On June 26 2014, the Monetary Authority of Singapore (MAS) published a consultation paper on the Proposed Framework for Systematically Important Banks in Singapore.
MAS intends to assess the impact of a D-SIB’s failure having regards to the four bank-specific factors taken from the BCBS D-SIB framework:
- substitutability; and
Given the focus on the domestic impact of failure of a bank, MAS tailored each of these factors to reflect the particularities of Singapore’s financial system. Substitutability for instance would be linked to the following indicators:
- share of MAS Electronic Payment System (MEPS+) payments;
- share of assets under custody;
- share of values of underwritten transactions in debt and equity markets; and
- whether a bank is a USD cheque settlement bank.
Proposed policy measures include more intensive supervision, Higher Loss Absorbency (HLA) requirements, Liquidity Coverage Ratio (LCR), recovery and resolution. In addition, there would be a local incorporation requirement for the retail operations of foreign bank branches that have a significant retail presence.
MAS expressly warns that a D-SIB designation would not automatically qualify a bank for liquidity assistance.
The deadline for comments is 25 July 2014.Contact Us