There is free movement of capital and profits in Singapore. Sources of Financing Three types of commercial banks operate in Singapore, depending on the type of license they possess. Three U.S. banks operate full licensed branches in Singapore. Several large commercial banks offer a variety of banking services to manufacturing firms and other clients. Most banks extend credit for five to ten years at competitive interest rates covering up to 50 percent of plant and machinery costs and up to 65 percent of the value of factory buildings.
Higher percentages are available for particularly desirable projects and for expansion loans.
Many larger Singapore banks have subsidiaries that carry out merchant banking, insurance, property development, securities trading as members of the stock exchange, and underwriting issues of government bonds. Eighty merchant banks provide a wide range of services not covered by some commercial banks, including investment portfolio management, investment advisory services, advice on corporate restructuring, mergers and acquisitions, financing, lending or participating in syndicated loans, capital equipment leasing, and underwriting and floating bond and stock issues. MAS engages in limited money market operations to influence interest rates and ensure adequate liquidity in the banking system. The Government does not set targets for monetary aggregates. Money supply and domestic interest rates are primarily determined by international, rather than local conditions.