Due to a combination of factors, including over- confidence, a hostile environment and poor communication, the expedition ended in one of the worst tragedies of the peak’s history. Rob Hall, one of three team leaders of the great expedition, had successfully scaled the mountain numerous times before. Underestimating the risks when faced with unstable weather conditions, Hall decided to proceed with the climb rather than turning back. He had strong belief that his past successes, which invariably inflated his confidence, sufficiently equipped him for the challenges ahead. This has now become a classic case study on leadership and risk management under extreme conditions. Interesting parallels can be drawn in the context of crisis preparedness in the financial sector. Over the course of crises history, policymakers and market participants that were involved in every financial bubble were repeatedly afflicted with the conviction that “this time would be different”. The majority voice was quick to dismiss rising risks, and contrarian views were often ignored. It was reasoned that efficient markets would work as they should to contain risks, and economies would have the structural flexibility to adjust to residual risks that might materialise. In hindsight, such views were surprisingly intractable throughout periods that have followed multiple episodes of crises – from the 30’s Great Depression, the 80’s debt crisis, the 90’s Asian and Latin American meltdowns, to the Great Recession of this century. Conditions surrounding each crisis differed widely, but this recurring mindset appeared to prevail in the run-up to each major collapse.

In the spirit of building trust and agility during normal times, we have worked hard to strengthen coordination arrangements with our regional counterparts and key domestic authorities. To name a few, this has included the development of crisis management protocols that are outlined in the Strategic Alliance Agreement with PIDM, the Operational Framework for Financial Crisis Management and Resolution with the Securities Commission, and the Executives’ Meeting of Asia-Pacific Central Banks (EMEAP) Crisis Management and Resolution Framework involving 11 jurisdictions. Numerous refinements have been introduced, and several crisis simulations were conducted. All in response to anticipated changes in the financial and regulatory landscape, and to continuously elevate our level of operational preparedness. We remain committed to building strong relationships based on mutual trust that will serve us well through the uncertainties that invariably accompany any crises. And we continue to work on ensuring that these arrangements are credible when disaster strikes. For us, it is as important to encourage open and honest communications with our counterparts, as it is to have formal arrangements for information exchange. We cooperate with each other in conducting joint surveillance and capacity building initiatives. Through these collaborations, we gradually build respect, trust and goodwill, the kind that no framework can hope to manufacture. Let me now conclude. In no trivial part due to my mentors, predecessors and colleagues, past crises that affected Malaysia were well-managed, leading to speedy recovery with minimal losses to taxpayers, and the equally important structural transformations that followed. Clear statutory remits. Independent policy making.