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Singapore take steps to boost corp bond liquidity
March 14, 2012 / 3:27 AM / 6 years ago

Singapore take steps to boost corp bond liquidity

SINGAPORE, March 14 (Reuters) - Singapore’s central bank announced new measures on Wednesday to boost liquidity in Singapore dollar-denominated corporate bonds in a bid to further develop the city-state’s financial markets.

Monetary Authority of Singapore (MAS) managing director Ravi Menon also said the deleveraging by European banks was far from over and that Asian banks lacked the capacity to fill the gap in trade financing.

“The U.S. dollar loan-to-deposit ratios of Asia ex-Japan banks are already at elevated levels and could be a constraint,” he told an investment conference.

Asian banks may be more selective about the risks they want to take, given the uncertain global outlook, he added.

MAS said it will provide swap liquidity to primary dealer banks handling Singapore dollar-denominated debt issuance for foreign companies to reduce uncertainty in pricing.

The central bank will also help the industry to create a Singapore dollar corporate debt securities lending facility and introduce a price discovery platform where participants will contribute end-of-day prices for Singapore dollar corporate bonds. (Reporting by Kevin Lim; Editing by John O‘Callaghan)

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