Singapore's financial regulator is proposing to lift the guaranteed level of client deposits – the first time it has done so since the financial crisis. What is behind the move?
The Monetary Authority of Singapore, or MAS, said it will propose to raise so-called deposit insurance, or guarantees on bank deposits, to S$75,000 from S$50,000. The scheme insures cash deposits held in S$ in Singapore banks or finance companies.
The regulator said the move follows rapid growth in deposits held in Singapore. When protection on deposits were last lifted six years ago, more than 90 percent of insured depositors were covered. That has now slipped to 87 percent due to growing wealth.
Progressive Boost
MAS aims to lift coverage of Singapore deposits to 90 percent with the move, which it says is in line with international averages. The regulator plans to bolster the deposit fund size to 30 basis points of total insured deposits progressively.
The plan is to extend the build-up period of funds to underpin the emergency shield from 2020 to 2028, and to raise the annual premium rates from banks.
