Govertment guarantee all deposit

[hamster_ham]

Hi, the government announced they would guarantee all deposits recently.
But, a lot of people may not know that it doesn't cover structured deposit.

U may think that it is not that important, but what u may not realized
is that there are people who were con into getting a structured deposits.

it happened to my father.
Around 10 years ago, he went to Dxx bank for a fixed deposit account.
Upon maturity, i saw the letter calling it a structured deposit.
Of course the economy was good at that time so he got the money with
interest.

but now if a bank goes down, even though the govt guarantees the deposits,
it doesn't cover structured deposits.

So u may want to go back and help your family and friends to check
what type of account did they really sign up.

 

[tomoko]

But, a lot of people may not know that it doesn't cover structured deposit.

The announcement made by MOF and MAS did not say what type of deposits are covered. It just say "all Singapore Dollar and foreign currency deposits".

Note that the guarantee is valid only for 2 years ie. 31 December 2010.

Ministry of Finance (MOF) and Monetary Authority of Singapore (MAS)

Joint Press Statement

Global financial markets have been under severe strain. Banks in developed markets are experiencing significant capital and liquidity constraints.

2. In Singapore, our financial system remains stable and robust. Financial institutions in Singapore are required by MAS to have assets exceeding their liabilities by an appropriate margin. They are also required to abide by stringent regulations on capital, asset quality and risk concentration. MAS’ approach is to emphasise sound regulation and supervision of financial institutions, so that risks can be identified and addressed at an early stage. Banks and financial institutions in Singapore are operating normally, despite the global problems.

3. Our domestic Singapore dollar money and foreign exchange market have been calm and banks have been able to obtain funding in the interbank market. Public confidence in Singapore’s markets and financial institutions remains high.

4. In the last week, several jurisdictions have taken extraordinary measures to stabilise financial markets and restart the flow of credit. In particular, recent plans by the European and US Governments to recapitalise their banking systems and guarantee bank borrowings in the wholesale markets have improved confidence.

5. Singapore has not had to undertake similar extraordinary measures, in view of the continuing stability and orderly functioning of the Singapore banking system. However, the announcement by a few jurisdictions in the region of Government guarantees for bank deposits has set off a dynamic that puts pressure on other jurisdictions to respond or else risk disadvantaging and potentially weakening their own financial institutions and financial sectors. This is why although Singapore’s banking system continues to be sound and resilient, the Government has decided to take precautionary action to avoid an erosion of banks’ deposit base and ensure a level international playing field for banks in Singapore.

6. The Singapore Government has therefore decided to guarantee all Singapore Dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the MAS.

7. The guarantee will take immediate effect and will remain in place until 31 December 2010.

8. All depositors, big and small, corporates and individuals, including those under the current Deposit Insurance Scheme administered by the Singapore Deposit Insurance Corporation will now enjoy protection from the Government on the full amount of their deposits for the duration of the guarantee. The Government guarantee will also be extended to deposits placed with credit co-operatives registered with the Registry of Co-operative Societies.

9. Given that Singapore’s financial sector is sound and robust, MOF and MAS have assessed that a guarantee of up to S$150 billion will be well in excess of possible liabilities arising from the failure of any financial institutions. The guarantee will be backed by S$150 billion of the reserves of the Singapore Government. The President has given his concurrence for the Government to provide such a guarantee.

10. MAS reminds financial institutions that they should not misuse the Government guarantee to take on activities without regard for the risks. In the current challenging environment, financial institutions must continue to heighten vigilance and enhance risk management practices. MAS will continue to closely supervise financial institutions to ensure that they operate prudently.

 

[tomoko]

Curbing flight of deposits

By Fiona Chan

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Recent bank guarantees by governments in the region, including Hong Kong, have 'set off a dynamic' that put pressure on other economies to do the same or else risk disadvantaging their own financial institutions. -- ST PHOTO: ALBERT SIM
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THE Government's move last week to guarantee bank deposits in Singapore was necessary to keep local banks competitive and to prevent deposits from flowing out to other countries, said Minister of Trade and Industry Lim Hng Kiang on Monday.

RELATED LINKS
MINISTERIAL STATEMENT BY MR LIM HNG KIANG, MINISTER FOR TRADE & INDUSTRY AND DEPUTY CHAIRMAN, MONETARY AUTHORITY OF SINGAPORE ON GOVERNMENT GUARANTEE ON DEPOSITS

But he does not expect to have to use much - if any - of the $150 billion reserves that is being set aside for the guarantees.

'For the guarantee to be called, two things have to happen: a bank has to fail, and at the same time its assets must be worth so little there is not even enough to repay its depositors,' he said in a statement to Parliament.

Since banks here are sound and closely supervised, there is a very small risk of them failing due to problems in Singapore. Even if one fails, it should have enough assets to pay back depositors, he said.

This is why the $150 billion should be 'ample to meet any eventuality except the most remote', even though Singapore's bank deposits actually total $700 billion (S$998 billion), he added.

Still, the Government had to provide this guarantee in order to ensure 'a level international playing field for banks in Singapore'.

Recent bank guarantees by governments in the region, including Hong Kong, have 'set off a dynamic' that put pressure on other economies to do the same or else risk disadvantaging their own financial institutions.

'If Singapore had not introduced a similar guarantee, there was a real risk that depositors would have shifted some of their deposits out of Singapore banks, to banks in other jurisdictions which guarantee deposits', said Mr Lim.

'The Government has therefore taken a precautionary step to pre-empt and avert any such possibility.'

Guaranteeing bank deposits here also bolsters the public's confidence, helps Singapore's key financial services sector function normally and contributes to restoring confidence in the global financial system, he explained.

Mr Lim also said Singapore is in a good position to provide this guarantee because it is in a strong fiscal position. Even with this $150 billion set aside, MAS will have ample reserves to defend the Singapore dollar if needed, he added.

'The risk of drawing on the guarantee and potential impact on Singapore's reserves are low,' Mr Lim assured. 'Singapore's financial system remains sound and we are well-placed to meet the challenges facing us.'

Summing up, he said: 'This global crisis is unprecedented, and requires Singapore to respond effectively, decisively but also prudently.'

The provision of a Government guarantee on deposits is a necessary temporary measure to protect the interests of Singaporeans and the economy, which are in turn dependent on a strong and competitive financial sector.

'The risk of drawing on the guarantee and potential impact on Singapore's reserves are low.'

'This is a measured, precautionary action that will help us to weather the global economic slowdown and the ongoing financial crisis in international financial markets.'

 

[tomoko]

What will happen to the guarantee after 2010

 

[angie II]

keep all ur $ underneath ur pillow!

 

[masgnoeL]

What will happen to the guarantee after 2010

By Mayan calendar, the present World ends on December 21, 2012.

So, should extend the guarantee till then.

 

[Frankiestine]

What is the logic if they claim that they will guarantee dollar for dollar but yet only standby USD150Bil against USD700Bil...how can these be $ for $?

It is just another round of bull shit...:oIo:

 

[hamster_ham]

I read on the 16 Nov Liang He Zao Bao

I think structured deposits is considered
an investment type of instructment whcih falls under
a FAA act/clause
(i think its something like financial advise act)
it isn't consider a saving or current current.

i thinkk most of these structured deposits will have
a "principle guaranteed" clause.
but if a bank goes down, u will not get any money back
becos the bank goes down and govt guarantee doesn't cover it.

but that will only happen if the banks goes down.
i think singapoe banks are still quite strong.

 

[minibond]

I read on the 16 Nov Liang He Zao Bao

I think structured deposits is considered
an investment type of instructment whcih falls under
a FAA act/clause
(i think its something like financial advise act)
it isn't consider a saving or current current.

i thinkk most of these structured deposits will have
a "principle guaranteed" clause.
but if a bank goes down, u will not get any money back
becos the bank goes down and govt guarantee doesn't cover it.

but that will only happen if the banks goes down.
i think singapoe banks are still quite strong.

If you are NOT a Sinkaporean then I congratulate you that you are safe and guaranteed by Singaporeans. MAS made the commitment. You can squeeze every Singaporeans dry in the future when your money is lost.

But if you are Sinkaporean, then I am afraid to inform you that you are not only unsafe but your further risk is that you stand as guarantor to all foreign depositors. You are the collateral MAS used to offer guarantee to foreigners!

Your CPF your nation reserve your savings your HDB flat your ass even your wife and daughters are to be paid off and worked off when Singapore's financial system collapsed.

No you do not stand equal with foreign depositors, you are liable to them, they are not liable to you. There are no other guarantors except Singaporeans and no one else. No foreign bodies nor government nor banks are standing as guarantor. Not UN not WB not IMF. But only you and me and other Singaporeans that's all.

 

[tommy]

I think structured deposits is considered
an investment type of instructment whcih falls under
a FAA act/clause

The Singapore Government has therefore decided to guarantee all Singapore Dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the MAS.

Is the fixed deposit a structured deposit?

Is structured deposit guaranteed?

By definition:

all Singapore Dollar and foreign currency deposits
​

means

all deposits including fixed deposits, structured deposits etc.

_______________________________________________

If the above is so hard to understand, try this:

Replace fixed deposit with dog
Replace structured deposit with mammal
Replace deposits with animals

Is the dog a mammal?

Is mammal guaranteed?

By definition:

all Singapore Dollar and foreign currency animals
​

means

all animals including dogs, mamals etc.

The answer is yes, fixed deposit is covered.

_________________________________________________

Of course, that is only by definition, I could be wrong. So far, no one in this forum has the expertise to answer this question

 

[wallace]

fixed deposit are guaranteed

 

[Leegimeremover]

Wah lao. Listen to them is bak chee one. Everything is honest mistake did not know move on. Give me a gun and I will show you honest mistake did not know it was full loaded and pointed at the PAP and let us move on. Dead people cannot revive what.