MM Lee strongly feels that we have still too many banks. I disagree.
Banks are not just any business entity. I am sure he knows this better than most. We are a small country, so having banks that go all over the world conducting business often exposed to and tempted with moral hazards especially when competing to out perform other banks is simply too risky. A bank like this fails, Singapore fails. Hasn't he learn a thing or two from UBS recent example?
Behavior does not arise from moral mandates but from incentives. I strain to see how we can create incentives for our banks competing internationally to be a success. Might as well just stay at home and in the region. I think the MM is wrong and Wee Cho Yaw is right.
It is incredible given DBS poor track record that he has the confidence to speak like this about bank consolidation and overseas adventurism.