Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam has raised the possibility of a further correction in property prices. He told a conference yesterday: “I think further correction would not be unexpected.”
He told a conference that Singapore had responded early enough to raging property prices with a set of cooling measures, but added that a crash in the property market was unlikely.
On the subject of keeping track of the market, he called for more emphasis on monitoring banks. “I don’t want to quarrel with the Basel recommendations. They are basically in the right direction; they are good for the long term.
“But far more focus needs to be placed on supervising banks and other financial institutions in the midst of the game, not just setting the rules of the game before it starts,” he said. “You need a good umpire, you need a good linesman.”
Last week, it was announced that Singapore would identify and regulate certain banks essentially deemed “too big to fail”. Such lenders, to be known as domestic systemically important banks, would have to meet Singapore’s prescribed liquidity coverage ratio, which seeks to ensure that these banks hold enough high-quality liquid assets to cover short-term market shocks. “The larger the bank is, and the more international it is, the more intrusive your supervision has to be,” said Mr Tharman.
As a result of greater banking regulation, which has meant higher capital requirements, growth may slow.
“It does mean that it weakens the ability of the banking systems to stimulate growth,” said Mr Tharman, adding that rules around crisis management of banks need to be outlined, too.
“Otherwise, I fear that we keep adding to regulatory requirements, some of which are already having negative impact, including in emerging economies.”
Mr Tharman invited laughter from the crowd, as he turned his attention to the subject of service expectations. “If you go into a top hotel in Stockholm, sit down and have breakfast, you don’t call someone for your coffee, because you’ve got a rather nice flask right in front of you – and you pour it yourself. Is it difficult?”
Here, a Singaporean is likely to look around for someone to serve the coffee. He said: “We must develop a new form of what comes naturally. Customers have to do things for themselves and not feel like they are getting less service as a result. It’s the quality of the coffee that counts.”
Source: Business Times – 5 July 2014
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