MAS Makes Multiple Announcements for Financial Sector
The Monetary Authority of Singapore (MAS) issued an update on the resolution framework for banks and announced that Credit Suisse Group AG will continue operating in Singapore with no interruptions or restrictions, following the announced takeover by UBS Group AG. MAS also imposed on DBS Bank Ltd an additional regulatory capital requirement, following the widespread unavailability of DBS Bank’s digital banking services on March 29, 2023 and a subsequent disruption to its digital banking and ATM services on May 05, 2023. In another development, MAS recently hosted the inaugural Financial Sector Cloud Resilience Forum for Asia Pacific financial regulators and Cloud Service Providers to exchange views on appropriate public cloud risk management practices for the financial sector. The Forum highlighted a trend of increasing adoption of public cloud services by financial institutions, the increasing need to ensure high operational resilience, and the criticality of sharing information between cloud service providers and regulators.
With respect to the update on resolution framework, MAS states that in exercising its powers to resolve a financial institution, it intends to abide by the hierarchy of claims in liquidation. This means that equity holders will absorb losses before holders of Additional Tier 1 (AT1) and Tier 2 capital instruments. Creditors who receive less in a resolution compared to what they would have received had the financial institution been liquidated would be able to claim the difference from a resolution fund that would be funded by the financial industry. The creditor compensation framework will also apply in the exceptional situation where MAS departs from the creditor hierarchy in order to contain the potential systemic impact of the financial institution’s failure or to maximize the value of the financial institution for the benefit of all creditors as a whole. MAS’ resolution framework is in line with the Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions.
AT1 bonds in Singapore are offered in the wholesale market, which is only for institutional investors accredited investors or transactions in denominations of at least SGD 200,000. No prospectus for the offering of AT1 bonds to retail investors has been registered with MAS. 6. As with other investment products, financial institutions that offer or distribute AT1 bonds are expected to make accurate and clear disclosures of key product features and risks to investors. Investors should understand the risks and rewards, and exercise due care in their selection of investment products.
Related Links
Keywords: Asia Pacific, Singapore, Banking, Basel, Regulatory Capital, Resolution Framework, UBS-Credit Suisse, DBS Bank, Cloud Service Providers, Operational Resilience, MAS
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
EC Updates Address Rules on Digital Platforms, Cyber Risk, and CMDIRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.