Malaysia's Macroprudential Policy Strengthens Financial Stability and Mitigates Systemic Risk
Macroprudential policy in Malaysia aims to prevent financial crises by using specific measures to control risks and maintain stability. After the Asian financial crisis, Malaysia started developing this policy framework to manage imbalances in the financial system. Bank Negara Malaysia strengthened the policy after the Global financial Crisis to ensure stability, address cyclical trends, and reduce systemic risks. The experiences in Malaysia show that macroprudential policy helps oversee financial conditions and develop tools to manage risks effectively.