AS PART of the government’s ongoing economic reforms, it is time Bank Negara Malaysia (BNM) be made independent as is the case with central banks in countries which has reformed its economic superstructures to be independent of partisan political influence.
According to Social Protection Contributors’ Advisory Association Malaysia (SPCAAM), BNM must be sitting outside of the interests of the commercial objectives of commercial financial institutions to ensure that it can objectively and independently promote monetary and financial stability.
“Prime Minister Datuk Seri Anwar Ibrahim is making great strides in reforming the governance architecture of the country, and this is in turn making Malaysia more attractive towards investments of various sorts which will grow the country’s economy,” said SPCAAAM international labour advisor Callistus Antony D’Angelus.
Suggesting that the central bank report to Parliament directly and not to any executive authority such as the Finance Ministry, D’Angelus said as a regulator, BNM, which should be exercising supervisory jurisdiction to ensure the safety and soundness of individual financial institutions and to monitor their impact on the financial system as a whole, cannot be or seen to be influenced by powerful financial institutions.
“It is today acknowledged globally that financial institutions have played an outsized role in the economy in the recent past, with the general public having to pay a price for it,” he remarked.
“The lessons of the global financial crisis of 2008 have evidently not been learnt. The upcoming budget will be an opportune time for the prime minister to put into motion steps which will make BNM independent from executive oversight and instead transfer such oversight to the legislature.
“We can expect financial institutions in Malaysia to oppose this, as they have grown accustomed to having it their way. The must be political will on the part of the Madani government to carry such a change through.”
Elaborating, D’Angelus said this is one measure which MPs from both sides of the political divide should come together on, where the interests of the people should be made a priority.
“Let us recognise that banks serve as custodians of public finance and should be accountable to the public,” he added.
“Where we refer to reforms, it must be tangible and benefit the people of the country. It is time to move beyond rhetoric and tokenism to make structural reform matter in the real sense.” – Oct 14, 2024
