S’pore guarantees all bank deposits…
Even before my previous post has been seen by too many, the Singapore Government and the Monetary Authority of Singapore (MAS) have announced tonite that “The Singapore Government has.. decided to guarantee all Singapore Dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the MAS.”
Needless to say, as someone who believes in savings, I’m delighted. Not that for one moment I thought our banking system is wobbly but because when everyone else, starting from the Irish, has begun guaranteeing bank deposits, it’s impossible and downright dangerous for Singapore to stay resolute, like the boy on the burning deck.
Thank goodness our country is pragmatic and sees that when every other country guarantees its bank deposits, it won’t do amid the continuing turbluence to say “no” to guarantee just because we aren’t Ireland.
This is because as I wrote yesterday “in a world of free flowing funds, banks that enjoy the blanket of Govt guarantee will draw funds from those that don’t. The irony is that if some Govts stand firm and say “I won’t join because my own banking system is sound”, such a contrarian stand could see the deposit base of perfectly sound banks eroded, as depositors move funds to take advantage of those with guarantee.”
That’s exactly what made Singapore moved to give the guarantee with immediate effect and which will remain in place until 31 December 2010.
All depositors, big and small, corporates and individuals, including those under the current Deposit Insurance Scheme administered by the Singapore Deposit Insurance Corporation will now enjoy protection from the Government on the full amount of their deposits for the duration of the guarantee.
Hurray! Now can sleep safe and sound and not worry that some dumb banker from some foreign glen or loch will start another Irish jig in the international markets and make others half way across the world have difficulties even with their food bills!
