Bankers were allegedly asked by regulators earlier this year to keep quiet about significant asset transfers from the mainland, the FT maintains. A case of intra-regional truth or dare – or not?
If true, the revelation appears to be an explosive one. If not, it is unlikely the public will ever comprehensively find out what really happened, as the stakes are simply too high.
The «Financial Times» published an article Friday claiming that regulators in the city-state asked large global financial institutions to «avoid discussing» the origins of significant inflows of funds into the hub.
They even went so far as to qualify it as a tacit directive from the Monetary Authority of Singapore (MAS), saying the message had been passed along during a meeting on 20 February at a regular industry group forum co-chaired with UBS.
Extensive Scrutiny
As finews.asia has extensively reported, the inflow of assets from abroad has prompted significant scrutiny in the city-state this year, including in parliament. As part of that, permanent residency requirements were strengthened significantly in March.
The British newspaper article referred to multiple people who attended the meeting as well as three people with knowledge of the specific discussion.
The sources apparently indicated that China was not directly mentioned at the meeting but that «it was clear» regulators were referring to the country.
Large Crackdown
In recent years, the Chinese government has launched a large-scale regulatory crackdown on various sectors, including finance, tech, and social media, while also fining key influencers and famous personalities for tax evasion.
Given this, the FT indicated that Singapore had «plotted a careful path» as a neutral financial center, particularly given the geopolitical tension between China and the US. As a result, it had increasingly become a magnet for mainland wealth - although that is likely to become an increasingly tenuous and difficult undertaking the longer any crackdown lasts, particularly if outflows from China remain at elevated levels, as finews.asia has commented on previously.
The newspaper said the meeting had been held under the auspices of the private banking industry group and that HSBC, Standard Chartered, UBS, BNP Paribas, JP Morgan, Citigroup, DBS, and Bank of Singapore had taken part. According to them, it is jointly chaired by MAS and UBS representatives, and it meets three times a year.
Nobody Singled Out
The FT said that the MAS had indicated that bankers should not single out «any particular markets» when reporting the sources of inflows.
«This banker summarized the MAS’s message as being that private banks should «just quietly do your job» because «you don’t want to antagonize»», the newspaper wrote.
For its part, the MAS maintained that the meeting had noted the growth in flows into the city-state was driven by high net-worth individuals from different regions and that robust anti-money laundering and terrorism finance controls had been discussed.
One of the banking sources indicated to the FT that this was not the first time that the meeting was used to address capital inflows, with Indonesia being a concern for regulators in the past.
