The Merger of Finance Companies in Malaysia
FIN 426
Banking Operation and Documentation
Assignment 1
“The finance company in Malaysia are no longer exist”
Prepared By:
ZURAINI BINTI SAMSURI
2010889082
EMBF5C
PREPARED FOR:
EN. HASBULLAH BIN OTHMAN
Nowadays, there are no more finance companies in Malaysia. This situation occurred due to Asian financial crisis in mid year of 1997. Start with Thailand whereas Thai government has decided to float Thai Baht due to financial crisis. A few days later, the crisis spread out to Malaysia and Malaysia currency Ringgit was attacked by speculators. The Prime Minister during that time Dato’ Seri Dr. Mahathir Mohammad has claimed money broker George Soros is the cause of the crisis and he taking drastic action with imposed strict capital controls and introduced RM 3.80 equal to USD$ 1.00. The Asian Financial Crisis was a period of financial crisis that gripped much of Asia and raised fears of a worldwide economic meltdown due to financial collapsed.
The crisis left many Malaysian banking institutions with high levels of non-performing loans (NPL) it also has given big impact to the financial institution. Debtors are failed to settle their debt because of losing job. During that time, Malaysia has too much financial institution that operates same services and function and the resources are wasted from this sector. On 29 July 1997 the Governor of Bank Negara Malaysia (BNM) announced a merger programmed for domestic banking institutions under BNM their agencies.
The merger will ensure that the domestic banking institution will be able to withstand pressures and challenges arising from globalization and from an increasingly competitive global environment. The rescues planned from International Monetary Fund (IMF) to effectively close the small financial institutions are totally declined. Malaysia did not believe that the IMF prescription of closing down the problem bank was the way to go, therefore do it their own way. The policies and strategies using monetary policy,
Banking Operation and Documentation
Assignment 1
“The finance company in Malaysia are no longer exist”
Prepared By:
ZURAINI BINTI SAMSURI
2010889082
EMBF5C
PREPARED FOR:
EN. HASBULLAH BIN OTHMAN
Nowadays, there are no more finance companies in Malaysia. This situation occurred due to Asian financial crisis in mid year of 1997. Start with Thailand whereas Thai government has decided to float Thai Baht due to financial crisis. A few days later, the crisis spread out to Malaysia and Malaysia currency Ringgit was attacked by speculators. The Prime Minister during that time Dato’ Seri Dr. Mahathir Mohammad has claimed money broker George Soros is the cause of the crisis and he taking drastic action with imposed strict capital controls and introduced RM 3.80 equal to USD$ 1.00. The Asian Financial Crisis was a period of financial crisis that gripped much of Asia and raised fears of a worldwide economic meltdown due to financial collapsed.
The crisis left many Malaysian banking institutions with high levels of non-performing loans (NPL) it also has given big impact to the financial institution. Debtors are failed to settle their debt because of losing job. During that time, Malaysia has too much financial institution that operates same services and function and the resources are wasted from this sector. On 29 July 1997 the Governor of Bank Negara Malaysia (BNM) announced a merger programmed for domestic banking institutions under BNM their agencies.
The merger will ensure that the domestic banking institution will be able to withstand pressures and challenges arising from globalization and from an increasingly competitive global environment. The rescues planned from International Monetary Fund (IMF) to effectively close the small financial institutions are totally declined. Malaysia did not believe that the IMF prescription of closing down the problem bank was the way to go, therefore do it their own way. The policies and strategies using monetary policy,