MAS' liberalisation measures in the last few years have encouraged greater participation from foreign banks in our banking sector. Should a foreign bank fail, the resolution of a cross-border bank insolvency could be a complex and drawn-out process with uncertainty over the amount and speed of any recovery. With this in mind, MAS has introduced an asset maintenance regime to strengthen the foreign bank regulatory framework by requiring foreign full and wholesale bank branches to maintain a minimum level of eligible assets in Singapore in proportion to their deposit liabilities. This would help to improve the recovery of assets from a failed foreign bank branch in Singapore to meet the claims of Singapore depositors. The asset maintenance requirements, after close consultation with the industry, have been carefully calibrated to balance prudential objectives with banks' commercial interests.
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Minister for Trade & Industry and MAS Deputy Chairman Lim Hng Kiang, in Parliament.
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