Deputy finance minister Steven Sim said an assessment made by local financial authorities affirmed that the country’s banking system remained competitive and resilient.

“We have strict rules in terms of regulations on capitalisation and also liquidity.

“Periodic tests are also carried out on the Malaysian banking system to ensure that it is prepared to face all pressures on the market,” said Sim in reply to a question from Syahir Che Sulaiman (PN-Bachok).

Syahir had asked the finance ministry about the mitigating measures Bank Negara Malaysia and the Securities Commission will take to address the impact of SVB’s collapse on the local banking system, especially the capital market.

He also wanted to know if the collapse of SVB would have any impact on the overnight policy rate (OPR), the ringgit, and inflation rate.

Sim said BNM’s monetary policy committee (MPC) autonomously manages this without any intervention from the ministry.

“Any decision by the MPC is based on price stability in Malaysia and sustainable economic growth.

“The mandate given (to the MPC) means that it does not only consider decisions made by the US Federal Reserve but also (assesses) the impact (of SVB’s collapse) on our domestic economy,” he said.

The collapse of SVB is the second largest bank failure in the US since the 2007-2008 financial crisis.

Reuters reported yesterday the bank’s collapse “triggered a shockwave that pounded global bank stocks” as assurances from US President Joe Biden and other policymakers failed to calm market worries about contagion.