Introduction

Enterprise Risk Management Enterprise risk management (ERM) in business comprises of methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives. ERM provides a framework for risk management, which typically involves identifying particular events or circumstances relevant to the organization's objectives (risks and opportunities), assessing them in terms of probability and significance of impact, determining a response strategy, and monitoring growth. By identifying and proactively addressing risks and opportunities, business enterprises protect and create value for their stakeholders, including owners, employees, customers, regulators, and society overall. (ERM) ERM can also be described as a risk-based approach to managing an enterprise, integrating concepts of internal control, the SarbanesOxley Act, and strategic planning. ERM is evolving to address the needs of various stakeholders, who want to understand the broad spectrum of risks facing complex organizations to ensure they are appropriately managed. Regulators and debt rating agencies have increased their scrutiny on the risk management processes of companies. Malaysian Banking System The banking system, comprising commercial banks, investment banks, and Islamic banks, is the primary mobiliser of funds and the main source of financing to support economic activities in Malaysia. The non-bank financial intermediaries, comprising development financial institutions, provident and pension funds insurance companies, and takaful operators, complement the banking institutions in mobilising savings and meeting the financial needs of the economy. The Central Bank Bank Negara Malaysia (the Bank), the Central Bank, is the apex of the monetary and banking structure of the country. Its main objectives as defined in the Central Bank of Malaysia Act 1958 are to: Issue currency and keep the reserves safeguarding the value of the currency;

Act as a banker and financial adviser to the Government; Promote monetary stability and a sound financial structure; Promote the reliable, efficient and smooth operation of national payment and settlement systems and to ensure that the national payment and settlement systems policy is directed to the advantage of Malaysia; and

Influence the credit situation to the advantage of Malaysia.

To meet its objectives, the Bank is vested with legal powers under various laws to regulate and supervise the banking institutions and other non-bank financial intermediaries. The Bank also administers the country's foreign exchange control regulations and act as the lender last resort to the banking system.