Tan Kin Lian's Blog: Excesses and redemption

Tuesday, January 12, 2010

Excesses and redemption

The free market, unregulated capitalism in America during the past two decades has caused a lot of damage to the global economy. It has created sub-prime mortgages, which were then packaged into collateralised debt obligations (CDOs) and backed by credit default swaps (CDSs) and dubious credit ratings and sold all over the world. It created a big, unsustainable bubble in housing prices, which has since collapsed, causing the biggest financial crisis in several decades.

In spite of its shortcomings, there are redemptive features in the American system. The poltical leaders have realized their mistakes and are enacting new laws to protect consumers, taxpayers and to stop the predatory practices.

Their state attorney generals are willing to step forward and take action on behalf of consumers to address cases where financial institutions could have broken the law in misrepresenting products to consumers or were negligent in giving bad advice. In many cases, the financial institutions were willing to settle the cases out of court and to compensate the consumers. The financial institutions knew that they had acted wrongly and that they are likely to be found guilty by the American system of justice.

Many consumers in Singapore have suffered similar damages on similar products sold in Singapore. It is possible for the Attorney General's office in Singapore to take a similar measure on behalf of these consumers who are not able to engage their own lawyers (at unaffordable fees). Their only recourse was through FIDREC (dispute resolution), but the outcome had been tedious and long and usually unsatisfactory. They have to bear their losses silently (as public protests are not allowed).

The poor level of consumer protection in Singapore will cause long term damage to our reputation as a financial hub. I hope that this serious shortcoming can be addressed before it causes irrepairable damage.

Tan Kin Lian

12 comments:

Anonymous said...: Can & have no choice but to suffer in silence, but will never, never, never forget!!; January 12, 2010 10:04 AM
Anonymous said...: "The poor level of consumer protection in Singapore will cause long term damage to our reputation as a financial hub. I hope that this serious shortcoming can be addressed before it causes irrepairable damage."

I strongly agree. But it seems the govt, by their actions or the priority of it so far, does not see it this way.

Cheaper, better, faster seems to be their catchword and also by their actions and policies. And seems only where workers are concerned.; January 12, 2010 10:58 AM
Anonymous said...: "Many consumers in Singapore have suffered similar damages on similar products sold in Singapore. It is possible for the Attorney General's office in Singapore to take a similar measure on behalf of these consumers who are not able to engage their own lawyers (at unaffordable fees). Their only recourse was through FIDREC (dispute resolution), but the outcome had been tedious and long and usually unsatisfactory. They have to bear their losses silently (as public protests are not allowed)."

it can be very costly to go to court and the authorities and those enlightened ones knew for a long time but were very slow to address this problem because the authorities wanted, in my view, "easy and quick resolution" to RISING social injustices in an ultra capitalist society.

when you put a high price tag on justice, most will suffer in silence( especially the poor, the struggling middle class and even those can afford may feel it is not worth pursuing justice because of unjustifiable costs) who can't afford justice( pro bono is a farce) giving a false sense of social justice(what does not turn up in legal radar does not exist) when disgruntled parties have no redress.

the government must realize that when we deny justice(or suppress justice through pragmatism) to people, the toxic repression may find other outlets of unhealthy and dangerous expression( taking lives for instance)

i have argued years ago that the MONOPOLY of justice must be dissolved so justice becomes accessible to everyone - rich or poor!!!!; January 12, 2010 11:59 AM
Anonymous said...: Thank you, Mr Tan,

For Pinnacle Note case, Morgan Stanly is still alive, but no People from Goverment are even bored to check what happened.

Why MAS keep quiet on Morgan Stantly but mentioned those FIs?; January 12, 2010 1:15 PM
Anonymous said...: the sg gov own banks that sell these products so it's very likely that the gov would want to sue it's self.; January 12, 2010 2:46 PM
Anonymous said...: They forgot Morgan Stanly becasue we did not make noise big enough. No Hongkonger suffered from Pinnacle Note. Poor Singaporean!; January 12, 2010 5:20 PM
A Singaporean said...: Consumer protection? Hah, the government doesn't want to care at all.; January 12, 2010 6:05 PM
Anonymous said...: The whole idea is to make legal recourse expensive for the ordinary folks so they will accept the FIDREC offer. So that the banks are spared to pay the hefty compensation.
By now consumers should know MAS is which side. Don't rely on it anymore.
In the future better consult FISCA first before you buy any financial product, be it an insurance or an investment product. Use FISCA to expose them, the mis-selling and unethical practices of the salespeople.; January 12, 2010 7:43 PM
Anonymous said...: As long as there is no change in current govt thinking, the man-in-the-street can forget about strong consumer protection or access to affordable justice.

The reality now and for the foreseeable future (at least the next 10-15 yrs) is that "you die your business". Therefore the only way to protect yourself is to trust nothing and nobody; educate yourself and read widely; seek info from various parties; always treat everything as guilty until proven innocent.

Sad but true. Nobody, including your own relatives, will care about protecting or growing your money or your family's financial wellbeing but you yourself.; January 12, 2010 8:33 PM
Anonymous said...: It's the same in every country where votes count. When enough people gather enough voices and can affect election result, the authority suddenly becomes interested to help the affected people. No difference in S'pore.; January 12, 2010 10:04 PM
Anonymous said...: Most people have been keeping a thief without their knowing it.; January 13, 2010 9:09 AM
Anonymous said...: It seems that the Singapore government is willing to put the welfare of the financial instituitions above that of its own people. They are so pathetically afraid of driving out MNCs with consumer protection policies. =(; January 14, 2010 3:00 PM