KUALA LUMPUR: Bank Negara Malaysia wants to strengthen 'character' in the banking community by deterring misconduct.
Beginning January 1, 2018, the central bank will make its enforcement action more transparent.
" A strengthened transparency framework for our enforcement actions will also be introduced as an added deterrence against misconduct," Bank Negara Malaysia governor Datuk Seri Muhammad Ibrahim.
He said this in his keynote address at the Asian Institute of Chartered Bankers's 20th graduation and awards ceremony today.
Referring to recent findings by the Financial Services Professional Board on a survey of banking professionals last year, he said they were sobering results.
Twenty three per cent of respondents observed that supervisors reward behaviour derived through unethical means.
Another 15 per cent stated they would act unethically when not being watched or monitored.
Our journey is far from over and more needs to be done to further strengthen character in banking community."
The economic consequences related to ethical choices can be dire and expensive, he warned.
Misconduct costs by banks globally have exceeded US$320 billion since 2008, with US$42 billion in 2016 alone.
Muhammad said there should be a clear tone from the top of institutions that unethical behaviour will not be tolerated.
"As a community, we cannot possibly expect ethical behaviour to be burnished if we persist in retaining, hiring or rewarding people who had acted otherwise."
BNM has enhanced standards for corporate governance, strengthened requirements for KLIBOR rate setting and introduced code of conduct for the Malaysian wholesale financial markets.
The event was participated by 1062 AICB members.