Singapore gives top-level briefings to reassure foreign banks on stability

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Singapore has given international banks an unusual series of top-level briefings on geopolitics as it seeks to reassure them that the financial hub can remain stable and neutral at a time of rising tension between China and the west. 

In meetings organised by Prime Minister Lee Hsien Loong’s office, officials discussed US-China rivalry, the Middle East conflict, the Ukraine war and the $2.2bn money-laundering scandal that rocked the city-state in August, according to four people with knowledge of the talks. 

The meetings have been held over the past six months with US and European financial institutions including Citigroup and Standard Chartered as well as some local banks, they said.

Co-ordinating minister for national security Teo Chee Hean, a top public official, led many of the discussions. Foreign minister Vivian Balakrishnan, trade and industry minister Gan Kim Yong and minister for home affairs R Shanmugam, were also involved in some of the briefings, the people said. 

The city-state has plotted a careful path as a neutral financial centre at a time of rising tensions between Beijing and Washington and the briefings show Singapore’s determination to reinforce its neutrality after large inflows of people and capital from mainland China.

One attendee said the US-China tensions “featured heavily” in the talks and officials sought to correct a “misperception” that Singapore is tilting towards China. “They were trying to explain that Singapore is not neutral but is friendly with both and chooses according to its own interests depending on the situation,” they said.

Another person who attended a briefing said that the government sought to reassure those present that financial institutions were not going to face unnecessary regulation in the wake of a $2.2bn money laundering investigation, the largest in the city-state’s history. 

Ten foreigners linked to China have been charged with money laundering and the financial regulator is probing whether lenders and other institutions took necessary steps to mitigate risks as part of the probe. 

Banks have since significantly tightened up scrutiny of clients, with approvals for setting up private banking accounts and new family offices in the city-state now stretching into months and in some cases more than one year. 

Ministers overall sought to emphasise Singapore’s safety, reliability and trustworthiness amid geopolitical uncertainty. 

“While Singapore regularly holds meetings with business groups, briefings by such senior ministers are not routine. The government [being] proactive, especially after the money laundering episode and the current global political and economic uncertainty,” one person familiar with the briefings said. “Singapore’s global stock as a financial hub is rising and the risks of being misunderstood and bad actors operating here have become greater.”

The prime minister’s office said public officials have been engaging with various groups, including banks and finance institutions, for decades. “We engage on a variety of issues — not only on international developments but also economic and social issues . . . Participants appreciate the opportunity to engage with ministers and public officials,” Lee’s office said.

A US bank executive said the meetings had been well received by local employees, though senior leadership were surprised that the prime minister’s office was contacting the business on geopolitical matters. The inclusion of ministers such as Hean, a former two-star rear-admiral who has been serving as co-ordinating minister for national security since 2015, “raised eyebrows”, they said.

“The ministers attending are among the top in Singapore, it is not something you say no to but it was surprising,” the person said. “The overall message we got was they want to make clearer that Singapore is still the safest, most reliable financial hub in the region.”

Standard Chartered and Citigroup declined to comment.