An important lesson is to continue to strengthen our resilience and buffers, especially during the good times. A World of Contrasts: Bankers as Active Stakeholders, Not Passive Bystanders The banking sector has been a central pillar of strength for the Malaysian economy. The industry can play a more positive role by engaging positively in conversations on economic and financial issues confronting the country. As I have experienced in the last one year, the chamber of conversation on the economy could be further expanded. Narratives on the economy and the industry continue to be shaped by external parties, drowning out the occasional whispers from the banking industry. Given the central role of banks in the economy, bankers have the equivalent of a box seat to provide an informed view on developments in the economy and financial system. Rather than being onlookers, the banking industry should weigh in on domestic economic discourse. From sectoral issues to macro trends, bankers’ perspectives would provide additional viewpoints and enrich assessments by the public and financial community, and help address gaps between reality and perception that have too often dominated the public conversation. It is therefore timely for our bankers to participate more actively in the economic discourse to shape a more balanced narrative. Bankers should be proactively offering solutions to some of the pressing economic and financial issues facing the country. A positive voice for socioeconomic change can help instill greater public trust in the role of the banking sector in nation building.

The last two primary auctions of government bonds recorded a healthy bid-to-cover ratio of more than two times. Following higher market demand, MGS benchmark yields have eased lower between 8 – 32 bps across the yield curve. Non-resident holdings of government papers have also been pared down from a peak of 34.7% to 25.3% as at end April 2017. More importantly, our surveillance indicates that the composition of stable and long-term investors is now much higher, with previous outflows mainly due to short-term speculative positions exiting the market. This is definitely a positive development. Malaysia remains a highly open economy and will continue to welcome the participation of longterm investors. Indeed, we remain a highly attractive destination for foreign direct investment. Returns on Malaysia’s FDI assets have averaged 12.9% per annum between 2010 to 2016, higher than nominal GDP growth of 7.7% over the same period3. Payoffs from investing in the real economy are one of the highest in the region, making Malaysia an important profit centre for investors. 4/6  BIS central bankers' speeches  In the next seven months, the Bank will introduce further regulatory measures to strengthen the foundations for a strong and resilient banking system. First, we will implement a mandatory employment reference check for financial industry employees which is aimed at removing employee information asymmetries during job transitions. Second, we will share with the industry proposed revisions to the outsourcing policy to improve the governance and supervision of financial institutions, especially involving crossborder arrangements.