The Monetary Authority of Singapore’s Financial Stability Review finds that corporates, households and financial institutions retain adequate buffers despite rising global financial stability risks from higher capital costs, geopolitical tensions and a possible correction in artificial intelligence related investment. With resident credit growing broadly in line with nominal gross domestic product and the credit-to-GDP ratio below its long-term trend, MAS will maintain the countercyclical capital buffer at 0% for 2027. Corporate debt servicing and household repayment capacity improved as borrowing costs declined, while bank asset quality, capital, liquidity and provisioning remained strong. Under severe stress tests, 32% of listed firms, representing 16% of corporate debt, were assessed as at risk, while about 1% of household borrowers could face negative cash flow with savings covering fewer than six months. Domestic systemically important banks’ aggregate Common Equity Tier 1 capital ratio would fall to a low of 10.9% under the adverse scenario but remain above the combined 9% minimum and capital conservation buffer requirement. Insurers remained well-capitalized, and most investment funds had sufficient liquidity to meet severe redemption shocks, although a small group accounting for 1.1% of assessed fund assets could face shortfalls. MAS also plans to issue supervisory expectations and milestones for financial institutions to migrate to quantum-resilient solutions, targeting full quantum resilience before 2030.

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