PETALING JAYA: Bank Negara Malaysia (BNM) has given an assurance that local lenders remained shielded from the troubles in the banking sector in the US.
“The country’s lenders have no direct exposure to the failed US banks and that the banking system remain well-capitalised,” the central bank said in an email response to queries from Bloomberg News today.
BNM said any indirect exposure from counter-parties or borrowers with linkages to the US banks “is also very limited”.
It pointed out that all licensed banks in Malaysia are required to comply with “stringent capital and liquidity rules” on an ongoing basis.
This, it said, was to ensure that banks are able to withstand “severe macroeconomic and financial shocks”.
The collapse of the Silicon Valley Bank (SVB) and Signature Bank in the US and the troubles that Swiss lender Credit Suisse Group AG is facing now have sent shock waves across the global financial system.
On March 8, SVB announced that it needed to shore up its balance sheet and raise US$2 billion (RM9 billion) after it was forced to sell a bond portfolio at a loss of US$1.8 billion (RM8.11 billion).
Credit rating agency Moody’s responded to the news by downgrading the bank’s bond rating and changed its outlook from “stable” to “negative”.
On the following day, panic spread on social media among investors with one of them, billionaire Bill Ackman, suggesting that SVB might need a bailout.
It set off a wave of withdrawals and the bank’s stock price dived.
By midday on March 10, US regulators had taken over SVB and the Federal Deposit Insurance Corporation was appointed the receiver.
On the same day, depositors began taking their money out of Signature Bank, leading to US regulators seizing the bank two days later.
Yesterday, Credit Suisse shares dropped 30% to a record low, prompting the lender to borrow more than US$50 billion (RM225 billion) from the Swiss National Bank.
Yesterday, deputy finance minister Steven Sim also assured Malaysians that the collapse of SVB posed minimal and limited impact on the local banking institutions.
Sim told the Dewan Rakyat that Malaysia’s banking system remained competitive and resilient.
However, the local financial institutions reacted negatively to the news of the SVB collapse. The share prices of top lenders fell sharply on the first day of trading this week on news of the US banking crisis.
Maybank, CIMB, Public Bank and Hong Leong Bank saw their share prices retreat two sen to 20 sen on the same day.