Recent developments in global standards and financial inclusion Global standards developed after the Global Financial Crisis were designed to address the financial stability and integrity issues that came to the fore in developed countries. Many of these issues involved the activities of Global Systemically Important Financial Institutions. The effects of these standards on financial inclusion, such as the impact on smaller financial institutions in developing countries most likely were not taken into consideration. Fortunately, Standard-Setting Bodies have now recognised the principle of proportionality, emphasising on the balance between objectives of financial stability, integrity and inclusion. However, the real challenge lies in implementing proportionality in practice. If principles are not implemented in a proportionate manner, there could be unintended consequences for financial inclusion. For example, despite the Financial Action Task Force’s guidance on the implementation of a risk-based approach to Anti Money Laundering/ Counter Terrorist Financing regulation, we have seen large-scale de-risking by international banks, where banks have indiscriminately terminated businesses in certain segments rather than on a case-by-case basis, or based on proper assessments of risk. In particular, international banks have exited entire areas of businesses, such as relationships with Money Transfer Operators, resulting in Money Transfer Operators no longer being able to provide remittances services for customers, mostly migrant workers remitting money to low-income family members. This indiscriminate de-risking deprives poor families of vital financial resources to live healthily, support and educate their children for a better future.

Muhammad bin Ibrahim: Towards proportionality in practice – financial inclusion and implementation of global standards Opening remarks by Mr Muhammad bin Ibrahim, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Global Symposium on Proportionality in Practice, Kuala Lumpur, 28 May 2015. *  *  *  Ladies and gentlemen, thank you for the opportunity to speak today at the opening of the Global Symposium, with the theme “Towards Proportionality in Practice: Financial Inclusion & Implementation of Global Standards”. Financial inclusion has captured the attention of many decision makers around the globe. We can confidently say that we have been successful in educating the world on the importance of ensuring access and usage of quality financial services by all segments of society. I think it has dawn to the power that be that financial inclusion empowers low income households and SMEs to improve their livelihood and because financial inclusion provides equal opportunities (and hopefully, it appropriately designed, equal outcomes), it also enables the under served to save in a secure manner, invest in productive activities and protect against unforeseen shocks. Financial inclusion, based on empirical evidence also reduces inequality 1, which in turn supports inclusive and sustainable growth, by allowing the poor to stay healthy, stay out of poverty, pay for education and accumulate human capital 2. It is, a very worthwhile agenda to pursue.