Bank Negara Malaysia is making efforts to make its enforcement action more transparent by deterring misconduct. Starting January 1, 2018, the central bank will introduce a new transparency framework.
“A strengthened transparency framework for our enforcement actions will also be introduced as an added deterrence against misconduct,” Bank Negara Malaysia governor Datuk Seri Muhammad Ibrahim said in an address at the Asian Institute of Chartered Bankers’s 20th graduation and awards ceremony.
He said the results from the survey of the Financial Services Professional Board were sobering.
About 23 percent of respondents observed that supervisors reward behaviour derived through unethical means, whereas 15 per cent stated they would act unethically when not being watched or monitored.
“Our journey is far from over and more needs to be done to further strengthen character in banking community.”
According to Muhammad, the financial consequences related to ethical choices can be dire and expensive. Thus, unethical behavour costs by banks globally have exceeded USD 320 billion since 2008, with USD 42 billion in 2016 alone. Muhammad said there should be a clear tone from the top of institutions that misconduct will not be tolerated.
BNM has enhanced standards for corporate governance, strengthened requirements for KLIBOR rate setting and introduced code of conduct for the Malaysian wholesale financial markets.
Read more at New Straits Times.