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NEWS UPDATES Asean Affairs   17 July 2013  

Singapore banks have strong financial positions: MAS

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.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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