Furthermore, a large amount of research has highlighted that higher uncertainty in general has a negative impact on the economy, particularly through lowering the investment level, see e.g., Bloom (2009) and Bloom, Bond and van Reenen (2007). [2]  See Coibion and Gorodnichenko (2015) and Aastveit, Bjørnland and Cross (2023). [3] Research on energy prices has shown that energy price fluctuations may have an adverse effect on the macroeconomy. The impact is likely to depend on the source of the shock (energy demand shock or energy supply shock), the persistence of the shock and the sign of the shock. See e.g., Kilian (2009), Aastveit, Bjørnland and Thorsrud (2015) and Baumeister and Hamilton (2019) on the effects of oil supply vs. oil demand shocks. See e.g., Hamilton (1983, 1996, 2003, 2011), Mork (1989) and Davis and Haltiwanger (2001) on the non-linear effects of oil price changes on the macroeconomy. [4] See Auclert, Monnery, Rognlie and Straub (2023) and Chan, Diz and Kanngiesser (2022). Published 30 June 2023 14:15
More importantly, it is to avert a sharp slowdown in economic activities. Financial liberalisation Bank Negara Malaysia has also remained committed to the objectives of the Financial Sector Master Plan (FSMP) issued in 2001. The recently announced liberalization measures, for example, forms part of the concluding phase of the FSMP which is to liberalise the banking sector by allowing for the increase in operational flexibilities, product offering and, the issuance of new licenses by 2011. But, as capacity and institutional building efforts continue to be pursued, it must be complemented by enhancements in regulatory, supervisory and surveillance framework to preserve the integrity and resilience of the financial system. Clearly this is the distinction which must be made with de-regularisation per se. Islamic banking Islamic banking also remains as one of the key agendas under the FSMP. Also in the recently announced liberalisation measures, we will issue up to two new licenses given the growing demand and the need to give further boost to the MIFC initiative. As we have more than two decades of experience in this area, Bank Negara Malaysia will continue to build on this competitive advantage to ensure Malaysia remains at the forefront of global Islamic banking. It is therefore encouraging to note that Islamic finance has continued to demonstrate its evolution and strong growth as assets have expanded by 22% to RM192 billion in 2008 alone and now accounts for 15.0% of the total assets in the industry.