Rip-roaring Malaysia, home of high growth, big capital markets and buildings tall enough to break records, has now decided that big is beautiful for banks, too. Merger and takeover fever has swept the stock market and the rumour mill is working overtime.
Already new financial supermarkets are taking shape, involving some of the biggest names in Malaysian business. The buzz words are global competition and regional expansion. But there's also an emphasis on prudent management, capital adequacy and grasping the concept of risk.
There are good reasons for caution. Malaysians remember only too well what happened the last time the banking sector got carried away. In 1983, the so-called Carrian affair, involving $1 billion in fraud losses at the Hong Kong subsidiary of Bank Bumiputra, Malaysia's second-largest bank, besmirched the country's reputation abroad. Two years later a severe local recession left banks with a massive overhang of property-related bad debt...
