The borrowing in the international markets by the financial institutions was also affected by increasing fiscal and current accounts deficits, arising due to wrong policies that created imbalances in the saving-consumption behavior of most important economic players in the economy, including the households. It is now a question, whether some of these issues could be addressed by a more powerful role of the monetary policy. Financial integration, among other things, has also contributed in the rapid expansion of the financial activity, and many financial institutions have become too big for a single country. This has occurred at a time when, for the same reason, the “de facto” power of regulation has shifted away from the local supervisors toward their host counterparties. Hence, despite a steady trend of convergence between financial legislation in many countries, there are still marked differences that, particularly at a crisis situation, create strong tensions between public authorities in different countries. A very strong effort by the public authorities in the world to address the abovementioned issues in order to improve the supervisory standards and superstructure is now underway. Both in the United States of America and in the European Union, the creation of special institutions is being envisaged, whose role will be to identify and control systemic risk through a different supervisory approach for financial institutions with systemic importance. At the same time, such financial institutions are expected to become subject of a more stringent regulatory framework in terms of capital and liquidity requirements, balance sheet composition and expansion, and governance relationships.

This opens up an enormous opportunity to tap into the potential for the more than 100,000-strong life and general insurance agency force to play a much more active role in educating consumers on the importance of insurance protection, on how to evaluate their insurance needs, and on making informed choices about the insurance options available. It is often joked that an insurance agent can persuade you to buy almost anything. Imagine what we could achieve by more effectively mobilizing such a powerful persuasive force to communicate essential and life-changing messages on the importance of insurance. The ability of agents to distinguish this role from the sales process is also important. This should be further developed by the representative bodies of agents as part of a professional commitment of all agents to promote sound financial and risk management. Finally, agents need to engender the type of trust that is built on a solid track record of quality professional service that places the long term interests of consumers front and centre. With more than 39,000 general insurance agents registered with PIAM, agents continue to have the widest outreach of any distribution channel, accounting for over 63% of general insurance revenues. With such reach, agents wield significant influence over how people perceive and experience insurance. This in turn affects not only decisions to purchase insurance; it can also affect the value that is derived from insurance coverage. For these reasons, Bank Negara Malaysia places significant importance on the responsibilities that insurers and agents have to treat customers fairly.