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SINGAPORE: Employees’ Get together Member of Parliament Jamus Lim wrote in a Fb put up on Mar 23 (Thursday) that despite the current collapse of Silicon Valley Financial institution (SVB) and Credit score Suisse, he doesn’t consider that is “symptomatic of the start of a extra generalized banking disaster,” although he famous that this could possibly be a case of “well-known final phrases.”
Nonetheless, the Sengkang GRC MP, an Affiliate Professor of Economics at ESSEC Enterprise College, identified that there are “actual imbalances and stressors in monetary markets, together with a buildup of sovereign debt within the aftermath of the pandemic, and eroding international trade reserves in a lot of rising Asian economies,” and added that these “factors of vulnerability” are greater problems with concern for him.
Assoc Prof Lim added that ought to these weaknesses be triggered, this might give rise to a graver downside.
“The large devaluation because of a forex disaster might result in increased import costs that give rise to an inflation disaster, for instance, or make curiosity funds on exterior debt insufferable, giving rise to a sovereign debt disaster,” he added. “These then induce defaults on non-public borrowing that makes the banking system fragile.”
Assoc Prof Lim was invited just lately to ship a visitor lecture as a part of the distinguished speaker collection in Economics and Society on the School of Integrative Research on the Singapore Administration College.
He spoke on the Political Financial system of Worldwide Monetary Crises, a well timed topic given the collapse of SVB and Credit score Suisse, and one he’s been notably all in favour of because the Asian monetary disaster of 1997-1998, which he described as “an expertise that formed the views of a whole era of Asian economists.”
“I’ve printed a bunch of papers on the subject, and my doctoral dissertation analysis handled the intersection of such crises and political financial system matter (therefore my alternative of subject for the lecture),” he added.
Assoc Prof Lim was additionally interviewed regarding UBS’ buy of Credit score Suisse and its implications, which will be discovered right here. /TISG
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