As a result, transformation of macroeconomic framework has been a key to enhance the effectiveness of market mechanism and pave ways for the economies towards the desirable directions. Moreover, robust macroeconomic policy management, including well-tailored monetary and fiscal policy mix, concrete tax policies, transparent business laws and governances, would shore up public confidence and create  BIS central bankers’ speeches  1  investment-friendly environment. Apart from that, it would also allow the country to better sustain its economic growth in the longer term despite the global headwinds. 8. The second element is an economic and social transformation to address inequality of income distribution, which is considered a major cause of “development fatigues” in many emerging countries. In many cases, countries’ statistics reveal high concentration of wealth in import – export sector as well as in FDI enterprises. It is important to note that such distributional bias, if not taken seriously, could hinder economic growth potential. To promote better distribution of wealth, both public and private sectors will have pivotal roles. While tax and subsidy policies should be tailored, given country specific structure, to efficiently allocate fair share of wealth, supply-side and financial policy should also ensure equal spreading of economic opportunities in tandem with easily accessible financial system. In this context, financial institutions’ effort to provide a more efficient and easily accessible financial service is a necessary condition to ensure that the benefits of regional affluence will be shared equitably. 9.

This market has since been liberalised to allow foreign corporations to raise funding in both domestic and foreign currency. In these recent few years, there has been a number of successful Reminbi bond issuance from our market to finance investment opportunities in China. Various other key financial infrastructures were also put in place to enhance the efficient functioning of the intermediation process of the overall financial system. This included the infrastructure to support robust payment and settlement systems. In 2012, we introduced onshore settlement of Reminbi transactions in our real time gross settlement system RENTAS via a local onshore settlement institution. As part of the development of our domestic financial infrastructure the Malaysia Deposit Insurance Corporation was establish to provide a comprehensive deposit insurance and insurance benefit system for the banking and insurance sector. This institution not only imposes discipline for risk management by the financial institutions through the imposition of differential premiums based on the risk profile  BIS central bankers’ speeches  1  of institutions, but it also is the resolution authority in the event of failure of a financial institution. Underpinning the financial sector growth was also the development of a more robust surveillance, regulatory and supervisory framework. As the Malaysian financial system evolved to become more complex, sophisticated and diversified, the regulatory and supervisory approach has correspondingly evolved from detailed and prescriptive rules to a risk-based approach that combined greater supervisory judgment and intensity with highlevel principles of sound practice.