Singapore and Malaysia on Thursday pledged to guarantee all local and foreign currency bank deposits, joining governments across the world in shoring up confidence in the embattled banking system. The neighbouring Southeast Asian countries announced within minutes of each other they will guarantee bank deposits until December 2010.
In the past week Hong Kong, Australia and New Zealand have provided blanket guarantees on all deposits amid a crisis of confidence in global financial markets. Their actions, however, threatened to draw deposits from neighbouring Asian countries, leading other governments to follow suit with matching assurances.
Singapore's finance ministry and central bank said in a joint statement the government will back all local and foreign currency deposits in banks, finance firms and investment banks in the country. The guarantee will be backed by S$150 billion ($101.4 billion) of government reserves.