Question

On 24 May 2016, the Monetary Authority of Singapore (MAS) withdrew the merchant banking license of the Singapore branch of Swiss private bank BSI Bank Ltd. The BSI group was one of the oldest banks in Switzerland and the sixth largest in the country. It specialized in private wealth management. MAS gave the following reasons for shutting down the Singapore subsidiary: (1) widespread control failures, resulting in numerous breaches of anti-money laundering regulations; (2) poor and ineffective oversight by senior management; (3) an unacceptable risk culture, with blatant disregard for compliance and control requirements as well as MAS's regulations; and (4) numerous acts of gross misconduct by certain staff. MAS referred the names of six BSI Singapore employees to the public prosecutor to evaluate whether they had committed criminal offences. It also imposed financial penalties, amounting to S$13.3 million (US$9.5 million), on the company for 41 regulatory breaches.

Could BSI have better managed the balance between risk management and achieving its growth strategy? If so, how?

Answer 1

BSI would have managed the balance between risk management and growth strategies in a better way-

A. It should have followed up with the anti money laundering regulations and it should not have breached it because it will be having serious consequences like abusing the law.

B.it should have adopted a balanced approach in management of books of accounts and it should also have not promoted window dressing and poor management of its books of accounts.

C.it should have managed the employee better and it should have also managed the agency relationship better because managers were taking illegal measures in order to inflate the profits of the company.

D.it should only have issued loan to those creditworthiness borrowers who were having a very high creditworthiness and they wear able to pay the loans issued by the company

E.there should have been a better management of corporate culture and following up with code of ethics which would have been helpful in order to maximize the profits of the company.

F. It should have followed up with standard benchmark of the banking and it should have also followed maintenance of regulatory procedures so that it could have maximize its profits within the regulatory framework.