If most of the people get more than 50% of their money back without lawsuits filed against the banks, I say the MAS deserves a pat on the back.
It is not clear from the report how much these people will be compensated.
For Singapore to be a successful financial hub, protection of investors is paramount. If the banks act against the interest of investors, they have to be punished to send a strong signal. The banks might lose some money when they pay out the compensation but what is important is reputation - lose money, don't ever lose reputation.
Digress a little....
DBS recently allowed those with home loans to pay only the interest on their loans to help those struggling with mortgages - it is a good move .....I hope more banks follow given the extraordinary times we are in. I hope MAS is proactive in tackling this home loan issue. Looking at what happened in US, it is important for govt to step in early to prevent an avalanche and vicuous cycle of loan defaults, foreclosures falling prices, negative equity and more defaults. In the "interest only" scheme, a $500K loan can be serviced with $1400 per month. This will allow those who are temporarily distressed to hang on longer with limited savings until they can find another job or sell off their homes in an orderly fashion.
It is time for banks to seek out win-win arrangements and quickly implement them. MAS should help to coordinate some of these before things get worse.
58% of investors 'missold' Lehman-linked products to be compensated
By Nicholas Fang, Channel NewsAsia Posted: 16 January 2009 1836 hrs
SINGAPORE: More than half of investors who complained they were mis-sold products linked to the collapsed Lehman Brothers are set to be compensated. The Monetary Authority of Singapore (MAS) says the financial institutions who sold the products will inform affected investors of the level of their individual compensation amounts. These could range from partial to full compensation. Over 5,300 complaints were received from investors who bought Lehman Minibonds, DBS High Notes 5 and Merrill Lynch Jubilee Series 3 products. MAS says resolutions have been reached for 5,127 of these cases, including one quarter of investors who bought DBS High Notes and 11 per cent of those who invested in the Merrill Lynch product. The central bank is still working on the details for those who bought the Lehman Minibonds. But 25 per cent of complainants whose cases have been resolved will receive full settlement while 33 per cent will get partial settlement. The financial institutions are in the process of informing investors about the individual outcomes and this is expected to take a few weeks. If individuals are still not happy about the compensation they receive, MAS says they can still turn to the Financial Industry Disputes Resolution Centre for further mediation. - CNA/ir