IMPACT OF BANKING SECTOR DEVELOPMENT ON ECONOMIC GROWTH IN MALAYZIA

Authors

1 Dept. Soc. Sci. Studies and Res., Inst. Asian Studies and Res., Zagazig Univ., Egypt.

2 Dept. Econ., Fac. Commerce, Azhar Univ., Egypt.

3 Dept. Agric. Econ., Fac. Agric., Zagazig Univ., Egypt.

Abstract

This research examines the experience of Malayzia, which was able to form strong banking entities after the severe economic crisis it was exposed to in 1997. Malayzia is one of the fastest countries to emerge from the Asian crisis. The importance of the research is represented in reviewing the country's banking experiences and the impact of reforms on economic growth in Malayzia during the period from (1980-2014). This research aims to identify the major developments that have taken place in the banking sector and to understand their results. Among the most important results of the research is a study of reforming the Malayzian banking sector, and the application of the privatization policy. Malayzia has achieved diversification in the traditional banking sector and the Islamic banking system, which coexist and work together. Among the most important indicators of the Malayzian banking sector, according to the balance sheets during the period (2007-2014), is the risk-weighted capital adequacy ratio, which reached an average of 10.9% and the basic capital adequacy ratio, which reached an average of 9.33%. Also, the return on assets ratio reached an average of 1.48%. Among the most important recommendations reached by the research is the necessity to adhere to structural reform programs and link them with economic, financial and legislative reform, work to merge small banks, increase bank branches and provide medium and long-term loans to create investment opportunities and obtain an appropriate profit margin.

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