The city-state's highest regulator looked back on a year of crackdowns over 1MDB, which saw two Swiss banks sent packing and several bankers jailed. The scandal likely represents the biggest test of his career.
Ravi Menon, head of the Monetary Authority of Singapore, talked to journalists at length about how the growth of Singapore’s financial centre has been underpinned by its reputation as a clean and trusted jurisdiction, in the regulator's annual look back.
He emphasized that upholding high standards of integrity in the financial industry is an absolute priority for the MAS.
All in, the Singapore regulator has closed 2 merchant banks and fined 8 banks nearly $30 million as a result of 1MDB – the heaviest aggregate financial penalties to date.
Trusted Financial Centre
The MAS head was disappointed that the 1MDB-related transactions allowed to flow through Singapore made a dent in the city-state's reputation as a clean and trusted financial centre.
The regulator said that it has intensified its supervision of financial institutions that have higher «inherent money laundering risks» or control areas found wanting during past inspections.
Singapore's DBS along with UBS, Standard Chartered, and Coutts were hit with penalties and Falcon Private Bank and the now-defunct Banca della Svizzera Italiana (BSI) had their Singapore operations shut down.
Most recently Credit Suisse and local bank UOB were also hit with fines for related money laundering lapses.
Collateral Damage
Menon said he believes the MAS actions will begin restoring Singapore's clean and trusted reputation. 1MDB is a test case for how a relatively young financial center handles scandal that offshore banking will inevitably attract, and Menon has been under pressure to respond forcefully.
«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,» Menon said.
In March, MAS issued lifetime bans against Jens Fred Sturzenegger and Yak Yew Chee, as well as a 15-year ban against Seah Mei Ying.
Re-Open Files
In concluding his assessment of the whole 1 MDB affair, Menon, who worked closely with Swiss watchdog Finma on the 1MDB case, stated that the regulatory actions so far are based on what MAS is aware of – so far.
He said there was nothing new in the latest filing by the U.S. Department of Justice that would warrant further action.
He warned however that «if any new relevant information or leads arise from ongoing investigations in Singapore or elsewhere, rest assured MAS will re-open the files and pursue the matter.»
