Singapore's MAS: banking system sound amidst US bank failures
MAS said that its local banks have “insignificant exposures” to the failed banks.
Singapore assured that its banking system “remains sound and resilient” after the recent closure of two US banks fanned fears of a contagion effect.
Over a span of days, California-based Silicon Valley Bank (SVB) and New York-based Signature Bank both collapsed after. SVB and Signature Bank are now the second and third largest failures in US banking history, eclipsed only by Washington Mutual’s demise in 2008.
Days before, a crypto-focused bank, Silvergate, also announced that it is winding down operations and voluntarily liquidating.
Silvergate and Signature Bank have been identified as the two largest providers of financial services to the cryptocurrency industry by the US media.
In a statement, MAS said that the local banking system has insignificant exposures to these failed banks in the US.
“Banks in Singapore are well-capitalised and conduct regular stress tests against interest rate and other risks. Their liquidity positions are healthy, underpinned by a stable and diversified funding base. These factors will allow them to weather potential stresses from global financial developments,” the financial regulator said.
MAS added that it is ready to provide liquidity if necessary to ensure that Singapore’s financial system remains stable and that its financial markets continue to function “in an orderly manner.”
MAS further shared that it has spoken with Enterprise Singapore on the failures’ potential impact to Singapore start-ups, including those with US operations.
“The initial feedback indicates that the impact is limited,” MAS stated.