S’pore banking system remains sound in wake of collapse of Silicon Valley Bank, Signature Bank in US: MAS

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SINGAPORE – The local banking system remains “sound and resilient”, said the Monetary Authority of Singapore (MAS) on Monday, 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 will 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 – on Friday.

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”.

DBS and UOB said their loan books have benefited from rising interest rates while their 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 de...

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