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Financial System in Malaysia

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Financial System in Malaysia
Chapter 5
Financial System of Malaysia

5.1

Financial System Structure in Malaysia

The Malaysian financial system is structured into two major categories, Financial Institutions and Financial Market. The Financial Institutions comprise Banking System and Non-bank Financial Intermediaries. The Financial Market in Malaysia comprises four major markets namely: Money & Foreign Exchange Market, Capital Market, Derivatives Market, and Offshore Market. Chart 1: The Financial System Structure in Malaysia

Financial System

Financial Institutions

Financial Market

Banking System
1. Bank Negara Malaysia 2. Banking Institutions • Commercial Banks • Finance Companies • Merchant Banks • Islamic Banks 3. Others • Discount Houses • Representative Offices of Foreign Banks

Non-Bank Financial Intermediaries
1. Provident and Pension Funds 2. Insurance Companies (including Takaful) 3. Development Finance Institutions 4. Savings Institutions • National Savings Bank • Co-operative Societies 5. Others • Unit Trusts • Pilgrims Fund Board • Housing Credit Institutions • Cagamas Berhad • Credit Guarantee Corporation • Leasing Companies • Factoring Companies • Venture Capital Companies

Money & Foreign Exchange Market
1. Money Market 2. Foreign Exchange Market

Capital Market
1. Equity Market 2. Bond Market • Public Debt Securities • Private Debt Securities

Derivatives Market
1. 2. 3. Commodity Futures KLSE CI Futures KLIBOR Futures

Offshore Market
1. Labuan International Offshore Financial Center (IOFC)

5.2

Banking System

The banking system consists of Bank Negara Malaysia (Central Bank of Malaysia), banking institutions (commercial banks, finance companies, merchant banks and Islamic banks) and a miscellaneous group (discount houses and representative offices of foreign banks). The banking system is the largest component of the financial system, accounting for about 67% of the total assets of the financial system. The summary background
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