Uni 1_Functions of MAS

Question 1

FUNCTIONS OF MAS

There are 8 functions:

Answer 1

A) Development of Singapore as an international financial centre
B) Management of official foreign reserves of Singapore
C) Banker to the Singapore Government
D) Banker to the Financial Institutions in Singapore
E) Financial Agent to the Singapore Government
F) Supervisor to the Financial Institutions in Singapore
G) Formulation of Singapore’s Monetary and Exchange Rate Policies
H) Issuance of Singapore Currency

Question 2

Functions of MAS

A) Development of Singapore as an international financial centre

Answer 2

In just over four decades, Singapore has established a thriving financial centre of international repute, serving not only its domestic economy, but also the wider Asia Pacific region and in some instances, the world. Singapore’s financial centre offers a broad range of financial services including banking, insurance, investment banking and treasury services.

Question 3

Functions of MAS

B) Management of official foreign reserves in Singapore

Answer 3

As the central bank of Singapore, one of the MAS’s main functions is to manage the Official Foreign Reserves (OFR) of Singapore. It is the most convervative of the three entities (MAS, GIC and Temasek Holdings), with a mix of short-term investments in liquid markets and longer-term investments.

Question 4

Functions of MAS

C) Banker to the Singapore Government

Answer 4

As banker to the Government, the MAS provides current accounts and deposit facilities for the government.

For example:
> It collects proceeds of taxes.
> It makes payment such as interest on Government Bonds.

Question 5

Functions of MAS

D) Banker to the Financial Institutions of Singapore

Answer 5

Banks and finance companies in Singapore maintain current account balances with the MAS to satisfy the statutory reserve requirements.
In the case of banks, their current accounts are also used for the daily settlement of the net balances arising among themselves from the clearing of cheques.

Question 6

Functions of MAS

E) Financial Agent to the Singapore Govenment

Answer 6

It manages the public dates and raises government loans both locally and internationally.

Question 7

Functions of MAS

F) Supervisor to the Financial Institutions in Singapore

Answer 7

All the financial institutions are supervised by the (MAS).
It conducts integrated supervision of financial services and financial stability surveillance.
The MAS administers the various acts that govern financial intermediaries.
For example: Banking Act, the Finance Companies Act and the Insurance Act

Question 8

Functions of MAS

G) Formulation of Singapore’s Monetary and Exchange Rate Policies

Answer 8

The MAS is responsible for formulating and implementing the country’s monetary and exchange rate policies in order to ensure monetary stability and a sound financial structure.

Question 9

Functions of MAS

H) Issuance of Singapore Currency

Answer 9

Following its merger with the Board of Commissioners of Currency Singapore (BCCS) on 1 Oct 2002,

the MAS has also assumed the function of issuing Singapore currency from Mar 2003, making it functions fully as central bank.

The MAS administers the various statues pertaining to money, banking, insurance, securities and the financial sector in general.