The financial inclusion mandate of the Bank is further reinforced by The Financial Sector Blueprint 2011–2020, which charts the future development of the Malaysian financial system. It details the Bank’s holistic approach toward achieving greater financial inclusion. An important evolution in the advancement of our financial inclusion strategies is the increasing focus on data and measurement. Success can only be celebrated if it is proven by visible developments that is felt on the ground. Hence, one of the cornerstone recommendations under the Financial Sector Blueprint is the development of a Financial Inclusion Index, a framework to measure accessibility to financial services as well as its  BIS central bankers’ speeches  1  usage and quality. Our performance on this agenda has therefore been measured, consistent with our drive for accountability and excellence. Further policy initiatives have included the introduction of agent banking which has enabled 99% of Malaysians today to enjoy convenient access to safe, reliable and affordable financial services. International efforts to enhance financial inclusion measurement Internationally, there is an emerging common understanding that measurement is an essential policy tool for implementation. In this regard, the Alliance for Financial Inclusion, a network of central banks and financial regulators from 96 countries, has provided an important platform in advancing the global agenda of financial inclusion measurement. With the Sasana Accord, which was agreed upon in 2013 during the Global Policy Forum held here in Sasana Kijang, AFI members underscored the importance of measuring the progress of financial inclusion using a common set of measurable indicators.

This saved the Government significant expense in recapitalising the banks. The new banking system amounted to 1.7 times GDP. As a result, the domestic payment system functioned more or less seamlessly throughout, and customers had continuous access to their deposits. The run on the domestic banks stopped, but at its peak, demand for cash tripled and the Central Bank almost ran out of banknotes. Nonetheless, international payment flows were seriously affected by the freezing order imposed by the UK, and the British authorities’ suspicion that Iceland would not honour deposit insurance in UK branches of the failed Landsbanki and by general distrust among foreign counterparties. With heavy Central Bank involvement, international payment flows were gradually restored in the months that followed. I have expanded at some length on the measures taken when the banks failed, as there are still a number of misconceptions about the process. Some have claimed that the banks were  BIS central bankers’ speeches  3  nationalised. They were not. The old banks are private companies. They are in winding-up proceedings governed by law; they are not under the control of the Government. The Government has a majority stake in only one of the new banks. Others have claimed that Iceland defaulted and got away with it. The opposite is true. The credit of the sovereign was preserved, and all debt obligations have been paid on time. This is why the sovereign was able to tap international capital markets last summer, and why its CDS spread is currently around 300 points.