This has the potential to become a systemic risk as first mover advantage could prompt a de-stabilising rush to the exits. In response, the Bank of England and the FCA have decided that there should be greater consistency between the liquidity of a fund’s assets and its redemption terms. Specifically:   The liquidity of funds’ assets should be assessed either as the price discount needed for a quick sale of a vertical slice of those assets or the time period needed for a sale to avoid a material price discount.   Investors who redeem should receive a price for their units that reflects the discount needed to sell the required proportion of a fund’s assets in the specified redemption notice period; and    Redemption notice periods should reflect the time needed to sell the required proportion of a fund’s assets without discounts beyond those captured in the price received by redeeming investors. Our next steps are to consider how these principles could be implemented and, in particular, the stress against which liquidity measures and redemption terms should be calibrated. We expect to publish the review’s conclusions in the summer and these will, where appropriate, inform the development of UK standards for open-ended funds. Our conclusions will also inform our international engagement for example with the FSB, IOSCO and other competent authorities on the financial stability risks of asset management activity. II. Creating monetary policy space Effective market functioning matters for price stability as well as financial stability.

This is not only to enhance competitiveness in the Malaysian financial markets but also to strengthen its international integration, thereby facilitating our economic inter-linkages with the global economy. As part of this process, Bank Negara Malaysia on April 11, 2004, liberalised the foreign exchange administration rules to permit Multilateral Financial Institutions and Multinational Corporations to raise ringgit-denominated bonds in the Malaysian capital market. The recent liberalisation of the foreign exchange administration rules on 23 March 2005, has also eliminated remnants of the restrictions on investors and greatly enhanced access to the Malaysian domestic market. The Malaysian foreign exchange environment is now by far, much more liberal than that existing prior to September 1998. To make the Malaysian capital market more competitive, the Government of Malaysia has also exempted non-residents from paying withholding tax on investments in such ringgit bonds issued in Malaysia. Infrastructure development on the issuance, trading, information dissemination and settlement system have also been improved to encourage new issuance and sustain existing instruments. In addition, the regular issuance of Government securities in both conventional and Islamic instruments with different maturities has facilitated the creation of a benchmark yield curve. To meet investors' demand and diversify further Islamic financial instruments, the Government has recently issued shorter-term Islamic Treasury Bills and longer-term Islamic bonds with a maturity of 10 years. With the development of the ringgit bond market it has continued to become an increasingly important source of financing to the economy. Total gross financing amounted to RM85.8 billion.