MAS kpkb over Moody Report last week. Today, press panic button

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An honorable member of the Coffee Shop Has Just Posted the Following:

Wait a minute, this has to be deja vu. Barely a week ago, when Moody's Investors Service downgraded the outlook on Singapore's banking system from "stable" to "negative", the Monetary Authority of Singapore (MAS) was quick to come up with an assurance that everything is honky dory. Don't worry about the interest rate hikes, go on buying those properties.

Now (yesterday), MAS is saying the rising household debt in the city state is worrying, and it is “important to act now to limit build-up of leverage”. MAS managing director Ravi Menon reported that 5 to 10 per cent “have probably over-leveraged on their property purchases” — one couple was reportedly granted a new home loan of $400,000 based on a loan repayment schedule amounting to 90 percent of their $6,000 total monthly income. If mortgage rates were to rise by 3 percentage points, MAS warned that the proportion of borrowers at risk could reach 10 to 15 per cent. Which was basically the reason that prompted Moody to revise it's assessment ("Hike in rates and fall in property prices may pose risks to financial stability").

- http://singaporedesk.blogspot.sg/201...panic-sir.html


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