How Malaysia Overcome Financial Crisis 2008

When the time of testing came in the form of the 2008 09 global financial crisis gfc the country s banking system was unscratched lee recalls.

How malaysia overcome financial crisis 2008. Malaysia has learned from the asean financial crisis in 1997 1998 and much stronger position when entered the global financial crisis in 2008. Besides during the economic crisis in 2008 the bank system has a sufficient capital to recovery from the crisis and malaysian authorities had limited exposure to foreign bank borrowing. Bank negara malaysia also managed the financial sector well following the bitter experience of the asian financial crisis and hence non performing loans as a share of total loans fell to 2 2 in 2008 and remained at roughly that level in the first two quarters of 2009. Malaysia is squeezed between being the low cost manufacturer we once excelled as and the knowledge intensive economy we are failing to become.

Us 2 5 trillion of government debt and troubled private assets were purchased by the federal reserve and european central bank resulting in the largest liquidity injection into the credit market and the largest monetary policy action in world history. While the effects of covid 19 are expected to be more severe than previous crises lee believes the banks substantial capital and liquidity buffers will help them survive this economic downturn. Malaysia and some asean countries will be able to overcome the global financial crisis because their economies are resilient supported by pro growth and proactive policies a visiting don said. The peak estimated output loss from a financial crisis in their sample is almost 8 with output losses of around 7 at a 10 year horizon.

The effects of the 2008 financial crisis the crisis spread to other parts of the world due to the highly intertwined global financial market. Malaysia overcome global financial crisis malaysia and some asean countries will be able to overcome the global financial crisis because their economies are resilient supported by pro growth and proactive policies a visiting don said. The financial crisis of 2007 2008 also known as the global financial crisis gfc was a severe worldwide financial crisis excessive risk taking by banks combined with the bursting of the united states housing bubble caused the values of securities tied to u s. Our years of sustained high growth ended in 1997 with the asian economic crisis.

In a classic empirical study cerra and saxena 2008 look at the effects of financial crises over a 10 year horizon using a panel of 190 countries from 1960 to 2001.