The Monetary Authority of Singapore (MAS) has reconfirmed that Singapore ’s banks are resilient, with strong financial and capital positions, and Singapore ’s triple-A rating from major rating agencies attests to the country’s economic and financial strength.

In a statement issued on January 14 in response to an article in Forbes which held that Singapore was heading for an "Iceland-style meltdown", the MAS said: “Singapore is not facing a credit bubble that puts the country or its banking system at any risk of crisis” because its property market is stabilising, household balance sheets are strong and the financial system is robust.

According to MAS, although property prices rose by an average of 12 percent per year during 2010 and 2011, private residential property prices increased by only three percent in 2012 and one percent in 2013, and declined by 0.8 percent in the fourth quarter of 2013.

New housing loans have also been declining, falling by 35 percent in the third quarter of 2013 from a year ago. The average loan-to-value ratio of outstanding housing loans was 47 percent as at the third quarter of 2013.

It cited the recent Financial Sector Assessment Programme (FSAP) by the International Monetary Fund that found that Singapore ’s financial system would “remain sound even under severe stress scenarios, which include a sharp increase in interest rates together with a steep decline in property prices”.

MAS acknowledged that low global interest rates have stimulated credit growth and an increase in property prices in recent years and “That is why the government and MAS have taken decisive steps to cool property demand and prevent excessive leverage”.-VNA