The Monetary Authority of Singapore (MAS) completed a stress test exercise on all local and major foreign banks in Singapore earlier this year and concluded that Singapore’s banking system is sound and able to withstand adverse scenarios.
This was according to a written response by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam to a parliamentary question by Member of Parliament for Aljunied GRC Chen Show Mao.
In particular, the local banks would be able to maintain adequate financial buffers above regulatory requirements under prescribed stress scenarios.
The exercise was done based on end-2012 data and was part of the regular tests carried out annually.
MAS may conduct more frequent tests when necessary.
Mr Tharman said MAS does not publish stress test results as the the regulator is obliged to keep the information provided by the financial institutions involved confidential.
Releasing the test results could also result in banks taking a narrow view of identifying risks and appropriate mitigating measures to achieve the right grade for the test.