Despite the extent of the changes that have occurred to date, the world is some distance from a fully open or integrated economic and financial system. This observation is important because it highlights the potential for an evolving global environment to complicate the challenge of crafting economic policy, and in particular, monetary policy. Economic theory is most comfortable with fully integrated systems in which prices and flows of goods and services along with real and financial capital responding continuously and completely to market forces. Significantly harder to capture in our models are the aspects of the world that do not fully, or quickly, adjust to market incentives, or where those incentives are hidden. Nations still retain a range of measures designed to insulate parts of the domestic economy from trade and competition. Capital controls remain in place in a substantial number of large economies and in most smaller ones. Policymakers in many economies still have implicit or explicit mandates to limit the variability of their nominal exchange rate against that of their major trading partners. These measures have the potential to distort the incentives of businesses and investors, and the resulting flows of goods, services, labor and capital. To understand the policy implications of globalization, one has to try to understand both the impact of these constraints and distortions and the  BIS Review 102/2006  1  interaction of these policies with the forces of technology and competition that are pushing or pulling economies and financial systems closer together.

We expect all financial institutions to properly inform and educate their customers on security measures implemented, and how customers can and should protect themselves. At the same time, various educational and awareness initiatives are being undertaken by relevant agencies, including the Financial Education Network (FEN) and Bank Negara Malaysia, such as through Amaran Scam Facebook page (facebook.com/amaranpenipuan). We also work with other law enforcement agencies and authorities to investigate fraud incidents and provide assistance and supports to victims. PDRM’s Scam Response Centre which was set up in collaboration with Bank Negara Malaysia, MCMC and the financial industry aims to ensure that immediate action can be taken to prevent further financial losses and attempt to recover stolen funds. For this, customers should lodge their complaints to their banks and the police immediately upon discovering that they have been defrauded or scammed. We are committed to working with other authorities to further strengthen existing arrangements in ongoing efforts to combat fraud and financial crime. This includes sharing of resources, expertise and data, as well as joint preventive measures. Compliance officers in the financial industry also have a role to play by being vigilant of emerging scam typologies and ensuring that response measures remain effective against new threats. I urge the entire compliance profession, including self-regulatory bodies, to take up leading roles to identify red flags and develop guidance to mitigate these threats. In 2019, we launched MyFINet to facilitate intelligence sharing on financial crimes.