Singapore financial vulnerability climbs, but still resilient to shocks -MAS & More Trending News


SINGAPORE, Nov 25 (Reuters) – Singaporean households, corporates and banks have seen a rise in financial vulnerability this 12 months, the city-state’s central financial institution stated on Friday, warning folks to be prudent about taking over extra mortgage debt.

The larger vulnerability was largely due to the unwinding of pandemic-related precautionary buffers, the Monetary Authority of Singapore stated in its annual financial stability overview.

However, the central financial institution’s stress take a look at confirmed corporates and households had been “resilient to macrofinancial shocks”, whereas banks maintain robust capital positions.

The central financial institution famous, nonetheless, that households – particularly these in lower-income teams – ought to be prudent when committing to mortgage loans, given financial situations had been anticipated to tighten additional in coming quarters.

It stated housing loans remained the important thing driver of an increase in family debt, contributing 2.7 proportion factors to the general 3.1% year-on-year development within the third quarter of 2022.

The silver lining was that the credit score high quality of housing loans had improved over the previous 12 months after tighter guidelines had been launched in December final 12 months.

Loan-to-value ratios have fallen to 43% within the third quarter of 2022 from 54% in 2017, and simply 30 items had been foreclosed this 12 months.

Globally, the Monetary Authority of Singapore expects development to sluggish sharply over the subsequent 12 months with inflation possible to stay “significantly” above the goal of many central banks.

Singapore’s central financial institution stated the danger of inflation and rates of interest remaining larger for longer than beforehand anticipated will worsen the debt burden for susceptible households and companies, placing better stress on banks.

“However, banks are better positioned than in the Global Financial Crisis to manage these credit risks and absorb losses,” stated the central financial institution.

Reporting by Xinghui Kok
Editing by Ed Davies

Our Standards: The Thomson Reuters Trust Principles.

Singapore financial vulnerability climbs, but still resilient to shocks -MAS

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Singapore financial vulnerability climbs, but still resilient to shocks -MAS

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Singapore financial vulnerability climbs, but still resilient to shocks -MAS

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