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Response to Questions from Bernama on the Malaysia's Economy and Financial System

Ref No : 16 Feb 2018 Embargo : For immediate release    
Question 1

On what are the factors that will ensure Malaysia's continuous strong growth and that it will be inclusive?
Is the global economy on track for a sustained growth recovery?


The GDP figures underscore a trend where the economy is becoming healthier, with growth becoming more broad-based across sectors amid a firm trajectory. If earlier, the economic sectors experiencing a strong momentum revolved around the export-oriented manufacturing, the spill over from that trend is now becoming more entrenched across other sectors. Data points to rising income and employment across a wider swathe of the economy. The commodity sector has also improved, benefitting rural income. The stronger ringgit appreciated in tandem, reflecting the improvement in the economy.

The world economy shows synchronised growth across many regions. Multiple indicators such as production, consumption, shipping, commodity prices show improving trends pointing to a sustained global growth in 2018. The IMF, World Bank, OECD have revised upwards the global growth forecast for this year. Being an open economy, and with domestic growth drivers being healthy, Malaysia is likely to do well.

Question 2

What is the current situation in terms of job creation, vacancies and layoffs in the financial industry in Malaysia?


Total employment in the financial services sector, remained strong at 164,885 persons as at the end of fourth quarter of 2017. Job opportunities remain ample with new jobs created and large job vacancies, driven mainly by high skilled jobs. The rationalisation of jobs were mainly at the lower level as automation begins to take place on a larger scale in the sector. More training programs focusing on in-demand expertise required by more knowledge and technology intensive jobs have to be undertaken to fill the gap for these high skilled jobs. Job layoffs remain low at 775 persons during the quarter and are substantially outnumbered by a combination of new jobs created of 1,170 positions and the high existing stock of job vacancies of 5,609 positions.

Question 3

To what extent has legal provisions in BAFIA been superseded by the Financial Services Act and Islamic Financial Services Act 2013?


The Financial Services Act 2013 has replaced the BAFIA since June 2013.

Question 4

Are banking secrecy and protection of customer information confidentiality also safeguarded in the Financial Services Act 2013?
How important are these in preserving the trust and confidence of the public into the financial system in Malaysia?


Given the nature of bank-customer relationship in the banking business, secrecy is the cornerstone of confidence in the banking system. It is of fundamental importance that the sanctity of confidentiality in the banking system is preserved at all times. The public must have confidence in the safety and secrecy of their deposits and dealings with their bankers, and confidence in the integrity and professional conduct of their bankers.

This confidentiality is provided for in Section 133 of the Financial Services Act 2013 and Section 145 of the Islamic Financial Services Act 2013. The secrecy provision clearly prohibits any person, including director, officer or agent of financial institutions to improperly disclose to another person any document or information relating to the affairs or account of the customers of the financial institutions. Banks are also required to have proper governance and effective internal controls to preserve customer confidentiality. The FSA 2013 and IFSA 2013 also provide protection to a whistleblower who reports wrongdoings similar to the Whistleblower Protection Act 2010 as long as proper procedures are followed, for example reporting to the relevant enforcement authority.

Question 5

Are there further development measures by BNM and the financial industry to protect the integrity and confidence in the domestic financial system?


Integrity is critical in enhancing confidence in the financial system. Bank Negara Malaysia will soon require financial institutions to undertake rigorous screening for their new hires. This is to ensure that the financial industry possess a competent and professional workforce. Furthermore, in providing comprehensive training and development on banking, institutions like the Asian Institute of Chartered Bankers (AICB), International Centre for Education in Islamic Finance (INCEIF) and Iclif Leadership and Governance Centre play an important role in strengthening the talent pool. The prestigious Chartered Banker qualification for example is aimed at providing comprehensive education on banking to raise the professionalism of bankers in supporting sound judgments and decision making in the industry. Beginning January 2017, all new graduate entrants into the banking industry are required to be a member of AICB and complete a mandatory program on ethics and professional standards. Since April 2017, the financial industry workforce operating in wholesale financial markets are also required to adhere to a high standard of professional entry eligibility, market conduct and internal controls ascribed in the Code of Conduct for Malaysia Wholesale Financial Markets. The Code of Conduct is rigorously and jointly enforced by the Financial Market Association of Malaysia, financial institutions and regulators.



Bank Negara Malaysia
16 Feb 2018

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