The Issue Of Transparancy In The Monetary Authority Of Singapore (mas)

p foilin theMo exonerateary authorization of hood of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of capital of Singapore2007 TABLE OF CONTENTSSection 1 . inception to the prove 4Section 2 . minimize on the Study 5Section 3 . economy and Supervision 6Section 4 .Exchange Rate Policy 8Section 5 .The Need for Transpargonncy 10Section 6 . transpargonntness Reforms 13Section 7 . randomness Disclosed by the MAS 16Section 8 . transp bence Shortcomings of the MAS 19Section 9 .ConclusionWORKS CITED mention 21Section 1 . understructure to the Study enhancer is an grave means of enhancing the performance and general duty of a fiscal institution . Ideally , monetary institutions should adopt a presumption in favor of the give away of selective schooling , except where much(prenominal) release might via media a well-defined need for confidentiality ( rim for inter topic Settlements 1998According to surveys examined by Transparency global , a non-profit organization based in Germany , Singapore has consistently been perceived as having the least misdirect customary vault of heaven among Asiatic nations . Singapore ranked number 5 demesnewide , with Hong Kong and lacquer joining Singapore as the scarce when Asian nations ranking among the top 25 countries . Asia s largest nations - namely , china , India , and Indonesia - all scored in the bottom half of the 133 ranked nations (Dube 2003In judgment why Singapore is perceived as the least corrupt , and in that respectfore some(prenominal) transparent , nation in Asia needs requires an examination of the Monetary authority of Singapore (MAS . The MAS is the rudimentary entrust of Singapore . Its task is to formulate and execute the country s monetary and substitute rate policy , and to issue Singapore gold . Since it is the banker and monetary agent to the goernment , MAS excessively manages the country s contradictory reserves and issues brass securities . In addition to these duties , MAS acts as the executive program over the country s banking , securities , futures , and policy industries , as well as in the promotion of Singapore as an planetary fiscal center (Monetary Authority of Singapore ` grounding 2007 Monetary Authority of Singapore , `Economics Explorer 1 1999Section 2 .Background on the StudyIn 1970 , the Parliament of Singapore passed the Monetary Authority of Singapore Act which take erupt to the creation of MAS on January 1 , 1971 previous to 1970 , the different monetary personas associated with a central bank were performed by various government de percentagements and agencies . However , as the country progressed , it became unvarnished that there was a need to develop a much(prenominal) dynamic , coherent policy on monetary matters . With the enactment of the MAS Act , the MAS was minded(p) the authority to streamline all monetary , banking and monetary sectors in Singapore . In April 1977 , the jurisprudence of the insurance industry was excessively brought under the coverage of MAS . In kinfolk 1984 , the regulatory functions under the Securities Industry Act of 1973 were excessively transferred to MAS . In October 2002 , MAS merged with the Board of Commissioners of coin , and now also assumes the function of currency issuance (Monetary Authority of Singapore , ` world 2007However , contradictory many opposite central banks such as the Bank of Eng fetch or The Fed , MAS does not regulate the monetary remains by inte stay rate to influence the liquidnessity in the system . MAS instead regulates the country s monetary system through a contradictory swap mechanism by intervene in the SGD grocery store (Wikipedia , 2007Thus , the MAS assumes the persona of overseeing and regulating the monetary , banking , monetary , and insurance sector in Singapore . Since all these industries - pivotal to the stinting growth and shelterness of any country - are controlled by a single authority , certain pushs devise as to the foil of its procedures . When one governmental body is given such a huge amount of power and function over such important sectorsSection 3 .Regulation and SupervisionThe go on taken by MAS in regulation and supervision focuses on systemic risk rather than individual trans sues . The concern is bearing secondary lump , or price stability , which is deemed as inherent for sustained frugal growth and for ensuring fiscal stability . The global monetary industry has been ever-changing rapidly payable to falling regulatory barriers , advances in discipline technology , and the increase number of mergers among monetary institutions . As financial markets and activities become more consolidated and integrated , there is a need and then to foster an environment to hasten the pace of market developing and innovation while at the equivalent time maintaining financial stabilityThe response of the MAS to all this was to shift away from a one-size-fits-all regulation toward a risk- concentrate supervisory begin . It manipulates a distinction amongst regulation and supervision Regulation refers to the setting of prudential rules and guidelines for financial institutions , whereas supervision refers to ensuring that these rules and guidelines are complied with . In adapting a risk-focused supervisory approach , the MAS gives stronger financial institutions the flexibility to develop and innovate while maintaining stricter controls over weaker institutions . As a regulator , the MAS sets minimum requirements on capital and liquidity that institutions should meet as prudential safeguards . At the same time , it strives to align its policies with worldwide best practices , and attempts to strike the decline balance between prudential regulation and market growing by consulting industry associations , market participants and professionals . Acting as a supervisor , MAS ensures that financial institutions comply with pitched rules and guidelines by conducting survey inspections , examination of statistical returns , accounts , reports by orthogonal and internal auditors , and exchanges of information with other regulators . MAS has always also been vocal about promoting higher(prenominal) revealing and transparentness standards among financial institutions in to facilitate a great degree of market scrutiny and discipline in the conduct of their activities (Monetary Authority of Singapore `Introduction 2007Regulatory foil is an essential grammatical constituent in making regulation effective and sightly - and is thus a neckclothamental foundation for deep liquid markets . Lack of transparency in the implementation of laws and regulations can severely impede the ability of financial institutions to debate fairly . pecuniary run firms face non-tariff barriers in the form of regulatory restrictions , and escape of transparency in the implementation and application of regulations . These barriers can sustain access in much the same way as tariffs but , unlike tariffs , no quantitative mechanism personifys to contract them (Lackritz , 2003From a pedigree stand level off , maintaining a high take aim of transparency is as essential to a successful financial services symmetricalness as tariff cuts are to an agreement on trade in goods . Lack of transparency in the implementation of laws and regulations - including limited usual comment periods on proposed regulations , non-transparent laudation mechanisms for firms and financial products , or other practices that are not dealt with consistent to written regulations can drastically impede the ability of securities firms to struggle fairly (Lackritz 2003Regulatory prohibitions also limit the ability of Singaporean firms to compete in abroad markets . In some cases , the sale of factized products requires regulatory approval . In other spokespersons , the ability to establish is impaired by restrictions on new licenses . Elimination of these barriers is composite , especially when the MAS determines these barriers are prudential in record - that they exist to protect the safety of consumers and the soundness of the marketplace . However critics point out that many of the regulatory restrictions constituted by the MAS go beyond any legitimate prudential objective (Lackritz 2003Section 4 .Exchange Rate PolicyFrom 1981 , Singapore s monetary policy has been focused on the exchange rate which is deemed as a more effective tool in controlling inflation given the small size and the cleanness of the Singapore economy . The Singapore dollar (S ) exchange rate is managed against not lone(prenominal) the US dollar or any single foreign currency , but against a basket of currencies comprising the currencies of the country s major traffic partners and competitors . The MAS regularly reviews and revises the composition of this basket of currencies , taking into account changes in Singapore s trade patterns . This trade- dull exchange rate is broadly maintained with an un produced target much , since how much the trade-weighted S is al paltryed to estimate or depreciate depends on the level of global inflation and house servant price takeures , among other things (Monetary Authority of Singapore , `Introduction 2007The choice of exchange rate , rather than money add together or interest rate has been further influenced by Singapore s want of natural resources The nation has to import even the most basic of necessities . Out of every S 1 pass in Singapore , 54 cents go to imports . This implies that house servant prices in Singapore are very much influenced by foreign prices , partly due to the accompaniment also that its economy is of such a small size . As such , foreign price increases ordain lead to higher domestic prices which in turn can be offset by changes in the exchange rate (Monetary Authority of Singapore , `Introduction 2007The exchange rate can also affect domestic be and prices pressures Since Singapore has a small domestic market , its economic development intention has always focused on producing exports for the rest of the world , with exports or external demand comprising about dickens-thirds of exchange rate can have an important influence on the demand for local anaesthetic resources , particularly labor . This is due to the fact that a weak exchange rate can lead to the overheating of the economy , a tighter labor market , and as a result thereof , higher growth of domestic wages and other costs (Monetary Authority of Singapore , `Introduction 2007MAS is also very open to capital flows . Small changes in the disagreement between domestic and foreign interest place would lead to large and quick movements of capital . regrettably , this bring ons it knockout to target money supply in Singapore , since net flows of funds from abroad make up the bulk of changes in domestic money supply . In the same vein , domestic interest rate are mostly inflexible by foreign rates and market expectations of the movement of the Singapore dollar Any attempts by MAS to raise or frown domestic interest rates over a huge period of time would in effect be prevent by a shift of funds coming in or out of Singapore (Monetary Authority of Singapore `Introduction 2007Section 5 .The Need for TransparencyTransparency is an important tool for enhancing the performance and earth accountability of a financial institution . In responding to the crisis in Asia , pay ministers and central bank governors from a number of systemically significant economies met in Washington , D .C . in April 1998 to examine issues link up to the stability of the international financial system and the effective surgical procedure of global capital markets . The April meeting was attended by pay ministers and central bank governors from Argentina , Australia , Brazil , Canada China , France , Germany , Hong Kong SAR , India , Indonesia , Italy , Japan Korea , Malaysia , Mexico , Poland , Russia , Singapore , South Africa Thailand , the joined Kingdom and the United States . The heads of the BIS , IMF , OECD and the domain Bank , as well as the Chair of the retardation Committee , attended as observers . In their discussions , ministers and governors stressed the splendour of strengthening the international financial system through action in three key areas : 1 ) enhancing transparency and accountability 2 ) strengthening domestic financial systems and 3 ) managing international financial crises (Bank for International Settlements 1998The Working Group on Transparency and Accountability considered the contributions that transparency and accountability can make to improvements in economic performance , as well as the nature of information mandatory for effective transparency and accountability Members particular importance to enhancing the relevance reliability , comparability and understandability of information tell by the private sector . They suggested that priority be given to compliance with and enforcement of high-quality accounting standards There was also a consensus on the need to improve the coverage frequency and opportuneness with which entropy on foreign exchange reserves external debt and financial sector soundness are published . what is more members recommended that consideration be given to compiling and publishing data on the international exposures of investment banks hedge funds and other institutional investors (Bank for International Settlements 1998These recommendations provided for by the Working Group on Transparency and Accountability have not necessarily been followed by the participants in the assembly , such as Singapore in this case . At best these recommendations are ideal or best-case scenarios to ensure transparencyWhen the Asian financial crisis erupted , many Asian economies were caught by surprise . Unlike Latin America , the crisis in Asia came largely from the private sector . If public institutions , such as central banks or finance ministries , were found wanting , it was not because they pursue inappropriate macro-economic demand management policies , but because they failed to safeguard the stability of the financial system . Countries in the region had rushed to liberalize their financial systems and capital accounts in the first place competent safeguards were in place . All was well as long as money continued to flow in . Banks were flushed with liquidity due to strong injections of capital and rising asset value . regrettably , banks lent to a fault to increasingly unproductive and speculative sectors of the property and nisus markets . When capital flows reversed and asset prices plunged collateral values collapsed and banks were caught with substantial loans that could not be repaid . Private firms had also borrowed excessively and short-term from overseas , without proper hedging and matching of maturities . In many cases , risk management and control mechanisms in banks and companies were mechanisms were adequate , banks and companies were lulled into complacency by the macroeconomic policy environment . The government were sending wrong signals to the market by implicitly guaranteeing stable exchange rates . Attracted by lower interest rates in offshore markets for the U .S . dollar and other currencies , domestic banks and companies borrowed heavily overseas . Institutional weaknesses not completely contributed to the crisis , they also seriously impede the adjustment process . Asia urgently needed to build and strengthen its institutions so that the Asian nations could cope with changing macroeconomic conditions . During this call for rebuilding , the principles of transparency and accountability emerged as fundamental elements to the successful reform of institutions (Hu 1998It is always dangerous to appreciation the markets guessing . Investors assume the worst when governments and companies are perceived to be withholding information . The regulators must share some of the province for this . Weak company and securities laws do not compel firms to make adequate disclosure . To ensure transparency , there must be proper rules on disclosure , which helps enforce market discipline (Hu 1998In Singapore , the MAS has continuously move ond local banks to disclose their exposure to the regional economies . It has set up a commissioning on banking disclosure standards , consisting mainly of representatives of private sector banks , to recommend ways to improve disclosure . In addition , the International Monetary Fund (IMF ) drafted a code of good practices on fiscal transparency (Hu 1998Its key points (four out of eight recommendations ) are thatroles and responsibilities in government should be clearinformation on government activities should be provided to the publicbudget preparation , execution and insurance coverage should be undertaken in an open mannerfiscal information should be subjected to independent integrity checks (Hu 1998Since the Singapore government s endorsement of the Report on Banking Disclosures in May 1998 , there has been significant progress towards greater transparency in the finance sector . All eight recommendations are being employ and some are already making a difference to the type and extent of information purchasable . This was most understandably in evidence recently when one of Singapore s bounteous Four local banks , OCBC d its annual report . innovative laws forced the company to reveal its hidden assets which many analysts had previously estimated at around twice the figure of S 2 .11 billion declared (Rodan 1999Section 6 .Transparency ReformsIn the IMF s 1999 assessment of Singapore reforms , it called for improved data on consolidated public sector operations and on medium-term fiscal projections , as well as on trade , reserves , and government assets held abroad . Transparency reforms are now an integral component of the government strategy to elevate Singapore to the status of a world-class financial center . The strategy included a world-wide value of financial services , with particular focus on fund management and bond markets . MAS has a leading role in the transformation of Singapore s regulatory and reporting regimes . By international transparency standards , though , Singapore starts from a very low base and it remains to be seen how far the government is hustling to go beyond the corporate disclosure agenda . reading control has in the past been a strategic element of the Singapore Inc . model - date is either unavailable or provided on a need to know basis to investors (Rodan 1999Since the ground has extensive direct and indirect economic influence important reforms for transparency would necessarily have to cover government departments and government-linked companies (GLCs . Temasek Holdings Ltd . owns more than 1 ,000 companies on behalf of the Ministry of Finance , GLCs control most land in Singapore , and national savings are largely steered through the separate-run compulsory superannuation scheme or deposited in state banks . Yet reporting by many GLCs and public authorities have historically been limited . For example , Temasek reports only to the Finance Minister and a parliamentary budget commissioning . The Government Investment Corporation (GIC , which manages more than S blow billion of Singapore taxpayers money , operates in virtual muteness . entropy on the levels and make-up of guest workers in Singapore and trade figures between Singapore and Indonesia have also been traditionally withheld for semipolitical or commercial reasons (Rodan 1999Why would MAS benefit from more transparency ? The reason is that according to index finger of Economic emancipation 2007 , Singapore s economy is 85 .7 submit , making it the world s second freest economy . This means that Singapore is considered as a world leader in all 10 areas of economic immunity (Index of Economic emancipation200794 .6 Business Freedom - In Singapore , kickoff a business takes an average of 6 days , as compared to the world average of 48 days Obtaining a business license and closing a business require only simple steps80 consider Freedom - In 2003 , Singapore s weighted average tariff rate was 093 Fiscal Freedom - first base income tax rates . The top income tax rate is 22 and the top corporate tax is only 20 . In 2006 , overall tax revenues as a percentage of the gross domestic product was 1386 .2 Freedom from Government - consumption and transfer payments , are low in Singapore89 .5 Monetary Freedom - Inflation is low , averaging 0 .

8 between 2003 and 200590 Investment Freedom - Foreign and domestic businesses are treated equally , with no production or local content requirements , and nearly all sectors open to 100 foreign ownership90 Property Rights94 Freedom from Corruption - As earlier mentioned , Singapore ranks 5th out of 158 countries in Transparency International s Corruptions Perceptions Index from 2003 and until recently in 200550 pecuniary Freedom - Regulated by the MAS99 .3 Labor Freedom80 swap FreedomSection 7 . entropy Disclosed by the MASTransparency is important to better enhance these 10 granting immunitys . For instance , Singapore could do slightly better in pecuniary Freedom , which at 50 t is the only one of the 10 Economic Freedoms which is below 80 Despite the government s dashing goals of promoting the nation as a global financial hub , state influence in the banking system persists . Although credit is readily available and generally allocated at market rates , the government controls the suppuration Bank of Singapore (the largest domestic bank group and publically listed ) and indirectly holds significant minority shares in the other two domestic bank groups (Index of Economic Freedom 2007In 2005 , the government launched the SME access Loan Program , a new financing scheme for small and medium-sized enterprises . Foreign banks have been granted greater freedom to open branches and offer services but the government seeks to maintain the domestic bank share of deposits above 50 and requires that the majority of board members of domestic banks must be Singapore citizens and residents . sise foreign banks possess qualifying full bank licenses . new(prenominal) foreign banks face more restrictions on their activities (Index of Economic Freedom 2007A free trade agreement (FTA ) between Singapore and the US has greatly loosened restrictions on U .S . banks in Singapore . A report by the Securities Industry Association (SIA ) in the US provides that the FTA between the US and Singapore plays an important role in increasing trade in the financial services of both countries , enhancing and strengthening capital market efficiency , and bolstering financial sector stability The success of the FTA was measured in the undermentioned key criteria (Lackritz 2003Permit 100 ownership , as well as right to establish in corporate form of choiceProvide national treatment (i .e , treat foreign financial sector participants and investors on the same basis as domestic investors for regulatory and other purposesCommit to procedural aspects of regulatory transparency (including commitments on prior commentEliminate economic needs tests andPermit dissemination and processing (within country and cross-b ) of financial information to provide clients with services necessary for the conduct of ordinary businessThe fundamental emphasis thus of such FTA is to call for the need for transparency . According to SIA , the FTA has helped to advance Singapore s goal of becoming a key international financial hub . In 2002 investors from Singapore acquired 9 .2 billion of U .S . securities - in comparison , of EU members states , only UK investors exceeded this 143 .3 billion . In addition , purchases and sales of U .S . securities pass 252 billion , ranking in the top dozen most active countries (Lackritz 2003The 2005 /2006 MAS one-year Report indicates transparency in a good number of areas . Common risk assessment and mannequin techniques for supervision are discussed , as well as Inspections and supervisory Reviews such as Thematic Inspections Relation to Anti-Money Laundering /Countering pay of Terrorism . New Legislation are also disclosed , as well as measures for Enhancing Regulatory Frameworks , such as Regulations for Islamic Finance and Revision to Requirements on Submission of Annual Audited Accounts . It further discusses Market and Business Conduct , Risk prudence , pecuniary Market Activity , Building a military personnel Class Talent Pool , Forging Alliances with the International Financial Community , Economic Developments and Monetary Policy in Singapore and in the world economy , MAS organizational initiatives , and most importantly , MAS Financial Statements . These include Financial Statement Highlights , MAS Income Statement , equilibrize Sheet , Auditor s Report , Statement of Changes in honor , Cash Flow Statement , Statement of Backing of Currency in Circulation , and Notes to the Financial StatementsIn the MAS official website (network .mas .gov .sg , online financial statements are also available . It has Annual Reports from 97 /98 online until 2005 /2006 . Reports and Consultation s are also available showing comments and feedback on MAS existent or proposed regulatory measures , or important supervisory policy issues , and MAS reaction to these comments and feedback . MAS Surveys of Professional Forecasters for March 2007 and regretsember 2006 are also available , as well as Surveys of the Singapore corporate Debt Market from 1999 to 2004 , the MAS Treasury /FX Surveys from 1999 to 2004 , Surveys of the Asset Management Industry , from 1998 to 2005In the MAS website , there are also Monthly Statistical Bulletins (which contains monetary and financial developments i .e . data on financial markets available in the website , Macroeconomic Review , Financial Stability Review , Financial Sector Development Fund for 2005 /2006 , Staff s , Information s , Monographs , Consumer Guides , and reports by other organizations such as the domain of a function BankSection 8 . Transparency Shortcomings of the MASThe International Advisory Panel was established by the MAS in 1998 composed of the heads of the different major international companies operating within Singapore . IAP recommendations to the MAS has over the years prominently displayed an absence in any call for a free media to assist the finance sector s development . Corporatist structures of the type which encourage free media participation would provide potential avenues for privileged information gathering and behind the scenes lobbying (Rodan , 2002 . According to Rodan (2002 , interviews with fund managers investing in Singapore also reveal that transparency s importance to their decisions is uncomplete static , nor principally determinant , and this whitethorn in part explain the surge for reform in Singapore during 1999 and 2000 . Unfortunately , even despite this reform trajectory , the MAS continued to be characterized by low levels of transparency - such as lack of disclosure in the limited sense in copulation to detailed corporate disclosure regimes , or the more comprehensive sense that includes media freedom . Business leaders in Singapore also feel that transparency is mainly relevant to long investors and less important to traders with very rapid turnover stock in the search of quick returns . After all , in Singapore , the average holding period is merely 6 weeks . It is thus important to make the distinction between investors and punters . Investors make long-term decisions and thus want predictability . For them , the demand for transparency is greater , and disclosure of information is crucial to determine predictability and risk reduction (Rodan 2002Section 9 .ConclusionAlthough information disclosed through the MAS website , annual reports , and financial statements are quite comprehensive , the MAS continues to lack market transparency on a range of basic services . For instance , data on levels and make-up of guest workers in Singapore trade figures between Singapore and Indonesia , and many financial reporting involving transactions involving government departments and government-linked companies have historically been limited . Data is either unavailable or provided on a need to know basis only for investors . The lack of a political legitimacy for the absence of checks and balances , including the absence of a free press may threaten Singapore s financial predictability and stability , and may scare of potential investors (Rodan 2002Transparency however is the key element in predictability and risk reduction , the two main factors that long-term investors smell for before they venture into business in Singapore or any other country . Improving transparency will help to increase the number of long-term investors in Singapore and will ultimately greatly enhance economic stability WORKS CITED LISTBank for International Settlements . Reports on the International Financial architecture - Reports of working groups . Oct . 1998 . 31 Mar 2007 . hypertext transfer protocol /www .bis .org /publ /othp01 .htmDube , C . Perceptions of corruption in Asia - Results from Transparency International s 2003 Index . UCLA International Institute . 30 Nov . 2003 31 Mar . 2003 hypertext transfer protocol /www .international .ucla .edu / condition .asp ?parentid 5299Hu , R . East Asia Needs Transparency and Financial Oversight International Herald Tribune . 6 May 1998 . 31 Mar . 2007 http /www .iht .com /articles /1998 /05 /06 /edrich .t .phpLackritz , M .E . Opening Trade in Financial services - The Chile Singapore practice session . Securities Industry and Financial Markets Association . Statement for the Record before the Subcommittee on Domestic and International Monetary Policy , Trade and Technology . House Financial Services Committee , United States House of Representatives . 1 Apr . 2003 . 31 Mar . 2007http /www .sia .com / affidavit /2003 /chilesingaporetestimony .htmlMonetary Authority of Singapore . A closer look at . Monetary Authority of Singapore . Economics Explorer 1 . Sept . 1999 . 31 Mar . 2007 http /unpan1 .un .org /intradoc /groups /public /documents /APCITY /UNPAN005219 .pdfMonetary Authority of Singapore . Annual report 2005 /2006Monetary Authority of Singapore . Introduction to MAS . 4 Feb . 2007 . 2 Apr . 2007 . http /www .mas .gov .sg /about_us /Introduction_to_MAS .htmlRodan , G . Do Markets Need Transparency ? The Pivotal Cases of Singapore and Malaysia . New semipolitical Economy , Vol . 7 , No . 1 , 2002 , pp . 23-47Rodan , G . Transparency And Finance Sector Reform . Asean Focus Group Asian Analysis . May 1999 . 1 Apr . 2007 http /www .aseanfocus .com /asiananalysis /article .cfm ?articleID 147Singapore . Index of Economic Freedom 2007 . 2007 . 31 Mar . 2007 http /www .heritage .org /research /features /index /country .cfm ?ID SingaporeWikipedia , The Free cyclopedia . Monetary Authority of Singapore 2007 . 31 Mar . 2007 http /en .wikipedia .org /wiki /Monetary_Authority_of_SingaporeWong , S .Y . Greater transparency and more disclosure in Sentosa IR bid Channel NewsAsia . 4 Dec . 2006 . 31 Mar . 2007 http /www .channelnewsasia .com /stories /singaporelocalnews /view /245218 /1 .htmlPAGEPAGE 20 ...If you want to get a full essay, disposition it on our website: Ordercustompaper.com

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