A Case Study on the Strategy of Bank Negara Malaysia to Curb Loan Growth
1997 was a challenging year for the con duct of monetary policy. The first quarter of the year saw high levels of monetary growth driven by rapid growth in credit, which had also prevaile d during the most part of 1996. In addition, loans were increasingly channelled towards less productive acti...
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| Main Author: | |
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| Format: | Project Paper Report |
| Language: | en English |
| Published: |
1997
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/8075/1/GSM_1997_31_.pdf http://psasir.upm.edu.my/id/eprint/8075/ |
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| Summary: | 1997 was a challenging year for the con duct of monetary policy. The
first quarter of the year saw high levels of monetary growth driven by
rapid growth in credit, which had also prevaile d during the most part of
1996. In addition, loans were increasingly channelled towards less
productive activities. Such developments raised several concerns. High
levels of monetary expansion, if left unchecked, would have inflationary
implications on the economy. Furthermore, the rise in loans to the
property sector and to stock market-related activities increase d the
exposure of banking institutions to these sectors, raising the potential risk
to the soundness of the institutions. Given these concerns, Bank Negara
Malaysia (BNM) has to introduce strategic measures, to ensure that the
stability of the banking system was not undermined by excessive exposure
to the relatively more volatile sectors of the economy. |
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