As elsewhere in Central and Eastern Europe, in Romania too the vulnerabilities exposed by the crisis in the model of centralised fund management at the level of cross-border banking groups led to a new paradigm, which emphasises the local funding of credit activities. The cross-border deleveraging which accompanied this switch, while sizeable, has nevertheless unfolded in an orderly manner. The shift towards the domestic market in terms of financing sources was accompanied by an increase in the relative importance of local currency-denominated loans: after a long time, their share exceeded 45 percent and will possibly overtake foreign currency lending by the end of the year. This is, undoubtedly, a positive development for both debtors, who avoid currency risk exposure, and central banks, due to the increased effectiveness of monetary policy. Looking ahead, the constraints on both credit supply and demand are expected to continue to prevail, as the effects of a balance-sheet crisis, such as the one we have recently encountered, tend to be longer-lasting. In such an environment, the quality of credit allocation appears more important than the volume, although the latter is not at all irrelevant in our case given a still low financial intermediation at 31.7 percent of GDP (not even during the credit boom period did it exceed 40 percent). In order to put the economy onto a self-sustained growth path, I believe it is necessary for banks to channel credit to productive investment, avoiding the overburdening of good debtors with the costs of past misallocations.

The MSB industry in Malaysia is also highly competitive, with among the lowest remittance costs in comparison with other markets. I know that this has been an issue of some concern among some players in the industry as margins have continued to narrow. As in any other industry, an environment of healthy competition that delivers more choice, provides better service and encourages innovation, generally benefits society. Tonight’s awards are a good example of MSB companies that have stepped up to deliver an outstanding customer experience in order to attract and retain customers. Many strategic partnerships between companies in the industry have also been formed over the 1/3  BIS central bankers' speeches  years in response to greater competition. This has unlocked value for the companies by opening up new business opportunities and increasing cost efficiencies. Throughout history, whether in an organisation, an industry or a nation, progress and development have always been achieved through a process of creative destruction, adjustment and evolution. The industry will continue to transform and evolve, and in the process, it become more efficient and advanced in delivering superior products and services to the public. Bank Negara Malaysia remains committed to ensuring that the market for money services continues to function efficiently and sustainably in the best interests of consumers, and a competitive market is an important part of this process. The industry’s remarkable development has not gone unnoticed. More than a few countries have been interested to study and learn from Malaysia’s experience.