Thus, with immediate effect, Bank Negara Malaysia announces the imposition of a maximum loan-to-value (LTV) ratio of 70% that is applicable from the third house financing facility taken by a borrower. Financing facilities for purchase of the first and second homes will not be affected by this measure and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by the individual banks based on their internal credit policies. This measure is expected to moderate excessive investment and speculative activity in the residential property market and to ensure affordability of homes for genuine house buyer. The objective of encouraging house ownership among Malaysians continues to be an important national agenda. As part of its continuous efforts to raise the level of financial savvy and sophistication among Malaysians through the promotion of sound financial and debt management by individuals, Bank Negara Malaysia also wishes to announce the introduction of the Financial Capability Programme. This Programme will be offered by Agensi Kaunseling dan Pengurusan Kredit (AKPK) through its nationwide establishments and will commence from January 2011. The Programme is to equip individuals with practical knowledge and skills in money and debt management. This is aimed at promoting sound household financial debt management. Individuals, particularly new prospective borrowers and young adults, are strongly encouraged to participate in this specially designed programme. The Bank will also issue Guidelines on the Conduct of Business for Retail Financing for responsible practices in consumer lending.

José De Gregorio: Fiscal policy and macroeconomic performance Opening remarks by Mr José De Gregorio, Governor of the Central Bank of Chile, to the 14th Annual Conference of the Central Bank of Chile “Fiscal policy and macroeconomic performance”, Santiago de Chile, 21 October 2010. *  *  *  Good morning. Welcome to the fourteenth installment of our annual conference, entitled Fiscal Policy and Macroeconomic Performance. Year after year, this event gathers an outstanding group of economists from academic and policy circles to discuss a topic at the forefront of the global discussion, and a glance at our program makes clear that this year is no exception. This venue serves to reinforce the strong links that our Bank has cultivated with top research institutions around the world. We at the Bank believe that rigorous research represents a fundamental pillar in the analysis of the causes and effects of economic developments, and we thus consider it an essential input to our policy decision-making process. Interaction between academics and policy makers is crucial, because it provides each with distinct feedback, permitting advances to occur at the frontier of knowledge – where they are most needed – while providing solid grounds for policy decisions. As I have mentioned, the topic of discussion during this conference will be Fiscal Policy and Macroeconomic Performance. Understanding the way in which fiscal policy transmits into the economy in normal and abnormal times is key to enhance the effectiveness of monetary policy.