Singapore's "perceived safe-haven status is misplaced — it is the first regional economy in recession and looks like it will remain so for at least a year", Morgan Stanley said in a report last week, reports Bloomberg. It adds:
Bailouts and insurance programs by regulators in the US and Europe put "pressure on other jurisdictions to respond or else risk disadvantaging and potentially weakening their own financial institution", the Monetary Authority of Singapore said yesterday.
"Although Singapore's banking system continues to be sound and resilient, the government has decided to take precautionary action," the MAS said, adding that the aim was to "ensure a level international playing field."
Switzerland's government said the funding for its biggest bank was to protect "the interest of the country as a whole".
The Singapore sovereign wealth fund, the Government of Singapore Investment Corp (GIC), said its over 9 percent stake in UBS AG will be diluted by the Swiss government's move to invest 6 billion francs in the embattled lender, reported Reuters yesterday.
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