Money and Banking in Malaysia in the Light of Asian Financial Crisis

Megumi Suto

January 2000

This paper is the first revision of the paper presented at the Seminar of Asian Studies Center of St. Antony's Gollege of Oxford Univeristy on 23 November 1999. I greatly appreciate Dr. Zhichao Zhang and Dr. Steve Tsang in Asian Studies Centre and other participants of the seminar.


1 Introduction: Focus and Purpose

2 Economic Growth and Financial Development beforethe Crisis

(1) Purposes of Financial Building
(2) Macroeconomic Performances, Distibution of Income, and Dispersion of Capital
(3) Policy Measures for Financial Development

3 Structual Issues derived from the Malaysian Financial development

(1) Fragility of Domestic Banks
(2) Heavy Burden on Employees Provident Fund
(3) Skewed Secrities Markets

4 Scale and Speed of the Recent Financial Crisis

(1) Direct Impacts on Financial Sector
(2) Changes in Capital Flows

5 Policy Issues: Urgent Responses and Financial Reform

(1) Urgent Policies to the Crisis
(2) Assessment of Capital Control and the Other Urgent Policies
(3) Some Comments on Financial Reform Plan

6 Concluding Remarks