PIDM’s Role in the Financial Safety Net System

What is a Financial Safety Net System?

• Financial safety nets are essential to ensure smooth-functioning and confidence in the financial system.
• In Malaysia, PIDM is one of the financial system safety net players. Others include Bank Negara Malaysia (BNM) and Ministry of Finance.

 

What is PIDM role?

• PIDM administers the deposit insurance system in Malaysia. It is also the Resolution Authority for its member institutions.
• PIDM also provides incentives for member institutions to implement sound risk management practices through its differential premium and levy systems.

 

Why is this important?

• The financial safety net players play complementary roles in ensuring financial system stability.
• Effective coordination between safety net players helps to ensure they carry out their respective mandates efficiently and effectively in promoting and contributing to public confidence in the stability of the financial system.