Established in 1999



 

Home

Public Others Government Business Arts Community
Entertainment Lifestyle Services People Travel Internet Stuff

 

 

     FrontPage Edition: Wed 7 Dec 2005

MAS releases Financial Stability Review for 2nd half 2005

 

Source: www.mas.gov.sg

MAS Releases Semi-Annual Publication of Financial Stability Review

 
The Monetary Authority of Singapore (MAS) has released its Financial Stability Review (FSR [1]) for December 2005.
Since the June 2005 FSR, global financial markets have remained resilient and have reacted well to a series of shocks, including the Katrina hurricane disaster in the US, terrorist bombings in London, and changes in the pegged exchange rate regimes in China and Malaysia.
The G3 economies continued to expand, amid continuing monetary policy tightening in the US and sustained high energy and commodity prices.
The East Asian economies, including Singapore, also experienced firm growth, with the balance sheets of both the banking and corporate sectors further strengthening over the past six months.
Although household credit in several of the East Asian economies continued to grow, household indebtedness has remained broadly under control with authorities in some countries introducing measures to curb indebtedness and stem property price inflation.
The Singapore banking sector has remained sound, supported by healthy corporate and household sectors. Firms reported sustained profits and improved liquidity positions, while the household balance sheet strengthened further.
In the banking sector, commercial bank lending accelerated in Q3 2005, reflecting strong non-bank lending activity in the Asian Dollar Market and overall interbank lending.
The three local banking groups registered growth in profits, declining non-performing loan ratios and capital adequacy ratios that were above the regulatory requirement.
The insurance sector saw improved performance on the back of growth in new life business premiums and higher operating profitability of general insurers.
Notwithstanding the overall positive assessment of Singapore's financial system, several possible downside risks remain.
First, global inflation could accelerate much more than seen currently if oil prices were to rise further. This could in turn lead to tighter-than-expected monetary conditions and slower global growth.
Second, the risk of a disorderly adjustment of the USD remains with the continued build up of large global imbalances.
Third, there have been growing concerns of a Avian influenza pandemic, which would have severe economic and financial costs for the global economy.
Based on a scenario of rapidly rising interest rate environment leading to a sharp contraction in economic growth, a stress test of market risk was conducted on six major banks, including the three local banking groups.
The stress test results showed that the banks would be resilient to the shocks assumed under the scenario. The estimated potential losses on the banks' market portfolios would be about half of their average pre-tax profits in the past five years.
A copy of the Financial Stability Review Dec 2005 is available on the MAS website. (Click here to view the Financial Stability Review). The next issue of the FSR will be issued in June 2006.

Source: www.mas.gov.sg Press Release 1 Dec 2005

 

Important Notice

Our FrontPage Editions are a historical record of our Web site and reflect the changing of the times, and also of our Web site through time. We do not and will not update the links and stories on these FrontPages even if they have become obsolete.

 

If you have an event or some news to share with our readers, send the details, including picture(s), to us at editor@getforme.com 

We are now 9254 pages thick and growing.

Public Holidays CHRISTMAS DAY is the next public holiday. It falls on 25 December 2005.