Bloomberg
The Monetary Authority of Singapore (MAS) rejected criticism that it didn’t take sufficient action against financial institutions that sold structured products tied to now bankrupt-Lehman Brothers Holdings Inc.
The MAS, as the central bank is known, said its decision to publish the results of an investigation into the sales and to ban 10 financial institutions in Singapore from selling structured notes was “unprecedented,” Lim Hng Kiang, the island’s trade minister and deputy chairman for MAS, said in parliament Monday.
The bans are “proportionate to the nature and impact of the lapses identified,” Lim said. “These actions have consequences beyond the immediate financial impact on the financial institutions. There have been adverse implications on their reputations.”
DBS Bank Ltd. and UOB Kay Hian Pte are among the financial institutions that were banned from selling the products for periods ranging from a minimum of six months to two years. The central bank has said it will intensify supervision of financial institutions in the wake of the global credit crisis.
Singapore’s financial institutions have offered to compensate about S$105 million (US$73 million) to more than 3,600 people who complained about the sales. Investors bought S$508 million of Lehman-linked structured notes that lost most or all of their value when the securities firm filed in September the largest bankruptcy in US history.