The Private Banking Industry Group (PBIG) has denied claims made in a recent report by the Financial Times that the Monetary Authority of Singapore (MAS) had issued a “tacit directive” to banks instructing them to avoid discussing the sources of wealth inflows into the country.
The report claimed that the directive was made during a meeting of an industry group comprising bankers and regulators on 20 February.
However, in a statement issued on Friday (14 Apr), the PBIG said that the MAS has not instructed banks to “keep quiet” about the origins of wealth inflows into Singapore.
The group said that at the 20 February meeting, it was noted that “while public commentary tended to focus on fund flows from China into Singapore, the sources of overall inflows into Singapore in fact remain diversified”. The increased fund flows into Singapore were from high net-worth individuals from different markets, said the group.
The PBIG is co-chaired by MAS and UBS, and was re-constituted from the Private Banking Advisory Group in 2011. The group holds thrice-yearly meetings to discuss matters concerning the trust, reputation and growth of Singapore’s private banking industry.
The Financial Times report had claimed that the flow of money from mainland China into Singapore has become a politically sensitive issue domestically, and the MAS wants banks to keep public discussion of the phenomenon to a minimum.
It further claimed that the MAS told banks that when they report the sources of their inflows, they should not single out any particular markets.
However, the PBIG statement refuted these claims and said that the central bank has not issued any directive to banks, “tacit or otherwise”.
The increased inflow of funds into Singapore has raised concerns about transparency and accountability, with some bankers suggesting that the MAS is trying to safeguard Singapore’s status as a neutral financial centre. However, some have also pointed out that the increased wealth inflows are a result of Singapore’s attractiveness as a regional hub for private banking.
At the 20 February meeting, the PBIG also discussed how to facilitate the deployment of wealth to purposeful causes, given the growing interest from family offices in philanthropy and other activities that will benefit Singapore and the region.
The group noted that it was important to maintain robust risk management controls to safeguard against money laundering and terrorism financing risks.