KUALA LUMPUR: Malaysia rose by an impressive five spots to get into the top 20 countries in the World Economic Forum's financial development index this year, bolstered by significant increases in its scores, especially in the financial stability area, where it even overtook Singapore.
The country's strength as an Islamic banking centre also remains evident based on the index, according to the World Economic Forum's third annual financial development report released today.
Malaysia moved up from 22nd place to 17th in the overall index led by the United States and United Kingdom, the report said.
It scored high points in financial stability the third pillar in formulating the financial development index where it was ranked third just below Saudi Arabia and Hong Kong while Singapore came in fourth.
The report ranks 57 of the world's leading financial systems and capital markets, analysing the drivers of financial system development in advanced and emerging economies to serve as a tool for countries to benchmark themselves and establish priorities for reforms.
Like last year, the report said emerging market economies performed well in the financial stability portion of the index, including Malaysia, Chile, Brazil, Slovak Republic, Mexico, Morocco, China and Peru.
Malaysia, which liberalised a wide range of areas in the services sub-sectors including financial services, was also ranked highly at 18th place among countries globally in non-banking financial services.
Among the pillars used in formulating the index are institutional environment; business environment; financial stability; banking financial services; non-banking financial services; financial markets; and financial access.
The World Economic Forum said in the report that Malaysia's top standing in currency stability, accompanied by a fairly stable banking system, served as the foundation of a stable financial system.
The country's strength as an Islamic banking centre remains evident in its continued 12th spot ranking in the banking pillar, a notable level of financial disclosure is a key contributor to its standing.
As far as financial access was concerned, it was ranked 20th.
Less-developed derivatives and foreign exchange markets are potential improvement areas for Malaysia's financial markets (25th place), although the country's well-developed equity and bond markets (15th and 16th) are sources of strength.
An evaluation of financial access in the country presents a divergent picture at the sub-pillar level, where robust commercial access to capital (9th) stands in contrast to more limited retail access (25th).
The report said the US and UK managed to hold top spots ahead of the Asian financial centres Hong Kong and Singapore with developing countries continuing to show financial stability. - BERNAMA
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