SINGAPORE, June 30 — The republic has begun restoring its reputation as a clean, robust and trustworthy financial centre after the fallout of the 1MDB-related scandal last year, said Monetary Authority of Singapore managing director Ravi Menon yesterday.
“Upholding high standards of integrity in the financial industry is an absolute priority for MAS,” said the central bank chief yesterday.
He added that this was why it has taken a serious view of the lapses in anti-money laundering controls among some financial institutions here in connection with suspicious 1MDB-related transactions, and had undertaken a rigorous investigation of these transactions.
Noting that the findings had made a dent in Singapore’s reputation as a clean and trusted financial centre, he added: “We have begun the process of restoring that reputation.
“We have taken tough and unprecedented enforcement actions and sent an unequivocal message that MAS will not tolerate the criminal abuse of Singapore’s financial system.”
He cited how the MAS had announced last month the completion of an intensive two-year long review of banks connected to 1MDB-related transactions known to-date.
The MAS had also issued prohibition orders (POs) against four individuals and served notices of intent to issue POs against three others for various regulatory breaches besides lifetime bans, for the first time, against two of the individuals.
In addition, the MAS closed two merchant banks — Falcon Bank and BSI Singapore — and fined eight banks a total of almost S$30 million (RM93.5 million), which is the heaviest aggregate to-date.
Speaking at the release of the MAS’ annual report, Menon also sought to dispel the notion that the fines paled in comparison to the billions that the authorities in the United States and Europe had imposed for such offences.
“What do we want these fines to achieve? Increasingly, the MAS’ approach is to pin responsibility on the individuals who made the mistakes, who are responsible for the lapses and their supervisors,” he said.
“When you fine a bank billions of dollars, it hurts basically shareholders and other stakeholders. It doesn’t hurt the board and senior management, and it doesn’t hurt the individuals much. And that is what, in my view, one of the failings of the current regime globally that people continue to do wrong things because they’ve not been held personally liable and responsible.”
Menon said that the MAS’ regulatory actions so far have been based on what it knows. “Thanks to excellent cooperation we have had with overseas jurisdictions, Singapore authorities have been able to obtain good intelligence and piece together most of the significant flows from end to end.”
He added that even though the MAS had completed its review, it is prepared to re-open the files again should there be any relevant new information or leads.
The MAS had found nothing new in the latest filing by the US Department of Justice (DoJ) that warranted further action, he said.
This month, the DoJ sought to seize US$540 million (RM2.3 billion) in assets obtained with funds allegedly stolen from 1MDB, Malaysia’s state investment fund.
At the same time, the regulatory authority has intensified its supervision of financial institutions that have higher inherent money-laundering risks or control areas found wanting from past inspections. The inspections go beyond rules-based compliance to focus on risk understanding and management, he said.
“Sustained effort and unstinting vigilance will be needed on the part of industry players to manage the risk of illicit finance and keep our financial centre clean,” Menon said. — TODAY
