SINGAPORE - The fines Singapore has levied on banks here for lapses related to the 1MDB scandal may pale in comparison to the billions that banks in the United States and Europe have had to fork out for similar offences, but that is because Singapore believes in punishing the individuals responsible and their supervisors to send a strong deterrent message, Monetary Authority of Singapore (MAS) managing director Ravi Menon said on Thursday (June 29).
Huge fines would not hurt a bank's senior management, board of directors or individuals responsible, but instead hurt its shareholders, he said at a media conference on the release of the MAS Annual Report.
"And that to me is one of the serious failings of the current regime globally. That people continue to do wrong things because they're not being held personally liable and responsible."
He added: "What do we want these fines to achieve? Increasingly the MAS' approach is to place responsibility on the individual responsible for the lapses and their supervisor.
"Punishing the bank serves a purpose and we've done so because it sends a very clear signal to the board and senior management they need to raise the game."
The shame, however, of being named in an MAS announcement in relation to such lapses, is a stronger deterrent that would change behaviour, he said.
Similarly, he said, issuing a prohibition order that bans someone from working in the financial industry for several years is a strong deterrent.
The MAS fined eight banks in the past year for 1MDB-related breaches. DBS, for example, was fined S$1 million while UBS was fined S$1.3 million. Credit Suisse and United Overseas Bank were fined less than S$1 million each.