A customer is escorted into the Silicon Valley Bank headquarters in Santa Clara, California. - REUTERS/Brittany Hosea-Small/File Photo/File Photo
KUALA LUMPUR: The collapse of Silicon Valley Bank - the second largest bank failure in US history - has minimal and limited impact on Malaysia's banking institutions, says Deputy Finance Minister Steven Sim.
He told the Dewan Rakyat that based on the assessment by local financial authorities, the Malaysian banking system remains competitive and resilient.
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"In terms of regulations on capitalisation and also (governing) liquidity, ours are quite strict. Periodic stress tests are also carried out on the Malaysian banking system to ensure that it is prepared to face all pressures in the market," he told Mohd Syahir Che Sulaiman (PN-Bachok) during Question Time on Wednesday (March 15).
Mohd Syahir had asked the Finance Ministry to state the mitigation measures that will be taken by Bank Negara Malaysia and the Securities Commission to address the impact of the SVB collapse on the local banking system, specifically the capital market.
Mohd Syahir also wanted to know if the collapse would have any impact on the overnight policy rate (OPR), ringgit, and inflation rate.
ALSO READ:Collapse of SVB not expected to have direct or major impact on local bourse, Malaysian companies
Sim said in terms of currency, Bank Negara's monetary policy committee autonomously managed the country's monetary policy without any intervention from his ministry.
"In this aspect, any decision by the committee is based on price stability in Malaysia and sustainable economic growth.
"The mandates given (to the committee) mean that it does not only take decisions made by the US Federal Reserve into consideration, but also (assesses) the impact (of the collapse) on our domestic economy," he said.
ALSO READ: Ringgit strengthens vs greenback as US bank stocks fall
On a separate matter, Sim told the House that the government will provide up to RM64bil under Budget 2023 in subsidies, assistance as well as incentives with most of the funds used to minimise the cost of living.
Among these provisions are subsiding nursery fees of RM180 for civil servants and increasing the monthly household income eligibility limit from RM5,000 to RM7,000.
Others include initiatives under the Rahmah programme, aimed at helping the lower-income group cope with the high cost of living.
