Singapore: Financial Sector Assessment Program; Technical Note-Crisis Management, Resolution, and Safety Nets
IMF Staff Country Reports, July 15, 2019
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- Singapore: Financial Sector Assessment Program; Technical Note-Crisis Management, Resolution, and Safety Nets
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Bibliographic details
- Published: July 15, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498325837.002
Key findings
- The resolution tools are well designed, with the exception of bail-in powers; however, steps are still needed to operationalize the resolution plans.
- The note reviews current practices, considering international best practice principles as outlined in the Financial Stability Board’s Key Attributes for Effective Resolution of Financial Institutions and the International Association of Deposit Insurers’ Core Principles Effective Deposit Insurance Systems.
- Monetary Authority of Singapore currently develops resolution plans for Domestic Systemically Important Bank only.
- The funding arrangements for resolution aim at limiting public sector exposure to loss.
Resolution planning and consistency
- Resolution plans are developed for Domestic Systemically Important Bank only.
- The resolution plans for each institution must be reviewed for both internal consistency and cross-institutional consistency.
- Some extension of resolution planning should be considered.
Resolution tools and loss-absorption framework
- Losses will be first borne by equity holders and unsecured subordinated creditors.
- When additional funds are required, the deposit insurance fund, built by ex-ante premiums from members, can be used to support the resolution of members on an equivalent cost basis.
Policy implications and recommended actions
- Operationalize existing resolution plans to ensure readiness for crisis management and resolution.
- Review each institution’s resolution plan for internal consistency.
- Review resolution plans across institutions for cross-institutional consistency.
- Consider extending resolution planning beyond the current scope of Domestic Systemically Important Bank.
- Maintain funding arrangements that limit public sector exposure and preserve the hierarchy where equity holders and unsecured subordinated creditors absorb initial losses, with the deposit insurance fund as a backstop funded by ex-ante premiums.
Source: Singapore: Financial Sector Assessment Program; Technical Note-Crisis Management, Resolution, and Safety Nets, IMF Staff Country Reports, July 15, 2019.
Content in this bundle
- Executive Summary