Financial Stability and Payment Systems Report 2010 Briefing to - - PowerPoint PPT Presentation

Financial Stability and Payment Systems Report 2010 1

by Dato’ Mohd Razif Abd. Kadir Deputy Governor 23 March 2011

Financial Stability and Payment Systems Report 2010

Briefing to Analysts & Fund Managers

Financial Stability and Payment Systems Report 2010 2

Stability of the financial sector was preserved throughout 2010

• strong fundamentals contributed towards efficient financial intermediation
• orderly and efficient conditions in financial markets, and payments and

settlements systems facilitated trade and domestic activities

Financial Stability and Payment Systems Report 2010 3

Financial system continues to be resilient

• Strong capital and liquidity buffers
• Improved profitability
• High asset quality
• Have capacity to withstand

extreme macroeconomic and financial conditions

Banking Sector (%) 2009 Jan’11 Capital Adequacy

Risk-Weighted Capital Ratio Core Capital Ratio Capital Buffer (RM bil)

15.4 13.8 64.6 14.1 12.4 60.5 Profitability

Return on Assets Return on Equity

1.2 14.0 1.8 19.7 Asset Quality

Net Non Performing Loan* Ratio

1.8 2.2 Liquidity Position

Liquidity buffer (<1 mth, % of deposits)

18.2 14.8 Insurance/Takaful Sector (%) 2009 2010 Capital Adequacy

Capital Adequacy Ratio^ Capital Buffer^ (RM bil)

225.7 18.6 224.6 18.6 Profitability

Profit Before Tax (RM bil)

14.7 16.3

* 2011 position based on impairment methodology ^ Conventional industry only

Financial Stability and Payment Systems Report 2010 4

Banking system recorded RM22.8 bil in pre-tax profit

Conventional Banking System 2010 RM bil 2010 growth

Net interest income 27.5 +15.8% Fee/Commission-based income 8.1 +11.2% Net trading & investment gains 7.4 +62.4% Staff cost and overheads 20.2 +14.4% Pre-tax profit 19.7 +37.1%

Islamic Banking System 2010 RM bil 2010 growth

Net income 6.8 +12.2% Fee/Commission-based income 0.7 +13.7% Net trading & investment gains 0.4 +17.8% Staff cost and

• verheads

3.6 +56.1% Pre-tax profit 3.1 +16.9%

Conventional banking system: PBT of RM19.7 billion Islamic banking system: PBT of RM3.1 billion

Financial Stability and Payment Systems Report 2010 5

Life insurance & family takaful: Excess

• f income over outgo of RM14.1 bil

I nsurance and takaful sector registered RM16.3 bil in pre-tax profit

2010 Life Insurance Family Takaful Total RM bil growth RM bil growth RM bil growth Net premiums/ contribution 21.9 15.9% 3.3 21.3% 25.2 11.5% Net policy/ certificate benefits 13 9.2% 1.6 75.8% 14.6 14.7% Net Investment income 5.4 10.2% 0.5 42.9% 5.9 11.5% Net unrealised and capital gains 4.2 44.9% 0.01

• 83.3%

4.3 46% Excess income over outgo 12.7 16.5% 1.4

• 15.6%

14.1 12.1%

General insurance & takaful: Operating profits of RM2.2 bil

2010 General Insurance General Takaful Total RM bil growth RM bil growth RM bil growth Gross direct premiums/ contribution 15.2 8.6% 1.4 26.3% 16.6 10% Net claims incurred 6.8 11.5% 0.5 34.5% 7.3 12.3% Net Investment income 0.8 3.9% 0.1 17.7% 0.9 6.2% Net unrealised and capital gains 0.06

• 75%

0.04 96.7% 0.1

• 68.1%

Operating Profit 1.9 2.7% 0.2 12.5% 2.1 3.8%

Financial Stability and Payment Systems Report 2010 6

Premiums for insurance sector continued to grow, driven by investment-linked and motor businesses

New business premiums for Life and Family Takaful

2.6 2.2 2.7 1.9 1.8 1.3 4.1 3.8 3.5 2 4 6 8 10 2008 2009 2010 RM bil

I nvestment-linked Par-products Non-Par products Annuity

Gross Premiums for General I nsurance and General Takaful Business

6.0 5.3 5.0 2.1 2.1 1.9 1.3 1.2 1.2 3.4 3.2 3.0 4 8 12 16 2008 2009 2010 RM bil

Motor Fire MAT Others

Financial Stability and Payment Systems Report 2010 7

Manageable trend in payouts of benefits and claims

6.8 0.9

1 2 3 4 5 6 7 8 1H 2H 1H 2H 1H 2H

%

Total benefits payments (Life Insurance) Total benefit payments (Family Takaful) 2008 2009 2010

80.5 70.8 62.5 59.6

40 50 60 70 80 90 100 1H 2H 1H 2H 1H 2H

%

• Gen. Insurance (Motor)
• Gen. Takaful (Motor)
• Gen. Insurance (Total)
• Gen. Takaful (Total)

2008 2009 2010

Total benefit payments of RM13 bil

• r 58.1% of premium

New motor cover framework that is being formulated to preserve access to affordable motor cover while ensuring its sustainability over the longer term Claims experience in motor continues to remain high

Financial Stability and Payment Systems Report 2010 8

Continued access to financing by all sectors

• Outstanding banking system financing

grew by 13.1%

– Continued expansion to all segments, including SMEs

• Bank deposits increased by 9.1%

– Loan-to-deposit ratio stable at 81.2%

• Favourable condition since 2H 2010

facilitated fund raising in PDS market

– New corporate debt securities and sukuk issuances of RM76 bil – Danajamin approved RM4.6 bil worth

• f guarantees

Financial System: Outstanding Financing

1,190.2 1,145.1 1,120.1 1,080.9 200 400 600 800 1000 1200 1400 Mar Jun Sept Jan 2011

RM bil

6 8 10 12 14

%

Large Enterprises SME Household Others Debt securities Annual growth (RHS)

Banking System: Deposits

1,091.4 1,073.3 1,159.4 1,113.7 200 400 600 800 1,000 1,200 1,400 Mar Jun Sept Jan 2011

RM bil

8 8.2 8.4 8.6 8.8 9 9.2

%

Business Household Others Annual growth (RHS)

Financial Stability and Payment Systems Report 2010 9

Higher new loans to large businesses and SMEs

10 20 30 40 50 60 70 80 90 100

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q RM bil Loans approved - Large Businesses Loans approved - SMEs Loans approved - Households

2010 2009

• Outstanding loans to businesses grew

10.1% to RM336.9 bil

– More moderate growth of 2.8% for SME loans – Adjusting for graduated accounts of business reclassification as large enterprises, SME loans had grew by 11.5%

• Bulk of new approvals to:

– Manufacturing (RM22 bil) – Construction (RM25.5 bil) – Wholesale & retail (RM18.9 bil) – Real estate activities (RM18.5 bil)

• Ave. 2009:

RM71.7 bil

• Ave. 2010:

RM85.8 bil

Financial Stability and Payment Systems Report 2010 10

Overall financing quality remained intact

4.8 3.2 2.2 1.8 2.3 2.2 1 2 3 4 5 6 2006 2007 2008 2009 2010 Jan-11

Increase in NPLs reflect adoption of impairment methodology since FYE 2010

5.4 4.9 2.3 2 3 4 5 6 7 8 9 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

%

Large businesses SMEs Households Stable loans-in-arrears accounted for 4.1% of total loans

10 20 30 40 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q RM bil 1 2 3 4 5 % 1-<2 month 2-<3 month 1-<2 month (% of total loans) 2-<3 month (% of total loans)

Increase in NPLs of large businesses amid adoption of impairment classification under FRS139

2008 2009 2010

2008 2009 2010

• New NPLs average at RM2.4 billion a month
• Loan loss coverage at 90.7%

Financial Stability and Payment Systems Report 2010 11

Margins rebounded on sustained financing activities and lower impairment provisions

0.3 0.4 0.5 0.6 0.7 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan 2.4 2.5 2.6 2.7 2.8

Net interest margin Gross interest margin (RHS)

Percentage point Percentage point 2008 2009 2010 2011

Net interest margins increased to 0.61 ppts

Financial Stability and Payment Systems Report 2010 12

Manageable credit risk from business

• sustained debt servicing capacity of businesses

Profitability continues to uptrend despite moderating interest-coverage ratio

5.7 7.5 5.5 9.7

1 2 3 4 5 6 7 8

1Q 2009 2Q 3Q 4Q 1Q 2010 2Q 3Q 4Q

%

2 4 6 8 10 12 14

Times ROA (Export-related sectors) ROA Interest coverage ratio (Export-related sectors) (RHS) Interest coverage ratio (RHS)

Year Downgrades Upgrades Ratio 2009 23 11 2.09 2010 22 15 1.47 Leverage position sustained <50% (Debt-to-Equity Ratio)

44.5 45.6

20 30 40 50 60 1Q 2009 2Q 3Q 4Q 1Q 2010 2Q 3Q 4Q

% Source: RAM and MARC

Improved downgrade-to-upgrade ratio

*Export-related sectors include timber & wood-based products, textiles & apparels, rubber gloves, plantation & agriculture, packaging materials, O&G, furniture, E&E, chemicals & chemical products

Financial Stability and Payment Systems Report 2010 13

Rising household indebtedness supported by strong financial buffers…

Household Debt-to-GDP Ratio (%)

75.9 76 50 60 70 80 2006 2007 2008 2009 2010

Household debt-to-GDP ratio unchanged at 75.9% Household financial assets are 2.4 times of household debts

Household Financial Assets, Deposits and Debts

200 400 600 800 1,000 1,200 1,400 1,600 2006 2007 2008 2009 2010 50 100 150 200 250 300

Financial Assets (LHS) Debts (LHS)

• Fin. Asset-to-Debt Ratio

Deposit-to-Debt Ratio

RM billion %

Financial Stability and Payment Systems Report 2010 14

Composition of HH Financial Assets (RM1,386 bil)

Savings with EPF 30% Unit Trust funds 16% Equity Holdings 17% Endowmen t policies 6% Deposits with FIs 31%

…and high level of liquid assets, while bulk of borrowings are for purchase of assets

Secured financing constitute 64.9%

• f household debt

Composition of HH Financial Debts (RM581 bil)

Others 10% Purchase

• f

Securities 5% Auto financing 20% Personal use 15% Credit Card 5% Housing loan 45%

Liquid assets accounted for 64.6%

• f financial assets

Financial Stability and Payment Systems Report 2010 15

Personal financing grew 17.5% driven by salary deduction scheme

Composition of household debts

15% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Dec- 03 Dec- 04 Dec- 05 Dec- 06 Dec- 07 Dec- 08 Dec- 09 Dec- 10 Others Securities Credit cards Personal use Transport Vehicles Housing Loans

• Personal financing (PF)

accounted for 14.6% of household debts

– Personal financing by banks grew at lower rate of 13% – Account for less than 5% of banks’ loans – NPL ratio of 2.5%

• Driven by development financial

institutions, cooperatives and building societies

– Approx. 80% under salary deduction schemes

Financial Stability and Payment Systems Report 2010 16 Household NPLs Ratio (%) 3.2 1.2 2.5 1.9 0.7

1 2 3 4 5 6 7 8 9

2007 2008 2009 2010

Overall Housing loans Car financing Personal use Credit cards Purchase of securities

Household loan quality remained intact

• Debt servicing capacity of

households remains sound

– Delinquencies continued to improve – Banking system gross NPL ratio: 2.3% (2009: 3.1%) – LIAs at 4.7% of total banking system loans

• Banks maintain prudent loan

underwriting standards and risk management practices

• Supported by comprehensive credit

information system and infrastructure

Household Loans in Arrears Ratio (%) 3.9 8.3 5.9 2.8 1.8

2 4 6 8 10 12 14

2007 2008 2009 2010

Financial Stability and Payment Systems Report 2010 17

Comprehensive and pre-emptive strategies to preserve household sector resilience

Prudential policies

• Loan-to-value ratio of 70% applied

to 3rd housing loans onwards

• New credit card guidelines
• Higher minimum income eligibility

from RM18k to RM24k per annum

• Limit on no. of cards and credit limit

for cardholders earning <RM36k per annum

• Increased risk-weights for housing

loans with LTV >90% and personal financing with tenure >5 years

Intensive supervisory

• versight

Standards on prudent and responsible lending practices

• Suitability and affordability assessments

Targeted financial education programme by AKPK

• Including advisory and support

arrangements

Financial Stability and Payment Systems Report 2010 18

Ensuring prudent and responsible conduct for retail financing as part of measures to preserve household sector resilience

• Inculcate responsible lending practices by financial institutions in

dealing with retail customers

• Requirements NOT intended nor expected to hamper credit availability
• Key requirements include

– Suitability and affordability assessment – Verification of customers' income – Product disclosure sheet to facilitate informed decision making – Compensation of sales and marketing personnel to take into account fair dealing conduct

• Complete submissions should not result in processing delays

Financial Stability and Payment Systems Report 2010 19

Key contents of product disclosure sheet

• Borrowing rate, variable / fixed rate, tenure, repayment structure
• Repayment obligation

– Installment amount, total repayment (entire duration), changes to installment amount for 100-200bps increase in borrowing rate

• Applicable charges

– Stamp duty, disbursement fee, processing fee

• Implications of non-repayment

– Late payment penalty, review of borrowing rate, legal implications

• Risk associated with the product
• Assistance and redress mechanism

Financial Stability and Payment Systems Report 2010 20

Financial markets exhibited enhanced capacity to intermediate larger and more volatile portfolio flows

Volatility of asset prices remained low

90-day volatility (%)

5 10 15 20 25 30 35 40 Jan- 08 Apr- 08 Jul- 08 Oct- 08 Jan- 09 Apr- 09 Jul- 09 Oct- 09 Jan- 10 Apr- 10 Jul- 10 Oct- 10 KLCI MGS (5-year yield) [RHS] Lehman collapse European sovereign debt crisis

Returns-to-turnover ratio was lower, denoting higher resilience

Ratio

0.000 0.004 0.008 0.012 0.016 0.020

Jan- 08 Apr- 08 Jul- 08 Oct- 08 Jan- 09 Apr- 09 Jul- 09 Oct- 09 Jan- 10 Apr- 10 Jul- 10 Oct- 10

0.1 0.2 0.3 0.4 FBM KLCI MGS [RHS]

Ratio

Avg 2010: 0.04 Avg 2010: 0.006

Source: Bloomberg

Financial Stability and Payment Systems Report 2010 21

Portfolio inflows channeled to more diversified asset classes

Bulk of inflows into debt securities with rising equity participation

5 7 9 11 13 15 17 19

M J S D M J S D

%

19 20 21 22 23

%

Debt securities as % of outstanding Equities as % of market capitalisation (RHS)

Strong increase in non-residents' holdings of KLCI and CPO futures

15 20 25 30 35 40 45

M J S D M J S D

%

10 15 20 25 30 35

%

KLCI futures as % of number of contracts CPO futures as % of number of contracts (RHS) 2009 2010 2009 2010

Financial Stability and Payment Systems Report 2010 22

No material changes in risk-taking by FI s

(RM bil) 2008 2009 2010 Dealing Securities 51.7 46.4 69.2 Investment Securities 163.5 199.3 201.6 Shares 1.8 2.2 3.1 MGS 61.4 90.7 84.0 BNM Debt 15.3 14.0 47.2 PDS 59.2 60.1 59.9 (RM bil) 2008 2009 2010 Investment Securities 72.2 87.8 101.7 Shares 12.4 20.0 21.3 MGS 16.2 15.7 22.1 BNM Debt 0.09 0.02 1.23 PDS 43.6 52.1 57.0

• Trading portfolio of banks grew

49.2% in 2010

– Due primarily to higher holdings

• f BNM papers (+237.1%)

Banking System: Securities Portfolio Insurance Sector: Securities Portfolio

• Equity holdings increased

slightly to 16.5% of assets (2009: 13.5%)

• Helps reduce mismatch in

returns

Financial Stability and Payment Systems Report 2010 23

Rise in market risk exposures of FI s is manageable

Banking system: Market Risk Exposure (as % of Capital Base)

2 4 6 8 Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec

Equity holdings Foreign currency net open position Duration weighted net position (interest rate risk)

2008 2009 2010

%

• FCY exposures edged up to 3.8% of

capital base, more active hedging by customers

– Stable FCY deposits from non-residents I nsurance sector: Components of Market Risk

Financial Stability and Payment Systems Report 2010 24

Limited impact from developments in Europe and MENA*

• Banks’ exposures at 18.3% of external

exposures or 5% of capital base

– No adverse spillovers from interbank funding strains in Europe – Regional operations of domestic banks’ unaffected due to strong fundamentals

• Counterparty risks to European reinsurers well-

contained

– High net retention ratio of 71.4% – Reinsurance exposures to Europe only 8.5% of total capital available for general insurance

• Under scenario of widespread sovereign default

by GIIPS^, potential credit losses will remain below 0.05% and 0.0006% of banks and insurance sectors’ capital buffers respectively

Banking System: External Exposures (RM bil, % of cap base)

GIIPS (0.1, 0.1) US (0.2, 0.2) Others (2.0, 1.3) Asia (25.7, 17.1) Middle East (2.2, 1.4) Europe (5.3, 3.5) Labuan (5.4, 3.6)

Distribution of Premium Income

0% 20% 40% 60% 80% 100%

Direct Insurers Domestic Reinsurers Offshore Reinsurers Foreign Reinsurers

* MENA – Middle East and North Africa ^ GIIPS – Greece, Ireland, Italy, Portugal and Spain

Financial Stability and Payment Systems Report 2010 25

Domestic banking groups have presence in 19 countries worldwide with a higher share of overseas assets and income

MBB, RHB, Public, HL MBB MBB, CIMB, RHB, HL, AM MBB, CIMB, AM CIMB, RHB Public CIMB MBB, CIMB, Public MBB, CIMB, Public, HL, AM MBB, CIMB, Public, HL

Expanded overseas presence of domestic banking groups in East Asia

Malaysian financial institutions have continued to strengthen their regional presence

Intensified domestic competition Rising needs of internationalisation of local firms Greater trade & investment linkages Growth opportunities in new markets Key Drivers for Expansion Abroad

2002 2010

Assets RM3.3 bil RM258 bil Revenue

• 4.3%

16.7%*

* 2009

Enhanced capacity to expand overseas

Financial Stability and Payment Systems Report 2010 26

Overseas operations remained well capitalised

Banking System: Assets of Overseas Operations (and # of establishments)

20 40 60 80 100 120

Singapore Indonesia China Labuan Hong Kong Thailand Others

RM bil 6 4 3 9 7 2 19 SMEs 39% Personal 6% Others 12% Mortgage 13% Corporate 30%

Banking System: Loan Composition of Overseas Operations

Key Financial Soundness Indicators

RWCR: 11.9% - 33.6% Overall NPL ratio: 3.3% Overall RoA: 1.0%

Financial Stability and Payment Systems Report 2010 27

I slamic banks: Effective management of displaced commercial risk

• Total deposits grew 15.7% to

RM218.4 bil

– 33% of deposits are mudharabah general investment accounts

• Active management of displaced

commercial risk

– Profit equalisation reserves of RM126.6 mil

Profit Equalisation Reserve

50 100 150 200 250 300 350 J A J O J A J O J A J O J A J O J RM mil 2007 2008 2009 2010

Financial Stability and Payment Systems Report 2010 28

I slamic banks: Active management of repricing gap risk

• 63.8% of assets on fixed-rate
• Risks increasingly hedged by

Islamic Profit Rate Swap (IPRS)

• Variable rate financing e.g.

musharakah mutanaqisah (diminishing partnership) and ijarah (leasing) contracts increasing in volume

– Increased by 44.1% to RM58.6 bil

20 40 60 80 100 120 J A J O J A J O J A J O J A J O RM bil Fixed Rate Financing Floating Rate Financing

Islamic Banking System: Fixed and Floating rate Financing

2007 2008 2009 2010

Murabahah and BBA 48% Ijarah 30% Musharakah and mudharabah 3% Others 19%

Composition of Financing by Islamic Contract

Financial Stability and Payment Systems Report 2010 29

Strengthened governance and decision making framework for financial stability

F inanc ial Stability E xe c utive Committe e

• High level committee

established under s.37 of CBA 2009 to review and decide on the Bank’s recommendations to manage risks to financial stability

• Entities outside

regulatory perimeter

• f the Bank
• Resolution of

systemically important financial institutions

• Involves public funds

F inanc ial Stability Polic y Committe e

(within the Bank)

• Maintaining price

stability while giving due regard to the developments in the economy

• Formulation of

monetary policy and policies for the conduct of monetary policy operations

• Risk assessment
• Macroprudential responses
• Microprudential responses
• Supervisory interventions

Recommendations with systemic implications

Mone tar y Polic y Committe e

(within the Bank)

Joint meeting for effective deliberation and consideration of macroprudential measures to safeguard financial and macroeconomic stability

Re solution of individua l F I by PIDM

Financial Stability and Payment Systems Report 2010 30

Foundations for financial stability were further strengthened

Enhanced robustness of risk management, stress testing and capital management More effective governance in financial institutions Strengthened cross- border supervisory cooperation Strengthened prudential standards for I slamic finance Enhanced protection for depositors and policyholders Adoption of more advanced capital approaches under Basel I I

Financial Stability and Payment Systems Report 2010 31

Share premium 14.6% Ordinary share capital 22.9% Retained profits 19.5% Others 6.1% Stat reserve fund 14.9% General provisions 7.1% Sub debt capital 14.8%

Composition of Insurance and Takaful Sector Capital

High quality capitalisation with > RM80 bil financial buffers

Composition of Banking Sector Capital

Valuation surplus in fund 30% Retained profits 11% Tier-2 less deductions 10% 50%

• f

future bonuses 35% Fully paid up capital 11% Share premiums 3%

More than 70% of the financial sector’s total capital comprise of equity, reserves and retained profits

Financial Stability and Payment Systems Report 2010 32

Malaysian banking system well-positioned to meet Basel I I I requirements

• Strong and high quality of bank capital
• Minimum liquidity standards have been in place since 2000

– Banks to further strengthen buffers going forward – Currently, banks have liquidity buffer of 14.8% (maturities <1 month)

• Implementation strategy for Basel III to be communicated to industry in 2011

– Consider specific characteristics of domestic market – Minimise impact on bank lending and economic growth

Common equity Tier 1 capital Total capital Leverage Minimum requirement 4.5% 6% 8% 3% Minimum requirement + conservation buffer 7% 8.5% 10.5%

• Estimated current position
• f banking system

9.3% 10.8% 14.5% 5.9%

Financial Stability and Payment Systems Report 2010 33

Malaysian financial sector increasingly integrated with the global financial system facilitating our economic linkages with the world

Financial Liberalisation Collaborative Arrangements Free Trade Agreements Various Avenues for Increased Internationalisation

• f the Malaysian

Financial Sector Push for areas that can further interests of Malaysian financial institutions overseas Regulatory & supervisory cooperation Capacity building & human capital development Currency swap agreements New players with significant value propositions to contribute to economic and financial development Increased diversity of financial institutions operating onshore Liberal foreign exchange policies to facilitate foreign investment Ensure sufficient safeguards to preserve economic & financial stability + 4 new family takaful licences were issued on 1 Sept 2010

Financial Stability and Payment Systems Report 2010 34

34

Malaysia maintains a leading role in development of Islamic finance

Malaysia tops global league tables in sukuk equity and fund management

Source: “Gateway to Asia: Malaysia, international Islamic finance hub” by Pricewaterhouse Coopers 2010

…and home to largest sukuk market

Global Sukuk Outstanding by Country* USD148 billion

*Source: Bloomberg Professional Services Terminal, as at end-2010

Malaysia 66% Indonesia 4% Offshore Centres 16% Others 1% Saudi 7% Bahrain 2% UAE 4% Singapore 0.1%

(USD94 billion)

Financial Stability and Payment Systems Report 2010 35

Outlook for domestic financial stability in 2011 remains positive

• Risks to financial stability largely externally driven
• Pre-emptive measures and strong financial buffers ensure that financial

system is well-placed with capacity and flexibility to respond to emerging risks

• Macrosurveillance and supervisory activities in 2011 will focus on:

– Ensuring prudent and responsible risk-taking and market conduct by FIs – Ensuring resilience and robustness of major payment and settlement systems – Active engagement in global regulatory and accounting reforms – Further strengthening of regulatory laws and prudential guidelines – Promoting closer domestic, regional and global cooperation and coordination

Financial Stability and Payment Systems Report 2010 36

Moving forward…

The new financial sector blueprint will build on the strong foundations of the Malaysian financial system to:

– remain resilient in withstanding any potential disruptions in the financial system and broader economy; – to best serve the needs of a high value-added and high income economy;

while further promoting financial inclusion and regional financial integration.