HONG KONG: Singapore's Senior Minister Goh Chok Tong has warned against over-regulation of the financial system in light of the recent meltdown on Wall Street.

He said the system must be flexible to allow ingenuity in creating new products, but agreed that more mechanisms need to be put in place to protect investors who are less knowledgeable.

Mr Goh, who is also the chairman of the Monetary Authority of Singapore (MAS), said Singapore will introduce stricter measures for the selling of structured products.

"The sale of structured products is something we will improve on. The sale process has got to be tighten up to ensure that distributors do not merrily sell these products like any other over-the-counter products to just anybody that comes along," said SM Goh.

Mr Goh, who is on a five-day visit to Hong Kong and Macau, was speaking at the Asia Society in Hong Kong on the lessons drawn from financial crises and political system.

In his keynote address to business and academic leaders on Tuesday, Mr Goh warned that the worst of the global slowdown has yet to come.

He said it would take a while before markets are calm and global growth resumes.

And that is why he believes that US President-elect Barack Obama's top agenda should be the economy.

Mr Goh said: "First, pay attention to the economy. Do something so that the recession we expect from the US would not be deep and the financial crisis doesn't swallow us up ... that must be his priority. Next, just remember that there are many East Asian countries who are your friends, who want to be your friends, reach out to these countries."

Mr Goh also argued for a case that sustained growth in Asia is possible under different political systems.

He went on to clarify Prime Minister Lee Hsien Loong's remarks that Singapore isn't ready for a non-ethnic Chinese leader in the near future.

Mr Lee was posed the question after Mr Obama became the first African-American to win the US presidency.

Mr Goh said: "We have a system of scouring the whole country for good leaders and we know more or less who are the leaders of each community. So we don't quite see one coming, but it is an open system and it is possible one day to have an outstanding person to become the Prime Minister of Singapore, whatever his race is."

Earlier, Mr Goh met with Hong Kong's Development Secretary Carrie Lam and received a briefing on Hong Kong's development plans to enhance its economic competitiveness and to provide a better living environment.

Mr Goh also met former chief executive Tung Chee-Hwa. They last met in Bangkok in 2003 while attending a summit on the SARS epidemic. Both met over an informal lunch, and exchanged views on recent developments in China and the territory.

Mr Goh will also meet both Hong Kong leader Donald Tsang and Macau leader Edmund Ho to get a first hand account of developments and how they are coping with the global slowdown. - CNA/de