Published:
Here's the impact of Fed tapering on Singapore banks
You have been warned.
According to Barclays, fund flows could reverse when tapering begins and drive system liquidity tighter, leading to greater competition for deposits, higher funding costs, and slower loan growth.
Here's more:
Banks would attempt to pass on higher funding costs in the form of higher lending rates (even before benchmark rate hikes start).
The start of Fed tightening, signaled by the first benchmark interest rate hike, is likely to further increase the borrowing cost burden for corporates and households, dampen the property market, and lead to banks asset quality deterioration in the medium-term.
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