Joint Press Release by the Monetary Authority of Singapore
and De Nederlandsche Bank

Memorandum of Understanding between the Monetary Authority of Singapore and De Nederlandsche Bank

SINGAPORE, 29 June 2009...The Monetary Authority of Singapore (MAS) and De Nederlandsche Bank N.V. (DNB) jointly announced today the signing of a Memorandum of Understanding (MoU) for an arrangement to enhance liquidity provision to banks in non-routine situations. This will be effective immediately.

2   Under the arrangement, Dutch banks operating in Singapore or Singapore banks operating in the Netherlands can approach the MAS or DNB to ask for liquidity assistance if needs arise. This arrangement will enhance the banks’ confidence in carrying out their business in the two markets. This arrangement is conducive to overall monetary and financial stability in both countries and strengthens liquidity provision cooperation between both central banks.

3   The provision of liquidity assistance will be based on cash collateral, and it will remain at the sole discretion of the respective central bank. If a Dutch bank in Singapore approaches the MAS to request the activation of the arrangement and the request is accepted, the Dutch bank will deliver euro cash collateral to the MAS in exchange for Singapore dollar and vice versa.

4   The advantage of this arrangement is that the liquidity providing central bank can quickly access an alternative and reliable source of collateral in addition to those under routine liquidity arrangements.

5   Mr Heng Swee Keat, Managing Director, MAS, said ":Cross border cooperation, including this linkage with DNB, assures global banks operating in Singapore of access to liquidity even under extreme conditions, and enhances the robustness of our financial centre which has strong international linkages."

6   Mr Nout Wellink, Governor, DNB, said "This type of linkage between central banks increases their ability to provide for back-up for the international liquidity distribution."

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