We will also discuss the challenges you share around keeping abreast of consumer compliance requirements. During today’s luncheon, our head of consumer compliance will share remarks on recent enhancements to the examination process. I’d like to close with a few words about a specific topic that is core to the community bank 2/3  BIS central bankers' speeches  business model, namely attracting new customers and growing deposits. I believe success in the area will be increasingly linked to a willingness to invest in technology and new processes. Customers today seem to prefer online banking, and millennials favor alternative banking options. This suggests both an opportunity and a strategic imperative. There may be no better time than now to reimagine transformation through investments in innovation, improved multichannel delivery, more fintech partnerships, and expansion of digital payments. Technologies to enable transformation are more powerful, readily accessible, easily implementable, and economical than ever before. Of course, these new activities bring risk management and legal issues and challenges to consider—vendor management, data privacy, consumer protection and cybersecurity to name just a few. To conclude, and again to echo the “on the horizon” theme of the conference, I believe we all need to be mindful of this new financial landscape as community banks strive to retain control of the customer experience. This is critical to the relationship-based business model of many community banks and reflects the unique local knowledge of the market and customer needs. As the industry evolves, this poses some challenges but also opportunities.

The appreciation of regional currencies is not likely to eliminate these imbalances. In fact, excessive focus on the exchange rates as corrective mechanisms for these imbalances has led to speculative capital inflows into Asian economies. This has required policy makers to intervene to avoid a sharp appreciation of their currencies, thus accumulating large reserve holdings. Clearly, at best, exchange rates offer only a partial solution and excessive focus on this area could in fact be counter productive. It risks sharp movements in exchange rates which at the extreme would be highly destabilising to the global currency, capital and commodity markets. The long-term solution would be for the US to increase its savings and moderate its import demand and for the rest of the world to increase its demand and imports. Such a transformation will eventually occur but it is unlikely to occur overnight. In the transition there could be some economic dislocation. However, with its young workforce and with the growing productivity, competitive and dynamic economies, there is great potential for the Asian economies to become the growth dynamo for the region and the world. With rising income levels in regional economies, particularly among the growing middle income group in China, India and the ASEAN economies, there is potential for an intrinsic source of demand within the region. This rebalancing of demand across the world will eventually reduce the prevailing imbalances. In 2004, the Malaysian economy experienced strong growth. Going forward, the economy will continue to be well supported by both domestic and external demand.