The sharing of credit information reduces asymmetries of information and search costs, thereby enhancing access to financing to a broader spectrum of the population. It also allows for more effective risk-based pricing, which could lower the cost of financing for borrowers with good credit background and history. With the availability of non-traditional data provided by credit reporting agencies, borrowers demonstrating strong financial characters are able to leverage on such “reputational collateral” to obtain borrowings at favorable terms and rates. For lenders, credit information helps to strengthen the entire chain of credit evaluation and credit risk management. The availability of a wide range of credit information on a real-time basis facilitates advancements in risk and decision-making analysis, thus contributing towards institutional soundness. For regulators, this will enhance the stability of the overall financial system. Additionally, from a social perspective, the sharing of credit information contributes towards inculcating financial discipline and avoiding incidences of imprudent and excessive borrowings among borrowers. All these, combined, would definitely enhance the overall credit culture in an economy. The benefits of having a well functioning credit reporting infrastructure are evidenced in Malaysia. The Central Credit Reference Information System, or better known as CCRIS, which is owned and operated by Bank Negara Malaysia, enables real time access to both positive and negative credit information on all borrowers in the banking system and of a selected group of non-banks. The system contains more than 22 million outstanding credit accounts and 7.9 million borrower records.

But it is clear that not all of the weakness was due to these one-time factors – and in light of this, I have revised down my expectations for the pace of recovery going forward. On the inflation front, the committee noted that inflation has moderated recently as energy and commodity prices have declined from their peaks – having picked up earlier in the year, mainly reflecting higher prices for commodities and imported goods, as well as the supply disruptions from Japan. Longer term inflation expectations remain stable, and the committee now expects inflation to settle over the coming quarters at levels at or below those consistent with our mandate to promote full employment and price stability. In light of the current outlook, the FOMC in its statement noted that we now anticipate that we are likely to keep short-term interest rates exceptionally low at least through mid-2013. We also discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. Further details on the discussion at the meeting will be available when the minutes are published later this month. I will not comment on monetary policy any further today. Following the release of the FOMC’s statement, market interest rates generally moved lower, which should help provide some additional support for economic activity and jobs. I would note, however, that conditions remain unsettled and the equity market in particular has been quite volatile recently. Regional economic conditions So how is our region doing?