Singapore Touted as Capital Markets Model for Developing Nations

(Bloomberg) -- Singapore is turning out to be a model of capital-market development for some countries in the Middle East and Africa, according to Michael Piwowar, former commissioner at the U.S. Securities and Exchange Commission.

The city-state’s legal and institutional framework offers a good example for some developing markets, particularly because it isn’t over-regulated like the U.S., Piwowar said in an interview on the sidelines of Singapore’s annual fintech festival on Wednesday. The Southeast Asian nation is also being noticed for how it promotes financial technology in a “responsible” way while allowing for innovation, he added.

“Singapore is an ideal framework for them to replicate, in terms of the development of capital markets,” said Piwowar, who is currently executive director of the Milken Institute Center for Financial Markets.

Over the past 50 years, Singapore has developed its capital markets and regulatory framework to become a financial hub to reckon with, capturing the top spots in several international rankings. It was among the top five countries in the 2019 edition of the Global Financial Centres Index and grabbed second place in the World Bank’s most recent ease of doing business study.

In the past few years, places in the Middle East and Africa including Dubai, Abu Dhabi and Kenya have made a concerted effort to improve their capital markets, launching international financial centers and signing cross-border agreements to improve regulatory supervision. This has helped attract banks, companies and law firms from across the world.

For some of them, the push for better capital markets was based on what they saw in Singapore, according to Piwowar. His experience of the city-state lies in stark contrast to what he sees in the U.S., where capital markets are over-regulated with costs potentially exceeding benefits, he said.

“Regulators also want to maintain the competitiveness of their own capital markets, and it has not gone unnoticed what Singapore is doing,” Piwowar said.

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.