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Zeti: Our recovery cost among lowest
30 Apr 2010
New Straits Times
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Zeti Our recovery cost among lowest
Rupa Damodaran
THE recovery cost incurred by Danamodal National the special ternational Monetary Fund the
Malaysia to restructure its financial purpose vehicle set up to capitalise gross costs of bank restructuring
arc massive Its estimates put the
sector following the crippling Asian Malaysia s banking system
In the case of Danamodal the public sector costs in the three
financial crisis a decade ago was
among the lowest in the world government had more than re crisis countries and Malaysia
Bank Negara Governor Tan Sri Dr covered the sum and given back to between 15 and 45 per cent of GDP
Zeti Akhtar Aziz said
The estimates may increase if fur
the private sector She attributed ther losses are uncovered but they
She said the total cost incurred by
the low cost among others to Bank
Malaysia to resolve the banking Negara s early intervention by put may also drop depending upon the
sector s crisis was just about 2 56
proceeds from asset sales and privat
ting in place appropriate institu isation said IMF adding that the rev
per cent of GDP
tional arrangements
Financing the cost of a Financial
She said although some institu enue generated by these sales will
resolution during a crisis can be
tions were closed in Malaysia fol not be known for several years
very high You won t know until you
On the recent global crisis Zeti
recover and when the bonds ma lowing the crisis they were done in
ture she said when met in Kuala an orderly manner while no con who celebrates her 10th year as
fidence was in the domestic finan governor said Bank Negara was
Lumpur after the Kijang Emas
cial system
ready for any consequences
Scholarship Award ceremony held
for the 2009 SPM top achievers
She said the 10 year bonds is
sued during the crisis had matured
and were redeemed recently
The government recovered 65 per
cent of the financing to Pengurusan
Danaharta National Bhd and fully
recovered the cost of capital to
There were however costs to be
Insurance guarantee on deposits
reckoned with during a crisis and was one of the first moves the central
this involved fiscal costs cost to bank undertook to shore up confid
shareholders cost to labour dislo
ence in the financial sector when the
cation following the loss in employ
ment as well as financing the ac
crisis erupted in late 2008
On the scholarship she said this
is the sixth year since the central
quisition of assets she added
According to a report by the In
bank introduced the award and to
date there have been 27 recipients