Report: Bank Negara assures Malaysia’s banks on solid footing, no direct exposure to failed US banks

Malay Mail
Malay Mail

KUALA LUMPUR, March 16 — Malaysia’s banks have no direct exposure to the recent failed US banks and have very limited indirect exposure, central bank Bank Negara Malaysia (BNM) reportedly said.

In an email reply to financial media outlet Bloomberg News, BNM said the Malaysian banking system is still well capitalised.

“Any indirect exposure from counter-parties or borrowers with linkages to the US banks is also very limited,” BNM was quoted as saying by Bloomberg News.

BNM also pointed out that all licensed banks in Malaysia must comply with “stringent capital and liquidity rules on an ongoing basis” to ensure they are able to withstand “severe macro-economic and financial shocks”, Bloomberg News said.

Bloomberg News noted that the US had earlier this week faced a “mid-sized banking stress”, and also pointed out Switzerland’s second-biggest bank Credit Suisse Group AG’s woes which it said had sent shock waves across the global financial system.

Last Friday (March 10), the Silicon Valley Bank collapsed, which makes it the biggest US bank to fail since the global financial crisis in 2008.

This was followed by the New York-based Signature Bank’s collapse last Sunday (March 12).

US regulators have since taken over those two failed banks and are reportedly seeking to sell them to banks in the private sector.

After Credit Suisse’s share prices fell on Wednesday, its largest shareholder Saudi National Bank said it would not invest more money into the bank, which prompted Suisse’s US-listed shares to fall to a record low and resulted in panic in the stock markets.

But Credit Suisse today said it plans to borrow up to 50 billion Swiss francs (RM243 billion) from the Swiss National Bank, while the Swiss National Bank and Swiss regulator Finma has assured that Credit Suisse has sufficient capital and liquidity levels.

Yesterday, Deputy Finance Minister Steven Sim also told the Dewan Rakyat that Malaysia’s banks have very limited exposure to the banking crisis in the US and that the local banking system remains resilient.