These studies find that monetary policies play a significant role in controlling house prices or house price bubbles. Maclennan et al. (2000) find that monetary policy may be transmitted through the housing market. The main direct effect is an income or cash flow effect: when the interest rate rises, the interest burden of any outstanding debt rises and after-housing-costs disposable income falls. Xu and Chen (2012) find that China monetary policy actions are the key driving forces behind the change of real estate price growth in China.
CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF STUDY The banking sector is still the primary form of financial intermediation in the Asian and Pacific region. It is the largest conduit for the recruitment of domestic savings. Hence, it becomes the main source of external capital to firms and the key player in the payment system. Apart from their financial intermediation role, banks have been shown the contribution to the general economic stability. This was prevalent during the Asian financial crisis when economy was adversely affected by the then-weak banking sector.
1.0 Introduction Bank Negara Malaysia (BNM, also called the national bank of Malaysia, it is Malaysia’s central bank officially) is a Malaysian central bank. Was established in 26th January 1959 as the Bank Negara of Malaya, its main purpose is to act as bankers and advisers to Malaysia’s government and regulates the nation 's financial institutions, issues currency, credit system and monetary policy. Its headquartered is located in Kuala Lumpur, which is the Malaysia 's federal capital. The bank actively developing financial inclusion policy and financial inclusion is an important member of the Alliance. AFI Global Policy Forum (GPF) jointly sponsored agencies in Kuala Lumpur, Malaysia in 2013.
As the economic and ﬁnancial adviser to the Government, Bank Negara Malaysia analyses and assesses the developments in the international and domestic economy and highlights the areas that needed to be addressed. Bank Negara Malaysia undertakes economic intelligence and surveillance and carries out forecasts on the economic condition of the nation. Based on these assessments, Bank Negara Malaysia presents policy recommendations at regular brieﬁngs to the Minister of Finance as well as at various economic policy making forums at the national level. As the ﬁnancial adviser of the Government, Bank Negara Malaysia gives advice regularly to the Government on the management of its domestic and external debts and the terms and timing of Government loan programmes. Apart from that, Bank Negara Malaysia also acts as the agent for the government in the negotiations and concluding of loan agreements.
Monetary policy is the art of managing money. It is a widely used tool by the central bank to control the money supply, often targeting the inflation rate and interest rate. The ultimate objective of the monetary policy is to control the price level and to better the overall economic situation of a country. Changes in the interest rates directly influence the behavior of individuals through an increase or decrease in the cost of borrowing. With a stable price level and a steady growth rate, economic and financial planning has been made much easier.
Banking On 24th January 1959, the central bank of Malaysia which is the Bank Negara Malaysia was officially opened. Bank Negara Malaysia is the main banking structure of the country by issuing currency notes and coins. Central bank is to promote monetary and financial stability. It plays an important role in stimulating growth in the financial sector and stabilizing the economy with respect to curbing inflation and combating recession. It is also responsible for the formulation and implementation of monetary policy to achieve financial and economic objectives.
Accounting is an important part of businesses as it is supporting the financial stability of a business. It is also the process of keeping track of the finances of a business through its financial transactions. The Malaysian Accounting Standards Board was established in 1997 with objective of improving the quality of external financial reporting in Malaysia. Previously, two professional bodies, the Malaysian Institute of Accountants (MIA) and the Malaysian Institute of Certified Public Accountants (MICPA) carried out the task of setting accounting standards in Malaysia to investigate the standard setting arrangements in Malaysia and the roles of the accounting profession in the standard setting process from year 1997 to 1999. Documentary analysis
Monetary policy is the use of interest rates or control on the money supply by the government or central bank to influence the economy. The Central Bank of every country is the agency which formulates and implements monetary policy on behalf of the government in an attempt to achieve a set of objectives that are expressed in terms of macroeconomic variables such as the achievement of a desired level or rate of growth in real activity, the exchange rate, the price level or inflation, the balance of payment, real output and employment. Monetary policy works through the effects of the cost and availability of loans on real activity, and through this on inflation, and on international capital movements and thus on the exchange rate. Its actions
Thus, Malaysia are heavily rely on monetary stability and financial stability. In order to maintain the value of the Malaysia currency (monetary stability), BNM take the responsibilities to maintain the price stability and to ensure the inflation is remains low and stable and the purchasing power of ringgit is not diminished (BNM, n.d.). Furthermore, financial stability is one of key elements to concern on. Financial stability refers to a strong financial system where institution can continue to meet their obligations without interruption or external assistance. The market confidential is raise because the transaction price is not fluctuated easily, the market participant can confidently enter into the transaction (BNM,
All products and services are strongly linked to each other. For example, different parts of computer can be manufactured in different locations of the world and assembled in China to save cost. Both developed and developing countries such as Malaysia are cautious of its benefits not only socioeconomically but also geopolitically. Realizing this, Malaysia has started to take initiative in the globalization approach in the 21st century. For example, the export of Thai rice and sugar to Malaysia, telecommunication equipment to Vietnam, rice and vehicles including spare parts to the Philippines and electrical equipment, machinery, fruits and vegetables to Indonesia.