Singapore's banking system not in trouble, assures finance minister
By S Ramesh, Channel NewsAsia | Posted: 15 October 2008 1526 hrs

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SINGAPORE: Singapore's banking system is not in trouble and the Monetary Authority of Singapore's response to the current financial crisis has been a measured one, said Finance Minister Tharman Shanmugaratnam on Wednesday.

Speaking on the sidelines of an event at the Hwa Chong Institution, he said there is no lack of confidence in Singapore's banking system.

However, he declined to comment if there would be off-budget measures to manage the economic downturn.

The global financial market is facing two big problems, said Mr Tharman.

These are the lack of capital in the banking systems and the lack of liquidity as the wholesale funding market is frozen. But, he said, confidence is still high in Singapore's financial system.

Mr Tharman said: "Our banks have enough capital and they are not dependant on the wholesale funding market, unlike banks in some other countries. So we have not had to respond with major actions domestically.

"But we have been very alert and vigilant to make sure that the financial system continues to function in an orderly fashion so as to make sure that the economy as a whole is able to go through this crisis without too much damage."

As for whether Singapore's central bank will follow other Asian countries in providing guarantees for local lenders, Mr Tharman said: "That is something we are studying carefully and I am not making a statement at this point.

"From the point of view of our system, it is not necessary because there is no lack of confidence in our system, and that is something that the market acknowledges. But we are studying the implications of Hong Kong and a few other countries having moved this way."

Turning to the recent protest by several investors at the Speakers' Corner, Minister Tharman said the Monetary Authority of Singapore has laid down its approach on this matter.

The key is to provide avenues of recourse for these investors. These could be either through the legal route or preferably through mediation.

Mr Tharman said: "Each of the banks has set up a panel headed by an independent person, respected individuals so as to make sure this is a fair and serious process. This is not whitewashing. It is a serious process of mediation.

"Customers who feel that they have been unfairly treated or their products are mis-sold can bring their complaints to the panel, who will evaluate them objectively. I think that's the best approach."

Questions on Singapore's response to the economic downturn have been tabled for Monday's sitting of Parliament.


- CNA/ir/so