ID :
24456
Tue, 10/14/2008 - 18:02
Auther :
Shortlink :
http://m.oananews.org//node/24456
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M'SIAN FINANCIAL SYSTEM CAN WEATHER GLOBAL FINANCIAL TURMOIL, SAYS CENTRAL BANK
KUALA LUMPUR, Oct 14 (Bernama) -- Malaysian financial institutions remain resilient despite the increased volatility in global financial markets, Malaysian Central Bank said Tuesday.
"Several years of reforms, institutional development and capacity building,
continuous efforts to enhance corporate governance and risk management standards
and practices have significantly strengthened the banking system," it said.
"The level of non-performing loans has also improved to 2.5 percent," the
central bank said in a statement.
In addition, the standardised approach of the Basel II capital adequacy
framework was implemented effective January 2008, Bank Negara said.
"There is also ample liquidity in Malaysia's financial system to facilitate
the orderly functioning of economic and financing activities," it said.
As at end-August 2008, net interbank placements with Bank Negara by the
banking system amounted to RM198.5 billion.
"The banking and insurance industries are therefore operating with adequate
capital and liquidity buffers that have been accumulated over several years," it
added.
Malaysia's financial institutions also have negligible exposure to both
subprime related securities and to the affected financial institutions of other
countries, with more than 90 percent of total assets of the banks and insurance
companies in ringgit denominated assets, according to Bank Negara.
In addition, all foreign financial institutions in Malaysia are locally
incorporated and have a high level of capital that is committed to support their
domestic operations, it said.
As at end-August 2008, the risk-weighted capital ratio for these foreign
financial institutions was at 12.6 percent.
The banking system's leverage position remained manageable and continued to
record strong risk-weighted capital ratio of 13.2 percent as at end-August 2008,
exceeding the minimum eight percent capital requirement by RM42.3
billion.
The insurance industry also recorded high solvency surplus of RM16.5
billion, the central bank said.
"The strong capital position combined with ample liquidity provides
adequate capacity to the banking system to continue to perform its
intermediation function and to meet its financial commitments as well as the
demands for financing and financial services in supporting domestic economic
activities," it said.
The aggregate domestic household sector continued to exhibit stable level
of indebtedness and wealth where total financial assets are more than two times
of total debts, the central bank said.
Overall, corporations also continued to exhibit sound financial position
and manageable leverage position with debt-to-equity ratio of 48 percent in the
first half of 2008, it said.
The central bank said it has a fully developed supervisory and
surveillance
system.
It continuously monitors all financial institutions under its purview
and
will take appropriate action to safeguard the soundness of the financial system.
"The bank stands ready to provide liquidity, whenever necessary, to
financial institutions under its purview," Bank Negara said.
It was also closely engaging with the other monetary authorities in the
region to monitor and respond with coordinated measures in managing the current
challenging environment.
"Several years of reforms, institutional development and capacity building,
continuous efforts to enhance corporate governance and risk management standards
and practices have significantly strengthened the banking system," it said.
"The level of non-performing loans has also improved to 2.5 percent," the
central bank said in a statement.
In addition, the standardised approach of the Basel II capital adequacy
framework was implemented effective January 2008, Bank Negara said.
"There is also ample liquidity in Malaysia's financial system to facilitate
the orderly functioning of economic and financing activities," it said.
As at end-August 2008, net interbank placements with Bank Negara by the
banking system amounted to RM198.5 billion.
"The banking and insurance industries are therefore operating with adequate
capital and liquidity buffers that have been accumulated over several years," it
added.
Malaysia's financial institutions also have negligible exposure to both
subprime related securities and to the affected financial institutions of other
countries, with more than 90 percent of total assets of the banks and insurance
companies in ringgit denominated assets, according to Bank Negara.
In addition, all foreign financial institutions in Malaysia are locally
incorporated and have a high level of capital that is committed to support their
domestic operations, it said.
As at end-August 2008, the risk-weighted capital ratio for these foreign
financial institutions was at 12.6 percent.
The banking system's leverage position remained manageable and continued to
record strong risk-weighted capital ratio of 13.2 percent as at end-August 2008,
exceeding the minimum eight percent capital requirement by RM42.3
billion.
The insurance industry also recorded high solvency surplus of RM16.5
billion, the central bank said.
"The strong capital position combined with ample liquidity provides
adequate capacity to the banking system to continue to perform its
intermediation function and to meet its financial commitments as well as the
demands for financing and financial services in supporting domestic economic
activities," it said.
The aggregate domestic household sector continued to exhibit stable level
of indebtedness and wealth where total financial assets are more than two times
of total debts, the central bank said.
Overall, corporations also continued to exhibit sound financial position
and manageable leverage position with debt-to-equity ratio of 48 percent in the
first half of 2008, it said.
The central bank said it has a fully developed supervisory and
surveillance
system.
It continuously monitors all financial institutions under its purview
and
will take appropriate action to safeguard the soundness of the financial system.
"The bank stands ready to provide liquidity, whenever necessary, to
financial institutions under its purview," Bank Negara said.
It was also closely engaging with the other monetary authorities in the
region to monitor and respond with coordinated measures in managing the current
challenging environment.
