a healthy and functioning financial system has continued to support credit and capital intermediation to the economy. compared to the asian financial crisis, the moderation in bank lending has been milder. while credit conditions have tightened, there has not been disruption of credit flows to corporates. a total of s $ 9. 6 billion 2 was raised by sgx listed companies in the first half of 2009, which accounted for 65 % of source : sgx & thomson reuters. total rights offerings in asia in this period. more than 7, 300 government - backed loans amounting to s $ 4 billion have since been approved in the first half of 2009. in the first quarter of this year, the financial sector grew by 7. 7 %

was due to default of mortgage and other consumer debt. it is hard to tell what is a sustainable level of household debt, but most estimates suggest that us households are just about a third to halfway through the deleveraging process. this means probably another 3 – 5 years of sub - par household consumption growth in the us. 12. third, deleveraging by eurozone banks. there are two factors at work here. one, the quality of eurozone bank assets has come under pressure. two, eurozone banks are required to improve their capital adequacy positions so as to buffer against shocks. in particular, european banks are required to achieve a minimum core tier 1 capital ratio of 9 % by june this year. to the extent that banks cannot achieve the target capital ratios through retained earnings and capital raising, they will have to reduce their balance sheets. they can do this by selling assets or reducing lending. both will have a dampening effect on economic activity. given the global footprint of many eurozone banks, the effects will be felt not just in europe but elsewhere in the world. bis central bankers ’ speeches impact of deleveraging on asia 13. emerging asia will not be immune to this synchronised deleveraging in the advanced western economies. fiscal consolidation and household deleveraging in the us and eu will have significant spillover effects on asia, principally through the trade channel. asia ex - japan exports about a quarter of its goods to the us and europe. already, asian export growth has decelerated from 25 % at the beginning of 2011 to 10 % in the last quarter of the year. 14. while asian economies have started to restructure their economies towards increasing domestic demand, and intra - regional trade within asia has been growing, these trends will, at best, cushion only part of the fall in demand from the west. rebalancing of demand is a long - drawn process. it is unrealistic to expect asia to become the main engine of growth for the global economy over the next few years. 15. the deleveraging of eurozone banks will impact asia mainly through the financial channel, in the form of tighter credit. euro area banks as a whole provide 36 % of global trade finance loans, and french and spanish banks together account for more than two - fifths of trade finance loans in asia. 16. to - date, the impact on asia of deleveraging by eurozone banks has been quite limited. through most