MAS Capital Charge on DBS a Mere Slap on the Wrist

Yesterday, it was reported that the MAS (Monetary Authority of Singapore) had slapped a $230m capital charge on DBS as a 'penalty' for the massive systems failure that occurred last month and that affected more than 1,000 DBS and POSB automated teller machines, Internet and mobile banking services, as well as Nets and credit card transactions.

The MAS required DBS to set aside S$230 million additional regulatory capital for operational risk and told it to improve customer communications procedures. This was widely noted in the press that MAS as a 'censure'. Teo Swee Lian, deputy managing director, financial supervision, MAS, was recorded as having said: 

"We expect all financial institutions to put in place a robust technology risk management framework that will ensure the reliability, resiliency and speedy recoverability of the institution's IT systems and infrastructure, whether outsourced or in-house. We have recently written to the CEOs of all financial institutions to remind them of this."

But does this set of measures on the part of the MAS constitute a real 'censure'? And does the $230m capital charge amount to much of a 'penalty'? Not according to research analysts who have been covering DBS stock.