This study reviews the development of the banking and insurance sectors in Malaysia since the 1980s, with a particular attention to the effects and sequencing of the various reforms as well as the impact of services trade liberalization and related commitments. Over the 31 years since independence in 1957, the Malaysian economy transformed itself from an agriculture based, to a manufacturing one. This was the result of maintaining an open and liberal trading regime with responsible economic policies to meet the challenges of internal and external imbalances. Malaysia achieved rapid economic growth largely due to the implementation of market oriented policies and reforms within the context of several 5 year-plans for the development of the economy.