Singapore's financial sector

Singapore's financial sector is modern and competitive. Bank consolidations have left the country with three dominant banking groups. One of these three groups is the government-controlled Development Bank of Singapore, which is the largest and is publicly listed. The other two banking groups also have significant government-held minority shares. There were 113 commercial banks in mid-2008, 107 of them foreign. Foreign banks now have greater freedom to open branches and offer services, but the government seeks to maintain the domestic bank share of deposits above 50 percent, and the majority of domestic bank board members must be Singapore citizens and residents. License quotas for full-service foreign banks were eliminated in July 2005, and the quota for U.S. wholesale banks was eliminated in January 2007. Foreign banks are allocated to three categories that specify the services they can provide: full service, wholesale, and offshore. Foreign firms compete aggressively in insurance, fund management, and venture capital. Capital markets are well developed, and the Singapore Exchange is increasing its ties with other Asian exchanges.