Singapore Says Financial System Remains Resilient, Has Adequate Buffers Amid Global Uncertainty
By Anas Abu Hassan
SINGAPORE, Sept 22 (Bernama) -- Singapore’s financial conditions have been broadly supportive despite a mixed global backdrop, supported by easing borrowing costs, tighter credit spreads and a pickup in bank credit growth, according to the Monetary Authority of Singapore (MAS).
MAS said overall bank credit quality remained good, underpinned by sound corporate and household financial positions. Singaporean corporates, households, and financial institutions have adequate buffers to manage shocks to earnings, incomes and financing costs, but should remain vigilant amid macroeconomic uncertainty.
"Most firms and households have strong balance sheets and are expected to remain resilient under stress. However, some highly leveraged firms or those with thinner liquidity buffers could come under strain," it said in its 2026 Financial Stability Review released today.
According to the financial regulator, corporates in Singapore have generally maintained or improved their financial positions over the past year, supported by stable earnings and lower borrowing costs. It said the banking sector continued to benefit from strong capital and liquidity buffers, alongside healthy provisioning coverage. For the non-bank sector, insurers have remained well-capitalised, and investment funds have managed liquidity risks well, it added.
MAS said the household sector remained resilient, supported by financial asset growth that outpaced liabilities. "Households’ debt-servicing capacity has improved amid stable income growth and mortgage rates that declined over the past year," it said.
It noted that risks to global financial stability have risen amid the expected tightening of financial conditions in the period ahead.
"Economies benefiting from artificial intelligence (AI)-related investment and exports are better placed to absorb higher borrowing costs, but are concurrently more exposed to a pullback in the AI cycle. Economies with weaker AI linkages and larger fiscal or current account deficits could be more affected by tighter global financial conditions, with portfolio outflows and currency depreciation raising risks," it added.
-- BERNAMA