KUALA LUMPUR: In promoting financial stability in 2020, Bank Negara Malaysia (BNM) would be focusing on monitoring and detecting potential stresses in the financial system to enable prompt actions to address any risks to financial stability.
It said regulatory and supervisory priorities would also be re-focused on ensuring the financial system’s strength and ability to support the financial needs of the economy during these challenging times.
“This involves us calibrating our regulatory and supervisory approach to address material risks in the financial system while reducing compliance burdens to allow financial institutions to focus their efforts and resources on proactively managing risks and supporting their customers,” the central bank said in its annual report 2019 released today.
BNM said it would also be focusing on reinforcing the resilience of the financial system by ensuring that financial institutions took timely actions to rebuild their buffers as the economy recovers.
The central bank said it is mandated to promote financial stability that is conducive to the sustainable growth of the economy.
“We discharge this mandate by ensuring that the financial system is resilient throughout the economic cycle and is able to withstand shocks.
“This involves us promoting resilient and well-managed financial institutions, fostering safe and reliable clearing and settlement systems, and ensuring orderly financial markets,” it said.
It said that this in turn would enable financial activities to be conducted in a safe, efficient and effective manner, and allowed consumers to have confidence when dealing with financial institutions.
BNM said it regulated and supervised financial institutions to promote their safety and soundness as well as overseeing money and foreign exchange markets to promote their integrity and orderly functioning.
“We also exercise oversight over payment systems to foster safe, efficient and reliable payment systems and payment instruments,” it said.
In addition, it said the central bank regulated the conduct of financial institutions and intermediaries in order to provide appropriate protection to financial consumers.
“Looking back to 2019, the economic environment was challenging, hence in promoting financial stability, the priority was to ensure that the financial system continues to effectively support the functioning of the economy,” it said.
It said for this reason, regulatory agenda was focused on ensuring that financial institutions are proactive in managing risks while also providing an environment that encourages healthy competition and the development of innovative products and services to meet the needs of individuals and businesses.
“We also continued to enhance our supervisory and surveillance systems and processes to support the early identification and management of risks to financial stability,” it said.
It added that the financial system remained resilient, despite increased risks in some areas, firmly supported by strong capital buffers of financial institutions and sound risk management practices. – April 3, 2020, Bernama
