Malaysia will open its banking and insurance sectors to greater competition, including allowing foreign players to own stakes in local companies, the government said in its new economic plan released Friday.
In the 9th Malaysia Plan, a five-year economic development plan covering 2006-2010, the government said it will review existing banking-sector regulations and introduce new foreign competition gradually.
"Existing regulatory framework will be reviewed with the objective of achieving a balance between promoting innovation and market development, and safeguarding financial stability through prudential requirements," it said.
"The regulatory burden will be reduced to achieve competitive equity within the financial sector," the plan said.
While the government has said it will allow foreign banks greater access to the local market next year, the 9th Plan says "gradual liberalization measures, including the possibility of introducing new foreign competition, will be properly sequenced to ensure it brings maximum benefits while preserving overall financial stability."
For the insurance sector, the government said it will issue more licenses, and allow "internationally reputed" insurers to buy stakes or "forge strategic alliances" with local players in both the direct insurance and reinsurance sectors, reports the AP.
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