Singapore banks urged to prioritise long-term funding

They are getting to grips with the new NSFR rules.

Reuters reported that Singapore's three biggest banks will be required to prioritise long-term funding from next year to ensure they will be stable in extended periods of market stress.

The Monetary Authority of Singapore (MAS) issued Notice 652 on July 10, which will require DBS Bank, OCBC Bank and United Overseas Bank to maintain a net stable funding ratio of 100 percent from January 1, 2018. The NSFR, a key reform announced by the Basel Committee on Banking Supervision in January 2014, measures a bank's long-term resources over 12 months of liquidity requirements.

The aim is to ensure banks can continue to operate when wholesale funding markets are closed for an extended period. During the financial crisis, many global banks struggled to access external funding, severely stressing the banking system.

Read more here.

 

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