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Singapore’s financial sector to undergo IMF’s comprehensive assessment for 3rd time

THE Monetary Authority of Singapore (MAS) announced on Wednesday that the Republic will undergo the International Monetary Fund's (IMF) Financial Sector Assessment Programme (FSAP) this year, its third such test.

The FSAP will assess the resilience of Singapore’s financial sector, the quality of MAS’s regulatory framework and supervision, and the capacity of the authorities to manage and resolve financial crises. This will be Singapore’s third FSAP
assessment, following the last one done in 2013.

The MAS said that Singapore, along with 28 other jurisdictions, is judged by the IMF to be a systemically important financial centre given its size and global connectedness. Such systemically important financial centres are required to undertake a financial stability assessment every five years.

The FSAP will include a stress test of the financial system under hypothetical macroeconomic scenarios; MAS’s regulatory and supervisory approaches covering fintech and cybersecurity, as well as MAS Electronic Payments System (MEPS+), which is a local electronic interbank payment and settlement system; Singapore’s macroprudential policy framework to mitigate systemic financial risk; and MAS’s regime for managing crises and resolving banks in an orderly manner.

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The IMF FSAP delegation will visit Singapore in November 2018 and February 2019 to perform the assessment.

During their visit, the IMF delegation will meet senior representatives from the MAS, other relevant government agencies, financial institutions and academic bodies.

The FSAP report will be completed and published in the second half of 2019.

In the last FSAP assessment in 2013, the IMF had concluded that Singapore’s financial sector was well-regulated, and displayed a high level of compliance with international standards for the regulation and supervision of the banking, insurance and securities sectors, and financial market infrastructures, the MAS said.

Stress tests indicated that banks and insurers were resilient to adverse macroeconomic scenarios, while crisis management and resolution arrangements were assessed to be strong.

"This assessment by the IMF affirmed Singapore’s standing as a sound and stable financial centre," said the MAS.