Read the message
Address by Deputy Prime Minister Lee Hsien Loong,
At MAS Staff Seminar
29 October 2002
Market Discipline and Caveat Emptor
22. Our efforts to promote market discipline and a caveat emptor regime have focussed on enhancing the amount, quality and timeliness of information disclosed by institutions. We have shifted from a merit-based supervisory approach to a disclosure-based approach that emphasises market discipline to incentivise financial institutions to conduct their business in a sound, efficient, and professional manner. The local banks in particular have significantly improved their disclosure practices.
23. We must continue to update our disclosure standards in line with industry developments and international best practice. Furthermore, the mindset change is not yet complete. The public still expects to be protected from downside risks, for example when playing the stock market, but more so when depositing their money in banks. Hence one major motivation for introducing deposit insurance is to change this mindset, and get people to understand that only a limited first tranche of their deposits with a bank is protected should the bank run into trouble.
24. But disclosure by itself is not enough. It must be accompanied by investor education. Investors have to understand and use the information provided to them. They must learn to make sense of this information and use it to look after their own interests. We also need a pool of knowledgeable analysts and journalists who will shine the spotlight on any obscure fine print that the lay investor fails to notice. A more informed and sophisticated investor base will reinforce market discipline and form the basis for a more vibrant and mature financial sector. In all these respects, we have a long way to go.
25. Market discipline also requires an effective enforcement regime. To preserve investor confidence, penalties for transgressions must be swift and appropriate. MAS now has the power to investigate and bring a court action for market misconduct under the new civil penalty regime. This will complement the existing criminal penalty regime administered by CAD.”
- ► 2020 (667)
- ► 2019 (1839)
- ► 2018 (1406)
- ► 2017 (1258)
- ► 2016 (828)
- ► 2015 (691)
- ► 2014 (144)
- ► 2013 (501)
- ► 2012 (1269)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1654)
11/02 - 11/09
- Has MAS responded to the 3 petitions?
- Proposed terms of settlement
- Saving the Financial Industry?
- A favourable impression of Tunis
- Impact of Obama's election on the future of Singap...
- Seminars on financial risks associated with financ...
- Minibond Saga in better explained form
- SCMP:Investor cool-off pondered
- SCMP: Democrats drop legal bid after deal on Lehma...
- Is mis-selling a market misconduct?
- The New Paper: Latest structured product scandal
- Business Times: Kudos to CIMB-GK and UOB-Kay Hian
- SCMP:Repairing the damage
- US Presidential Election 2008
- Advancing the best interest of our people
- Keep sadness and hatred to themselves
- Tunis, 5 to 8 November
- Dr Lan Luh Luh – your further clarification is req...
- SCMP: Regulators have let down investors badly
- 10,000 SACRIFICIAL LAMBS
- Market Discipline and Caveat Emptor
- Open Forum with OCBC Bank/Securities
- Should financial markets be more strongly regulate...
- MAS has the power to investigate and bring a court...
- Flaws in financial planning industry
- Presence of disclaimers in prospectus
- Indicate price of Pinnacle Notes as at 20-10-08
- Spain Lets Jobless Postpone Half of Mortgage Payme...
- Mis-selling of Lehman structured notes
- Million Dollar Round Table (MDRT)
- Clarification from Dr Lan Luh Luh
- Bank claims to be "order executor"
- Petitions on Structured Products
- Fortnightly Meetings at Speaker's Corner on Struct...
- Open Forum with UOB Kay Hian
- Send your views directly to MAS
- New swap counterparty to replace Lehman Brothers
- Adolf Hitller complains about the ERP and MRT
- Buy a property that you can afford
- How to manage a crisis
- NTUC Income is different today
- Upset investor share bad experience with bank
- How to track all comments on my blog
- Political ambitions?
- Intention to deceive?
- Key features of structured products
- Reply to "Risk listed in bold"
- Stolen identity
- Collective legal action - Leonard Loo
- Reply to SP Services: Don't shoot the messenger
- ▼ 11/02 - 11/09 (50)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)