Bank secrecy laws a blow for Singapore

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SingaporeNew regulations for private banks in Singapore could threaten the city state’s status as an offshore financial hub and hurt its competitiveness against other offshore havens such as Hong Kong or Dubai, sector analysts fear.

Starting July 1, any bank in Singapore suspected of facilitating tax evasion or having inadequate controls will be punished with fines, criminal cases and possible loss of license to operate in Singapore, a reaction of the city state to tighter regulations in the global banking system after the US and Europe have changed the rules on bank secrecy.

Reportedly, some banks are already preparing to relocate to Hong Kong or even to Dubai to avoid implementing new compliance rules.

This could be a blow for the entire sector – depending on how the new banking rules are perceived by clients.

London-based research firm Wealth Insight recently estimated that Singapore could surpass Switzerland as the world’s largest offshore center by 2020.

Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth, accounting for 34 per cent of the $8.15 trillion in total global wealth. Yet the report said Singapore could overtake Switzerland in offshore assets under management by 2020. It said Swiss offshore assets could fall below $2 trillion by 2016, while Singapore’s assets could more than quadruple by then.

Some analyst say that even for clients who don’t deposit “dodgy” money the regulations are inconvenient because the want to rely on confidentiality for other reasons. However, others say that the new regulations will improve Singapore’s status as wealth management center as illicit funds will stay out and, instead, the “right kind” of clients and funds would be attracted.

Half of Singapore’s offshore wealth is currently coming from China. Asia as a whole has recently replaced North America as the region with the most billionaires globally.

 

 

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Reading Time: 2 minutes

New regulations for private banks in Singapore could threaten the city state’s status as an offshore financial hub and hurt its competitiveness against other offshore havens such as Hong Kong or Dubai, sector analysts fear.

Reading Time: 2 minutes

SingaporeNew regulations for private banks in Singapore could threaten the city state’s status as an offshore financial hub and hurt its competitiveness against other offshore havens such as Hong Kong or Dubai, sector analysts fear.

Starting July 1, any bank in Singapore suspected of facilitating tax evasion or having inadequate controls will be punished with fines, criminal cases and possible loss of license to operate in Singapore, a reaction of the city state to tighter regulations in the global banking system after the US and Europe have changed the rules on bank secrecy.

Reportedly, some banks are already preparing to relocate to Hong Kong or even to Dubai to avoid implementing new compliance rules.

This could be a blow for the entire sector – depending on how the new banking rules are perceived by clients.

London-based research firm Wealth Insight recently estimated that Singapore could surpass Switzerland as the world’s largest offshore center by 2020.

Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth, accounting for 34 per cent of the $8.15 trillion in total global wealth. Yet the report said Singapore could overtake Switzerland in offshore assets under management by 2020. It said Swiss offshore assets could fall below $2 trillion by 2016, while Singapore’s assets could more than quadruple by then.

Some analyst say that even for clients who don’t deposit “dodgy” money the regulations are inconvenient because the want to rely on confidentiality for other reasons. However, others say that the new regulations will improve Singapore’s status as wealth management center as illicit funds will stay out and, instead, the “right kind” of clients and funds would be attracted.

Half of Singapore’s offshore wealth is currently coming from China. Asia as a whole has recently replaced North America as the region with the most billionaires globally.

 

 

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