I think more of the second and third factors.

It's just as well because if you try to predetermine your winners, the higher the chance you lose it.

But I think where we do rather well is that after there's been some movement to enable us to figure out that this is the way of the future or we think this is going to be the way of the future, we can latch on to it, generally we have been successful and we've not had to spend too much of our own money in a fruitless search for the successful formula.

We created the conditions, the infrastructure, the appropriate laws and regulations and, of course, fiscal incentives. And the private sector, worldwide, has responded. So we have been quite good at that.

Of course what we may say afterwards is something else! We might have preened ourselves and said we anticipated it. No harm done, a little bit of poetic licence is okay.

The politics of public service

Yes, of course.

Our rulers believe that they have the mandate to set the national agenda, and they do so.

In the civil service, we are committed to the government in power and that government is led by a party which enjoys a mandate from the people.

So there's no question of the civil servant questioning the authority of the people who are elected to rule. They have set the agenda, so be it.

If they want to consult, they consult pretty extensively while the civil servant's role lies in the formulation of policy.

He is responsible for the formulation of policy under the direction of the political leadership. In this sense, the ministers decide policy. The civil service converts the ideas and the intentions and the ambitions of the leadership into a workable and defensible programme that can be implemented.

The accountability lies within the internal hierarchy, because each person has an accountability to his unit and to the person who exercises authority in that unit, and that's how the chain goes all the way up to the permanent secretary.

Beyond that, the ultimate accountability of the public service lies through the politicians, in the ballot box. Because if the public is not satisfied, well, then out goes the old bunch and in comes a new one.

It seems you are saying the civil service aligns itself with the political leadership in carrying out policy. What does this do to the ideal of a neutral civil service? How do you remain impartial?

Very interesting point. I want to draw the distinction between being neutral and being impartial.

When we say we are impartial as civil servants, we mean that we treat everybody alike and there's no difference between one citizen and another.

Neutrality is a different concept. We cannot be neutral in terms of policy because, as I said earlier, we are the people who implement the agenda of the government, of the political leadership. We have the duty to do so because that is our oath of office, and the government has the mandate of the people.

So there's no question of being neutral in policy, in implementing the national agenda. We have to accept that the elected politicians have the authority to determine policy for us and to require us to implement it. There's no grey area there.

The civil service is not neutral because once the political party has been elected, its mandate, its manifesto, its agenda, have to be accepted by the civil service. We don't query that.

I was new to the Monetary Authority of Singapore. I was a greenhorn!

The year 1985 was a time of some excitement in the market, the index was rising, so people thought they could buy now and sell later at a higher price, of course, the usual expectation.

The trades were being conducted on a daisy-chain basis. Trades were being made without any margins, no need for collateral, but solely on the brokers' assessment of the investors' financial situations.

This means the brokers were exposed to the risk themselves.

It built up to a crescendo and became unsustainable.

The problem was not so much that the market itself was going to crash but that the brokerage industry would collapse because the brokers were all heavily exposed and there was not enough transparency about the transactions.

This is something similar to what is being faced now in the so-called sub-prime market, with the collateralisation and the securitisation of debt.

The similarity lies in the lack of transparency in the market now, as there was then: not enough disclosure, the difficulty of finding out who owes what and to whom and what is the quality of the instrument.

Clearly, there have been excesses, including by investors who were seduced into believing that they were on to a good thing - then and now.

If the returns are a little too attractive, you should feel a little hesitant instead of plunging in. Exercise prudence, especially when you don't know what exactly you're plunging into.