Central Bank Governor of the Year, East Asia Pacific
Ravi Menon, Singapore
Finance initiatives impress the markets
How should one judge a central bank like the Monetary Authority of Singapore? The MAS operates a currency peg, meaning that its major monetary policy tool is to adjust the fixing. But the central bank also has oversight over financial regulation.
Luckily, it doesn’t matter whether you consider monetary policy moves or financial regulation: the MAS has impressed with both over the last year.
In April, the MAS adjusted the currency fixing for the first time in six years. It manages
the Singapore dollar against a trade-weighted basket, allowing the currency to trade within a certain range. Although the MAS did not change that range in April, it did increase the slope — allowing more appreciation of the currency.
That was a smart move, reflecting upward
pressure in the foreign exchange market. But monetary policy was not the main
reason Ravi Menon, managing director of the MAS, won this award. More
impressive was the stellar work he has done to make Singapore a financial
The MAS has committed to creating 3,000 new jobs in financial services and 1,000 in fintech. It has offered a subsidy for credit ratings, the Asian Bond Grant Programme, which has helped bond volumes rise 22% in two years. It has a similar subsidy for green bond issuers, which has pushed volumes to S$2bn. It has also launched a ‘regulatory sandbox’, encouraging innovation in fintech.
Menon and his team have mixed long term initiatives, like the Financial Industry Transformation Map, with more immediate moves. The changes announced this year include a stock trading link with Malaysia, a multi-agency project to develop the use of artificial intelligence in the financial system, a memorandum of understanding with India on fintech co-operation, the expansion of its FinTech Festival and launch of a programme called Careers Connect, designed to keep bankers in the city state world class.
These initiatives are all reasonably modest when taken in isolation, but together they add up to something larger. This points to the style of the MAS since Menon took over in 2011: the regulator has been chipping away at any weaknesses in its financial system, improving liquidity and adding incentives for banks, corporations and individuals.
Singapore is a tiny island that undoubtedly punches above its weight. Its greatest resource is not precious metals or oil — it is people, particularly those working in the financial system. Under Menon, the MAS has made the most of that resource, making quiet developments that too often get overlooked amid the bluster of policy announcements from larger economies. He is undoubtedly a deserving winner of this award.