Bank of International Settlement (BIS)
Changing Patterns of Financial Intermediation and Implications for Central Bank Policy: The Malaysian Perspective
Article Overview
A notable feature of the Malaysian financial sector is the dual system of conventional and Islamic finance. This system was established pursuant to a strategy that had the objective of promoting an inclusive financial system and of strengthening linkages between the financial system and the real economy.
The assets of the banking sector have grown considerably over the last decade, to 210.5% of GDP in 2014 (2004: 184%). Of this, the share of Islamic banking assets has grown from only 2.7% in 2004 to 22.8% of total assets of the banking system at end-2014.
Malaysia is one of the few emerging economies with a private sector debt securities market comparable in size to those of advanced financial systems. It is also a leading international centre for
sukuk (Islamic Bonds) issuance. In 2014, the private debt securities market represented 41.7% of total outstanding debt securities.
