Afi Term Paper

FINA0501 Asian Financial Institutions Term Paper FINA0501 Asian Financial Institutions Term Paper

Name: Li Cheuk Ying Cherry
UID: 2010078197
Name: Li Cheuk Ying Cherry
UID: 2010078197
Overview of
Malaysia’s Banking Sector Overview of
Malaysia’s Banking Sector

Contents

Introduction | P.3 | Overview of Malaysia’s Financial System | P.4 | Central Bank of Malaysia | P.5 | Commercial Banking System | P.7 | Islam Banking System | P.9 | Investment Banking System | P.11 | Development Financial Institutions | P.12 | Conclusion and Outlook | P.13 | References | P.14 |

Introduction

The financial crisis in Asia has shown that a robust financial system is one of the key components of economic progress. Without it, misallocation of investments could seriously disrupt development. For Malaysia, the banking sector is sound compared to the Asian crisis and well capitalized to withstand any deterioration in asset quality. From 2001 to 2010, the central bank of Malaysia, Bank Negara Malaysia (BNM), carried out the Financial Master Sector Plan (FSMP), which objective is to evolve a “competitive, resilient and dynamic financial system” (Bank Negara Malaysia, 2011). Under FSMP, there were restructuring of financial systems, aiding the industry to become more competitive in the international arena after post-liberization. The outcome was positive – having resulted in more resilient financial institutions in the country and being able to survive the 2008 financial turmoil. In 2011, it contributed to almost 12% of the GDP of Malaysia (Bank Negara Malaysia Annual Report, 2011).

This paper aims to examine the key of success behind Malaysia’s financial banking sector, focusing on the banking system made up of monetary institutions, including central bank, commercial banks, and Islamic banks, and the non-monetary institutions like investment banks and