BNM Framework Should Evolve From Prescriptive To Collaborative -- Former Deputy Governor
KUALA LUMPUR, July 28 (Bernama) -- Bank Negara Malaysia’s (BNM) supervisory framework should evolve to become more collaborative and consultative with the financial industry, including greater use of regulatory sandboxes, said former BNM deputy governor Datuk Ooi Sang Kuang.
Ooi said the framework, which is an instrument used to maintain a stable and credible financial system, should adapt to the challenging needs of the economy.
He said the framework needs to be modified so that, instead of being prescriptive, telling banks what they should do, it can be more collaborative.
“Let’s sit down, let’s identify the risks. These are the risks we are talking about. Why don’t we sandbox it?
“Similarly, instead of prescriptive and directive, the bankers in this room will say it’s directive, (but) BNM will say no, it’s not directive, it’s actually consultative,” he said during the plenary session titled “Resilience: Implications for Policy and Practice” at BNM’s Sasana Symposium 2026 (SS2026) here today.
Ooi noted that the current approach, which has developed into a risk-based supervisory framework since the Asian Financial Crisis, should place greater emphasis on collaboration between regulators and financial institutions in identifying and managing risks associated with new industries.
He said that while risk-based supervision has served Malaysia well, maintaining the same approach without greater flexibility could limit the growth of new industries that require innovative financing models.
“The new growth industries have a totally different risk profile.
“If we continue to adopt the same framework, we are not going to grow these industries,” he said.
He added that strengthening collaboration between regulators and the financial sector would enable financial institutions to better assess and manage risks while supporting Malaysia’s broader economic transformation and innovation agenda.
Themed “Reforms for Resilience: Navigating Uncertainties”, the SS2026, held from July 28-29, features discussions on key economic and financial issues, including economic resilience, wages, cost of living challenges, investments, energy security, Islamic finance and private healthcare costs.
-- BERNAMA