What Steps Have Been Taken To Enhance The Stability Of The Financial Essay

What Steps Have Been Taken To Enhance The Stability Of The Financial System In Singapore What be The Main Steps That Remain To Be Taken - Essay ExampleFSAPs are designed to assess the stability of the monetary system as a whole and not that of individual institutions. They have been developed to help countries identify and remedy weaknesses in their financial sector structure, thereby enhancing their resilience to macroeconomic shocks and cross-border contagion.FSAPs do not cover risks that are specific to individual institutions such as asset quality, operational or legal risks, or fraud. The views expressed in this memorial are those of the staff team and do not necessarily reflect the views of the government of Singapore or the Executive Board of theSingapore the name inspires heed and trust. Today, it is looked upon with awe by people from all over the world, both from developed nations and the developing world. It is considered as a role model by the Asian countries. This ha s been feasible because of Singapores stable and slightly conservative economy, which has withstood the screen out of economic downturns and sudden asset price declines.Singapores financial sector, which is dominated by the banking sector, remains robust despite a series of economic downturns and substantial asset price declines. Even when faced with a series of economic jolts and decline in asset price, the economy has stood on solid ground in the past few years. The local banks and insurance companies are endowed with huge capital and making considerable profits. Stress rill results indicate that Singapores systemically important banks and insurance companies could withstand further significant shocks.-Problem Statement What steps have been taken to enhance the stability of the financial system in Singapore What are the main steps that remain to be taken It would be our endeavour here to analyse the running of the financial system in Singapore, study the factors that contribute positively to it and likewise try to find if anything else needs to be done to create a positive impact on the financial system.Singapores financial stability can be attributed in large to the smooth running and well organized set-up of the banks and their branches both local and foreign. The insurance sector also plays a major role in contributing to this stability as it is also capital rich and highly gainful. It has weathered three major shocks the Asian crisis in 1997-98 a sharp drop in electronics exports in 2000-01 (resulting in the worst recession sinceindependence) and the outbreak of SARS in early 2003. This stability in the face of such downturns can be contributed to sound fiscal and monetary policies, long-standing external current account surpluses, significant external assets and reserve positions, the healthy incarnate sector high household wealth, and conservative financial regulatory and supervisory practices.ConceptualizationThe steps been taken to enhance the stability of the financial system in Singapore include the following1. Banks dominate the financial sectorLocal banks, which hold more than one half share of domestic banking assets, are profitable and well capitalized. They are also liquid, have enough back up for non performing asset exposures, and conservative in their management practices. The insurance sector, though contributes solitary(prenominal) 6% to the total assets of the system, too is well capitalized and doing good business. Systemically important banks (including major foreign bank branches) and insurance companies have been shown to withstand major shocks under test conditions.2. Systemic liquidity is well managedThe Monetary Authority of Singapore