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Article: The Cost of Antitrust Law to Malaysia's Financial Services Sector

TitleThe Cost of Antitrust Law to Malaysia's Financial Services Sector
Authors
KeywordsAntitrust compliance
Internal audit
Malaysia
Issue Date2015
Citation
World Competition, 2015, v. 38 n. 1, p. 133-170 How to Cite?
AbstractJudging by only economic incentives, Malaysian financial institutions (particularly banks) should completely ignore the Competition Act. The data show that Malaysian banks probably benefit from anti-competitive behaviour. Political and family connections likely facilitate such behaviour. Given that the Malaysian Competition Commission will likely lack the resources to investigate and sanction anti-competitive behaviour in Malaysia’s banking industry – the banks’ best response to the Act probably consists of ignoring it. Maximum fines of 10 million ringgit and revenue-tied penalties of only 10% of worldwide revenue mean that banks still have strong incentives to engage in anti-competitive behaviour and to pay any low fine that might be levied. The best compliance programme for banks in Malaysia likely consists of actions that avoid detection rather than detecting and preventing anti-competitive behaviour. Private rights of action are unlikely to provide any stronger economic incentives for Malaysian banks to adopt strong antitrust compliance programmes and internal audit programmes. By staying the course, Malaysian banks can continue to earn about 15 billion ringgits (approximately US $4.6 billion in anti-competitive rents).
Persistent Identifierhttp://hdl.handle.net/10722/202318
SSRN

 

DC FieldValueLanguage
dc.contributor.authorMichael, B-
dc.contributor.authorWilliams, M-
dc.contributor.authorMunisamy, S-
dc.date.accessioned2014-09-15T02:33:18Z-
dc.date.available2014-09-15T02:33:18Z-
dc.date.issued2015-
dc.identifier.citationWorld Competition, 2015, v. 38 n. 1, p. 133-170-
dc.identifier.urihttp://hdl.handle.net/10722/202318-
dc.description.abstractJudging by only economic incentives, Malaysian financial institutions (particularly banks) should completely ignore the Competition Act. The data show that Malaysian banks probably benefit from anti-competitive behaviour. Political and family connections likely facilitate such behaviour. Given that the Malaysian Competition Commission will likely lack the resources to investigate and sanction anti-competitive behaviour in Malaysia’s banking industry – the banks’ best response to the Act probably consists of ignoring it. Maximum fines of 10 million ringgit and revenue-tied penalties of only 10% of worldwide revenue mean that banks still have strong incentives to engage in anti-competitive behaviour and to pay any low fine that might be levied. The best compliance programme for banks in Malaysia likely consists of actions that avoid detection rather than detecting and preventing anti-competitive behaviour. Private rights of action are unlikely to provide any stronger economic incentives for Malaysian banks to adopt strong antitrust compliance programmes and internal audit programmes. By staying the course, Malaysian banks can continue to earn about 15 billion ringgits (approximately US $4.6 billion in anti-competitive rents).-
dc.languageeng-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectAntitrust compliance-
dc.subjectInternal audit-
dc.subjectMalaysia-
dc.titleThe Cost of Antitrust Law to Malaysia's Financial Services Sectoren_US
dc.typeArticleen_US
dc.description.naturepreprint-
dc.identifier.spage133-
dc.identifier.epage170-
dc.identifier.ssrn2488904-
dc.identifier.hkulrp2014/028-

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