MAS will work with Enterprise Singapore to assess any potential impact the failure of SVB and Signature Bank might have on Singapore start-ups, including those with operations in the United States. — Bloomberg
SINGAPORE: The local banking system remains “sound and resilient”, said the Monetary Authority of Singapore (MAS), amid the closure of two banks in the United States over the weekend.
The US authorities have since said that all customers in the two banks would be paid in full.
In its statement, MAS said that the Singapore dollar money market and foreign exchange market continue to function well.
SVB Financial Group, which did business as Silicon Valley Bank (SVB) and focused on start-ups, became the largest American bank to fail since the 2008 financial crisis.
This was followed by the closure of Signature Bank in New York state which ran a big real-estate lending business and had recently made bets on cryptocurrencies.
A third bank, California-based Silvergate Bank, which did business with a high number of crypto clients, announced earlier last week that it plans to wind down and voluntarily liquidate its operations.
In response to queries from The Straits Times, a DBS Bank spokesman noted that it has “strong liquidity and a diversified funding base that is supported by a solid retail customer deposit franchise”.
Its loan exposure to startups is immaterial and it does not have exposure to the three banks.
DBS said its loan books have benefited from rising interest rates while its debt securities, or fixed-income securities portfolios, have relatively short maturities.
Short-term bonds are less sensitive to interest rate changes than long-term bonds, meaning that if interest rates rise, the value of the short-term bonds in the portfolio is less likely to decline significantly compared to longer-term ones.
Noting that the bank has a sizable and diversified deposits base, a UOB spokesman added that it has a short-duration and highly-liquid securities portfolio. It, too, has no exposure to the three banks.
Koh Ching Ching, head of group brand and communications at OCBC Bank, also confirmed that her bank does not have any exposure to the three banks.
In its statement, MAS reiterated that “banks in Singapore are well-capitalised and conduct regular stress tests against interest rate and other risks”.
Thus “their liquidity positions are healthy, underpinned by a stable and diversified funding base. These factors will allow them to weather potential stresses from global financial developments”.
The central bank added that it “stands ready to provide liquidity through its suite of facilities to ensure that Singapore’s financial system remains stable and financial markets continue to function in an orderly manner”.
MAS will also work with Enterprise Singapore to assess any potential impact the failure of SVB and Signature Bank might have on Singapore start-ups, including those with operations in the United States.
This comes after the US Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp on Sunday said depositors at Signature Bank would have access to their money – just like SVB clients who will get their money in full on Monday.
“All depositors of this institution will be made whole,” the regulators said.
“As with the resolution of SVB, no losses will be borne by the taxpayer.”
MAS said the feedback it has received so far indicates that any impact is limited.
Straits Times understands that Singapore-based, US-listed Grab is not exposed to SVB. Nirgunan Tiruchelvam, head of consumer and Internet at investment advisory firm Aletheia Capital, confirmed that Grab has not banked with SVB.
Meanwhile, payments firm Wise, which has a Singapore-client base, told Reuters that while it held funds in SVB, the firm faced “minimal exposure”.
State investment fund Temasek Holdings did not comment.
However, some companies in its portfolio, including US-listed payments firm Bill.com and online gaming platform Roblox, filed statements noting that their exposure to SVB is limited. — The Straits Times/ANN
