MAS flags some riskier practices in bank lending here

Singapore

THE Monetary Authority of Singapore (MAS) on Monday warned banks to watch their credit underwriting standards, with particular reference to shifts in trade finance.

In an MAS review that pinpointed heightened competition in a low-interest-rate environment, the central bank noted two "emerging trends" - that of substituting trade-finance facilities with working capital facilities, and that of pricing loans below the hurdle rate, a benchmark that captures the amount of return a bank seeks as compensation for taking lending risks.