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Singapore ranks fourth in the World Economic Forum’s Financial Development Index 2009, while UK tops the list, followed by Australia and US. The report ranks 55 of the world’s leading financial systems and capital markets. The rankings are based on over 120 variables ranging from institutional and business environments, financial stability, banking and non-banking financial services to size and depth of capital markets.
According to the report, Singapore shows consistent strength across its institutional and business environments. It is ranked 5th in the world for financial stability, 2nd for efficiency of its banks and 2nd for commercial access to capital.
The Singapore government has consciously shaped the country’s banking and financial environment in order to strengthen its financial market segment. One of the major steps was the liberalization of the banking sector in 1999 and 2001. There was a rapid expansion of foreign banks, with some even setting up regional head quarters in the country. This led to a highly competitive environment which spurred the introduction of innovative financial products and efficient banking services. At the same time, the Monetary Authority of Singapore regulates Singapore’s financial industry, ensuring that it operates in a smooth and efficient manner.
A flourishing financial center only serves to complement Singapore’s position as a regional business hub and as an attractive offshore business jurisdiction. Foreign entrepreneurs tend to set up business operations in jurisdictions that offer a business supportive environment. Some of the factors of consideration are financial stability, access to capital, ease of availing loans, efficiency of banking services and equity financing. With Singapore scoring high on all these factors and its ranking as one of the top five global financial centers, the country continues to remain an attractive offshore business center for foreign investors.
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