Singapore regulator floats new SGD facility for banks

It will be launched in the week of 28 September.

The Monetary Authority of Singapore (MAS) will upgrade the banking system’s access to SGD and USD funding in order to boost sector resilience, according to an announcement.

The regulator will introduce a new SGD term facility to provide banks and financial institutions an additional channel to borrow SGD funds in one-month and three-month tenors. It will be launched in the week of 28 September.

Collaterals such as cash and marketable securities in SGD will be accepted. Singapore-incorporated domestic systemically important banks (D-SIBs) will be able to pledge eligible residential property loans as collateral at facility.

In addition, MAS will raise the asset encumbrance limit imposed on locally-incorporated banks under the Banking Act to 10% of their total assets, up from the 4% current limit.

MAS will also expand the range of collateral that banks in Singapore can use to access USD liquidity from the USD facility, through pledging a wider pool of cash and marketable securities from 28 September.