Mr. Chairman, having said that, we will now discuss some case studies that would throw some light about the degree of harmonization that took place between the policies of the Central Bank and the Ministry of Finance, in order to deliver some of the vital results to our country and economy, over the past 7 years. Case Study 1: Opening out Sri Lanka Treasury Bills and Bonds to foreign investors Mr. Chairman, the first case study that I would like to cite is the November 2006 move to open out Sri Lanka Treasury bills and bonds to foreign investors. By late 2006, in Sri Lanka, a massive infrastructure development programme had been launched, and the critical humanitarian operation had begun. These twin programmes had demanded a regular, steady and massive flow of funds, and it was becoming increasingly clear that we would not be able to secure the new fund requirements only via local taxes and local borrowing. If such a quantum of funds were to be sourced from within, an enormous pressure would have been exerted upon the entire economy. In fact, such an attempt would have pushed interest rates to unacceptable levels, and may have even dragged the economy towards negative territory, and placed the entire monetary system at considerable risk. Such fears may have perhaps been one of the reasons that prompted successive governments of the past, to avoid large scale infrastructure development programmes or attempt to launch a full scale counter action programme against terrorism.

The strong and continuing support and commitment shown by the industry will augur well for the success of the Financial Mediation Bureau. Ladies and gentlemen, In recent years, much progress has been achieved in developing and strengthening the financial sector through policy initiatives in the areas of regulatory and supervisory frameworks, risk management and corporate governance. These have been complemented with consumer protection and education initiatives that promote more active consumerism to create a dynamic and responsive financial system. Moving forward, Bank Negara Malaysia will continue to focus on the development of the necessary infrastructure to ensure that consumers are given greater access to information on financial products and services that will enable them to make well-informed choices and safeguard consumer interests. Among the measures that are being finalized for implementation is the issuance of guidelines to ensure that the public has access to banking services at reasonable costs. Guidelines have been issued to banking institutions to govern the imposition of fees and charges. With effect from 1 February 2005, banking institutions will also be required to provide ‘basic banking services’ to Malaysians at minimal costs. The guideline specifies the minimum threshold of services and monthly transactions that are to be offered without charges. The details of the services offered under this guideline are being announced today. Over and above these financial services, as products and services become more complex, financial institutions need to provide appropriate pricing that not only reflect costs but also adequately reflect the cost saving that arises from investments undertaken.