> Bank Negara Guarantees Depositors

All deposits with financial institutions in the country will be guaranteed by the government with immediate effect until December 2010, including those in locally-incorporated foreign banks.

In a statement, Bank Negara said this was one of the measures to maintain the stability of the Malaysian financial system, consistent with regional initiatives to preserve confidence in the sector. 

"These measures are pre-emptive and precautionary, since Malaysian financial institutions are well-capitalised with ample liquidity, and confidence of depositors remains intact," BNM said. 

It said the government guarantee, through Perbadanan Insurans Deposit Malaysia (PIDM), covered all ringgit and foreign currency deposits with commercial, Islamic and investment banks, and deposit-taking development financial institutions regulated by BNM.

Access to BNM's liquidity facility would also be extended to insurance companies and takaful operators regulated and supervised by the central bank.

The move replaces the current limit of RM60,000 per depositor covered by PIDM, and followed similar initiatives by governments across the globe.

Singapore yesterday said it had set aside S$150 billion (RM357 billion) to guarantee all bank deposits in the republic, closely following a similar move by Hong Kong monetary authorities earlier. 

It said given the strong capitalisation of the Malaysian banking institutions, it was unlikely that these guarantees would be called upon.

Should there be any further destabilising consequences from external developments, BNM would also guarantee interbank obligations of banking institutions and facilitate efficient access to capital for banking institutions to maintain capital adequacy at target levels above the minimum standards. Deposits in the banking system as at end August stood at RM933.1 billion - NST.

Yes, what about after 2010? - My Journal.