By Kor Kian Beng

SENIOR Minister Goh Chok Tong has assured investors in troubled structured products such as those linked to the collapsed Lehman Brothers that the Monetary Authority of Singapore (MAS) has not taken its eyes off the issue.

He gave the assurance last night when he explained why the MAS was unable to reply to any particular group or individuals on its action plans as 'some of these are market-sensitive'.

Mr Goh, who is chairman of the MAS, was speaking at a community event in his Marine Parade GRC. He said: 'I can tell you that MAS has been active in looking after the interests of the investors of the structured products.'

However, the finance industry regulator cannot announce every action it takes as some of these are market-sensitive, he added. The issue concerns banks that are listed on the stock market, and what the MAS does could affect their share prices, he pointed out.

'So MAS has to be measured in its actions and statements because what it does has long-term implications on the confidence of investors in Singapore.

'To be fair and transparent to everyone, MAS has to communicate to all investors at the same time through public press statements. Hence, MAS cannot reply to any particular group of individuals or individuals writing to the MAS on what it intends to do,' said the Senior Minister.

Since the issue of alleged mis-selling of Lehman Brothers-related structured products erupted early last month, the MAS has urged financial institutions to focus on and compensate the vulnerable group of retiree investors. Some institutions have started doing so.

Following the MAS' call, Mr Goh also urged the institutions to look at the less clear-cut cases, as it would help retain customer trust and loyalty.

However, rumblings of discontent continue among some investors, despite assurances from institutions like DBS Bank and the authorities that every case will get a fair hearing.

In his speech yesterday, Mr Goh pointed out that few investors or countries had been spared the financial tsunami, which began a year ago as a sub-prime crisis in the United States.

Last month alone, US$5.8trillion (S$8.6trillion) had been wiped off 52 stock markets worldwide, he said.

'That is 36 times the GDP of Singapore last year. Or three times Singapore's cumulative GDP since 1960!'

To ensure 'this tsunami does not sweep Singapore away', the MAS has been kept very busy in recent weeks, he said, as he listed its four priorities. They are:

One, to ensure an appropriate monetary policy stance that serves as an anchor of stability against turbulent external conditions.

Second, to ensure that Singapore's financial system remains stable and there is enough liquidity in the system; that is, no credit crunch.

Third, to ensure that Singapore banks and other financial institutions remain sound and well-run, and to provide a level playing field for them by a government guarantee on their non-bank deposits.

Fourth, to ensure that investors of troubled structured products, like those linked to Lehman Brothers, get a fair hearing from the institutions they bought the products from, and that those who can prove that they had been mis-sold the products are compensated in part or in full.

This article was first published in The Straits Times on November 07, 2008.