Financial Liberalization, Innovation and the Response of Malaysian Commercial Banksʼ Portfolio to Monetary Shocks”, Paper presented at

tmt theoretical papers have shown that banking institutions posses rcle in the transmission mechanism of monetary policy. The 6banl6 toward changes in monetary conditions, particularly their dbcations, determine the ultimate impact of monetary policy on In addition, several findings also indicate the changing $ commercial banlcs in recent years due to the development of m*cts and liberalization process which begin since early eighties. aonines this issue for the Malaysian banking industry. Without liheralization and innovation that occur in the Malaysianfinancial fue early eighties also affect the way banks respond to changes in dicy. It is shown that banks resort to competitive funds and funidation in their attempt to shield the lending capacity. This is byt the recent development in the banking industry ' It is argued eml bank loses to some extent, its direct inJluence on banks futions, thus, reducing the effectiveness of monetary policy. * tqtsmission rpechanisrn of monetary policy, therefore requires to the behaviour of banking firms. ABSTP.I.K tdfum teoretikal kebelakangan ini menuniukkan bahawa institusi inlcan perarwnyang penting di dalam transmisi polisi monetari. fu * terhadap perubahan di dalam polisi monetari, terutamanya prtfolio mereka mempengaruhi kesan muktamad polisi monetari ibnar. Di samping itu beberapa leajian menuniukkan perubahan futk akibat dari pembangunan di dalam pasaran kewangan dan Efuralisasi yang bermula seiak awal lapan puluhan. Kajian ini pful berkaitan bagi industri perbanknn di Malaysia. Keputusan fuIuwa sistem perbankan di Malaysia juga tidak terkecuali,q wno- Proses liberalisasi dan inovasi lcewangan mempengarahi b*urludap perubahan di dalam polisi monetai. Bank didapati ponfolio pinjaman mereka dengan cara mencairl<nn ponfolio Jurnal Pengurusan 18 pelaburan ataupun mempertingkatkan piniaman luar ' Kesemuanya int 'Lterkemungkinan hasil dai pembingunan sistem kewangan sejak awal lapan ii"n*ryZ"s berlaku di Milaysia ' Olehyang demikian ' keupayaan bankpusat 'wmk mimpingaruhi perletaian portfolio institusi bqnk adalah berkurangan dan ini seterusnya mengurangkan keberkesanan polisi monetari ' Pene-ntuan saluran transmisi polisi-moneiari seharusnya memberi perhatian yang khusus ke atas tingkahlaku firma p erbankan&apos