REGULATORS' ROLE ANTICIPATED TO REDUCE OVER TIME, SAYS HUSNI

KUALA LUMPUR, Nov 19 (Bernama) -- The role of regulators will reduce over
time with increasing number of foreign banks entering the Malaysian banking
industry following the liberalisation of the financial sector.

Referring to regulators as the paternalistic hand, Second Finance
Minister Ahmad Husni Mohamad Hanadzlah said this development would be
a natural consequence as the government gradually decreased its role in the
economy.

"I envision that with the increasing number of foreign entrants into our
marketplace, the paternalistic hand will need to be lightened.

"In consequence, you will see new dynamics being introduced in the market
place," Ahmad Husni said at the annual dinner of the Malaysian Investment
Banking Association (MIBA) here Friday.

He said Malaysian financial institutions have been fortunate, thus far, as
the regulators' paternalistic hand had provided much protection to domestic
financial institutions.

"We adopted this position because we viewed the financial institutions as
the lifelines of our economy," he added.

Ahmad Husni also said domestic financial institutions must begin to prepare
themselves with what would be rapid changes in the customers' profile.

As the government proceeded with the Economic Transformation Programme, a
substantial per centage of the nation's private sector would move up the
value chain, he explained.

Against such a backdrop, a greater number of corporations and high income
earners would demand more sophisticated products and services, he said, adding
that the banking industry was anticipated to be busy raising necessary funding
to finance the 131 entry point projects over the next few years.

Ahmad Husni said going forward, financial institutions must be able to
compete as equals in the various sub-sectors of the financial services industry.

Earlier, MIBA Chairman Azman Hashim said fund raising activities through the
banking system and the capital market was expected to increase in tandem with
strong economic growth, particularly, as the nation transformed into a developed
and high-income economy.

"We must ensure that we continue to strive to promote the fundamental values
of transparency, accountability and responsibility that are expected of
investment banks, from our various stakeholders and the marketplace, at large,"
he said.
-- BERNAMA