MAS to ensure ‘well-paced’ exit of COVID-19 reliefs, minimise ‘sharp cliff’ effect for borrowers
SINGAPORE: The Monetary Authority of Singapore (MAS) is planning to gradually withdraw temporary COVID-19 relief measures for individuals and businesses, but will do so in a “well-paced” manner so as to minimise a “sharp cliff” effect on borrowers, said Senior Minister Tharman Shanmugaratnam on Wednesday (Aug 26).
Introduced earlier in the year, the relief measures have allowed companies and individuals hurt by the COVID-19 pandemic to defer repayments for various bank loans and insurance policy premiums.
Those relief measures, however, come with longer-term costs and “need to be gradually withdrawn”, said Mr Tharman in the MAS’ addendum to President Halimah Yacob’s address at Monday’s opening of the 14th Parliament. Mr Tharman is also Minister-in-charge of the MAS.
“MAS is working closely with the industry to ensure a well-paced exit that minimises sharp cliff effects for borrowers, while safeguarding financial stability,” said Mr Tharman.
READ: MAS in talks with banks on easing borrowers back into repayments when COVID-19 relief measures end
Mr Tharman also said that Singapore’s banks and insurers generally entered the crisis with strong balance sheets, and that stress tests by the central bank have found them to be “resilient in a deep downturn”.
The local financial sector has demonstrated “strong operational resilience” through different phases of the pandemic, reflecting years of investments in digitalisation, sound business continuity planning and agile adjustments to work processes, he added.
“To ensure that financial institutions stay resilient financially and operationally, MAS has provided a number of regulatory reliefs that do not compromise prudential standards, and will continue to supervise the industry closely,” said Mr Tharman.
ENSURE ‘SOLID SINGAPOREAN CORE’ IN WORKFORCE
As part of positioning the financial sector to emerge stronger from the crisis, the MAS, which is also Singapore's financial regulator, will ensure that the sector is well-equipped with skills and capabilities.
This involves working with tripartite partners to support the reskilling and upskilling of the local workforce, and create jobs and traineeship opportunities for fresh graduates and mid-career workers.
The MAS is also working with major financial institutions “to ensure a solid Singaporean core in their workforces, complemented by diverse and high-quality manpower”, said Mr Tharman.
These efforts include developing a strong pipeline of Singaporeans for senior responsibilities in the sector, he added.
He cited a support package worth S$125 million that was launched by the MAS in April.
The package, which included enhanced subsidies for training and manpower costs, will pave the way for structured talent development programmes for more than 900 Singaporeans among those newly hired by financial institutions over the next three years, he said.
Meanwhile, financial institutions have committed to hiring “significant numbers” under the various SGUnited Jobs & Skills programmes, said Mr Tharman, adding that nearly 60 of them have offered about 1,300 traineeship positions to fresh graduates.
There is also support for local mid-career workers, with the MAS working with the Institute of Banking and Finance and Workforce Singapore to train and redeploy them to financial institutions.
The Technology in Finance Immersion Programme – which was launched last year to help individuals gain skills and experience in key technology areas within the financial sector – has seen 18 financial institutions put up more than 200 attachments this year in growth areas such as artificial intelligence, cloud computing, cybersecurity and data analytics.
READ: Singapore’s research and innovation key in fight against COVID-19, creation of growth opportunities: Heng Swee Keat
PUSH IN TECHNOLOGY, GREEN FINANCE
With digitalisation gathering pace during the COVID-19 outbreak, work is under way to drive further progress in electronic payments and digital banking, said Mr Tharman.
In addition, the MAS will work with the financial services and financial technology sectors to adopt digital solutions that will strengthen operational resilience, improve productivity, better manage risks and engage customers.
“Achieving a high degree of digitalisation will be a key source of competitive advantage for our financial sector in the future,” he added.
Mr Tharman said Singapore is now widely regarded as one of the top financial technology hubs globally after five years of investments in digital transformation and innovation by players here. About 1,000 financial technology firms are estimated to be based here.
More is being done. For instance, a S$250 million enhanced Financial Sector Technology and Innovation Scheme was recently announced to spur technology and innovation-driven growth in the sector.
When it comes to safeguarding the environment and managing climate-related risks, Mr Tharman said the MAS has made good progress since it set out its vision for Singapore to be a leading global centre for green finance in November last year.
It will continue to strengthen the financial sector’s resilience to environmental risks, develop green finance markets and solutions, and harness technology and innovation to promote green finance.
Concluding, Mr Tharman said the financial sector plays a critical role in supporting Singapore through the downturn and its recovery.
“MAS’ priorities are to ensure monetary and financial stability, support individuals and businesses to tide through the crisis, and position the financial sector for recovery and future growth,” he said.
“MAS is working closely with the financial services and fintech sectors to achieve these aims and help Singapore emerge stronger from the crisis.”