Central bank reinstates credit rules: regulations criticized for hiding debt woes, scaring away investors

Article Abstract:

A number of foreign investors and Malaysian bankers and businessmen were dismayed over the decision of the Malaysian Central Bank to reregulate bank credit, after announcing that it plans to liberalize banking credit. Malaysian economic observers believe that the central bank blundered in retracting its pledge to liberalize the market, giving investors the impression that the central bank is covering up systemic errors in the country's lending sector. The retraction is in line with Malaysia's aggressive capital control strategy for its economy, that has seen the government regulating offshore exchange rate trading for the ringgit and fixing an exchange rate for the ringgit against the US dollar at 3.8 ringgit to the dollar.

Administration of General Economic Programs, Foreign Exchange & Reserves Policy, Currency Stabilization Programs, Securities Credit Regulations, Prices and rates, Political aspects, Foreign exchange, Foreign exchange rates, Credit, Securities law, Commercial loans, Currency stabilization

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Malaysian banks' reserve requirements to rise in bid to cut spending, inflation

Article Abstract:

The Malaysian central bank is attempting to cut consumer spending and relax inflationary pressure by increasing reserve requirements for financial institutions by one percentage point. The reserve requirement for commercial banks, finance companies and merchant banks in the country is raised from 11.5% to 12.5% of total liabilities. Bankers predict this will drop about two billion Malaysian dollars in excess liquidity from the country's financial system.

Commercial Banks, Commercial Banking, All Other Nondepository Credit Intermediation, NONDEPOSITORY INSTITUTIONS, Financial Institutions NEC, Bank Reserves, Reserves Regulation, Central banks, Financial institutions, Bank Negara Malaysia

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Finance mergers are pushed

Article Abstract:

Malaysia's Finance Ministry has set a Mar 31, 1998 deadline for the country's 39 finance firms to merge into six groups, with a government-selected anchor company heading each group. The plan calls for the dissolution of MBf Finance Bhd, Malaysia's biggest finance firm, and its operations to be consolidated into Mayban Fiance Bhd. The government deems that consolidation is the key to strengthening the finance industry.

Banking Regulation, Bank mergers

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