Asia Financial Institutions

In: Business and Management

Submitted By cr7cruise
Words 255
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Malaysian banking financial institutions is comprised of both local and foreign players. An analysis of banking performance is evaluated in order to gauge the financial standings or ‘healthiness’ of the respective banks. Generally, banks play a crucial financial intermediation process in promoting development and economy sustainability as the institutions mobilise saver’s surplus money to borrowers in the form of loans. The activity of accepting deposit and lending out to borrowers are essential to preserve the liquidity of money in economy. Moreover, banks are also acts as customer’s money guardian. So, it is important to have banks with strong financial standing to withstand any financial or economic crisis locally or globally (to prevent cessation of banking activities) and to avoid customer’s loss in confidence towards banking industry which subsequently can lead to bank runs. A single bank failure could lead to systemic risk (contagion effect) where it will have adverse effect on all other financial players and subsequently could lead to the collapse of country’s economy.

In Malaysia, currently, financial institutions are comprised of 27 commercial banks; 9 local banks and 18 foreign based banks (Central Bank of Malaysia website). Commercial banks in Malaysia are the nation largest fund providers in the financial system and had contributed immensely to Malaysia economic development. The commercial banks primary activities are including provide facilities for savings, payments, and loans. Moreover, banking services such as remittance, foreign exchange transactions are also provided. Commercial banks also fund the government via purchasing Malaysian Government Securities (MGS) and Malaysian Treasury Bills…...

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