Singapore to implement Basel III standards two years ahead of schedule

Singapore banks will then meet MAS’ capital adequacy requirements that are 2% higher than the Basel III global capital standards.

Here's what MAS has to say:

In the area of loss-absorbency, Singapore will fully implement the Basel III capital standards. Singapore-incorporated banks will meet Basel III minimum capital adequacy requirements two years ahead of the Basel Committee’s timeline of 1 January 2015. They will then meet, from 1 January 2015, MAS’ capital adequacy requirements that are 2% higher than the Basel III global capital standards.

Next, we are stepping up consolidated supervision of financial groups. In banking, MAS has always conducted group wide supervision. We are increasingly focusing on areas such as mitigating intra-group contagion risk, preventing the multiple use of capital within the group, and limiting group concentration risk exposures. For insurance groups, we will be enhancing our supervisory practices.

We issued a consultation paper in February this year, with detailed proposals. We will also introduce a new Financial Holding Companies Act. This will cover companies incorporated in Singapore, which hold as their subsidiary or subsidiaries, banks, insurance companies, or both, but does not itself conduct banking or insurance business.

Third, regulation of the fund management industry. All fund management companies will have to meet the enhanced competency, business conduct, and capital requirements by August. Those with assets under management greater than S$250m will have to be licensed, while those below this threshold may operate under the ‘Registered Fund Management Company’ regime, which will replace the existing ‘Exempt Fund Manager’ regime.

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