The banking sector total capital ratio stood at 18.4% for the first half of 2021 as compared to 18.9% at 31 December 2020. In addition, the banking sector also recorded excess capital buffers of RM127 billion, slightly lower than RM133 billion in December 2020.

i) Based on the above statistics, explain the overall position of bankings sector capital in the first half of 2021.(8 marks)

(ii) Explain how the capital position of the banking institution facilitates the financial stability of Malaysia.(10 marks )