Martin Lee @ Sg
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MAS Financial Stability Review 2010

The Financial Stability Review (FSR) is an annual publication by MAS that analyses the risks and vulnerabilities arising from developments in Singapore and the global economy and assesses their implications for the soundness and stability of the financial system.

The FSR aims to contribute to a greater understanding and exchange of views among market participants, analysts and the public on issues affecting Singapore’s financial system.

The report basically sums up the various themes we have coming on at this moment:

  1. Weakening of economic recovery in US, Europe and Japan (G3) due to sluggish private sector demand and wearing off of stimulus. Limited room for fiscal intervention due to strain on public finances. Asia has recovered strongly but could experience a weaker recovery due to headlines from G3.
  2. Widening sovereign risk could increase counter party risks and increase the vulnerability of banks, especially those in Europe.
  3. Banks in US and Europe continue to face the risks of asset writedowns from their real estate exposures.
  4. Low interest rate environment reduces incentives for banks to address vulnerabilities related to their funding structures and encourages lax lending practices.
  5. Search for yield could lead to large capital flows into emerging markets and cause asset price and foreign exchange instability.
  6. Singapore government will continue to monitor the property market closely and if necessary, impose more measures to promote a more sustainable property market.

You can download the latest issue here:

MAS Financial Stability Review 2010

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