The Monetary Authority of Singapore (MAS) has guaranteed there is no similar Goldman Sachs fraud situation in Singapore.
MAS made the statement in response to concerns, particularly in Parliament by Nominated Member of Parliament Teo Siong Seng over its possible effect on the Singapore economy.
Mr. Lim Hng Kiang, MAS Deputy Chairman and Minister of Trade and Industry, pointed that the charges refer to the collateralised debt obligation product (CDO) which was linked to the securities backed performance by subprime residential mortgages. He explained that these were not marketed to the retail public, but to financial institutions.
"Goldman Sachs allegedly failed to disclose the role that a large hedge fund had played in the portfolio selection process, and the fact that the hedge fund would benefit if the mortgage-backed securities defaulted," he said.
MAS said that not all of the overseas developments it has been monitoring are applicable in the country. It added that rules are being placed to require financial institutions to unveil all the information needed for the investor to make an informed decision. Mr. Lim added the MAS will also take proper regulatory actions if laws are violated.
Additionally, MAS has been receiving extensive feedback on its two consultation papers concerning the modification of rules governing financial products.
The MAS had released two consultation papers in March 2009 and January 2010 to improve industry practices
Mr. Lim said that "in finalising its proposals, MAS will take these views into account as well as the outcome of its own review. Some proposals will require legislative amendments and take some time to implement. MAS has started work on the legislative amendments, and will start consulting on draft legislation this year.”