People are concerned that the recent failure of two US banks, Silicon Valley Bank (SVB) and Signature Bank, could have a “contagion effect” on the global banking system. But the Monetary Authority of Singapore (MAS) has told investors and the public that the country’s banking system “remains sound and resilient” and that local banks have “insignificant exposures” to the failed US banks.
SVB and Signature Bank’s Failure Only the collapse of Washington Mutual in 2008 ranks higher among the largest banking failures in US history than SVB and Signature Bank. Another bank with a focus on cryptocurrencies, Silvergate, recently disclosed that it is voluntarily winding down operations. The US media has named Silvergate and Signature Bank as the two biggest financial service providers to the cryptocurrency sector.
MAS Reassures Investors
The local banking system has “insignificant exposures,” according to a statement from MAS, proving that Singapore’s banks are well-capitalised and regularly subject to stress tests against interest rates and other risks. The regulator added that a steady and diverse funding base supports the strong liquidity positions of local banks. They will be able to handle any stresses brought on by potential changes in the world economy thanks to these factors.
MAS also reassured the public that it is ready to provide liquidity if needed to keep Singapore’s financial system stable and its financial markets “orderly.”
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Impact on Singaporean startups is minimal The potential effects of the failures on Singapore start-ups, including those with US operations, were also discussed by MAS and Enterprise Singapore. According to MAS, the initial feedback suggests that the impact is minimal.
Recent bank failures in the US have made some people worried about the global banking system, but Singapore’s banking system has shown itself to be stable and strong. The MAS’s reassurances should give investors and the public confidence that the local banks are well-prepared to handle any stress that could come from changes in the global financial system.
