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Feb 19, 2010
Beware of 'too big to fail' situation
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IN THE late 1990s, local banks consolidated and a dominant three emerged. The rationale then - to remain competitive both locally and abroad - was compelling, even when POSB merged with DBS.
In similar vein, our transport system pivots on a couple of major operators.
Singaporeans were reminded recently that most adverse developments in the past decade could not have been foreseen. So it stands to reason that our regulatory authorities may not be able to guarantee in future that mainstays of our economy are not buffeted by global downturns to the point of distress or even bankruptcy.
The Economic Strategies Committee suggested even more consolidation. However, given the vagaries of the global economy, is it wise to develop corporate behemoths that may eventually become too big to fail locally and require national resources to be rescued?
Errol Goodenough
Beware of 'too big to fail' situation
<!-- by line --><!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
IN THE late 1990s, local banks consolidated and a dominant three emerged. The rationale then - to remain competitive both locally and abroad - was compelling, even when POSB merged with DBS.
In similar vein, our transport system pivots on a couple of major operators.
Singaporeans were reminded recently that most adverse developments in the past decade could not have been foreseen. So it stands to reason that our regulatory authorities may not be able to guarantee in future that mainstays of our economy are not buffeted by global downturns to the point of distress or even bankruptcy.
The Economic Strategies Committee suggested even more consolidation. However, given the vagaries of the global economy, is it wise to develop corporate behemoths that may eventually become too big to fail locally and require national resources to be rescued?
Errol Goodenough
