Part 7/10:
A close watch is being kept on the banks' exposure to regional economies and the commercial real estate sector, both of which are cyclical and susceptible to downturns. While no significant cracks have emerged so far in Asia, the interconnectedness of regional markets means that any downturns could have spill-over effects on the Singapore banking sector.
The dominant concern remains a slowing global economy, which could reduce loan demand and inflow of funds, especially amidst rising risk aversion among investors. Wealth management revenues, in particular, may remain under pressure if high-net-worth clients continue avoiding risk.