SINGAPORE (Apr 7): The Monetary Authority of Singapore (MAS) says it will adjust selected regulatory requirements and supervisory programmes so financial institutions can continue providing for their customers seamlessly in this month-long ‘circuit-breaker’.

The measures include adjusting banks’ capital and liquidity requirements for banks, such that they have sufficient capital buffers to support their lending activities

“Banks in Singapore can afford to do this because they have managed their businesses prudently and have built up healthy capital buffers over the years,” the central bank notes.

“Our local banks have sufficient capital to see them through the current economic slump and support businesses and individuals,” it adds.

As such, to support the lending, MAS has adjusted its Net Stable Funding Ratio requirement – the amount of stable funding banks maintain for shorter-term loans is reduced –  to 25%, from 50% till Sep 30 2021.

Aside from this, the central bank has allowed the set-up of accounting loan loss allowances, to factor in the drag of the Covid-19 pandemic on financial institutions.

It has also asked for the measures and support meted out by the government to be factored in when accounting such losses.

In addition, MAS has deferred the implementation of regulatory reforms on: credit risk, operational risk, leverage ratio, output floor, market risk and credit valuation adjustments.

“While the reforms are necessary to strengthen the banking system over the long term, they will require banks to make considerable operational adjustments which they would be hard pressed to make under the current challenging conditions,” the central bank said.

Meanwhile, MAS has extended reporting timelines and deferred non-urgent industry projects, such as the launch of a e-system for submissions on key appoint executives.

In this time, it has also suspended all inspections and visits and will focus on how financial institutions are managing the impact of the health and economic pandemic.

This is to ensure that key financial services remain sustainable to customers, to sustain the flow of credit to the economy, the central bank stressed.