Apparently there is a shady business going on in town, dealing in a type of foreign exchange contract known as a non-deliverable forward (NDF). Two parties agree to buy or sell a foreign currency for a fixed price at some future date. Both counterparties settle their trades with a "fixing rate" set daily by a panel of banks in Singapore. Although there are official rates set by Southeast Asian central banks, some of the traders are resorting to a "shadow" fixing system that has emerged in Singapore. Singapore is the biggest NDF market in Asia outside Japan.
Banks in Singapore run trading desks where NDFs are also traded speculatively, usually over the phone. In the aftermath of the manipulation scandal of the London Interbank Offered Rate, or LIBOR, one former UBS trader had raised concerns to his employer over the way in which reference rates were being set in Singapore, in particular "increasingly unrealistic" US dollar-rupiah rates. At least one bank, Bank Negara (Malaysia's central bank) has advised domestic banks to use a locally set reference rate for dollar-ringgit transactions, steering them away from the suspicious rates set in Singapore.
The attitude of the Monetary Authority of Singapore (MAS) is to direct banks to review their own processes for setting rates for NDFs. When derivatives broker Nick Leeson brought down the United Kingdom's oldest investment bank in 1995, Singapore authorities laid much of the blame on Barings' internal auditing and risk management practices. Yet the Singapore International Monetary Exchange (SIMEX) had allowed Leeson to trade, when he was denied a broker's license in the UK because of fraud on his application. Leeson pleaded guilty to two counts of "deceiving the bank's auditors and of cheating the Singapore exchange". That the deception and cheat occurred in Singapore gave the little red dot a big black eye.
By leaving the NDF market unregulated, Singapore is set to repeat the disaster of the unregulated over-the-counter (OTC) derivative markets, such as the credit default swaps, that triggered the 2008 global financial melt-down. Last we heard, MAS is expected to wrap up its review of the NDF market "soon".
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They seem always to be several steps behind in enforcement and regulatory control.You must wonder why because they are no fools or laggards.
ReplyDeleteIt's called "regulating with a light touch".
DeleteOther buzzwords are;
"we operate on a disclosure- based regime" ... meaning if you can't understand a 500 page prospectus of legal language in fine print ... too bad.
Also called "they went in with their eyes wide opened"
There is only "mis-selling" ... no such thing as "mis-representation"
- mis-selling is not found in any English dictionary
- mis-representation carry well defined legal definitions and penalties
At one time who would have imagined that a reputable bank like DBS Bank would get involved in such rampant marketing of sophiscated products to unsuspecting retirees by persuading them to handover their expiring fixed deposits to re-invest in toxic products under the promise of higher interests/dividends, only to find that the official position is that they have themselves to blame for not investing with their eyes wide open.
ReplyDeleteThen we now have so many investment scams like profitable plots, golden bullions, resort time sharing, all seems to be at one's own risks of "invest with your eyes open". With so many of these scams going round trying to bait innocent takers, it just makes one wonder whether GST is ever collected over any of these scams ?
Yet another great post on SingaporeDesk!
ReplyDeletecyprus is taxing its bank account holders ! so the rest of euro zone countires have better watch out !
ReplyDeleteWe should be happy to let PAPies continue shady & risky financial shenanigans. Then when the crash comes, it will be bad enough to wipe out a lot of people and big companies. By inflicting massive pain on Sinkies, then and only then will Sinkies grow balls to kick the PAPies out. By alerting PAPies to all these unscrupulous and unsustainable activities, we only help to maintain their rule over S'pore. E.g. now PAPies are trying to cool down property bubble. If we let the PAPies don't care and bochap, the coming property crash will be much worse. If there is no cooling measures, the property crash will definitely cause -60% to -70% wipeout. This will definitely cause PAPies to lose power by 2016. Now PAPies got chance to survive till 2026.
ReplyDeleteTrue, should let them commit themselves to their whim and fancy, greed and avarice.
DeleteNever interrupt your enemy when he is making a mistake - Napoleon Bonaparte
DeleteThe supreme art of war is to subdue the enemy without fighting - Sun Tzu
when you need 56 or 65 man years to collate data on the country reserves .... everything is possible
ReplyDeleteLui is itching to increase bus and mrt fares and they are holding him back. Natcon and Budget 2013 is to win back votes for the next GE. If Sinkies return them back to power with higher percentage of votes in 2016...
ReplyDeleteAt least during the Barings/SIMEX episode, some really well-connected folks under the umbrella of Goh Keng Swee were thrown out to take responsibility, that ballroom -dancing granny E Sam and the much feared Koh Beng Seng from MAS? Anyone old enough to remember them? One even suggested it was a convenient excuse lay the road of ascendance for the new great leeder. Goh took it on the chin and his people quietly left the scene.
ReplyDeleteToday, your favourite regulator Mxx is no longer an accountable regulator, it is a pom-pom cheerleader, all out to outdo the laissez faire of HK and promote the money washing of Switzerland. Fret not, they are laying the rope which is on the verge of hanging themselves. Unca sam has fixed Switzerland's black ops money disappearance acts, next up would likely be the offshore centres in Carribbean, then all the trusts holing up in Asia. HK they cannot touch unless they want open war with the CCP money hiding there. So unless red dot pony up with bigger arms deals, the party will also end. Even then, merkel's confiscators or hollande's tax inspectors, who are now they are hard at work on russian mafias, would stir enough shit for everyone holing up here to chase the gezillonaires to the next rat hole.
More unwelcomed scrutiny? What people or governments wouldn't do for Money!
ReplyDeleteGlobal Witness did an undercover investigation into the corruption and illegality at the heart of governance in Sarawak, Malaysia’s largest state. The video is going viral in Malaysia, and shows the money trail to Singapore.
"Dirty money in not-so-squeaky-clean Singapore." "The Singapore Government has a China Wall", said lawyer Alvin Chong (a Sarawak lawyer representing the Chief Minister Taib Mahmud's relatives), referring to Singpore alledgedly protecting the billions of corrupt money from Malaysia.
http://www.globalwitness.org/insideshadowstate/
http://www.malaysiakini.com/news/224250
http://www.malaysiakini.com/news/224354
Wow, this is dynamite!
Delete@11:15
"OK, all these instruments I'm creating, it's not going to be done here, it's got to be to be locked up somewhere... In Singapore."
"You do it in Singapore, then it won't surface and the nominee's not going to keep a shred of paper."
http://www.tremeritus.com/2013/03/20/s%E2%80%99poreans-vs-pap-from-keyboard-warriors-to-real-heroes/
ReplyDeletehttp://www.tremeritus.com/2013/03/20/discriminatory-hirings-against-sgs-we-need-more-whistleblowers/
ReplyDelete$ingap0re boosting to foreigners, that singapore has among the highest GNP best airport, best seaport etc, behind all these success the heavy price of its citizen got to pay, one wonder how it calculate it, maybe they took all the ministers average income, which is ten time of the advanced nations ministers income, the income to calculate it.
ReplyDeleteBehind this figure you see many low income workers maybe up to 100,000 or more, many can't get out of their poverty cycle and stay in one room rented HDB flats, their income below $1000 or around $800, many of the usually old retrenched and sick, can't find a job work in part time agents in properties and insurances, some are cleaners, some on social welfare, some collect cardboard, sell tissues papers, some collect cans, some sleep in the street which they came out late at night or beach at night after losting their houses, most of them their job likely to be taken by cheaper foreigners, unable find a job some borrow to survive you see the uniquely singapore - owe money pay money sign (O$P$) with beautiful artworks splash beside it?
And broken families, low birthrate causes by heavy influx of foreigners, no retirement for some work until they died? And they going to increase the population to aggravate it, instead of concentrating on improving the local population?
Many credit companies sprang up quickly because of the casinos or jobs lost to cheaper foreigners, Singapore kept present it good side to the foreigners, if they go to Orchard road at midnight they will see the real Singapore. Singapore is in heavy shortage of cheap one room rental flats need at least 60K, if more cheap foreign workers and immigrants to take over Singaporean jobs, more of these will likely to be like the cages like which Hong Kongers who lost their jobs living in?
Now more and more younger populations are aware of Singaporean facing, with most of them had hand held internet devices, gone are the days many are less educated and rely on the govt own MSN?
With recent PE Elections from plus 55 percent dropped to 43 percents is the strongest messages, and the huge turnout in the recent Hong Lim Park possible up to 7K, due to some left earlier because of rain and not enough space to stand, that Singapore is too overcrowded and going to serious uncharted water with no resources at all, yet pay its ministers 10 ten times the equivalent amount of the some advanced countries nations ministers pay? More things need to changed in the future?
Nice blog and great information about investment bank list in Singapore. And the post really helped me to explore more about the investment banks in Singapore.
ReplyDeleteThanks for sharing the post