Date of Award

1-1-2001

Thesis Type

Masters

Document Type

Thesis

Divisions

Faculty of Business and Economics

Department

-

Institution

Universiti Malaya

Abstract

The financial sector is poised to enter a new era of institutional development and maturity with the unveiling of both the Financial Sector Master Plan (FSMP) by Bank Negara Malaysia and the Capital Market Master Plan (CMP) by the Securities Commission in 2001. FSMP is a blueprint to chart the way forward for the country's banking, insurance and other financial sectors for the next decade from year 2001 to 2010. It aims to develop a more resilient. competitive and dynamic financial system that will be able to meet the challenges of further liberalization and globalization. CMP is a financial development blueprint that complements the FSMP. It is a comprehensive plan that will guide the strategic positioning and future direction of the Malaysian capital market in the period 2001-2010. The CMP is intended to ensure that the capital market is well positioned to play its role in supporting national growth needs, as well as in meeting the challenges of increasing globalization. The unveiling of both master plans will provide the broad direction for financial institutions in their efforts to achieve a higher level of competitiveness that is on par with international standards. They are also aimed at increasing the efficiency of financial institutions in the country as a conduit for the mobilization and allocation of funds. The FSMP's main focus is further development of the supervisory framework. further consolidation of the industry and promotion of Islamic banking and the venture capital industry. In addition, it also contains recommendations on the improvement of consumer protection and the intensification of R & D efforts. As for CMP. its strength lies in the presentation of the recommendations and the implementation timeframe as well us the sequencing of recommendations. The CMP concentrates on further strengthening of the regulatory framework for the capital market as well as enhancement of investor protection. There are several salient weaknesses in both plans. In FSMP. the descriptions for most of the recommendations are too brief, lacking information on the strategies that would be useful for the achievements of the objectives of the master plan. Furthermore. the concern about data security. the enforcement of ethical business practices and the overlap problems in rules implementation are amongst the issues that are not adequately presented in the blueprint. With regard to C-MP, the time frame for certain recommendations are relatively tight, and the R & D efforts in relation to product innovation are insufficient. Besides that, both master plans are weak in presenting the linkages between BNM and SC for the implementation of the master plans. In view of the interconnection between the FSMP and CMP, both BNM and SC should further co-operate in providing training programmes, developing an integrated payment system, and sharing resources in R & D activities. In addition, the regulators from both BNM and SC should also study together the possibility of consolidating certain laws and regulations, and solving problems raised from the overlapping of the functions of different authorities.

Initial

snms

Additional Information

Dissertation (M.A) -- Faculty of Business and Economics, Universiti Malaya, 2001.

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