For example, the declared cumulated write-downs and credit-market losses of European banks so far 1 amount to almost USD 358 billion – of which euro area institutions account for less than USD 173 billion. At the same time, a total of USD 382 billion of fresh capital has been raised by European banks, while capital newly injected into euro area banks has reached USD 190 billion, thus exceeding the declared losses and write-downs. Unfortunately, more write-downs can be expected in the coming quarters. The total writedowns of banks globally since the eruption of the turmoil are estimated by the International Monetary Fund to reach USD 2.8 trillion, of which USD 737 billion would be borne by European banks. 2 These estimates depend on the underlying projection of the path of economic activity and assumptions about future asset market developments. Coping with this stress will pose a particular challenge for financial institutions – and this at a time when their shock-absorbing capacity has already been severely tested. A number of risks lie ahead, stemming from the external environment, notably a deeper and more prolonged recession in advanced economies, as well from the subdued economic activity in the euro area and its effect on banks’ balance sheets, notably on the quality of loans to non-financial corporations,  1  Figures are up to 19 April 2009 and include non-EU banks. 2  See IMF, Global Financial Stability Report, 21 April 2009, p. 28.

A number of regional and global business processing centres and other regional facilities have been set up including the OHQs, regional offices, international procurement centres and regional distribution centres. Ladies and Gentlemen, As part of the Government policy commitment to improve the delivery system and reduce the cost of doing business, the Central Bank has undertaken a progressive liberalisation of domestic rules and regulations to reduce the cost of doing business. An area of focus has been the rules governing the foreign exchange transactions. Reducing cost of managing risks associated with such transactions include the recent liberalisation of rules on foreign currency accounts, interest rates swaps and hedging. To broaden and deepen our capital markets, the multilateral agencies and multinational  corporations are now allowed to issue bonds in Malaysia. Going forward, Malaysia will continue to undertake further liberalisation while balancing the need to accord flexibility and choices to businesses with the macroeconomic objectives of ensuring stability in financial markets. Ensuring such long-term stability that facilitates planning and investment decisions has been an important part of maintaining our competitive position. In the development of our financial sector, the banking sector continues to be the pillar of the financial system and is now at its strongest position with high level of capitalisation, improving asset quality and stronger profitability. Policy initiatives to strengthen the banking system, including in the areas of regulatory and supervisory frameworks, risk management, corporate governance and best practices in transparency and disclosure have contributed to strengthen the system further.