Bank Negara received report from S'pore counterpart on 1MDB

26 May 2015 / 17:50 H.

KUALA LUMPUR: Bank Negara today confirmed that it received a report from its Singaporean counterpart – the Monetary Authority of Singapore (MAS) on 1MDB's investment with BSI Bank Singapore.
Bank Negara Governor, Tan Sri Dr Zeti Akhtar Aziz (pix) said the findings were highly confidential and could not be revealed.
"This information can only be extended to other enforcement agencies under Malaysian jurisdiction," she told a press conference after the launch of the Labuan Financial Services Authority Annual Report 2014 today.
She said the international community would not cooperate with us in the future if the information was released.
"Therefore, disclosure will stop all investigations if we talk about it," she said.
Zeti also declined to reveal when MAS provided the information.
Earlier in March, MAS said it was in touch with BNM over investigations into 1MDB and told Reuters that it is committed to assist within the full ambit of its laws, but could not provide details as investigations were ongoing.
1MDB said it had redeemed US$1.1 billion (RM3.99 billion) in cash from the Cayman Islands and subsequently parked it into BSI Bank, a unit of Swiss asset manager BSI.
However, the Finance Ministry said last week that the investment funds from Cayman Islands have been redeemed in the form of assets in US currency, which is being kept in BSI Bank.
Zeti reiterated that a potential default of 1MDB’s loans will not have systemic implications on the country’s banking system.
“When an organisation or entity takes loans from the banking sector, if they exceed more than RM2 billion, they are monitored very closely and they are put on the watch-list of the central bank. We will make the assessments and this is published in the financial stability report as to whether they will have systemic implications on the banking systems,” she said.
She said stress tests have indicated that the country’s banking system will remain sound and well capitalised even in the event of a default by 1MDB.
“We cannot comment on what effects it has if it is borrowing from banks that are outside our jurisdictions. I have already commented that some banks will suffer lower profits but we view that the banks will continue to function,” she added.

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