Bank Negara

Malaysia's central bank finally came up with a statement entitled, Malaysian Financial System Can Weather Current Global Financial Turmoil that squarely addresses and, assuages the concerns of Malaysian depositors in the wake of very tepid and tentative utterances last week emanating from Perbadanan Insurans Deposit Malaysia (PDIM).
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You may, if you wish to, click on the link above to read the short and succinct statement. Bank Negara highlights the key indicators that measure Malaysia's financial system and pronounces that everything is in good order.

I just want to highlight the penultimate paragraph that where Bank Negara says, The Central Bank has a fully developed supervisory and surveillance system. It continuously monitors all financial institutions under its purview and will take appropriate action to safeguard the soundness of the financial system. The Bank stands ready to provide liquidity, whenever necessary, to financial institutions under its purview. The Bank is also closely engaging with the other monetary authorities in the region to monitor and respond with co-ordinated measures in managing the current challenging environment.

The sentence that I put in bold is what nervy depositors have been waiting to hear. So, depositors should calm down.
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There is every reason to believe that Malaysia's financial system is sound. As I have posted earlier in Fortress Malaysia, due to the laggard and cautious approach of our regulators, Malaysian banks have not indulged in very exotic and terribly hybridised and mutated derivative instruments. That stands the Malaysian financial system in good stead.