ID :
59444
Thu, 05/07/2009 - 17:03
Auther :
Shortlink :
https://oananews.org//node/59444
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MALAYSIAN BANKS' CAPITAL BUFFER MORE THAN RM44 BIL
By Saraswathi Muniappan
KUALA LUMPUR, May 7 (Bernama) -- Malaysian banks have a capital buffer of
more than RM44 billion (US$12.4 billion) and are well positioned, Malaysia's
Central Bank Governor, Dr Zeti Akhtar Aziz, said Wednesday.
The risk weighted capital ratio of banks is about 13.4 percent, way above
the eight percent minimum international requirement.
"The capital buffer is more than RM44 billion and therefore we believe that
they are well positioned to absorb any consequences," she said.
Dr Zeti was responding to a question on the Chairman of the Basel Committee
on Banking Supervision, Nout Wellink's comments earlier today that the capital
buffer of banks be built up in the future.
He had said this during a press conference at the United Nations Advisors
Group Asia Regional Forum on Policies and Regulation of Financial Inclusion
being held here.
Speaking to Bernama later, he explained his views: "What we intend to do is
build up a capital buffer that you can draw down in bad times and build up in
good times."
He said one of the problems nowadays was that if a bank had a capital ratio
of 10 percent, it was assumed that the 10 percent should be the figure.
"So, even if the bank brings it to nine percent, which is above the minimum,
the analyst will say it is a wrong development. So, that is why you need a
buffer," he said.
"What we have seen during the crisis is that the level of capitalisation in
the banking system is not high enough, the reason being that the risks that the
banks have been confronted with have increased over the years. So, it is
important to increase the level of capital," said Wellink.
However, he said raising the banks capital will only take place when the
present financial crisis comes to an end.
This might take time, and the consensus forecast is that the economy will
gradually recover in 2010, he said.
Wellink also said that it was important to improve banking regulations.
In the upgrading of the regulatory system, most of the measures will be
announced before mid 2010, he said, adding that the sector is already being
consulted on areas like liquidity risk management.
-- BERNAMA