Menon said that huge fines would not hurt a bank’s senior management, board of directors or individuals responsible, but would hurt shareholders, reports local newspaper the Straits Times.
“And that to me is one of the serious failings of the current regime, globally. That people continue to do wrong things because they’re not being held personally liable and responsible.”
The Monetary Authority of Singapore (MAS) boss questioned the purpose behind the financial penalties. “What do we want these fines to achieve? Increasingly, the MAS’s approach is to place responsibility on the individual responsible for the lapses and their supervisor.
“Punishing the bank serves a purpose and we’ve done so because it sends a very clear signal to the board and senior management they need to raise the game.”
The shame, however, of being named in a MAS announcement, is a stronger deterrent that would change behaviour, he said; adding that permanent and temporary industry bans on individuals are an equally strong preventive measure.
The Singapore regulator has issued fines as part of its two-year investigation in 1MDB.
Credit Suisse and United Overseas Bank (UOB) were fined, S$0.7m (£0.4m, $0.5m, €0.45m) and S$0.9m respectively.
Lifetime industry bans have issued against three people.
Regulators in the US and across Europe, particularly Switzerland, have hit several banks with large fines related to beleaguered Malaysian sovereign wealth fund 1MDB.
The US Department of Justice (DOJ) is currently working to recover around $1.7bn it believes was laundered through American banks.