Business

Thursday July 23, 2009

Bank Negara, two others plan to exit full deposit guarantee


PETALING JAYA: The Hong Kong Monetary Authority, Bank Negara and the Monetary Authority of Singapore have established a tripartite working group to exit the full deposit guarantee by end-2010.

The announcement on the setting up of the working group to map out a coordinated strategy for the scheduled exit in the respective country’s jurisdiction was made at the Executives’ Meeting of East Asia-Pacific Central Banks Governors’ Meeting in Hong Kong yesterday.

The EMEAP is a regional cooperative organisation of 11 central banks and monetary authorities.

In a coordinated effort to contain the effects of the global financial crisis, Malaysia and Singapore provided a blanket guarantee on all bank deposits in their respective banking systems in October last year.

All ringgit and foreign currency deposits placed with financial institutions regulated by Bank Negara were fully guaranteed by the Government.

In addition, Bank Negara announced that access to its liquidity facility would also be extended to insurance companies and takaful operators. The deposits are fully guaranteed through Perbadanan Insurans Deposit Malaysia until December 2010.

The move has helped to reassure depositors and preserve confidence in the financial systems, as some of the biggest and respected international financial institutions were wracked by huge losses globally.

It is understood that this is part of bilateral cooperation efforts between Malaysian and Singaporean authorities to reduce the amount of contagion in the region arising from the global financial crisis.

Similar measures were also taken by Hong Kong, Indonesia, Australia and New Zealand to safeguard deposits.


For Bank Negara statements click here


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