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Singapore Ready to Take "Steps" to Protect Banks Print E-mail

AP – 15 October 2008

Singapore's central bank suggested it may guarantee bank deposits after regional financial rival Hong Kong pledged to back all deposits for the next two years.

"We will take the necessary steps to ensure that banks in Singapore are not disadvantaged and are able operate on an equal footing with other banking systems internationally," the bank, which is known as the Monetary Authority of Singapore, said in a statement late Tuesday.

The Hong Kong Monetary Authority said Tuesday it would use exchange fund reserves to guarantee bank deposits until 2010, regardless of the amount.

Singapore has not taken any exceptional measures since turmoil in world financial markets worsen over the last few months. Flagging demand for the city-state's exports led to a 0.5 percent contraction of the economy in the third quarter.

"Financial institutions here are sound and are operating normally," the bank said. "Banks have been able to obtain funding in the interbank market."

 
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