RTTNews - Monday, the Monetary Authority of Singapore and De Nederlandsche Bank signed in a Memorandum of Understanding for an arrangement to increase liquidity provision to banks in non-routine situations.
Under the immediately effective arrangement, Dutch banks operating in Singapore or Singapore banks operating in the Netherlands are allowed to approach the MAS or DNB for liquidity assistance when necessary.
This arrangement will enhance the banks' confidence in carrying out their business in the two markets, both central banks said in a joint statement.
Cross border cooperation, including this linkage with DNB, assures global banks operating in Singapore of access to liquidity even under extreme conditions, and enhances the robustness of our financial center which has strong international linkages, said Heng Swee Keat, Managing Director of the MAS.
According to the joint statement, the advantage of this arrangement is that the liquidity providing central bank can quickly access an alternative and reliable source of collateral in addition to those under routine liquidity arrangements.
DNB Governor Nout Wellink said, This type of linkage between central banks increases their ability to provide for back-up for the international liquidity distribution.
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