Shadow Banking in Singapore

[Dr Christopher Cheok C S]

In recent years, we have online investment platforms, finance startups, robo-advisors, startups, foreign brokerages that offer short-term deposit schemes that pay higher than our bank/finance companies deposit rates. Let's say I placed my deposits with enHUATawaYE+ (eHY+).

Eg. Our bank offer 3.2%pa for your fixed deposits, and eHY+ offer 4.2%pa for your deposits with shorter lock-in period or tenors.

These institutions operate like shadow banks in our financial market, I had tried them and notified that they were vague in their disclosures, and often cite "MAS" or "SDIC" to mislead investors.

I shall not name them here.
I am also not refering to real digital banks in Singapore (covered by SDIC directly).

 

[Dr Christopher Cheok C S]

When you asked if these entities were safe, they will tell you that they are "regulated by MAS". In actual fact, they are just licensed by MAS or approved by MAS to operate in Singapore, by no means, they are "backed by MAS".

When you asked if your deposits with them are safe, they tell you that your deposits are kept in SDIC-banks. SDIC guarantees up to $75,000 deposit for each person per bank in SGD accounts. However, in actual fact, when your deposits are with them and when they deposit into a local bank, SDIC guarantees them directly, not you.

• It is like you place $50,000 deposit with realDonaldTrump.
• realDonaldTrump places the money with OCBC.
• SDIC guarantees realDonaldTrump's money in OCBC, not you.

*SDIC coverage may increase in future.

 

[k1976]

Like that Boss John agreed?

 

[Dr Christopher Cheok C S]

Misleading Example 1
SDIC covers SGD deposits (up to $75000) per person, per bank. Technically, eHY+ will gather funds with many people and deposit under their name, so they exceeded the $75000 limit.


Misleading Example 2
eHY+ went on to tell you, no doubt they exceed the $75000 limit, they have separate accounts in custodian banks for you, and these are separate from their finances, with these SDIC banks. Some of these funds may also be placed with reputable foreign brokers such as SAXO, Tiger, Moomoo (Intermediaries) who have such arrangements with banks.

Think of it this way, it's like you place deposits with realDonaldTrump, then realDonaldTrump places the deposits with @eatshitndie who got such arrangements with banks or finance companies. The bank guarantees @eatshitndie, who in turn guarantees realDonaldTrump, who in turn guarantees you. Wah so many layers, either one of us die = you die.


Misleading Example 3
eHY+ knows your doubt and outright tell you that your funds are held in which bank. However, they will never tell you that your deposits may have been converted and placed in foreign currency bank accounts. For examples, Japanese Yen with Sumitomo Mitsui Bank, AUD with ANZ Bank, or even Yen, NZD or AUD with DBS.

Ask yourself this, how do they make money? Sumitomo Mitsui Bank's cost of funds is almost interest-free, Sumitomo Mitsui bank will not be so desperate for your deposits and ask eHY+ act as their proxy to obtain your funds. Your money gives them the bullet to speculate in foreign currencies.

Look, an outright one-year forward contract for AUD will cost eHY+ "premiums" that are higher than your typical bank saving interests. So if eHY+ wanna bet Yen appreciation (because Yen dropped a lot recently), your SGD deposits could be converted JPY deposits or used as collateral with a SDIC bank or intermediaries. Bear in mind that SDIC only covers SGD deposits, not foreign currencies in SDIC banks.

Imagine their currency bets go wrong, eg. Japanese Yen keeps depreciating, eHY+ will not be financially-sound.

I have cited just one one illustration of how they aim to make money from yours. Think of the underlying risks that they did not disclose to you.

 

[k1976]

https://www.channelnewsasia.com/singapore/mitchell-ong-audrey-fang-killing-murder-spain-4285196


The report by Levante El Mercantil Valenciano said there might have been an "economic motive" for the killing, adding that Ms Fang had reportedly transferred money to an unidentified third person.

Sources also told La Verdad of an "economic motive", corroborating Levante El Mercantil Valenciano's report, while adding that she had participated in a type of investment fund.

However, it is not ruled out that the murder was committed over a sentimental issue.

 

[k1976]

Misleading Example 1
SDIC covers SGD deposits (up to $75000) per person, per bank. Technically, eHY+ will gather funds with many people and deposit under their name, so they exceeded the $75000 limit.

Misleading Example 2
eHY+ went on to tell you, no doubt they exceed the $75000 limit, they have separate accounts in custodian banks for you, and these are separate from their finances, with these SDIC banks. Some of these funds may also be placed with reputable foreign brokers such as SAXO, Tiger, Moomoo (Intermediaries) who have such arrangements with banks.

Think of it this way, it's like you place deposits with realDonaldTrump, then realDonaldTrump places the deposits with @eatshitndie who got such arrangements with banks or finance companies. The bank guarantees @eatshitndie, who in turn guarantees realDonaldTrump, who in turn guarantees you. Wah so many layers, either one of us die = you die.


Misleading Example 3
eHY+ knows your doubt and outright tell you that your funds are held in which bank. However, they will never tell you that your deposits have been converted to foreign currencies. For examples, Yen in Sumitomo Mitsui Bank, AUD in ANZ Bank, or even Yen, NZD or AUD with DBS. Your money gives them the bullet to speculate in foreign currencies.

Ask yourself this, how do they make money? and Sumitomo Mitsui Bank's cost of funds is almost interest-free, Sumitomo Mitsui bank will not be so desperate for your deposits and ask eHY+ act as their proxy to obtain your funds.

Look, an outright one-year forward contract for AUD will cost eHY+ "premiums" that are higher than your typical bank saving interests. So if eHY+ wanna bet Yen appreciation (because Yen dropped a lot recently), your SGD deposits could be converted to a foreign-currency deposit with a SDIC bank. Bear in mind that SDIC only covers SGD deposits, not foreign currencies in SDIC banks. Alternatively, your deposits could be just used as collateral with SDIC-Banks or intermediaries for their riskier bets.

Imagine their currency bets go wrong, eg. Japanese Yen keeps depreciating, eHY+ will not be financially-sound.
Just think of the underlying risks that they did not disclose to you.

Thanks for sharing

 

[KingFook Sr]

In recent years, we have online investment platforms, finance startups, robo-advisors, startups, foreign brokerages that offer short-term deposit schemes that pay higher than our bank/finance companies deposit rates. Let's say I placed my deposits with enHUATawaYE+ (eHY+).

Eg. Our bank offer 3.2%pa for your fixed deposits, and eHY+ offer 4.2%pa for your deposits with shorter lock-in period or tenors.

These institutions operate like shadow banks in our financial market, I had tried them and notified that they were vague in their disclosures, and often cite "MAS" or "SDIC" to mislead investors.

I shall not name them here.
I am also not refering to real digital banks in Singapore (covered by SDIC directly).

OK if MAS approved.
Otherwise, dun touch.

 

[k1976]

I

Misleading Example 1
SDIC covers SGD deposits (up to $75000) per person, per bank. Technically, eHY+ will gather funds with many people and deposit under their name, so they exceeded the $75000 limit.

Misleading Example 2
eHY+ went on to tell you, no doubt they exceed the $75000 limit, they have separate accounts in custodian banks for you, and these are separate from their finances, with these SDIC banks. Some of these funds may also be placed with reputable foreign brokers such as SAXO, Tiger, Moomoo (Intermediaries) who have such arrangements with banks.

Think of it this way, it's like you place deposits with realDonaldTrump, then realDonaldTrump places the deposits with @eatshitndie who got such arrangements with banks or finance companies. The bank guarantees @eatshitndie, who in turn guarantees realDonaldTrump, who in turn guarantees you. Wah so many layers, either one of us die = you die.


Misleading Example 3
eHY+ knows your doubt and outright tell you that your funds are held in which bank. However, they will never tell you that your deposits have been converted to foreign currencies. For examples, Yen in Sumitomo Mitsui Bank, AUD in ANZ Bank, or even Yen, NZD or AUD with DBS. Your money gives them the bullet to speculate in foreign currencies.

Ask yourself this, how do they make money? and Sumitomo Mitsui Bank's cost of funds is almost interest-free, Sumitomo Mitsui bank will not be so desperate for your deposits and ask eHY+ act as their proxy to obtain your funds.

Look, an outright one-year forward contract for AUD will cost eHY+ "premiums" that are higher than your typical bank saving interests. So if eHY+ wanna bet Yen appreciation (because Yen dropped a lot recently), your SGD deposits could be converted to a foreign-currency deposit with a SDIC bank. Bear in mind that SDIC only covers SGD deposits, not foreign currencies in SDIC banks. Alternatively, your deposits could be just used as collateral with SDIC-Banks or intermediaries for their riskier bets.

Imagine their currency bets go wrong, eg. Japanese Yen keeps depreciating, eHY+ will not be financially-sound.
Just think of the underlying risks that they did not disclose to you.

Ish it a Yen Carry Trade?

 

[k1976]

Misleading Example 1
SDIC covers SGD deposits (up to $75000) per person, per bank. Technically, eHY+ will gather funds with many people and deposit under their name, so they exceeded the $75000 limit.

Misleading Example 2
eHY+ went on to tell you, no doubt they exceed the $75000 limit, they have separate accounts in custodian banks for you, and these are separate from their finances, with these SDIC banks. Some of these funds may also be placed with reputable foreign brokers such as SAXO, Tiger, Moomoo (Intermediaries) who have such arrangements with banks.

Think of it this way, it's like you place deposits with realDonaldTrump, then realDonaldTrump places the deposits with @eatshitndie who got such arrangements with banks or finance companies. The bank guarantees @eatshitndie, who in turn guarantees realDonaldTrump, who in turn guarantees you. Wah so many layers, either one of us die = you die.


Misleading Example 3
eHY+ knows your doubt and outright tell you that your funds are held in which bank. However, they will never tell you that your deposits have been converted to foreign currencies. For examples, Yen in Sumitomo Mitsui Bank, AUD in ANZ Bank, or even Yen, NZD or AUD with DBS. Your money gives them the bullet to speculate in foreign currencies.

Ask yourself this, how do they make money? and Sumitomo Mitsui Bank's cost of funds is almost interest-free, Sumitomo Mitsui bank will not be so desperate for your deposits and ask eHY+ act as their proxy to obtain your funds.

Look, an outright one-year forward contract for AUD will cost eHY+ "premiums" that are higher than your typical bank saving interests. So if eHY+ wanna bet Yen appreciation (because Yen dropped a lot recently), your SGD deposits could be converted to a foreign-currency deposit with a SDIC bank. Bear in mind that SDIC only covers SGD deposits, not foreign currencies in SDIC banks. Alternatively, your deposits could be just used as collateral with SDIC-Banks or intermediaries for their riskier bets.

Imagine their currency bets go wrong, eg. Japanese Yen keeps depreciating, eHY+ will not be financially-sound.
Just think of the underlying risks that they did not disclose to you.

Why u put $$$$$ into a bank that will fail in the 1st place?

 

[k1976]

https://en.m.wikipedia.org/wiki/Systemically_important_financial_institution

For your reading reference when u are free

 

[Dr Christopher Cheok C S]

Like that Boss John agreed?

Different league, he is private banking customer. Can do risky thingies.

 

[k1976]

Different lead, he is private banking customer. Can do risky thingies.

We simpur peepur do simple things

 

[k1976]

Different lead, he is private banking customer. Can do risky thingies.

We simpur peepur do simple

Different lead, he is private banking customer. Can do risky thingies.

Do consider GSIB, kym?

 

[k1976]

Most important ish...we dun block peepur from Huat Big Big de woh

 

[Dr Christopher Cheok C S]

OK if MAS approved.
Otherwise, dun touch.

eHY+ activities are not transparent.
Likewise DBS is also MAS-licensed but they can play along the grey areas:

• Some DBS RMs are known to take kopi money from weaker SMEs for approving their loans.
• Some RMs assigned to sell clients Universal Life policies for fat commissions and then DBS became nominees of these policies and gives loans to these customers, backed with these policies. Can make money 3x and lend money to an otherwise unqualified client.
• DBS Singapore also lend their clients money to lend money to DBS China for liquidity purposes.

It is like printing money out of thin air. Grey areas of banking.

 

[k1976]

eHY+ activities are not transparent.
Likewise DBS is also MAS-licensed but they can play along the grey areas:

• Some DBS RMs are known to take kopi money from weaker SMEs for approving their loans.
• Some RMs assigned to sell clients Universal Life policies for fat commissions and then DBS became nominees of these policies and gives loans to these customers, backed with these policies. Can make money 3x and lend money to an otherwise unqualified client.
• DBS Singapore also lend their clients money to lend money to DBS China for liquidity purposes.

It is like printing money out of thin air. Grey areas of banking.

Ish all smoke and mirrors

As long as the wheel can turn, nobody really cares de woh

 

[Dr Christopher Cheok C S]

Digital banks losses are increasing
https://fintechnews.sg/97627/digita...sses-higher-despite-tripling-of-total-income/

• GXS, founded by Grab/Singtel, saw losses expanded to S$208.2 million in 2023 from S$131.1 million the previous year.
• Maribank founded by Sea Ltd (Shopee) in 2021, saw losses rising to S$52.17 million from S$40.4 million.

 

[laksaboy]

Thanks to the Useless Son for opening a can of worms.

I am reminded of the media coercion of the masses asking Sinkies to switch to a 'private' electricity supplier some years ago. What happened in the end? Consolidation towards a few GLCs.

Lights out for some electricity retailers in Singapore​

20 Oct 2021
https://www.channelnewsasia.com/sin...xit-singapore-what-it-means-consumers-2253931

 

[liamricci]

Is it for real? I discussed this with the plainscapital bank customer service, and they seemed to have no knowledge of any such developments. It’s surprising to hear about the potential benefits of contributing to a TSP, especially when my current bank contacts weren’t aware of it. I’m wondering if there might be some confusion or if this is something that hasn’t been widely communicated. It might be worth following up with other financial advisors or institutions to get a clearer picture and ensure that I’m getting accurate information about these tax benefits and retirement plan options.

 

[worcer]

Another kind of subprime crisis?