. in the area of central bank cooperation, the pbc has actively participated in all our regional groupings including that for the asean economies. for malaysia, this cooperation has manifested itself in many ways. the one event that i will always vividly remember is the one on 21st july 2005 at 7 o ’ clock in the evening when both china and malaysia transitioned to a flexible exchange rate regime. for malaysia, we had seven years earlier fixed our exchange rate during the height of the asian financial crisis. our transition into the flexible regime with china allowed for us to achieve it without being destabilised by the financial markets. bank negara malaysia also became one of the first asian central bank to be accorded the qfii status in 2009 as we took steps to diversify our reserves into chinese and other asian denominated papers. while china in the current environment is being confronted with challenges as it addresses its areas of vulnerabilities and as it takes steps to rebalance and reform its economy and financial system, it is these very actions that will provide the ground for a more sustainable china that will in turn become a source of stability for the region and for the global economy. looking ahead, there is much to be done by all of us. i have said that the business of central banking is an unfinished business. in view of the highly dynamic environment, there will always be new challenges on the horizon. for asia, it is the future challenges that we now need to be concerned with. and it is what we do now that will prepare the ground for us for the future. there has been too much focus on the present. in asia, while we have successfully prepared ourselves for the current environment, we now need to prepare ourselves for the future. among the future challenges that are likely to confront asia is whether our prevailing growth model is sustainable given the consequences from erosion of our demographic advantage, the rising indebtedness, the rising cost of living in an apparent period of low inflation, the need to meet the massive infrastructure requirements and the need to address the rising income disparities and the environmental challenges. what then are the ways economic management can prepare us for the future? this will involve policies and reforms that will reduce leverage that will address the widening income disparities, that will effectively manage infrastructure development and urbanisation, that will accord environmental sustainability and finally that will accord importance to governance, accountability and integrity in the implementation and execution of the many endeavours to achieve a sustainable advancement

. for most central banks in the emerging world, our mandate is broader. most certainly we are expected to have a role in contributing to addressing many of these challenges both directly and indirectly. most of all, not only do we have a voice but we also provide support to addressing many of these issues, whether it is on financial inclusion, financing of infrastructure or putting in place financial and social safety nets or on environmental bis central bankers ’ speeches sustainability. as much of these efforts will involve interface with other parts of the public sector, it has been my experience that the participation of the central bank in many of these agendas will require careful boundary management and a signing off when it is completed so that it does not remain permanently with the central bank. of great importance in this process is also to carefully safeguard the independence of the central bank. in conclusion, let me express my deep gratitude and appreciation to my fellow governors for all the cooperation and support that has been extended to me and to bank negara malaysia. for the friendship and for the collaboration, it has truly been enriching for me. and to the bis, thank you for this privilege to be part of the central bank community. bis central bankers ’ speeches