There are no new ideas in banking - no equivalents of flying cars, or even 20-foot containers. The revolutionary thinking in finance is usually dusted off from the archives. Singapore's plan to let bankers play businessmen is no different.
That's what JP Morgan was: a banker-businessman who created US Steel and controlled railroad pricing. Now, Singapore wants its guardians of other people's money to engage in "permissible non-financial businesses" up to 10 per cent of their shareholder funds. What should investors make of this back-to-the-future move?
Widows and orphans should be a little nervous. Already, shares in Australian, Japanese and Hong Kong banks hold the promise of higher dividend yields than their three home-grown Singapore cousins, whose expected payouts over the next year range between 3.2 per cent and 3.5 per cent.
Landlords in Singapore make more from renting out apartments. If lenders were to invest a tenth of their US$82 billion (S$114 billion) in common equity into e-commerce platforms, the US$2 billion they paid out over the past 12 months could also be at risk.
With risk, however, could also come outsize rewards. Double-digit returns on equity are becoming rare in developed Asian banking markets outside of Australia. If by deploying capital outside of lending and advising, DBS, OCBC and United Overseas Bank (UOB) can squeeze a couple of percentage points of extra juice from their returns on equity - battered by bankruptcies in the offshore and marine services industry - then nobody should complain.
It all depends on the nature of the bets. E-commerce is a winner-take-all derby, and finding the right horse to back is often a matter of dumb luck.
Besides, Singapore's state investment fund owns more than 29 per cent of DBS. If the latter decided to become an equity owner of future "national champions", investors in the bank could be riding white elephants. Singapore is thankfully both more pragmatic and more prudent to go down that route.
In the early 2000s, then Finance Minister Lee Hsien Loong, who's now Prime Minister, told the Association of Banks in Singapore that the Asian financial crisis of 1997-98 underscored the dangers of commingling financial and non-financial activities within a corporate group.
Singapore's local lenders were then asked to wind down such cross-shareholdings. The threat assessment has changed. Lenders now fear that they'll be made irrelevant by BAT - Baidu, Alibaba Group and Tencent.
The Chinese trio is expanding in South-east Asia and will use its growing expertise in payment systems and funds management to outgun Singapore's banks.
It's only now that retail clients of DBS, OCBC and UOB, and local customers of Citibank Singapore, HSBC, Malayan Banking and Standard Chartered are being allowed interbank fund transfers via mobile phones free of charge without knowing the receiving parties' bank account details. Cutting-edge Singapore is embracing something that already exists in Thailand and India.
As banks dismantle their lazy, float-based business models, they need to muscle up elsewhere. So Finance Minister Heng Swee Keat proposed to allow commingling again. After the Monetary Authority of Singapore (MAS) releases operational guidelines in September, lenders can invest in any business that is related or complementary to their core financial activities. The MAS won't let them invest in real estate and hotels, however. Becoming the owner of a fleet of flying taxis would still be fine, one imagines.
If, in future, Singapore's biggest banker is found mediating a minimum fare lest all owners of air capsules go broke, politicians will bring back anti-commingling laws.
There really are no new ideas in banking.
• This column does not necessarily reflect the opinion of Bloomberg LP and its owners.