2013年-世界发展银行全球_Financial_Sector_Assessment___Malaysia_25页_993kb

Malaysia Financial Sector Assessment Summary (March 2013)

Core Content

The Financial Sector Assessment Program (FSAP) for Malaysia, conducted in 2012 by an IMF/World Bank team, evaluated the country's financial sector development and stability, with a focus on regulatory and supervisory frameworks, financial institutions' resilience, and the role of the state in the sector. The assessment also included an update on the Labuan International Financial Centre.

Main Findings

1. Macroeconomic and Financial Environment

• Malaysia has successfully weathered global economic and financial stresses, with strong economic growth in 2012 H1 (5.1%).
• Inflation is at a two-year low.
• Capital inflows have been volatile in recent years, but well-managed through BNM interventions and bond purchases by EPF and other GLICs.
• The financial account has remained close to balance in recent quarters.
• Foreign exchange intervention is generally two-sided.

2. Structure and Functioning of the Financial System

• Malaysia has a large, well-diversified financial sector with total assets close to 400% of GDP.
• Banking intermediaries account for just over half of the financial system.
• The financial system is highly interconnected through funding and ownership, with significant consolidation in the banking sector.
• Government-linked entities (GLCs) and government-linked investment companies (GLICs) are major players in the financial system.
• The bond market is well-developed, with RM 456 billion in federal government debt (51.8% of GDP) at year-end 2011.
• The equity market is robust, with market capitalization growing at a faster pace than regional peers.
• The Labuan International Financial Centre (IBFC) is a small offshore financial center, primarily engaged in bank lending, reinsurance, and trust business.

3. Financial Sector Development Indicators

• Credit intermediation through the banking sector and corporate debt securities market is high compared to regional peers.
• The domestic stock market, provident/pension funds, and mutual funds have grown significantly and outperformed regional peers.
• The insurance sector remains relatively small and underdeveloped, with low penetration rates.

4. Banking Sector Performance

• Banking institutions are well capitalized, profitable, and have strong asset quality.
• The risk-weighted capital adequacy ratio (RWCR) increased to 15.1% in 2011, well above the BNM minimum of 8%.
• Tier 1 capital comprises 73% and 80% of commercial and Islamic banks' capital, respectively.
• Return on assets (ROA) and return on equity (ROE) are above regional averages.
• The cost-to-income ratio is low (43.6%) compared to peers (48%).
• Gross non-performing loan (NPL) ratio dropped from 8.3% in 2006 to 2.7% in 2011.
• Provision coverage is close to 100% of NPLs, indicating strong risk management.

5. Risks and Vulnerabilities

• Household debt has risen significantly, reaching 74% of GDP in 2011, with mortgage lending playing a key role.
• Stress tests indicate the banking system is resilient to economic and market shocks but highlight vulnerabilities in some smaller Islamic banks.
• Liquidity risk is a concern due to reliance on non-retail, at-call deposits, though these deposits are generally stable.
• The state's extensive involvement in the financial sector, including ownership and preferential treatment, may hinder market development.

6. Regulatory and Supervisory Framework

• The regulatory and supervisory regimes for banking, insurance, and securities are well developed and largely compliant with international standards.
• Gaps exist in the consolidated supervision of financial holding companies (FHCs), legal provisions affecting supervisory independence, and clarity in connected lending definitions.
• Insurance regulation is strong but needs improvements in incorporating expectations into guidelines, regulating financial guarantee business, and enhancing transparency.
• Securities regulation is robust but requires legal support for the Securities Commission's operational independence.

7. Government Role and Oversight

• Government equity holdings in the financial sector are extensive, with GLICs playing a significant role in the capital market.
• Some state-sponsored activities receive preferential treatment, including tax incentives for Islamic finance and favorable fee structures for PNB's unit trusts.
• While the government claims not to interfere with management, the perception of implicit guarantees may affect market competition.
• The need for a more market-driven approach is emphasized, especially as Malaysia transitions to a high-income, high-value-added economy.

8. Crisis Management and Financial Infrastructure

• The crisis management framework has the necessary building blocks, including experience from the Asian Financial Crisis.
• A more formalized framework with a permanent apex committee and interagency contingency plans is recommended.
• The national financial market infrastructure (FMI) is well-developed, with BNM overseeing payment systems and SC regulating corporate securities and derivatives markets.

Key Recommendations

• BNM should adopt multi-year top-down and bottom-up macroeconomic stress testing and introduce more conservative credit loss parameters in stress tests.
• Legal reforms are needed to enhance the supervisory independence of BNM and SC, particularly regarding FHCs and connected lending.
• Insurance regulation should be strengthened to incorporate expectations into guidelines, regulate financial guarantee business, and improve transparency.
• Securities regulation should be supported by stronger legal frameworks to ensure the Securities Commission's operational independence.
• PIDM should secure a backup funding agreement with MoF and gain legislative authority to approve operational matters.
• State involvement should be reduced gradually, with a clear timetable for liberalization and market-based reforms.
• Financial development should be pursued with a focus on enhancing private sector participation and reducing reliance on state support.
• Islamic finance should continue to be promoted, with careful monitoring of regulatory and supervisory implications as products evolve.
• Crisis management should be formalized with a permanent apex committee and interagency contingency plans.

Conclusion

Malaysia's financial sector has made significant progress since the Asian Financial Crisis, with strong regulatory and supervisory frameworks, well-capitalized and profitable institutions, and a resilient banking system. However, challenges remain in areas such as insurance development, liquidity risk, and the need for further liberalization and market-based reforms. Continued monitoring, legal reforms, and a gradual reduction in state involvement are essential for sustaining financial stability and promoting inclusive growth.