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Singapore Regulator Allays Contagion Concerns

The Monetary Authority of Singapore says the banking sector has "insignificant exposure" to failed US banks.

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Singapore's central bank had allayed concerns about potential contagion risks to the city-state's banking sector from the failures of Silvergate Bank and Silicon Valley Bank, saying that Singapore's banking system remains "sound and resilient" amid heightened volatility in global financial markets.

"Banks in Singapore are well-capitalised and conduct regular stress tests against interest rate and other risks. Their liquidity positions are healthy, underpinned by a stable and diversified funding base. These factors will allow them to weather potential stresses from global financial developments," the Monetary Authority of Singapore said in a statement on Monday.

The regulator added that the Singapore dollar money market and foreign exchange market continue to function well, though it is monitoring the domestic financial system and international developments and is ready to provide liquidity to "ensure that Singapore’s financial system remains stable and financial markets continue to function in an orderly manner."

Blockhead previously reported that the bigger worry is not just the risk of contagion globally from the bank collapses, but what the rising cost of money would do to other global banks.

Silicon Valley Bank’s Collapse Underscores Risks From Rising Cost of Money
In a surprise collapse on Friday, startup-focused lender SVB Financial Group became the greatest bank failure since the 2008 financial crisis.

Start-Up Ecosystem Impact

The sudden closure of Silicon Valley Bank (SVB), a highly influential player in the startup ecosystem, particularly in the technology and innovation sectors, is concerning for the Web3 and crypto industry, which will likely find it harder to raise funding going forward.

The bank was a major player in the startup ecosystem, providing banking and financial services, including loans, investment banking, cash management, and international banking services, to many startups and venture capital firms. Its abrupt failure on Friday shocked the startup community, which had grown to rely on the lender as a stable source of funding, especially for the most ambitious projects in the tech industry.

"The vast majority of local tech start-ups are likely to escape any direct impact. But Southeast Asia’s funding activity could take (another) hit amid an already-challenging macroeconomic environment," Qin En Looi, principal at Saison Capital, told CNA.

"We anticipate lower fund-raising activity from US-centric venture capital funds in Southeast Asia, as they need to 'stabilise the ship' in core domestic markets," Looi added.

One More Setback for Crypto as Signature Bank Closes
The Treasury Department said that New York State shut down Signature Bank on Sunday and that depositors could get their money back on Monday.