2013年-世界发展银行全球_Financial_Sector_Assessment_Program___Malaysia_-_Basel_Core_Principles_for_Effective_Banking_Supervision_119页_1mb

Malaysia: Basel Core Principles (BCPs) Observance Assessment Summary

Core Content Overview

This document presents the findings of the Financial Sector Assessment Program (FSAP) conducted by the World Bank and the International Monetary Fund (IMF) in 2012, assessing the observance of the Basel Core Principles (BCPs) in Malaysia. The assessment focuses on the effectiveness of banking supervision, regulatory framework, market structure, and macro-prudential settings. It also outlines key recommendations for improving compliance and strengthening the supervisory and regulatory environment.

Main Findings

1. Supervisory Framework

• BNM's Risk-Focused Supervision: The Bank Negara Malaysia (BNM) has a well-developed, hands-on, and comprehensive regulatory and supervisory regime. It includes:
  • Onsite supervision.
  • Extensive off-site macro- and micro-surveillance.
  • A Supervisory Risk-Based Framework (SuRF) that supports consistent and effective supervision.
• Supervisory Structure:
  • Supervision is led by Relationship Managers (RMs) and their teams.
  • Supported by micro-surveillance personnel, macro-surveillance unit, and Specialized Risk Unit (SRU).
  • A system of checks and balances is in place, with ratings and recommendations vetted by independent panels.
• Communication and Remediation:
  • Supervisory expectations are communicated effectively to banks.
  • Remediation is followed through in a disciplined manner.

2. Regulatory Framework

• Capital and Liquidity Standards:
  • BNM's capital framework is generally in line with, and in many cases stricter than, international standards.
  • However, it does not cover financial holding companies (FHCs).
  • The liquidity framework applies on a per-entity basis, not consolidated.
• Risk Management:
  • Interest Rate Risk (IRR) and operational risk are generally managed.
  • More detailed regulation on interest rate risk in the banking book (IRRBB), credit concentrations, country risk, and operational risk is being developed.
  • Pillar 2 will further strengthen oversight of IRRBB and credit concentration risk.
• Independent Risk Units:
  • All domestic banking groups have independent risk units, but there is no regulatory requirement for their existence.

3. Transparency and Legal Protection

• Transparency Needs:
  • BNM should increase transparency in licensing criteria and acquisition requirements.
  • Clear communication of supervisory expectations beyond standard audit procedures is recommended.
• Legal Protections:
  • The Memorandum of Understanding (MoU) with the Securities Commission should be revised to focus on consolidated supervision.
  • An MoU with the Cooperatives Commission (SKM) should be negotiated.
  • Legal protection for BNM staff should not depend on employment status, and indemnification provisions should be included in law for former employees.

4. Regulatory Gaps and Legislative Changes

• FHCs Regulation:
  • Six of the eight large domestic banking groups have parent FHCs.
  • The current legal framework does not apply to FHCs on a consolidated basis.
  • A proposed Financial Services Act (FSA) aims to address these gaps by providing a more comprehensive regulatory framework and granting BNM enhanced legal powers.
• Supervisory Independence:
  • The proposed FSA seeks to enhance BNM's independence in supervisory decisions.
  • There is no evidence of serious government interference in BNM's operations.

5. Financial System Overview

• Concentration of Financial System:
  • The onshore banking sector holds 200% of GDP in assets, comprising ~50% of total financial sector assets.
  • Islamic banks account for ~20% of the banking sector.
  • Labuan OFC banks contribute an additional 3.2%.
• Top 5 Domestic Banking Groups:
  • Hold ~62% of total banking system assets.
• Asset Quality:
  • Gross Non-Performing Loans (NPLs) decreased from 3.6% (2009) to 2.7% (2011).
  • Total provisions covered ~99.4% of NPLs in 2011.
  • Net NPLs stood at 1.8%, below the 5-year average of 2.3%.
• Capital Adequacy:
  • System-wide risk-weighted capital ratio was 15.6%, and core capital ratio was 13.6% in 2011.
• Non-Bank Credit Intermediation:
  • Accounts for ~90% of GDP.
  • Main contributors: Employee Provident Fund (33%), Insurance Companies (15%), DFIs (16%).
  • DFIs have improved their asset quality, with gross impairment ratio reduced to 7.3% in 2011.
  • They remain well capitalized with a leverage ratio of 13.9% in 2010.

6. Financial Infrastructure and Services

• Public Infrastructure:
  • Malaysia operates under a common law legal system.
  • MyClear, a subsidiary of BNM, manages real-time gross settlement (RTGS), securities settlement, and scripless securities depository systems.
  • CCRIS, operated by BNM, collects and disseminates credit information across financial institutions.
• Credit Reporting:
  • Private sector credit reporting agencies (CBM, RAMCI, FIS, CTOS) are to be regulated under the Credit Reporting Agencies Act 2010.

7. Crisis Management and Deposit Insurance

• Crisis Management:
  • BNM has a structured crisis management framework.
  • The Financial Stability Committee (FSC) oversees financial stability risks.
  • BNM collaborates with other regulatory bodies for systemic risk mitigation.
• Deposit Insurance:
  • The PIDM provides deposit insurance up to RM 250,000 per depositor per institution.
  • Covers conventional and Islamic deposits.
  • Member institutions include all commercial and Islamic banks under BAFIA and IBA.

Key Recommendations

• Improve FHCs Regulation: Implement a consolidated supervisory framework for FHCs, including capital, liquidity, and stress testing requirements.
• Enhance Transparency: Increase transparency in licensing and acquisition criteria, and clarify supervisory expectations for banks.
• Strengthen Legal Protections: Ensure legal protection for BNM staff is not dependent on current employment status.
• Regulatory Requirement for Risk Units: Introduce a mandatory requirement for independent risk units in banking institutions.
• Leverage Legislative Changes: Use the proposed Financial Services Act (FSA) to enhance supervisory powers and regulatory clarity.
• Improve Coordination: Review and enhance coordination arrangements between BNM and PIDM, and consider an MoU with SKM.
• Enhance Staff Capacity: Expand the Specialized Risk Unit (SRU) to meet increasing demands from advanced risk management approaches.
• Review Policy Issues: Address policy issues regarding the relationship between BNM and MOF, and between BNM and PIDM.

Conclusion

BNM has a robust and well-structured supervisory and regulatory framework that aligns with international standards, with some notable areas for improvement, particularly in the supervision of financial holding companies (FHCs) and transparency of supervisory expectations. The proposed Financial Services Act (FSA) is expected to address many of these gaps. The financial system is resilient, with strong capital adequacy, asset quality, and market discipline. Continued efforts are needed to ensure consolidated supervision, legal clarity, and staff protection.