Singapore banks have strong financial positions: MAS
POSTED: 16 Jul 2013 8:25 PM
Singaporean banks are not at risk, the city-state's central bank said on Tuesday after credit rating agency Moody's downgraded its outlook on local lenders to "negative".
SINGAPORE - Singaporean banks are not at risk, the city-state's central bank said on Tuesday after credit rating agency Moody's downgraded its outlook on local lenders to "negative".
The three home-grown banks have the highest average credit ratings among banking systems worldwide and hold adequate capital to weather financial stresses, the Monetary Authority of Singapore (MAS) said.
It was reacting to an announcement by Moody's on Monday lowering its outlook for Singapore's three main banks to "negative" from "stable".
Moody's cited mounting domestic household debt and rising property prices in Singapore and in countries where the three banks are active.
It said these "have increased the probability of deterioration in the banks' credit profiles under potential adverse conditions in the future".
MAS said that while some borrowers are at risk, especially when interest rates rise as a result of a tightening of US monetary policy, "the local banks are not at risk".
"They undertake regular stress tests on their own as well as coordinated by the MAS, and have adequate buffers in place to cope with the inevitable upturn in the interest rate cycle," it added.
"The local banks continue to have strong financial positions by any serious assessment. As Moody's itself concluded, the local banks have enough capital to withstand even the severe stress test scenarios that it considered," Singapore's central bank said.
The three local banks -- DBS, Oversea-Chinese Banking Corp and United Overseas Bank -- maintain capital levels well above the threshold required under new global banking rules known as Basel III, MAS said.
Moody's pointed to a tightening of US monetary policy as a "potential trigger" for Singapore and neighbouring countries also to raise interest rates, which would affect borrowers' ability to repay their loans.
Markets are closely watching testimony by Federal Reserve Chairman Ben Bernanke at the US Congress on Wednesday and Thursday for clues on monetary policy.
MAS said it has been monitoring the financial system closely, noting that it and other government agencies have also introduced pre-emptive measures against risks in the property market. These measures include tightening loan-to-value ratios for housing loans and setting up a total debt servicing ratio framework.
- CNA/AFP/ir
- wong chee tat :)
Showing posts with label Basel III. Show all posts
Showing posts with label Basel III. Show all posts
Tuesday, July 16, 2013
Thursday, March 21, 2013
Singapore's banking rules compliant with Basel framework
Singapore's banking rules compliant with Basel framework
By Yvonne Chan | Posted: 20 March 2013 2340 hrs
SINGAPORE: The Basel Committee on Banking Supervision (BCBS) said Singapore's banking regulations are compliant with the capital standards under the Basel framework.
This is according to the BCBS Regulatory Consistency Assessment Programme (RCAP) report of Singapore, published Wednesday.
The capital standards under the Basel framework (comprising Basel II, Basel 2.5 and Basel III) set out the global standards on bank capital adequacy.
A regulatory framework is considered compliant with the Basel framework if all minimum requirements of the international framework are met.
The Monetary Authority of Singapore (MAS) welcomed this positive assessment of Singapore's regulations.
Teo Swee Lian, deputy managing director at MAS, said: "MAS is committed to ensuring full, timely and consistent implementation of Basel III in Singapore. Maintaining high standards of financial regulation in Singapore will strengthen the resilience of our banks and stability of our financial system."
- CNA/ch/xq
- wong chee tat :)
By Yvonne Chan | Posted: 20 March 2013 2340 hrs
SINGAPORE: The Basel Committee on Banking Supervision (BCBS) said Singapore's banking regulations are compliant with the capital standards under the Basel framework.
This is according to the BCBS Regulatory Consistency Assessment Programme (RCAP) report of Singapore, published Wednesday.
The capital standards under the Basel framework (comprising Basel II, Basel 2.5 and Basel III) set out the global standards on bank capital adequacy.
A regulatory framework is considered compliant with the Basel framework if all minimum requirements of the international framework are met.
The Monetary Authority of Singapore (MAS) welcomed this positive assessment of Singapore's regulations.
Teo Swee Lian, deputy managing director at MAS, said: "MAS is committed to ensuring full, timely and consistent implementation of Basel III in Singapore. Maintaining high standards of financial regulation in Singapore will strengthen the resilience of our banks and stability of our financial system."
- CNA/ch/xq
- wong chee tat :)
Thursday, June 30, 2011
Tougher capital rules for Singapore banks
Tougher capital rules for Singapore banks
By Rachel Kelly | Posted: 28 June 2011 2217 hrs
SINGAPORE: The Monetary Authority of Singapore (MAS) has announced tougher capital rules for Singapore banks, setting the revisions at higher levels than those rolled out for Basel III.
Basel III is the new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision following the global financial crisis.
In a statement, MAS said Singapore incorporated banks were well capitalised and in a strong position to meet the new requirements.
United Overseas Bank (UOB), DBS, OCBC Bank, and Citi Singapore fall under the new rules to be implemented by the MAS.
Explaining the move, Minister for Trade and Industry and Deputy chairman of MAS Lim Hng Kiang said that each of the local banks was systematically important to Singapore, as together they accounted for more than half of the total non-bank resident deposits and loans in Singapore.
As such, higher capital levels are required to strengthen the banks' ability to absorb unexpected losses effectively in a crisis.
"Capital requirements that are significantly above Basel III will not result in a large reduction in economic output, but would be beneficial in reducing the likelihood and cost of a crisis," said Mr Lim at the 38th Association of Banks in Singapore (ABS) annual dinner.
In deciding on the levels appropriate for Singapore, MAS carefully weighed the costs of additional capital against the benefits, he said.
Banks that are well-capitalised, prudently regulated, and located in stable financial centres such as Singapore, present an attractive value proposition to depositors and investors.
Holding systemically-important banks to a higher solvency standard reduces both the likelihood of failure and impact to the real economy if one of them runs into difficulties.
Under the global minimum standards of Basel III, banks are required to increase their capital to buffer against unexpected losses.
Singapore has set its requirements for capital adequacy requirements (CAR) two percentage points higher than what is required by Basel III.
MAS will require Singapore-incorporated banks to meet a minimum Common Equity Tier-1 (CET1) capital adequacy ratio (CAR) of 6.5%.
Meanwhile, Tier-1 capital adequacy requirement will be increased from 6% to 8%.
The total capital adequacy requirement (Total CAR) will remain unchanged at 10% from 1 January 2015.
These standards are higher than the Basel III minimum requirements of 4.5%, 6% and 8% for CET1 CAR, Tier-1 CAR and Total CAR, respectively.
Singapore banks are believed to have already met Basel III standards. As such, MAS is targeting that banks officially meet Basel III requirements by 2013, two years ahead of the international standard.
And MAS wants the banks to meet its higher minimum requirements by 2015.
In line with Basel III requirements, MAS will introduce a capital conservation buffer of 2.5% above the minimum capital adequacy requirement. MAS says this will be met fully with CET1 capital and phased in on 1 January each year, from 2016 to 2019.
Mr Lim said: "The impact on banks' capital structures will be manageable. This is, in part, due to the already high internal capital buffers held by the banks and also due to the transition arrangements that will apply."
So far Singapore seems to be ahead of the pack in terms of capital requirements compared to the Basel III global standards. Switzerland, the UK and China have introduced rules, at levels similar to Basel III.
- CNA/ir
- wong chee tat :)
By Rachel Kelly | Posted: 28 June 2011 2217 hrs
SINGAPORE: The Monetary Authority of Singapore (MAS) has announced tougher capital rules for Singapore banks, setting the revisions at higher levels than those rolled out for Basel III.
Basel III is the new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision following the global financial crisis.
In a statement, MAS said Singapore incorporated banks were well capitalised and in a strong position to meet the new requirements.
United Overseas Bank (UOB), DBS, OCBC Bank, and Citi Singapore fall under the new rules to be implemented by the MAS.
Explaining the move, Minister for Trade and Industry and Deputy chairman of MAS Lim Hng Kiang said that each of the local banks was systematically important to Singapore, as together they accounted for more than half of the total non-bank resident deposits and loans in Singapore.
As such, higher capital levels are required to strengthen the banks' ability to absorb unexpected losses effectively in a crisis.
"Capital requirements that are significantly above Basel III will not result in a large reduction in economic output, but would be beneficial in reducing the likelihood and cost of a crisis," said Mr Lim at the 38th Association of Banks in Singapore (ABS) annual dinner.
In deciding on the levels appropriate for Singapore, MAS carefully weighed the costs of additional capital against the benefits, he said.
Banks that are well-capitalised, prudently regulated, and located in stable financial centres such as Singapore, present an attractive value proposition to depositors and investors.
Holding systemically-important banks to a higher solvency standard reduces both the likelihood of failure and impact to the real economy if one of them runs into difficulties.
Under the global minimum standards of Basel III, banks are required to increase their capital to buffer against unexpected losses.
Singapore has set its requirements for capital adequacy requirements (CAR) two percentage points higher than what is required by Basel III.
MAS will require Singapore-incorporated banks to meet a minimum Common Equity Tier-1 (CET1) capital adequacy ratio (CAR) of 6.5%.
Meanwhile, Tier-1 capital adequacy requirement will be increased from 6% to 8%.
The total capital adequacy requirement (Total CAR) will remain unchanged at 10% from 1 January 2015.
These standards are higher than the Basel III minimum requirements of 4.5%, 6% and 8% for CET1 CAR, Tier-1 CAR and Total CAR, respectively.
Singapore banks are believed to have already met Basel III standards. As such, MAS is targeting that banks officially meet Basel III requirements by 2013, two years ahead of the international standard.
And MAS wants the banks to meet its higher minimum requirements by 2015.
In line with Basel III requirements, MAS will introduce a capital conservation buffer of 2.5% above the minimum capital adequacy requirement. MAS says this will be met fully with CET1 capital and phased in on 1 January each year, from 2016 to 2019.
Mr Lim said: "The impact on banks' capital structures will be manageable. This is, in part, due to the already high internal capital buffers held by the banks and also due to the transition arrangements that will apply."
So far Singapore seems to be ahead of the pack in terms of capital requirements compared to the Basel III global standards. Switzerland, the UK and China have introduced rules, at levels similar to Basel III.
- CNA/ir
- wong chee tat :)
Singapore banks confident of meeting new capital rules
Singapore banks confident of meeting new capital rules
By Millet Enriquez | Posted: 28 June 2011 2301 hrs
SINGAPORE : Singapore banks are confident that they will be more than ready to meet the new requirements set out by the central bank by 2013.
This is because most of them already have strong capital positions post the Asian financial Crisis in 1997.
Thus, the new capital requirement will not pose much fundamental adjustments for the banks.
DBS, UOB and OCBC have all welcomed the move, which is expected to boost Singapore's position as a global financial hub.
The Monetary Authority of Singapore (MAS) announced on Tuesday tougher capital rules for Singapore banks, setting the revisions at a higher level than those rolled out for Basel III.
"Well, the truth is that most of the Singapore banks already have high levels of capital post the 97-98 crisis. Capital adequacy in Singapore has been very robust and the central bank has been very prudent in encouraging banks to be well-capitalised," said Piyush Gupta, DBS' CEO and incoming chairman of the Association of Banks in Singapore.
"Therefore, the new capital requirement would not require too much fundamental action on the part of the banks over the next two or three years. So I really don't see a profound shift in the market, either from a capital or a liquidity standpoint in the short-term," he added.
Mr Gupta was speaking at the sidelines of the annual dinner by the Association of Banks in Singapore.
OCBC said its capital levels under Basel III rules are already higher than MAS' revised requirements and ahead of the 2019 timeline.
In a statement, OCBC CEO David Conner said: "We expect to be able to meet MAS' revised CAR (Capital Adequacy Ratios) requirements comfortably without having to raise any additional equity, undertake any rights issue, cut any dividends, or change our strategic plans."
UOB said the changes provide clarity for local banks to implement the Basel III standards.
"The phased approach will help ensure a smooth transition. UOB has consistently placed emphasis on maintaining a strong capital position and we are confident of meeting the new requirements. The revisions are in line with ongoing efforts to strengthen the industry's resilience and to position Singapore as a global financial centre," said Wee Ee Cheong, deputy chairman and CEO of UOB in a statement.
- CNA /ls
- wong chee tat :)
By Millet Enriquez | Posted: 28 June 2011 2301 hrs
SINGAPORE : Singapore banks are confident that they will be more than ready to meet the new requirements set out by the central bank by 2013.
This is because most of them already have strong capital positions post the Asian financial Crisis in 1997.
Thus, the new capital requirement will not pose much fundamental adjustments for the banks.
DBS, UOB and OCBC have all welcomed the move, which is expected to boost Singapore's position as a global financial hub.
The Monetary Authority of Singapore (MAS) announced on Tuesday tougher capital rules for Singapore banks, setting the revisions at a higher level than those rolled out for Basel III.
"Well, the truth is that most of the Singapore banks already have high levels of capital post the 97-98 crisis. Capital adequacy in Singapore has been very robust and the central bank has been very prudent in encouraging banks to be well-capitalised," said Piyush Gupta, DBS' CEO and incoming chairman of the Association of Banks in Singapore.
"Therefore, the new capital requirement would not require too much fundamental action on the part of the banks over the next two or three years. So I really don't see a profound shift in the market, either from a capital or a liquidity standpoint in the short-term," he added.
Mr Gupta was speaking at the sidelines of the annual dinner by the Association of Banks in Singapore.
OCBC said its capital levels under Basel III rules are already higher than MAS' revised requirements and ahead of the 2019 timeline.
In a statement, OCBC CEO David Conner said: "We expect to be able to meet MAS' revised CAR (Capital Adequacy Ratios) requirements comfortably without having to raise any additional equity, undertake any rights issue, cut any dividends, or change our strategic plans."
UOB said the changes provide clarity for local banks to implement the Basel III standards.
"The phased approach will help ensure a smooth transition. UOB has consistently placed emphasis on maintaining a strong capital position and we are confident of meeting the new requirements. The revisions are in line with ongoing efforts to strengthen the industry's resilience and to position Singapore as a global financial centre," said Wee Ee Cheong, deputy chairman and CEO of UOB in a statement.
- CNA /ls
- wong chee tat :)
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