This peer review examines two topics relevant for financial stability in Singapore: the macroprudential policy framework, and the framework for resolution of financial institutions. The review finds that good progress has been made in recent years on both topics, reflecting Singapore’s strong adherence to international standards and focus on financial stability. Legislative amendments to the Monetary Authority of Singapore (MAS) Act in July 2017 prioritise MAS’ supervision and financial stability objectives vis-à-vis its developmental objective. The active use of macroprudential policies by MAS in close collaboration with relevant government agencies, supported by a comprehensive risk assessment framework, has helped to mitigate housing price appreciation and moderate household leverage. The resolution regime has a broad scope covering all financial institutions and their holding companies, while recent amendments to the regime incorporated additional elements of the FSB Key Attributes for Effective Resolution Regimes for Financial Institutions.

Notwithstanding this progress, the review concludes that there is additional work to be done:

  • On the macroprudential policy framework:

    • clarifying responsibility within MAS for the calibration and implementation of its macroprudential policies; and

    • continuing to enhance the risk assessment framework in terms of process, use of modelling tools and ongoing work to assess systemic risks from FinTech.

  • On the framework for resolution of financial institutions:

    • extending the scope of liabilities subject to bail-in to senior debt and promulgating regulations on ex post recovery from the industry of any temporary funding provided by the authorities in resolution;

    • balancing supervision and resolution perspectives through appropriate organisational arrangements within MAS; and

    • continuing work to refine, expand and operationalise resolution planning including for domestic systemically important banks as well as for insurance companies and financial market infrastructures that could be systemic in failure.

The peer review report includes recommendations to the Singaporean authorities in order to address these issues.