MAS Assesses Stability of Financial Sector, Signs Fintech MoU with HMT
The Monetary Authority of Singapore (MAS) published the financial stability review for 2022 and signed a Memorandum of Understanding (MoU) with Her Majesty's Treasury (HMT) on the UK-Singapore FinTech Bridge. The financial stability review finds that banks in Singapore have emerged from the pandemic with strong capital positions and liquidity buffers and have set aside adequate provisioning buffers to cushion against possible credit losses. However, banks are being cautioned to actively monitor and manage their credit risk as tighter financial conditions faced by firms and households could place pressure on asset quality of banks.
The MoU on FinTech Bridge builds on an earlier co-operation agreement and is expected to remove barriers to fintech trade by opening regular discussion between regulators and businesses. The FinTech Bridge seeks to support continued growth, investment, and technological innovation in the fintech sector, building on active interest of fintech players in the areas of payments, regtech and wealth management. The MoU will enhance the cooperation and sharing of information on emerging trends in the fintech sector as well as break down barriers to trade for UK and Singaporean fintech firms, boosting growth, and investment opportunities. The FinTech Bridge MoU will:
- enable close and stronger collaboration between the HMT, MAS, and the industry through the establishment of a new structured engagement.
- provide a formalized framework for on-going cooperation between the HMT and MAS on fintech issues, covering policy to policy and business to business (including trade and investment) engagement.
- recognize the ongoing regulator-to-regulator engagement on fintech issues between the Financial Conduct Authority (FCA) and MAS pursuant to the 2016 cooperation agreement.
- highlight the facilities and assistance available to fintech firms in each jurisdiction to explore new business opportunities.
- provide opportunities to discuss ways to improve available support and reduce barriers to entry in both jurisdictions.
- facilitate future discussions covering the joint promotion of the FinTech Bridge and further innovation in financial services.
The UK and Singapore renewed their commitment to deepening the UK-Singapore Financial Partnership that was agreed in 2021 as well as discussed mutual priorities and further co-operation in areas such as fintech, sustainable finance, transition finance, disclosure standards, greenwashing, crypto-assets, E-wallets, and digital banking. Both countries recognized the importance of the UK-Singapore Digital Economy Agreement (DEA) signed in February 2022 and the principle of the free flow of data for the development of respective fintech sectors and supporting future digital and innovation partnerships. Going forward, FinTech Bridge MoU will be reviewed regularly to ensure its maximum impact and efficiency in a fast-paced industry.
Keywords: Europe, Asia Pacific, UK, Singapore, Banking, Fintech, Regtech, Fintech Bridge, Financial Stability Review, Greenwashing, Cryptoassets, Digital Banks, Basel, Climate Change Risk, MAS, HM Treasury
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