(SINGAPORE) Financial institutions in Singapore are sound and operating normally, even in the wake of the ongoing global turmoil that has seen hundreds of billions of dollars lost in the mortgage and securities markets.

This assurance was made yesterday by the central bank as it made a concerted effort to calm consumers worried about the safety of their deposits, insurance plans and investments.

Speaking at a financial seminar yesterday, Monetary Authority of Singapore (MAS) managing director Heng Swee Keat described banks here as being 'sound and operating normally'.

He cited a number of reasons for this optimism. First, Singapore has no sub-prime mortgages that originated here, which means that banks and insurance companies have limited exposures to such assets or to the banks that have failed.

Second, MAS has been conservative in its approach to how it supervises financial institutions. 'Their assets must exceed liabilities by a good margin, and we require them to hold sufficient capital. Financial institutions here, both local and foreign, have invested resources in risk management,' said Mr Heng.

Lastly, unlike banks elsewhere that face liquidity problems, depositors and investors here maintain a high level of confidence in Singapore's banks, especially as the MAS is also very strict about the spreading of rumours.