The more inclusive process to global standard setting is therefore very much welcomed and needs to be further enhanced through continued open dialogue and support for implementation approaches that are more responsive to unintended consequences at a jurisdictional level. Today, the Bank will communicate its intention to extend the observation period for the Net Stable Funding Ratio, or NSFR, in Malaysia for another year to 2020. This takes into account the Bank’s intention to conduct further on-site assessments to validate the maturity and robustness of the liquidity and funding practices of banks, and uneven progress in implementation at the global level. 3/4  BIS central bankers' speeches  The Bank remains committed to implementing the NSFR requirements as part of overall liquidity standards applicable to licensed banks in Malaysia. At present, all banks maintain adequate liquidity buffers against short term liquidity stress, and the vast majority of banks already report NSFR levels above the minimum 100% based on observation data. Let me now draw my remarks to a close. The task of financial stability authorities is to prepare for the worst, and work for the best. There are rarely easy fixes to the issues that we face, but also no shortage of diverse experiences to draw from and to guide our path. It is my hope that this conference will serve to generate useful discussions that will help inform our own preparations to confront any eventuality, and strengthen our conviction that being prepared is better than being right.

2/4  BIS central bankers' speeches  The need for surveillance to extend beyond traditional boundaries of financial services can make it harder for authorities to “stay within their lanes”. This can be further complicated when the primary responsibility for financial stability is not always clearly defined. More authorities today have acquired expanded powers to access information and respond to financial stability risks. Even where there is a single authority charged with the mandate for financial stability, such powers will tend to rely on a system of regulation and supervision over different actors in the financial system that is often discharged by different authorities, using different instruments and approaches. Ensuring effective coordination across such a system depends on a number of factors. Institutional set ups such as inter-agency arrangements – of which there are many good examples – are important and clearly even necessary. But they are not a sufficient condition for effective coordination. The most important factors for effective coordination are more likely to be internal ones – the submission of institutional agendas to a higher collective goal, an internal resolve to overcome inherent conflicts, and the organisational flexibility to move in a common direction with others. In increasing their agility to shift gears where required, authorities must also find ways to do so while preserving the credibility and predictability of policy. Shorter policy cycles and more frequent adjustments in response to developing risks can make this significantly more challenging. Communicating financial stability policies effectively will be key.