Parliamentary Replies
Published Date: 14 May 2013

Reply to Parliamentary Question on the banking crisis in Cyprus




Date: For Parliament Sitting on 13 May 2013

Name and Constituency of Member of Parliament

Ms Mary Liew, NMP


To ask the Prime Minister whether Singapore is affected by the banking crisis in Cyprus and what are the financial and regulatory safeguards in place to protect our taxpayers and depositors.

Answer by Mr Lawrence Wong, Acting Minister for Culture, Community and Youth on behalf of Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in Charge of MAS:

1   The direct impact of the banking crisis in Cyprus on Singapore is unlikely to be significant.  Banks in Singapore have negligible exposure to Cyprus.  In addition, as Cyprus accounts for only 0.2% of the Eurozone’s GDP, its direct impact on the global economy is minimal.

2   However, we must remain vigilant to risks of contagion from Cyprus or any of the other peripheral economies in the Eurozone, especially given the continued financial strains faced by these economies.  Contagion risks combined with policy uncertainty can lead to renewed financial stresses in the broader Eurozone. 

3   Financial institutions in Singapore are subject to high standards of regulation and supervision.  Our financial system has thus far remained resilient despite the crisis in the Eurozone.  Liquidity conditions are sound and funding markets are functioning well.  MAS however continues to closely monitor developments in the external environment and any possible impact on Singapore’s economy and financial system.