'Govt to promote inclusive access to financial servisce' 'Govt to promote inclusive access to financial servisce'

KUALA LUMPUR: The success of any reform strategies hinges on the readiness of a country's financial system and overall economy, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz.

Citing Malaysia as a case, Zeti said it has adopted a conscious effort to put in place the financial and economic pre-conditions to enable it to benefit from financial reforms involving the deregulation and liberalisation of its financial system. 

Malaysia's next phase of transformation will continue to promote inclusive access to financial services and spur the development of financial institutions, products and markets that will drive new domestic sources of growth, she added.

"It has been maintained that such deregulation and liberalisation will facilitate the development of more efficient and robust financial systems, and that it would result in a more efficient allocation of financial resources across borders. 

"While such financial liberalisation may indeed bring such wide- ranging benefits, it also brings with it increased risks that needs to be effectively managed," Zeti said at the 2013 China Business News Annual Meeting and Finance Summit in Beijing yesterday.

She said Malaysia is focused on strengthening the institutional capacity of domestic financial intermediaries to narrow the performance gap between local and international financial intermediaries.

"As the Malaysian financial system evolved to become more complex, sophisticated and diversified, the regulatory and supervisory approach has correspondingly evolved from detailed and prescriptive rules to a risk-based approach that combined greater supervisory judgment and intensity with high-level principles of sound practice," she said.

Zeti said the more competitive environment also became an important driver of productivity gains, customer-centricity and innovation in the financial system.

Various other key financial infrastructures were also put in place to enhance the efficient functioning of the intermediation process of the overall financial system. 

Zeti said this included the infrastructure to support robust payment and settlement systems. Underpinning the financial sector growth was also the development of a more robust surveillance, regulatory and supervisory framework.