SINGAPORE: Singapore’s central bank urged banks on Monday to keep their finances strong and resilient to “shocks”, in case of an abrupt rise in unemployment and business insolvencies due to the COVID-19 pandemic.
Although the economic outlook had improved recently, there remained a risk of a further deterioration in the ability of individuals and companies to repay debt, if the pandemic continued to cause prolonged disruptions to economic activity, the Monetary Authority of Singapore (MAS) said in its annual financial stability review.
“Unemployment and business insolvencies could in turn rise abruptly … .banks should therefore continue to remain prudent in managing their balance sheets, to ensure that their capital positions remain robust and resilient to shocks as they continue to support the economy through the latter stages of the recovery from the pandemic,” MAS said.
With the recent emergence of the new COVID-19 variant Omicron, Singapore has held off on further reopening plans. Singapore’s government coronavirus taskforce said it will be evaluating the Omicron variant before making on any new moves. – Reuters