The proposed Financial Services Act is expected to be tabled in Parliament in March next year, Bank Negara Malaysia (BNM) Governor Dr Zeti Akthar Aziz said yesterday.
She said this would enhance the bank’s capacity to manage risks from financial intermediation activities that occur outside the banking system and provide enhanced powers for timely intervention actions.
“The enhanced intermediation during this decade has benefitted access to financing, particularly for small and medium enterprises, has also improved, both in volume and efficiency,” she said at the launch of the Financial Sector Blueprint 2011-2020 by Prime Minister Najib Razak.
Zeti said by leveraging on the distribution networks of commercial banks, enhanced product and risk management capabilities, access to financing by this sector had increased at an annual rate of almost 20 per cent since 2005.
On the blueprint, she said the financial system was expected to expand from the current 4.3 times to six times of the country’s gross domestic product (GDP) by 2020.
Correspondingly, Zeti said the financial sector contribution to nominal GDP was projected to rise from 8.6 per cent to between 10 and 12 per cent in 2020. She said more than half of total financing in 2020 would be raised via financial markets while Islamic finance would continue to increase in prominence, growing at a faster pace to account for 40 per cent of total financing.
She said a national consumer credit law and improved arrangements for combating financial crime were also included in the recommendations in the blueprint.
To ensure cross-border financial linkages do not propagate risks across borders, Zeti said the central bank would intensify its coordination with other regional and international supervisory authorities.
The coordination would focus on achieving more consistent regulatory and supervisory standards, timely information exchange and effective supervisory colleges, she added.