Professional Documents
Culture Documents
YOU
payment &
settlement
systems
markets
institutions
SECURITIES COMMISSION
stock
broking
companies
commercial
banks
Islamic banks
(re)insurance
companies
(re)takaful
operators
insurance
brokers/
adjustors
venture
capital/private
equity
asset/fund
management
companies
offshore
insurance
international
Islamic banks
international
takaful
operators
financial
advisors
financial
planners
dealers/ brokers
offshore fund
management
companies
money brokers
development
finance
institutions
factoring &
leasing
companies
money market
investment banks
unit trust
companies
LABUAN
FSA
other offshore
financial
institutions
debt securities
market
derivatives
market
equity market
payment system
operators
offshore
banking
non-bank
financial
intermediaries
provident &
pension funds
Cagam as
cooperatives
Credit
Guarantee
Corporation
m oney lenders
housing credit
institutions
macroeconomy
household
sector
financial
sector
corporate
sector
Widespread unemployment
Social repercussions
Declined economic
activities
GDP contracted 7.5%
Weak regional export
demand
VICIOUS CRISIS
CYCLE
Inefficiency in
intermediation process
Tight liquidity
Sharp loan growth moderation
Pressure on
Banking system
NPLs (2.2% 7.7%)
Capital erosion
Over-concentration of
risk
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50
40
25
30
13
20
10
0
Indonesia
Recapitalization
Thailand
Purchase of NPLs
S. Korea
Interest Costs
MALAYSIA
Liquidity Support
1600
1400
1200
1000
800
600
400
200
0
Bank losses
Other financials
40
35
30
25
20
15
10
5
0
US subprime
crisis (2007present)
% of GDP (RHS)
1.3 billion
movie tickets
20 million
iPhones
250,000
Chanel bags
Rapid credit
expansion
Liberalisation and
deregulation
Economic shocks
from greater market
volatility
Confidence crisis
interest/exchange
rates
asset prices
Financial crisis
liquidity
Weakened banking system
Reduced credit availability
Economic slow down
and be avoided
Rapid credit
expansion
Liberalisation of
financial system
Protection of
consumers
Economic shocks
from greater market
volatility
Preserve market
confidence
interest rates
asset prices
Effective
regulation/
supervision & crisis
management
Financial stability
Primary functions
Regulate and supervise financial
institutions
Promote sound, progressive and
inclusive financial system
Provide oversight over the money
and foreign exchange market
Exercise oversight over payment
system
efficiently
financial
stability
financial
system
smoothly absorbs
financial and real
economic shocks
priced reasonably
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Structural
transformations
Globalisation
More contestable
markets
Advances in
financial
engineering
Financial conglomeration
Securitisation
Credit derivatives
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efficient
safety nets
robust
financial
infrastructure
comprehensive
surveillance
framework
sound
supervisory
framework
Market transparency
Responsibility to consumers
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Development of
financial markets
Consumer protection
arrangements
Institutional and
capacity building
Human capital
development
nation
building
political
stability
growth with
balanced
distribution
financial
inclusion
social
harmony
access to financing
peoples
confidence
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Create a
diverse range
of financial
service
providers that
thrives and
competes
Enhance
distribution
channels to
ensure
widespread
access to
financial
services
Ensure a
minimum level
of banking
products and
services are
provided at
reasonable
costs
Improve
Strengthen
the
supporting
financial
financial
literacy,
advisory,
awareness
and
consumer
education
infrastructure
and enabling
environment
9.7%
enhance infrastructure
intensify competition
PHASE III
assimilate into
global arena
2010
11.7%
ENABLER
CATALYST
DRIVER
Facilitate transformation
into a high income, high
value-added economy
Accelerate growth of
supporting and ancillary
services sectors
Generate higher
contribution to gross
domestic product
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Financial
Surveillance
Payment
Systems
Policy
Prudential
Financial
Policy
Financial
Sector
Development
Consumer
and Market
Conduct
Islamic
Banking and
Takaful
Development
BEFORE
REALIGNMENT
BANKING
INSURANCE
ISLAMIC
BANKING &
TAKAFUL
Development Financial
Enterprises
Payment System Policy
SUPERVISION
SECTOR
Financial
Conglomerates
Supervision
Banking
Supervision
PAYMENT
SYSTEMS
From sectoral to
functional organisation
Provide more
comprehensive view and
cohesive approach to
development of financial
system
Insurance and
Takaful
Supervision
Supervisory
Practices unit
DFE
Malaysian Accounting
Standards Board
Industry associations
Professional bodies
YOU
consumer
leader
employee
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Useful links
Bank Negara Malaysia
http://www.bnm.gov.my
Malaysian Deposit Insurance Corporation
http://www.pidm.gov.my
Information portals
http://www.bankinginfo.com.my
http://www.insuranceinfo.com.my
http://www.smeinfo.com.my
Centres for education and development
http://www.iclif.org
http://www.inceif.org
http://www.seacen.org/
http://www.ifsb.org/
http://www.insurance.com.my/
Other regulators
http://www.sc.com.my
http://www.lofsa.gov.my
THANK YOU
Questions?
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Islamic banks carry out almost similar activities in nature as commercial banks
but based on Shariah principles
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Within banking
groups
Universal brokers
Minimum Capital
Requirement
RM2 billion
(on Group basis)
RM500 million
Discount houses
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Investment Banks
Regulatory body
BNM
BNM + SC
Loans
All types
i)
Deposits
All types
Stockbroking
Advisory services
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DFIs
Functions
To develop and promote certain
strategic sectors of the economy
(specialised institutions)
To achieve socio-economic goals
To complement the role of the
banking institutions
Regulated by BNM:
Bank Pembangunan
SME Bank
EXIM Bank
Bank Simpanan Nasional
Bank Kerjasama Rakyat
Agrobank
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Intermediaries
Insurance / Takaful
brokers
Loss adjusters
Financial advisors
Insurance business concerned with life policies and those incidental to life
insurers business. Takaful business for the benefit of individual & family
All insurance business which is not life business (eg. property and liability)
All takaful business which is not family takaful business
Composite Insurance
Reinsurance Company /
Retakaful Operator
Insurance of risks assumed by the insurer under the policies it has issued.
Offers coverage for takaful companies against risks, loss or dilution of its
capital and reserves resulting from high-claim exposure.
Financial advisors
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Money Brokers
Money brokers may also arrange deals between banking institutions and
foreign counterparties in the international money market
6 money brokers:
1)
2)
3)
4)
5)
6)
Financial Markets
Money Market
Forex Market
Market for buying and selling of one currency against RM or against other foreign currencies
Dealings in forex market through spot, forward or swap market
Under the Exchange Control Act 1953, FX transactions have to be undertaken through authorised
dealers (CBs & designated IBs)
Capital Market
Equity Market
Bond Market
Derivatives
Market
Markets for trading instruments that provide contingent claims on underlying assets
Main use - to hedge against volatility in the price of the underlying assets
Examples - forwards, futures, options, swaps, and credit derivatives
Instruments traded - stock index, interest rate & commodity futures
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