MAS published its approach to the macro-prudential policy in Singapore. MAS sets out the objectives, framework, and principles that guide the approach to macro-prudential policy, including its interaction with micro-prudential supervision and monetary policy. In its approach, MAS elaborates on the macro-prudential policy framework while laying out the principles that guide the macro-prudential policy approach and policy toolkit of MAS.
The MAS framework for macro-prudential policy involves the iterative processes of surveillance and risk identification, impact and vulnerability assessment, and policy response. If the MAS surveillance and impact assessments identify a material systemic risk that could impact the financial system or the real economy adversely, MAS will take policy action to remove or mitigate the risk, or build resilience against it. The macro-prudential policy approach of MAS can be characterized as pre-emptive, targeted, calibrated, and multi-pronged. In its approach, MAS also lists the policy tools, along with the particular systemic risk they assess. MAS takes a system-wide perspective in its macro-prudential surveillance efforts. It constantly monitors a broad suite of indicators to identify potential risks and how they may manifest. These indicators cover five broad sectors: banks, non-bank financial institutions, corporates, households, and the external sector. Linkages within and between these sectors are identified through network analyses of balance sheet variables and transaction flow data.
Keywords: Asia Pacific, Singapore, Banking, Macro-prudential Policy, Systemic Risk, CCyB, LTV, MAS
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.