Tan Kin Lian's Blog: TODAY: On the issue of responsibility

Friday, July 17, 2009

TODAY: On the issue of responsibility

MAS was asked about its accountability in the minibonds saga at the press conference:

About the Lehman saga, there were some comments that MAS sort of allowed such instruments to be marketed to consumers. Do you think MAS should take some responsibility?

Mr Heng Swee Keat, managing director of MAS, replied: “I have highlighted a number of things that MAS has been doing in terms of regulation and the supervision of financial institutions (FIs).

“And if you go through the investigation report which has been issued, you will notice that there is a fairly detailed report that goes into the operation of the FIs, and quite a lot of those are operational lapses.

“I emphasised in my remarks that those are the actions that we expect board and senior management of FIs to take, to ensure that guidelines and standards are complied with.”

Would it be fair to say that MAS has no responsibility for the crisis?

Mr Shane Tregillis, MAS deputy managing director of market conduct, said: “We outlined the steps that we took before. In terms of setting the rules, in terms of inspecting, you can clearly outline what we have done since the problems emerged.”

24 comments:

Anonymous said...: I attended a seminar on how to respond to straight and difficult questions. That is the way I would have responded.; July 17, 2009 10:21 PM
Daoyi said...: Hi Mr Tan,

An article about the state of financial planning in Australia. You might like to post it on your blog for other readers.

http://business.smh.com.au/business/are-you-being-served-20090717-do6x.html

Daoyi; July 17, 2009 11:03 PM
Anonymous said...: Rubbish!!! if there was regulation, whether from product or sales perspective the debacle would have been averted.It means double layers of check but no, there wasn't. First the products were not vetted. Second the sales reps were left to push the products as they liked without complying with the rules.
Thirdly, MAS was on vacation; July 18, 2009 1:04 AM
Anonymous said...: If the FI did not follow the rules accordingly and mislead their customer into buying something that not suitable, why must the customer have to suffer a hugh lost because of their misleading act?!!

I became one of the victim partly because I have trust too much in S'pore government; I never know the government that confront so hard against toxic drugs and cigarette, would allow CL this kind of toxic financial product be easily market to general public.

Yes, I have learnt my lesson, that is: nothing worth trusty anymopre.; July 18, 2009 9:07 AM
Unknown said...: I refer to the statement "I attended a seminar on how to respond to straight and difficult questions."

- I attended a similar course many years ago. It taught me to give soothing and acceptable answers to difficult questions.

- it was a very effective course. The course fees were also very low.

- Contrast this with the expensive Kepner-Tregoe course that taught executives HOW TO MAKE GOOD DECISIONS AND SOLVE DIFFICULT PROBLEMS. (there are actually standard methodologies that can be applied in real world conditions).

- I remember asking myself what choice should I make:
a) be the the corporate high-flier who rotates once every year from one posting to another. Avoid controversy. Avoid solving difficult problems which are controversial. And pretend to work (wayang) by spending my time "reorganising" the workflow of my subordinates

b) actually try to solve difficult problems. And risk getting blamed and fired for my sincere efforts.

I'm just recounting my own life's choices. No attempts at any forms of insinuations.; July 18, 2009 10:42 AM
Anonymous said...: The answers given by the two MAS
directors were irrelevant.Can we post a similar question to MOH if
toxic drugs were sold to the public and no responsibility on MOH at all?
The answers mentioned guidelines and regulations only apply to products which have been granted approval for sale.MAS should touch on whether there were screening measures to check and to avoid toxic products to be sold to the public.If the answer is negative,
MAS should hold part of the
responsibility for the lax of
regulatory duty.
Obviously MAS cannot totally wash its hands off the whole issue.; July 18, 2009 11:40 AM
Anonymous said...: The response actually represent the Art of communication. That is one normally say a lot but did not respond to the questions.; July 18, 2009 11:44 AM
Anonymous said...: The board and senior management following the guidelines? MAS is naive.Look around you and one thing you notice is the all the sales reps of FIs are still product pushing. Look at the insurance agents, especially agents from ntuc , they are peddling products with free gifts.With huge posters promoting the products , are they not product peddling. Unlike other agents' roadshows there aren't posters.
So you see, what changes, what guidelines, they are doing the same thing. The guidelines are useless if they are not enforced. MAS must not trust the FIs and the insurance companies.You have to check on them. Give them surprise check.
Don't warn them of your coming. The cats don't warn the mice of their coming, do they?
Is MAS losing the moral authority after losing the 6 billions?; July 18, 2009 11:52 AM
Steve Wu said...: If MAS has performed its duties PROPERLY (e.g. provided relevant advisories or outright banned the sale of dubious products to retail investors), the structured notes debacle would have been avoided. Even now, MAS is defending its approach to handle the complaints against FIs individually (divide and conquer) when its (incomplete) investigation report already documented major systemic lapses which warranted a much firmer approach. The punitive measures are manifestly inadequate relative to the crime (yes, it's plain cheating in many cases). I find no reason why Heng Swee Keat, MD of MAS should not be called to resign for this debacle.; July 18, 2009 12:05 PM
Anonymous said...: To MAS :
The big question which we want an answer from you is - Why did you allow these toxic products to be sold to the general public in the 1st place ?
- Did you do due diligence to vet thru the products ?
Did you understand that they were toxic ?
- Or you did not know cos you were sleeping on the job ??

You can't run away from your responsibility by giving 'beat-round-the-bush' answers !

Be honest and admit your shortcomings !!!
Redeem yourself by helping the victim investors instead of rubbing salt on the wounds by siding with the bandit banks !!!!; July 18, 2009 12:50 PM
Anonymous said...: To us investors, MAS has failed both in regulating the product forsale and in compensation recovery for the affected investors. YES, MAS FAILED!; July 18, 2009 1:28 PM
Anonymous said...: wah Mr Heng is a potential PAP candidate, such a simple question but he never answered it, instead just wayang only.; July 18, 2009 2:07 PM
Anonymous said...: My suspicions of the calibre of MAS management and its use of useless foreigners are confirmed.
What rubbish when they talk about setting rules and inspecting them in the aftermath of the minibond crisis! The cleanup crew is paid the garbage man's salary. Reactive Repairwork is considered cleaning up. Do not need extraordinary talent, anyone can do it. Proactive Prevention is what we expect from highly paid foreign talent and from the name of the senior management mentioned in your report he does not seem to understand his role as a senior management staff in MAS. Why is Singapore paying top dollar for cleanup crew in MAS when we pay a few dollars an hour for the real cleaning up around the city? At least we can see the cleaniness in our streets after paying that meagre pay to the real cleanup crew. As for MAS, after paying top dollars, what we see are some foreigners playing tai-chi, and not very good at it somemore. Come to think of it, this reflects the calibre of the top local person in charge of talent acquisition. He or she has failed in the job miserably, and the time span of discretion has allowed it to fester and fail till it becomes evident now. In other words, the rot starts from the top and we are only discovering it now because enough time has gone by to surface it. When we find termites in our house, do we allow it to continue until the whole house crumbles?; July 18, 2009 3:22 PM
Anonymous said...: MAS is a Tai-Chi Master with GCT as the Grand Master. Good for nothing other than taking high pay.

Highly Disappointed.; July 18, 2009 6:16 PM
Junyang said...: I am sad that our government often do not take responsibility for lapses in regulation. No man is perfect, and neither will the citizens expect our government not to make any mistakes.

So why can't they just admit their mistakes, take steps to rectify it and move on?

This financial debacle is one case in point. A more recent case involving MOE in regulating private schools (Stamford / Brookes) is another case in point.; July 18, 2009 6:40 PM
Concerned said...: Putting the cart before the horse.; July 19, 2009 10:34 AM
Concerned said...: Bolt the gate after the horses have left the barn; July 19, 2009 10:35 AM
Anonymous said...: Let us give MAS a vote of no confidence.We want the top layers removed. They are incurring high cost and not doing up to expectations. This once again tells you that academic qualification not important. Non accredited Us may be better than Harvard or those poison lvy beleagued Us.At least they are more responsive.; July 19, 2009 2:51 PM
Anonymous said...: Questions regarding structure products fiasco have been asked in the next Parliament sitting. Just watch who will be answering the questions. Who answer the questions in previous settings?; July 19, 2009 3:55 PM
Anonymous said...: Toxic drugs kill so MOH is very careful.

Toxic products won't kill so MAS is very happy! At least nobody dies from buying it, so let's move on!!

Selling fake degrees also won't kill, so again MOE chief doesn't need to apologise and resign...

Seems like COMPLACENT is a very good word to describe our high paying govt civil servants. COMPLACENT in layman term is "sleeping on jobs if nothing adversely happens"!

Even it does happen just change the SOP here and there, admit that it is just another "honest mistake" and urge the forgetful S'poreans by saying "let's move on"!!; July 20, 2009 4:54 PM
Anonymous said...: Jeremy, cannot admit the mistake lah. If admit, means our elite (scholar) education and the foreign talent theory has failed.; July 20, 2009 5:28 PM
Anonymous said...: As the regulatory authority, MAS failed in many areas as regards the issue of structured toxic products:
1)MAS failed in checking and
stopping the toxic products to
to be sold to the public prior
approval was granted. MAS should
aware that US govt banned the
all toxic products to be sold
to retail investors.
2)MAS failed to bring the FIs to
task even though they were found
breaching the FAA. The fine for
2 years is no more than a farce.
600 m dollars were swindled by
the cheating syndicate and yet
they were lightly let go.
3)MAS failed to meet the target in
protecting the interest of the
public.The FIs were not liable
for compensation though they were
found in mis-selling. At least,
MAS can provide us with the name
list of RMs who mis-sold the
products. Unfortunately this
upheld of information will only
benefit the FIs.
4)Top management for MAS should be
replaced like HK if they failed
miserably in the mission of
regulatory task. We don't need
a tai-ji boxer to do the job.; July 20, 2009 8:40 PM
Admin said...: Accountability and Fairness are what we are looking for. Something so simple yet so far fetching from the elites.

Goh Meng Seng; July 22, 2009 12:07 AM
Anonymous said...: I dont think the products could have been rated as toxic PRIOR to Lehman being declared bankrupt, an event that no one could have envisioned in advance. Following the bizarre logic of some of the people who have posted here, you should also ban ALL insurance, deposit and investment products - after all, any of the underlying instruments COULD implode under certain sets of circumstances, however improbable. And that's precisely the issue: it seems that what certain ignorant segments of the public are demanding is a sure win from any investment product available from sale. In that case, why should they get a higher return for their minibond investments, while there are still a vast pool of pple who placed their money in much lower yielding fixed deposits? Why should there even be choice for investors - just pick the highest available yield in the market and you will surely win. There is no return without risk.

The banks certainly did some wrong in how they sold their products, and they deserve to be disciplined under the terms of the law. I would even agree that perhaps the current legal framework doesnt offer enough stick for errant banks.

However, at least pple who were uneducated and who had no reasonable way of making an assessment were fully compensated. Sadly, the rest of the complaints seem to emanate from the pple who had the MEANS to use their brain but who absolutely refuse to accept any responsibility. Unlike drugs, a product where pple have no reasonable way of discerning quality just by appearances, investing is far more straightforward in comparison. Do not invest in anything that you do not understand, and whose risks u cannot comprehend or stomach. Try not to only rely on what a smooth talking, barely educated, personal banker is telling you before you make up your mind, he's earning a commission for goodness sake. You wouldnt spend 3 bucks to buy your char kuay teow just because the char kuay teow man claims that it's the best - you would smell it, watch him cook it, look at the queue, compare against other options, then decide. Why in the world would you invest 100k with any less care?; July 22, 2009 2:04 AM

Friday, July 17, 2009

TODAY: On the issue of responsibility

24 comments:

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