SINGAPORE – The Monetary Authority of Singapore (MAS) says it is working with the Institute of Banking and Finance “to proactively address any impact on employment” as a result of a merger between Swiss banks UBS and Credit Suisse.
It noted that the details of UBS’ takeover of Credit Suisse are still being worked out.
“The implications for jobs in Credit Suisse in Singapore are not clear at this point in time.
“MAS is monitoring this closely and in touch with the two banks,” MAS said in its reply to queries from The Straits Times.
The regulator did not say how many jobs are at stake here, but market sources told ST on Monday that estimates would put the number of Credit Suisse employees in the Republic at roughly 3,500.
A report in July 2018 by The Business Times put the number at 4,000. Both UBS and Credit Suisse did not mention any numbers when asked by ST.
But MAS did reveal the size of Credit Suisse’s Singapore operations.
The total assets of the bank’s business here, excluding intragroup balances, stood at about $38 billion as at end-February 2023. It represents 1.6 per cent of the total assets of Singapore’s banking sector.
When asked if it would ramp up assessments of banks’ resilience, MAS said it assesses the impact of emerging risks on the sector here on a regular basis, and reviews individual banks’ internal stress tests against interest rate, credit and other risks.
It added that it conducts a comprehensive annual industrywide stress test of key financial institutions in Singapore.
“The results of the stress test in 2022 showed that Singapore banks would remain resilient to adverse macro-financial shocks from a sharp tightening of monetary policy amid a global economic downturn,” the regulator noted.
UBS agreed on Sunday to buy rival Credit Suisse for 3 billion Swiss francs (S$4.3 billion) in a deal engineered by the Swiss authorities to avert further turmoil in domestic and global financial markets.
The lender, which has its biggest regional office in Singapore, will assume up to US$5.4 billion (S$7.2 billion) in losses under the deal, expected to close by end-2023.
The 167-year-old Credit Suisse, among the world’s largest wealth managers, is one of 30 global banks deemed systemically important.
But it has been plagued by a string of scandals, including losses linked to the collapse of investment fund Archegos and Greensill Capital, which triggered a stock sell-off in 2021.
The merger of the two Swiss banks comes after fears about the stability of banks spread across the Atlantic from the United States.
The 16th-largest bank in the US – California-based Silicon Valley Bank, which focused on start-ups – was closed by the authorities. Its failure was led by a bank run that came about due to higher interest rates.
Clients were pulling money out to meet liquidity needs as fund-raising became harder.
Two days later, US authorities shut New York-based Signature Bank, which was one of the main cryptocurrency lenders, in order to contain the situation. This made it the third-largest bank failure in US history and the second massive bank failure in a matter of days.
Before the shutdown of the two US banks, Silvergate also ran into trouble after it was hit with a liquidity crunch following the collapse of US crypto exchange FTX in late 2022. The bank said it would wind down operations and voluntarily liquidate.
All eyes are on the US Federal Reserve this week as it must decide if it will raise interest rates again amid the banking turmoil that has been partly triggered by sharp rate hikes.