- Case Study 3 Bank Negara Malaysia Forex Scandal 1991 In The Early 1990s The Bank Negara Malaysia Bnm Began To Dabb 1 (61.35 KiB) Viewed 74 times
- Case Study 3 Bank Negara Malaysia Forex Scandal 1991 In The Early 1990s The Bank Negara Malaysia Bnm Began To Dabb 2 (21.41 KiB) Viewed 74 times
Case Study #3 – Bank Negara Malaysia Forex Scandal 1991 In the early 1990s, the Bank Negara Malaysia (BNM) began to dabble in speculative currency trading and foreign exchange trading with large sums of money, alarming other banking institutions worldwide. BNM lost almost RM30 billion between 1991 and 1994, with a maximum exposure in the foreign exchange markets reached as high as RM270 billion – three times the country's GDP and more than five times the country's foreign reserves at the time! before being rescued by the Ministry of Finance. None of the top executives in the Bank Negara accused of trading activities as the government fully absorb losses. After that, Bank Negara is no longer involve in any high-risk business to prevent it recurring. After 25 years, in June 2017, a Royal Commission of Inquiry (RCI) was finally being established to investigate the FOREX scandal. Tasks: Students are required to undertake an in-depth study the Bank Negara foreign exchange losses, which has been a controversial issue in the foreign exchange markets. Your investigation and outcomes should cover the following: 1. Examine and discuss should there been any financial malpractices and abuses in power when the Bank Negara participated in the forex trading. 2. Evaluate and discuss whether Bank Negara, as a central bank as well as the regulatory, is allowed to participate in the forex trading and how these colossal losses have impacted the Malaysia financial position. Objectives of the Task: 1. To evaluate students' understanding towards the financial market issues and to provide critical
solutions to address the matters, whichever applicable. 2. To evaluate the students' ability to articulate the issues within Malaysia financial market's regulatory frameworks. 3. To assess students' ability to identify the key contributing factors that contributes to the issues, whichever applicable.
Assessment Marks Allocation Marks Obtained 1. 25 2. Examine and discuss should there been any financial malpractices and abuses in power when the Bank Negara participated in the forex trading. Evaluate and discuss whether Bank Negara, as a central bank as well as the regulatory, is allowed to participate in the forex trading and how these colossal losses have impacted the Malaysia financial position. 25 Total Marks 50 marks