bank in the restructuring process rather than explaining in great detail about korea ’ s restructuring measures or their outcomes, i would like to focus on how the central bank is contributing to the process through its monetary policy. the restructuring process requires both a micro and an administrative approach since it aims to reform individual companies and financial institutions. therefore government ministries in a position to draft and revise legislation, or those government agencies which oversee or monitor the detailed management of financial institutions, should be in charge of the process. the central bank, on the other hand, faces natural limits on the extent to which it can share actively in the restructuring process. it conducts monetary policy based on the efficient workings of the market rather than on administrative devices or legislation. moreover, monetary policy influences economic entities as a whole rather than acting on individual institutions or businesses. despite these limitations, a central bank can contribute to the restructuring process within the monetary policy framework. there are four ways in which it may do so. 1. create a macroeconomic environment conducive to the restructuring process first, the central bank creates an economic environment which helps the successful implementation of restructuring measures. the economy needs some degree of dynamism if restructuring measures are to be implemented smoothly. looking back, most restructuring was carried out when the real economy had contracted due to the ripple effects of a crisis. korea is not the only country to experience negative growth after a crisis. several countries which suffered a crisis in the 1990s including three scandinavian countries, mexico, thailand and malaysia all went through a period of negative growth lasting for one or two years. however, a deep economic downturn is likely to act as an obstacle to successful restructuring. if a company or a financial institution is to improve its financial structure, it should pay back its debt by realizing profits or increasing its capital through a public offering. during a recession, such attempts do not yield the desired outcomes. moreover, since job mobility decreases significantly in a recession, bold management rationalization which inevitably entails large - scale job shedding, is difficult to carry out. another reason why a certain degree of economic vitality is necessary for successful rescheduling is related with the problem of the “ black sheep ” of the economy. when a specific sector clearly needs emergency surgery, but it is feared that there would be a heavy toll in terms of unemployment and financial market disturbance, then the government will be tempted to put off the operation, especially when the economy is depressed. this sector will remain the “ black sheep

prospects of the region as it increasingly becomes an important growth centre in the world economy. with china now becoming malaysia ’ s largest trading partner, bank negara malaysia and the people ’ s bank of china have entered into a bilateral currency swap arrangement in 2009. this swap arrangement serves as a key platform to promote trade and investment linkages between both countries. in march of this year, bank negara malaysia established a reuters page for the rmb / myr exchange rate for trade - related settlements, with 11 banking institutions offering the facility to malaysian companies. a cost - effective arrangement is now being finalised to provide the option for exporters and importers to settle bilateral trade obligations in local currency by the middle of this year. this will complement the existing facilities that are already being provided by commercial banks in the settlement of trade in rmb. bank negara malaysia has also signed a memorandum of understanding with the china banking regulatory commission in 2009 to further strengthen the framework for cooperation and collaboration between both authorities, and to promote regional financial integration. this mou provides the platform for both regulatory agencies to share information, to ensure the enforcement of prudential rules and regulations and to undertake pre - emptive actions towards ensuring the sound development of financial institutions operating in both the respective jurisdictions. this mou also provides an established mechanism to enhance cooperation in areas that will be mutually beneficial for the development of the financial sector in both countries. with respect to the performance of the malaysian financial sector, it has demonstrated its resilience throughout the recent global financial crisis. financial intermediation has remained intact with the banking institutions in a strong position to support the economy. this has been reinforced by fiscal and monetary measures to ensure adequate access to financing by all segments of the private sector. malaysia has also pursued its longer term strategy to enhance the role of the financial sector in supporting the transition to become a high valueadded, high income economy. despite the challenging economic environment in 2009, key liberalisation measures were introduced as part of this strategy to enhance the longer term vision for the financial sector to facilitate this economic transformation. let me conclude my remarks. we look forward to icbc ’ s commitment and contribution towards promoting greater economic and financial linkages between china and malaysia. we congratulate you on this historic occasion and we welcome your presence into the malaysian financial system.