Read a story on zerohedge.com claiming that Singapore is rightly worried about the fallout from the European sovereign debt crisis because European banks have claims in our financial system that amounts to around 60% of our GDP.
I asked a banker friend about this and he said that his guess regarding this would be that a lot of European banks have bought Singapore government bonds. In any case, he felt that MAS would be able to handle any suddenly repatriation of funds back to Europe.
I personally am not sure what impact any fund repatriation will have on our financial system. Could it lead to a drop in the value of the SGD against other major currencies? How will it affect the stock market and property market, if at all?
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