The Minster said that the global crisis is caused by "failure of regulations premised by beliefs that were not supported by facts", in particular the "faith in self-correcting markets". He argued that the government has a duty to intervene to stop asset bubbles from growing to an unsupportable level.
I agree.
There is another big market failure that has not been recognised in the paper - the failure to provide transparent and fair information to consumers. The sellers have more information than the buyers and can mislead the buyers into paying an inflated price that is far more than what the product is worth.
This is the modus operandi of land banking and structured products (e.g. capital guaranteed, linked products, dual currency products, high cost life insurance products) that were created by financial experts for sale on unfair terms to consumers (but generate high profit margin to the issuer). The sale of new property launches at unjustified high prices is also premised on the insufficient information available to consumers.
It is important that the regulation should also focus on providing transparent and fair information to consumers. FISCA will play a role by creating a white list of financial products.
I have build a website at www.easysearch.sg (Real Estate Data) that makes it easy for consumers to get information on properties. I urge consumers to do your research before jumping into making million dollar purchases that will tie you down for a lifetime.
Tan Kin Lian
There is another big market failure that has not been recognised in the paper - the failure to provide transparent and fair information to consumers. The sellers have more information than the buyers and can mislead the buyers into paying an inflated price that is far more than what the product is worth.
This is the modus operandi of land banking and structured products (e.g. capital guaranteed, linked products, dual currency products, high cost life insurance products) that were created by financial experts for sale on unfair terms to consumers (but generate high profit margin to the issuer). The sale of new property launches at unjustified high prices is also premised on the insufficient information available to consumers.
It is important that the regulation should also focus on providing transparent and fair information to consumers. FISCA will play a role by creating a white list of financial products.
I have build a website at www.easysearch.sg (Real Estate Data) that makes it easy for consumers to get information on properties. I urge consumers to do your research before jumping into making million dollar purchases that will tie you down for a lifetime.
Tan Kin Lian
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