DBS says US rating downgrade has negligible impact on positions
Publish date: Mon, 08 Aug 2011, 05:50 PM
DBS (DBSM.SI), Southeast Asia’s biggest bank, said the impact of a U.S. credit rating downgrade on its trading and investment positions is “immaterial” and that it is adequately positioned to meet liquidity needs.
“Over the past few weeks, DBS has already taken proactive steps to understand possible repercussions of a U.S credit downgrade, including stress-testing our books and portfolios,” said Chng Sok Hui, DBS’s Chief Financial Officer in an email.
“Over the past few weeks, DBS has already taken proactive steps to understand possible repercussions of a U.S credit downgrade, including stress-testing our books and portfolios,” said Chng Sok Hui, DBS’s Chief Financial Officer in an email.
“In terms of our trading and investment positions, on a net basis, the impact is immaterial,” she added.
DBS said its holding of European debt is negligible.
Analysts said Asia’s banks are seen facing a bump-up in dollar-funding costs and potentially slower credit growth after Standard & Poor’s historic U.S. debt rating downgrade, strengthening China’s case to push the yuan as a global alternative to the dollar.
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S&P has downgraded US debt, this has created panic in the markets. But the question is should we take S&P seriously when these credit rating agencies have proved that their understanding about economies is indeed poor.
Remember, it was the same S&P that gave AAA rating to mortgage backed securities in 2005-2007 and we all know what happened after that. So I guess one should take this and apply own judgement in the current situation. After all, Apple and Google have been making record earnings in the recent quarters.
2011-08-10 15:03