Question

Pls do not handwrite the answer, this is for easy reading
Question 2:-
2) Analyse and discuss the steps that MAS can take to ensure the stability and the sounded of the financial system?  
Pls refer to the link
http://www.mas.gov.sg/News-and-Publications/Speeches-and-Monetary-Policy-Statements/Speeches/2018/Financial-Regulation.aspx

Answer 1

Measure for stability:

Balancing supervision and resolution perspectives: MAS does not have a dedicated resolution unit, and relies instead on subject matter experts within the supervisory teams to conduct such work (including the development of resolution plans) in consultation with a resolution working group. This group, which comprises representatives from various departments (including policy, legal and supervision) involved in resolution issues in addition to their other day-to-day responsibilities, is overseen by a member of MAS’ senior management outside of line supervision (but reporting to the Deputy Managing Director for Financial Supervision). MAS takes the view that this structure leverages on the institutional knowledge of supervisors, allows for an objective challenge from the resolution working group, and that a strict organisational separation of those two functions risks creating silos and a duplication of resources.

Refining, extending and operationalising resolution planning work: MAS should continue to develop the resolution framework in order to make it operational and ensure that firms are resolvable. One such step involves further work to refine resolution strategies and plans for D-SIBs in light of the new resolution tools in the MAS Act and to continue 6 efforts to enhance cooperation with foreign authorities. This step is relevant both for local banks (which have grown fast through regional expansion in recent years) and for G-SIBs, particularly where MAS participates in the Crisis Management Group as a host authority. It includes signing Memoranda of Understanding with foreign resolution authorities and refining resolution strategies and plans for local D-SIBs to reflect the availability and potential application of new resolution tools. As part of the development of resolution strategies and plans, MAS should also continue to conduct resolvability assessments and take steps to address identified barriers to resolvability. Finally, given the cross-sectoral scope of the regime, it is important for MAS to extend resolution planning to insurance companies and financial market infrastructures (FMIs) that could be systemic in failure. As part of this work, MAS should consider whether sector-specific adaptations to the regime are required to implement resolution strategies and plans for these types of entities.

The authorities should further strengthen the resolution framework to minimise the risk of public support by: (a) extending the scope of bail-in to include senior debt; and (b) promulgating regulations to further clarify loss allocation and the mandatory mechanism for ex post recovery from the industry of resolution funding. MAS should take steps to balance supervision and resolution perspectives by: (a) establishing a resolution hub to bring together staff in supervisory and other teams responsible for supporting resolution-related activities; (b) ensuring that the hub has regular access to senior management, e.g. through a separate reporting line; and (c) tasking a member of MAS senior management outside of line supervision with responsibility to champion the resolution perspective. MAS should continue to develop the resolution planning framework by: (a) refining resolution strategies and operationalising resolution plans, particularly for local DSIBs; (b) addressing barriers to resolvability; and (c) developing sector-specific adaptations to resolution planning and resolution strategies for insurance companies and FMIs that could be systemic in failure.