MAS names inaugural list of domestic systemically important banks

SINGAPORE - The Monetary Authority of Singapore has named Singapore's three local banks - DBS Bank, OCBC Bank and United Overseas Bank - as well as four other banks as banks that have a significant impact on the stability of the financial system and proper functioning of the broader economy.

Known as domestic systemically important banks (D-Sibs), the seven banks that include Citibank, Maybank, Standard Chartered and HSBC will come under additional MAS supervisory measures.

Banks that have a significant retail presence in Singapore will be required to locally incorporate their retail operations.

Locally-incorporated D-Sibs will need to meet higher capital requirements - a minimum Common Equity Tier 1 capital adequacy ratio (CAR) of 6.5 per cent, Tier 1 CAR of 8 per cent and Total CAR of 10 per cent, compared with the Basel III minimum requirements of 4.5 per cent, 6 per cent and 8 per cent respectively.

Other measures such as recovery and resolution planning, liquidity coverage ratio requirements, and enhanced disclosures will also apply, depending on the bank's operating model and structure.

MAS will allow a transition period for affected banks to comply with the requirements that are currently not in effect, such as the local incorporation requirement.

Mr Michael Zink, head of Asean and Citi Country Officer for Singapore, said the bank believes the the D-Sibs framework will further enhance the stability of the financial sector in Singapore.

"Citi has been in Singapore since 1902 and was the first foreign bank to locally incorporate. We are happy to note that we already exceed the requirements and will continue to invest and grow our business in Singapore," he added.