She said three series of macro prudential measures had been introduced to avoid the very risk of the formation of such a bubble asset.She was responding to a question on whether Malaysia was experiencing an asset bubble that would burst if China’s economy tumbled and as global interest rates rose, as reported recently by the foreign media.
“Conditions between now and in 1997/1998 are different. We are now on a growth path,” she told a press conference in conjunction with the South East Asian Central Banks (Seacen) 30th Anniversary Conference on Greater Financial Integration and Financial Stability and launch of the Seacen Financial Stability Journal, here yesterday.
Zeti said domestic demand was driving Malaysia’s economic growth and the country was not at the epicentre of the recent global financial crisis. “Our financial intermediaries remain resilient and the supply of credit was never disrupted,” she added. "This is the result of the focus over the last decade on financial reforms that have strengthened the foundation of our financial system".
Meanwhile, Zeti said the modernisation of the Asian financial system had been accompanied by a significant strengthening of the regulatory and supervisory frameworks. It had also been accompanied by improved financial safety nets, a more effective surveillance of financial stability risks and stronger legal underpinnings. “These reforms supported the transition towards more market-oriented financial systems that are anchored in stronger institutions, risk management capacity and governance,” she added.
“Significant strides also continue to be made in strengthening consumer protection frameworks, promoting financial inclusion, and enhancing market discipline,” she said.
She also said these developments continued to support the region through the recent episodes of turbulence in the global financial markets.
Source: theSTAR 21-10-2013
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