Credit card shOck

Customer applied for one but received four

Letter from Mervyn Sek

ABOUT a month ago, I received a telephone call from my bank inviting me to receive the Ikea friends Visa credit card because I am an existing credit card holder.

Since I patronise Ikea occasionally, I accepted the invitation.

Subsequently, a courier delivered an application form for me to sign, as an official endorsement of my application.

Days and weeks passed and I wondered why it took so long for the credit card to be sent to me.

I then received a package in the mail that contained not one, not two but four different credit cards issued by the bank.

I was so flabbergasted to receive so many credit cards that I called the bank to check if it had made a mistake.

The hotline staff assured me that there was no mistake and that each card entitled me to a different set of benefits.

I saw it as a ridiculous and desperate attempt at getting me to maximise my credit limit and chalk up a credit card debt with the bank and so I insisted to the hotline staff that all four cards be cancelled immediately.

I am sure others will receive a call from a credit card company one day, inviting them to receive a credit card.

I would like to advise them to assess very carefully whether they really need another credit card from the same bank.

When in doubt, they should ask themselves this question: Does my wallet have any space for me to squeeze in additional credit cards?

Banks need to reduce leverage to absorb losses

SINGAPORE

Mr Heng said that banks need to reduce leverage and have a higher quality and quantity of capital to absorb losses.

The Basel Committee has agreed on the need for standards relating to capital, liquidity and leverage.

The first set of parameters for core capital have been carefully constructed following the consideration of conditions in the various economies.

The phase-in arrangement for the new benchmarks strikes an important balance between strengthening the financial system and supporting economic recovery.

Mr Heng said: “The phase in arrangement for the new benchmarks strikes an important balance between strengthening the financial system and supporting economic recovery.”

He added: “As we phase in these measures we need to be vigilant that these do not have unintended consequences on credit availability and economic growth, or in reducing diversity in the financial system.”

Mr Heng added that new macro-prudential tools and approaches should also be explored.

Macro-prudential regulations promote the stability of the overall financial system, and not just that of individual institutions.

The managing director of MAS said:“In the coming years, we will be focusing on some new tools such as counter cyclical capitalwill need to be assessed over time, and against other options. We need to agree on the right set of policy tools to deal with systemic risks with the least unintended consequences.”. Their effectiveness

This approach is in line with the two themes for this year’s ICBS — building a more resilient banking system, and creating a stable financial environment for sustained economic growth.

Meanwhile Mr Nout Wellink, chairman of the Basel Committee who also spoke at the ICBS said the moves to improve banks’ capital, risk coverage and leverage ratio will help decrease the risks of a banking system failure.

“Banks can meet the new standards through earnings retention, capital raising, or reducing their riskier exposures that are not necessarily associated with the granting of credit to ultimate borrowers,” Mr Wellink added.— Better micro-prudential reforms are needed to promote the stability of the financial system. That is according to Mr Heng Swee Kiat, managing director of the Monetary Authority of Singapore or MAS, speaking at the International Conference of Banking Supervisors (ICBS) yesterday.

Rachel Kelly

As we phase in these measures, we need to be vigilant that these do not have unintended consequences on credit availability and economic growth or in reducing diversity in the financial system.

Mr Heng Swee Kiat, managing director of the Monetary Authority of Singapore

In  CAPITALISM

API   Is  merItO-cracY

In  CAPITALISM

every thIng  InvOlves

cOnflIct  Of  persOnal  Interests [COPI]

CAPITALISM  Is  mOtIvated bY

absOlUte  persOnal  Interests  [API]

every owner of  high rise flats, apartments  bOUght  aIr ? ? ? ?

tIme  tO  sEll  all  ? ? ? ?

hIgh  rIse  prOpertIes  ? ? ? ?

befOre  market  cOllapse  ? ? ? ?