IMF-亚太地区的金融互联性_近期变化及其对新加坡的影响（英）-2025.8_19页_2mb

Summary: Financial Interconnectedness in Asia and the Pacific—Recent Shifts and Implications for Singapore

Core Content

This IMF Selected Issues Paper (SIP/2025/114) explores the evolving financial interconnectedness in Asia and its implications for Singapore. The paper emphasizes the contrast between Asia's strong trade integration and its relatively limited financial integration with the rest of the world, highlighting Singapore's role as a key financial intermediary.

Main Points

• Asia's Financial Integration Lags Behind Trade Integration: While Asia has become a major player in global trade, its financial integration remains limited. Advanced economies, including Singapore, have driven financial integration, whereas emerging markets have not seen significant progress.

• FDI and Trade Networks Align Closely: The FDI network in Asia closely mirrors the trade network, indicating that trade relationships are a strong indicator of investment flows. In contrast, portfolio investment networks are dominated by advanced economies, with Singapore playing a stable but not dominant role.

• Singapore as a Financial Hub: Singapore's banking sector is a crucial intermediary between advanced economies and emerging Asian markets. It holds a significant share of cross-border assets and liabilities, with a large portion of its financial activity involving foreign currencies.

• Cross-Border and FX Funding Risks: Singaporean banks are exposed to cross-border and FX funding risks due to their extensive international operations. These risks are exacerbated by global macroeconomic shocks, tight financial conditions, and liquidity shortages in U.S. dollars.

• Resilience of Singapore's Banking System: Despite these risks, Singaporean banks have shown resilience, particularly after the 2024 stress tests conducted by the Monetary Authority of Singapore (MAS). The stress tests indicated that banks maintain sufficient capital and liquidity buffers, meeting or exceeding regulatory requirements.

Key Findings

• Trade and FDI Relationship: The gravity model analysis shows that trade is a significant driver of FDI flows but not of portfolio investments. A one percentage point increase in bilateral trade as a percentage of average GDP is associated with a 0.5 percentage point increase in FDI stock.

• Singapore's Financial Profile:

  • Singaporean banks have substantial cross-border exposures, with claims on non-residents reaching 116.6% of GDP in 2024.
  • Liabilities to non-residents totaled 194.4% of GDP, with a significant portion coming from non-bank deposits and interbank loans.
  • Local D-SIBs (DBS, UOB, OCBC) hold about 52% of the banking sector assets and have a diversified loan portfolio across regions, with a large share of loans and deposits denominated in foreign currencies.

• Risk Mitigation Efforts: The authorities continue to implement measures to mitigate cross-border and FX funding risks, including liquidity stress tests and regulatory frameworks. Singapore's banks have improved their resilience against FX risks, with their FX liquidity coverage ratio (LCR) reaching close to 100% in 2023 and 2024.

Implications for Singapore

• Singapore's financial sector plays a pivotal role in regional financial integration, acting as a bridge between advanced economies and emerging markets.
• However, this role exposes Singaporean banks to systemic risks, especially from global and regional shocks.
• The paper underscores the importance of maintaining financial stability and resilience in the face of increasing geoeconomic fragmentation and evolving financial linkages.

Conclusion

• The paper concludes that while Singapore continues to be a leader in financial integration in Asia, the sector remains vulnerable to cross-border and FX risks.
• Continued efforts by authorities to strengthen regulatory frameworks and monitor financial linkages are essential to ensure the stability of Singapore's financial system and its role in the broader Asian financial network.