Who was the Finance minister when the likes of DBAss was allowed to con the aunties and ah beks of their SeePF savings?
TAN KIN LIAN
Consumers need protection
Mr Tan Kin Lian, former chief executive of NTUC Income. He is now a consultant and pens a blog (at tankinlian.blogspot.com) to educate the public about financial matters
'I was shocked to learn about the high risks taken by the investment banks. It appears that they have short-term loans that are many times more than the shareholders' funds.
These short-term loans have to be rolled over every few months. What happened to the risk management practices of these financial institutions?
It is also highly risky for AIG to take on so much of credit default swaps, especially as the risk of failure is likely to hit many insured credit lines at the same time.
There was an unsound accumulation of risks that could cause catastrophic losses, which is what has now happened.
Regulators have asked firms to strengthen their risk-management practices in recent years. There has been a lot of lip service, but the real issues have still not been addressed.
It is time for the regulators to rethink their failed approach of leaving issues to be sorted out by the market.
In the meantime, the markets will continue to be highly volatile over the next few months.
Many investors will lose confidence in the financial markets and the financial institutions and it will take several years for the confidence to be regained.
Singapore will have to suffer retail investors' loss of confidence in the financial markets and the integrity of the financial institutions.
Many investors have been disappointed at the low interest rate on bank deposits for many years. Now, they have to suffer large capital losses from their investments, including structured products that were marketed to them as being safe alternatives to bank deposits.
This loss of confidence will have a negative impact on the economy for a few years.
In terms of lessons learnt, I think the financial markets need to be better regulated.
There has to be stronger protection of consumers. Regulators should disallow unsuitable products from being marketed to the retail investors.
Regulators also need to take stronger action against financial institutions that fail in their duty to provide good advice to their customers.'
Fiona Chan
TAN KIN LIAN
Consumers need protection
Mr Tan Kin Lian, former chief executive of NTUC Income. He is now a consultant and pens a blog (at tankinlian.blogspot.com) to educate the public about financial matters
'I was shocked to learn about the high risks taken by the investment banks. It appears that they have short-term loans that are many times more than the shareholders' funds.
These short-term loans have to be rolled over every few months. What happened to the risk management practices of these financial institutions?
It is also highly risky for AIG to take on so much of credit default swaps, especially as the risk of failure is likely to hit many insured credit lines at the same time.
There was an unsound accumulation of risks that could cause catastrophic losses, which is what has now happened.
Regulators have asked firms to strengthen their risk-management practices in recent years. There has been a lot of lip service, but the real issues have still not been addressed.
It is time for the regulators to rethink their failed approach of leaving issues to be sorted out by the market.
In the meantime, the markets will continue to be highly volatile over the next few months.
Many investors will lose confidence in the financial markets and the financial institutions and it will take several years for the confidence to be regained.
Singapore will have to suffer retail investors' loss of confidence in the financial markets and the integrity of the financial institutions.
Many investors have been disappointed at the low interest rate on bank deposits for many years. Now, they have to suffer large capital losses from their investments, including structured products that were marketed to them as being safe alternatives to bank deposits.
This loss of confidence will have a negative impact on the economy for a few years.
In terms of lessons learnt, I think the financial markets need to be better regulated.
There has to be stronger protection of consumers. Regulators should disallow unsuitable products from being marketed to the retail investors.
Regulators also need to take stronger action against financial institutions that fail in their duty to provide good advice to their customers.'
Fiona Chan
