when compared to similar exercises done in other jurisdictions. 19. given the scale and breadth of the focused review, the exercise is expected to complete around early next year. after that, we plan to share with the industry the identified insights as well as practices that lead to good customer outcomes. through this exercise, we also aim for better alignment of incentive systems whilst preventing potential misconduct behaviour. we trust this would advance bank culture development in hong kong to the next level. accountability 20. while a proper incentive system will encourage desirable staff behavior, we should not lose sight of the other side of the coin, which is accountability framework. in the past few years, the hkma has been making greater use of accountability reviews as a tool to identify those responsible for misconduct incidents. the idea is that those who have pursued undesirable behavior have to face the consequences of their own misconduct. another aspect of accountability that banking supervisors in several jurisdictions have been trying to tackle is how can we effectively address the problem of “ rolling bad apples ”. 21. as this phrase literally means, “ rolling bad apples ” refer to individuals who have committed misconduct behaviour, but are able to obtain subsequent employment elsewhere without disclosing their earlier misconduct to the new employers. 22. when “ bad apples ” tried to “ roll ” from one institution to another, this cannot be easily dealt 3 / 4 bis central bankers'speeches with by individual banks working alone. it is important for the banking community to work together to collectively tackle the issue and limit the harm inflicted by the “ bad apples ” on the system. 23. earlier last year, the hkma consulted the industry on a proposed mechanism for doing “ conduct - related reference checking ” between banks. we have received many useful comments during the consultation exercise, including those from asifma, and we have issued the consultation conclusions in may this year to set out the operational framework for what we call “ mandatory reference check ” – in short the “ mrc ”, scheme. 24. the mrc scheme will adopt a proportionate approach, where conduct - related reference checks would be required for certain categories of bank staff whose conduct and integrity are especially important. 25. misconduct behaviours to be captured for reference will include breaches of legal and regulatory requirements ; misconduct incidents and incidents relating to honesty, integrity or matters of similar nature ; as well as internal or external disciplinary actions relating to conduct matters. 26. our plan is to implement the mrc scheme as an industry - led initiative with

crucial in supporting rising living standards and an increasingly diverse external trade. as adviser to the government, the bank has played a key role in formulating economic policies. the bank has also been at the forefront of financial - sector development, in particular through building efficient and advanced payment systems. this work has stimulated a diverse financial system, with impressive growth in stock - market capitalisation and other non - bank activity. all of this is indeed impressive, and reason enough for celebration. but bank negara's contributions to the well - being of the country go somewhat beyond the more conventional central bank functions. of great interest in any survey of its role in nation - building is bank negara ’ s promotion of forms of financial intermediation that are of special relevance to malaysia's needs and culture. the bank has been a pioneer in the promotion of microfinance, and a leading participant in the national agenda to promote a strong sme sector. considerable funding and expertise have been devoted to these activities in recent years, with the result that the share of sme financing in total business financing has increased from 31 % in 2000 to 44 % in 2007. the experience and networks established in this field have been of great value in the government's efforts to mitigate the effects of the current global financial crisis, which have included the recent launch of a substantial micro enterprise fund. like many other economies in this region, malaysia is a land of small businesses, but the attention that has, during years of stability, been given to strengthening channels of finance to the smallest of enterprises offers lessons for all economies at this time of pervasive credit crisis. bank negara has also taken a prominent part in the development and advocacy of islamic finance, which has seen rapid growth in the country since 2003, with annual growth rates in islamic banking assets and insurance assets approaching 20 %, and malaysia now accounting for about 70 % of all global sukuk issues. islamic finance is increasingly recognised as an important alternative channel of financial intermediation, and not only within primarily islamic communities. as governor zeti has persuasively argued, islamic finance encourages business activities that generate legitimate profits, and rests on principles of fairness, shared risk and ethical practices. 1 there is, i think, much for us all to reflect on in this when considering how badly things have gone wrong recently in what might be called " traditional " finance. no institution with such a long history can have escaped controversy, and bnm has had its