The government is due to set up a national asset management company aimed at propping up the banking sector and troubled businesses hit hard by the Covid-19 crisis, according to a report in the Straits Times.

Apparently, senior Finance Ministry civil servants met at the weekend to discuss the proposed move and the fate of troubled flag carrier Malaysia Airlines Berhad.

Officials were understood to be using the defunct Pengurusan Danaharta Nasional Bhd (Danaharta) as an example to follow but independent observers warned the scale of the new entity would dwarf that of Danaharta, which was set up to cushion the blow of the 1998 financial crisis to the banking sector.

Danaharta was folded up in 2005, after using a combination of bonds and cash to go into the domestic market and scoop up loans with property or stock-based collateral at a huge discount.

This in turn allowed the banking sector to begin lending again and jumpstart the economy. – March 26, 2020.