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10 APRIL 2024

Thursday, June 29, 2017

Shaming banks better than fines in 1MDB scandal, says Singapore

Malaysia may have slapped financial institutions involved in the 1MDB scandal with the "highest" administrative fines in the country's history, but our neighbour down south believes in a different approach.
In dealing with the 1MDB scandal, the Monetary Authority of Singapore (MAS) said shame has a greater effect than fines.
MAS managing director Ravi Menon said huge fines would only hurt shareholders instead of the upper management and those responsible.
"And that to me is one of the serious failings of the current regime globally. That people continue to do wrong things because they're not being held personally liable and responsible," Menon was quoted as saying by the Straits Times.
The daily then cited him as saying that the shame of being named in a MAS announcement for wrongdoing was a stronger deterrent that would change behaviour.
He added that banning individuals involved from working in the financial sector also served as a strong deterrent.
MAS had fined eight banks in the past year over 1MDB-related offences.
Last year, the Singapore authority fined Standard Chartered Bank and Coutts & Co Ltd SG$5.2 million and SG$2.4 million respectively. 

Singapore had also ordered Falcon Private Bank and BSI Bank out of the country for serious breaches of anti-money laundering rules in relation to the scandal.
Actions have also been taken against banks by authorities in Switzerland and Luxembourg.
In Malaysia, former Bank Negara governor Zeti Akhtar Aziz said the central bank was unable to carry out any action on the 1MDB scandal, except for slapping the "highest" administrative fines against the financial institutions involved.- Mkini

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