Globally, given the high degree of leverage built up during the last 10 years of accommodative monetary policy, the ongoing sharp increases in interest rates poses potential risks of debt defaults, market volatility, and financial instability. According to the BIS, average private sector debt service ratios in advanced economies could rise to their highest level in over a decade. According to the IMF estimates, around 30% of emerging market economies and 60% of low-income countries could be at or near conditions of debt distress. Interest rates in Singapore have risen, alongside the pick-up in US interest rates. The increase in domestic interbank interest rates has in turn led to a rise in lending and mortgage rates in Singapore. Domestic interest rates are expected to rise further as global central banks continue to raise rates, adding to the debt servicing burdens of corporates and households. MAS is closely monitoring any systemic risk to the financial system arising from debt related stresses in the corporate and household sectors. MAS subjects all major banks to rigorous stress testing to assess any vulnerabilities in their portfolios. Regulatory limits on sectoral exposures (such as for property) and to single borrowers help to ensure that banks’ corporate credit risk profiles are diversified. MAS supervisors have stepped up engagement with banks on their asset quality, including the adequacy of provisioning against possible asset quality deterioration. Corporates in Singapore continue to manage debt-related risks with sufficient liquidity holdings built up on post-COVID earnings recovery.
The effort to eradicate financial scams requires cooperation and concerted action from all parties, not just of BNM and the financial industry, but also from law enforcement agencies, relevant Ministries and agencies, as well as the public. PDRM plays an important role in combating scams, and has implemented various initiatives on this front. This includes establishing the CCID Scam Response Centre to facilitate the reporting by the public of financial scams. BNM and the financial industry will continue to cooperate with PDRM to combat financial crimes. This includes supporting efforts to recover stolen funds and bring scammers to justice. To combat scams effectively, the cooperation of law enforcement agencies is key, especially to share information and intelligence. In this regard, BNM, together with PDRM, the Malaysian Communications and Multimedia Commission (MCMC), and the National Anti-Financial Crime Centre (NFCC), will work together to further elevate the CCID Scam Response Centre as a more systematic information sharing platform that will enable quicker action to prevent further losses. Through the centre, the agencies will also cooperate and coordinate measures to prevent scams, through the sharing of resources, expertise and data. Further details on this initiative will be announced in due course. In addition, the cooperation of MCMC, third-party service providers (e.g. telecommunication companies), and tech platforms (e.g. social media, ecommerce) will also be key to prevent these services from being abused for scams. In short, all parties play an important role in strengthening our collective defences to deal with the threat of financial scams.