The Monetary Authority of Singapore (MAS), Singapore’s central bank, has been closely monitoring recent developments surrounding the troubled Credit Suisse Group.
The MAS said on Thursday that it is in communication with the Swiss Financial Market Supervisory Authority (Finma) to assess the situation and its potential impact on Singapore’s financial stability.
Credit Suisse’s Singapore branch mainly focuses on private and investment banking, with no retail customers in its portfolio.
Despite the recent plunge in shares, the Swiss National Bank (SNB) stepped in to provide the lender with a 50 billion Swiss franc (S$73 billion) lifeline, easing concerns over systemic risk and the possible effects on the global economy.
Credit Suisse is one of 30 global financial institutions considered systemically important by the international Financial Stability Board.
Shares of Singaporean banks, including DBS, OCBC, and UOB, dropped on Thursday amid fears of wider financial contagion globally from the Credit Suisse crisis, as well as a series of United States bank failures.
DBS shares fell by 1.27% to $32.55, OCBC slid 0.98% to $12.15, and UOB dipped 0.71% to $28. The benchmark Straits Times Index also declined by 0.55% or 17.38 points.
In response to the market fluctuations, DBS, OCBC, and UOB assured the public that their exposures to Credit Suisse were “insignificant.” The MAS also reiterated that Singapore’s banking system remains sound and resilient.
The central bank emphasized that lenders in the city-state are well-capitalized and regularly conduct stress tests against credit and other risks. Additionally, the MAS highlighted that the liquidity positions of these banks are healthy, supported by a stable and diversified funding base.
As the situation continues to evolve, the MAS stated it would maintain close communication with Finma and remain vigilant in monitoring developments to ensure the stability and resilience of Singapore’s banking system.