The impact of the current global crisis on the Malaysian financial sector has remained well
contained. Efforts following the Asian financial crisis to develop effective regulatory,
supervisory and surveillance frameworks, as well as the strengthened governance and risk
management practices and the development of a robust financial infrastructure and safety
nets have supported a resilient banking system that is well positioned to continue facilitating
intermediation activities despite the difficult environment. These efforts have been further
complemented by a more diversified financial system and a higher level of regional
cooperation and collaboration in responding to crises. Underpinned by the strength of the
financial system, the management of the current global crisis has focused on pre-emptive
measures to ensure continued access to financing and to preserve confidence in the
financial system.
At the same time, monetary policy has been directed at providing support for domestic
demand to encourage economic recovery. In addition, fiscal policy measures have provided
countercyclical support for growth and incentives aimed at stimulating private sector
consumption and investment. These combined conditions significantly enhance the
prospects for Malaysia to resume a strong and sustainable growth path once the global
economic and financial conditions return to normal.