Singapore regulators have wrapped up a two-year review of banks involved in 1MDB-related transactions known to date, but the after-effects of this probe will likely reverberate through the financial industry for many years to come.
As the Monetary Authority of Singapore (MAS) itself noted in a statement yesterday, the review is the most extensive it has ever undertaken. The probe was a deep dive into all the transactions that have flowed through Singapore and were related to Malaysian state investment fund 1Malaysia Development Berhad (1MDB).
It led to the shutting down of two banks, BSI Bank and Falcon Bank, and financial penalties totalling $29.1 million being imposed on eight banks - BSI, Falcon, DBS Bank, UBS, Standard Chartered Bank, Coutts, Credit Suisse and United Overseas Bank.
Prohibition orders have been issued against four former employees of financial institutions implicated in 1MDB-related transactions, with more such orders to come against another three current and former financial professionals.
MAS managing director Ravi Menon noted that these enforcement actions are unprecedented.
"The two-year-long 1MDB- related review holds key lessons for both MAS and financial institutions in Singapore. MAS has enhanced its anti-money laundering (AML) surveillance and taken unprecedented enforcement actions against errant institutions and individuals. Financial institutions have increased their risk awareness and strengthened their AML controls. Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place. The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance."
PwC Singapore financial crime partner Denise Lim noted this whole review highlighted how the standard of compliance is rising, which is in line with the tone of enforcement, and that should not be taken lightly. "As a responsible global citizen, we need to continue to make Singapore a safe place to do business," she said.
